COVID-19 and Toronto Real Estate: Update
April 8, 2020
The news is in from the Toronto Real Estate Board and March is showing two different markets. During the first half of March, sales were up by 49% as compared to March 2019, and during the second half they were down by 15.9%. When it comes to prices, the average price during the first half of March was up by 14.5% and during the second half of March: up by 10.5%.
What this tells us is that there are no bargains to be had in Toronto, despite everything that’s happening, prices are still going up. That said, I am seeing a bit of play with some prices. Depending on the price point, homes are selling at list or slightly below. A lot of condos are still selling for over asking although the number of sales being recorded on the MLS systems is less and less as we get further into April.
It’s all a bit confusing and nobody can predict what is going to happen down the road. I was expecting to see far fewer listings coming to market in April but there is still a steady stream of new product being posted daily on MLS. When all this is over and the market returns, I don’t think we’re going to see a big drop in pricing or activity, although there may be a shift in the rental market.
I have clients that had purchased properties to rent on Airbnb, but with the tourism market gone and the City of Toronto bringing in new rules, we’ve been having conversations about rental rates for a full year and what they should be expecting. More and more property owners are going to be doing the same; converting Airbnb properties to long term leases.
So what’s happening right now? The province recently released an updated list of professions considered essential services and real estate agents are still on that list.
That said, as with my previous blog, if a seller is considering putting a home on the market, they have to go through a needs analysis. If they need to sell because they’re relocating (although is anybody relocating right now?) or if they have already purchased a property, they may have no choice but to list.
Not only are brokerages advising people not to sell if they don’t have to (as am I), listing a property now is a bit riskier for health reasons obviously. Strangers will be coming through your home so it has to be disinfected regularly and you will be required to sign a disclosure about the risks, releasing the listing brokerage of any liability. This is on top of the regular cleaning and maintenance required when your home is for sale. There’s also a risk of someone else’s deal not closing, creating a domino effect.
If you’re a buyer, many home inspectors are not working and I absolutely do not recommend buying a property without an inspection.
I’ve had a couple of buyers inquire about seeing places…. it’s still possible to view property but as a whole, the industry is discouraging any face-to-face meetings and real estate boards are asking buyers to really narrow down their choices to one place by reviewing all the online marketing collateral for properties. If a buyer is truly serious, I’m happy to go see a property with them, maintaining a safe distance and not touching anything. There are many cases where Brokerages or their sellers aren’t allowing showings at all and in some cases, not without a negotiated Agreement of Purchase and Sale containing a condition upon which the buyer is allowed to view the property. Interestingly, some condo buildings are not allowing Realtors to show suites at all and only letting residents in.
Either as a buyer or a seller, it’s a little more challenging to be in the market but the market is still moving; albeit at a different pace and with a few more hurdles.
If you have questions about what’s happening in Toronto real estate or just want to catch up, please get in touch!