How’s the local real estate market?
Covid-19 affecting the market? Is this a good time to sell or buy?
Many of you are wondering how Covid-19 is affecting our community home prices.
To be truthful, no one knows what the outcomewill be because it is still too early to know. What I do know, however, is that there are still people who are moving and looking to buy or sell a home. Some may have pressed the pause button, while others are adapting to the current circumstances as they continue on with their search or sale of their home.
I would like to provide the highlights from a survey done by Point2 Homes which is a real estate market website where buyers can search properties for sale. Point 2 Homes conducted this survey from March 23rd to 25th and surveyed 5,000 visitors to their website. The key takeaways that I found interesting were as follows:
- 50% will continue their search for a property however will now focus more on a digital online search
- 60% would still like to buy in the next 12 months
- 12% are actively searching to purchase in the near future
- 44% are keeping an eye on the market
- 20% said they are putting their search on hold
- 27% were undecided on what to do
This tells me that buyers are currently cautiously optimistic in the current real estate market. I know in the last 2 weeks the number of showings have decreased with everyone complying with the Public Health and Government recommendations. However, the online hits or number of people looking at properties online have dramatically increased. The graph below from Showing Time shows how the number of showings have decreased by 80+%.
Now let’s review the local community statistics for the month of March 2020 compared to 2019.
The number of Months of Inventory is a metric that indicates the supply and demand equilibrium in the housing market. This ratio represents the number of months (or days) it would take to completely sell the homes that are currently listed for sale, based on the area’s current rate of sales activity. Typically, a balanced market has about 5 or 6 months of inventoryon the market. This indicates that the supply and demand for properties is fairly equal. In a seller’s market, there are less than 5-6 months of inventory on the market, therefore the fewer months of inventory, the more competitive the market. As you can see, most of the communities in our area in March of 2020 were in a seller’s market compared to a buyer’s market of last year.
The Sales to New listing Ratio is a metric that I use to assist in understanding if we are going to see a shift in the market or in MOI. If more properties are selling than are being listed in a given month, and if this continues, it will ultimately reduce the number of current listings available.
The last metric we are going to look at this week is the average sale price in each of the local communities. The year to year variance compares the home price fluctuation in a given market.
The local real estate market was off to a great start for 2020 and March statistics are definitely better than those of March 2019. There was, however, a difference in the last part of the month which is not as obvious because of the momentum at the start of the month.
The real estate market is definitely changing! There was a slow down of the market, especially the last week of March as we saw a huge decrease in the number of showings, the number of new listings as well as the number of sales. This is a result of the new measures that were announced by the Ontario Government. Yes, Real Estate is considered an essential service, but it is not business as usual. Real Estate Offices are closed, agents and staff are working from home. The profession has increased the use of virtual and digital tools such as virtual tours, virtual showings, and virtual open houses, video conferencing and electronic signature programs. Recommended guidelines are no physical showings or meeting with clients unless absolutely essential and done with health guidelines taken into account, and open houses have been prohibited. Most real estate brokerages have instituted polices for any showings and home inspections that are classed essential, and screening procedures need to be done. This declaration was done to ensure homeowners with pending closings (those individuals who have bought and need to sell or vice versa) are still able to transact. The real estate market is continuing, just at a reduced pace.
No one knows how long this Covid-19 pandemic will last, and in turn, this slower real estate market. What I do know is that there will be a pent-up demand when life starts to return to a more normal pace and the markets will rebound. This has been the case after previous real estate market slow downs, which we will look at next week.
Stay tuned for next week’s update on our local real estate market during these unusual times. If you would like to be kept up-to-date with the real estate market as it pertains to the coronavirus, sign up below.
Written by Karen Cox, Broker of Record Sea & Ski Realty
Stay Up To Date
Contact us below for updated information or to speak to a Team Member about your Real Estate needs.
Leave a comment to let us know where you think the market will go.