June 29, 2020 | Spring Market
You may not be all that interested in how busy I’ve become, but this busy June does say something important: The Toronto real estate market is currently bouncing back strong from Covid-19. Does that mean business as usual? Not at all. Protocols and safety measures are in place. For now, traditional open houses are not allowed and there are certain necessary precautions taken when conducting business. That said, it appears we are learning to move forward in our new world with Covid-19. The future may still be uncertain, but for now, we are roaring back from the slowdown during the peak of Covid.
Why is June busier than any other month, especially since we still have the virus circulation among us? Well, for 2020 we just kicked the Toronto Spring real estate market ‘can’ down the road two months. With Covid-19, showings and sales fell dramatically from mid March to mid April, then began a very slow return from there. May showed us a slow recovery, but fewer showing/sales than the previous May. As many of you know, the Spring market really warms up in March and then peaks in April and May. Those are the months we were shut down – usually the busiest months of the year. So, it feels as if the Spring market was just postponed until people felt more comfortable to buy and sell properties again.
What does this mean for prices? Some may think this fluster of activity is a rush of concerned sellers or people who have to sell. After all, we have been inundated with news about a correction in real estate prices. Down 18% this year, according to CMHC. But the buyers are back too. And they are not holding back. Single family houses seem to be the golden spot right now. One Junction Triangle house had 28 offers after 173 showings in a week.
Of course, this bounce back is going to be very neighbourhood specific, but June tells us that we appear to having a “V” shaped recovery for houses with prices bouncing back quickly with more competition for properties. A “U” shaped recovery would be much longer at the bottom before a bounce back. For now, I don’t see that happening.
For condos, we may see a softer recovery than houses, though we are still seeing some competition, even with condos in denser neighbourhoods. Condos have not suddenly become significantly discounted.
It’s true that there is a desire, among select folks, to leave the city after months of quarantine and spending much more time inside at home. The desire for space has become more of a demand than ever. I’m certainly seeing a boost in activity happening in cottage country and in smaller, less expensive markets, like Kitchener and Guelph outside of the city. It is also true in Toronto. There is more of a push for bigger spaces. More buyers considering a move from condo to house.
Just don’t be fooled into thinking that entry level, smaller condos have become affordable. They have not.
Now some of us may become too excited/discouraged that the Toronto market is bouncing back. So, let me be clear: we may still have very uncertain future before us. We are not sure what a potential second wave could do to the Toronto real estate market or if continued pressure from Covid-19 will place more long term damage on the economy. This activity of this June could be very different in September.