It is the middle of October 2020 and we have once again realized an extraordinary real estate market! Many, many multiple offers, sale prices tens of thousands of dollars over asking price and most offers having no conditions whatsoever has been “normal” for most of the Spring and Summer market.
The big question always is, “Why is this happening?” There’s not one answer and a lot depend on location. Just outside of Ottawa in smaller towns and cities such as Arnprior, Smiths Falls, Perth and others, have all seen an increase in interest and value. The Corona pandemic has forced many people into working from home and have shown their employers that this method of working can be greatly beneficial to all. Many firms have decided to allow and even encourage their staff to continue to work from home either full time or for most of their working day. This has led to a surge in sale of properties that normally would be considered too far of a commute for work.
Within the city, the demand for house is still out stripping the supply although that seems to be changing right now. We are starting to see less and less listing coming on the market asking that offers be held off (no conveyance of offers) and starting to see less multiple offer situations. There are still plenty of multiple offers, but now we may see two or three offers on a property instead of eight to fifteen or more! This is somewhat expected as we move deeper and deeper into the Fall and approach the Winter months. Plus, a great deal of the demand has been satisfied. And there is a significant number of buyers who have just quit the mark out of frustration or affordability. It is still a buyers’ market and will remain so for the foreseeable future.
If you’re thinking of selling or buying, let us help you through today’s market which after over thirty years in the real estate business, has certainly been the most interesting and challenging!
Here we are. The beginning of June and deep into the COVID-19 Pandemic. The Ontario government has announced that restrictions as they are now will stay in place until at least the end of June.
For many people this is bad news. Workers in all industries and professions want to get back to work or as close to normal as possible. For real estate agents the statistics are not good. Residential sales are down 43% and condo sales are down 49% (May 2019 compared to May 2020). These numbers are showing improvement as the combined sales (condo and residential) were 55% lower in April compared to a decline of 49% in May.
There is a silver lining. Prices have increase from 2019. Condo sale prices were up by 15.5% and residential class properties were up 11.2% in May alone. Year to date, prices have increased 13.8% for condos and 17.8% for residential properties. The shortage of new listings and delays in building new homes have cause prices to rise. 2019’s market was supper competitive as almost every home saw multiple competing offers. 2020 has not been as competitive but we are still seeing many, many competing offers. We have heard of up to 20 offers on one home even in this market.
Our summary of the market is this. If you are buying a home, make sure all your ducks are in a row. Get a reputable experienced agent, have your lender pre-qualify you in advance. Be open and honest with both your agent and lender. Make sure they have all the facts so that there will be no surprises when it comes time to put an offer in with no financing condition. Take a good look at the home you are thinking of buying. There’s a reasonable chance you may have to skip a building inspection if you want a shot at that home particularly if you are competing with other buyers. A seller will take a lower offer if there are no conditions over a higher offer with conditions. Be confident that you have a little extra money put aside in case issues with the home do come up after you move in.
If your selling! Well, for the most part, you are in the driver’s seat. BUT the basics still pertain. Keep your home exceptionally clean especially in the COVID-19 era. Check and make sure all your maintenance items are up to date. If there is an issue with your home (furnace or central air not working, sink leaking, roof leaking) and you are aware of these or any defects, you are required to disclose these facts. If it can be proved that you knew or should have known about a defect, you could be held responsible for repairs even after transfer of ownership. Make sure you are readily available to your agent. Make sure you have good access to email as most transactions today are handled electronically due to COVID-19. If your home is for sale do not go camping or to a cottage with no or very poor internet or data connection. Offers and negotiations will be happening fast and furiously.
Need to talk to a pro? Call or write us and we’ll be happy to discuss today’s real estate reality. firstname.lastname@example.org or 613-825-9710 (home office)
As many of us have, you are bombarded with news about the pandemic that is changing the world, at least temporarily. No much is staying the same and it certainly is business as usual in the real estate market.
Sales are down and there is no better way to show this to you that the March statistics below which compare March 2019 to March 202 week by week.(Ottawa Real Estate Board). What you see is the clear affect of COVID-19 on sales.
March 1-7: increase of 5%
March 8-14: increase of 43%
March 15-21: increase of 8%
March 22-28: decrease of 19%
March 29-31: decrease of 43%
March 1-7: increase of 41%
March 8-14: increase of 2%
March 15-21: increase of 9%
March 22-28: decrease of 36%
March 29-31: decrease of 51%
In our branch alone the number of showings has dropped dramatically from 168 showing of properties between March 15-21, 2020 and just 66 showings from March 22-28, 2020. This all points to a slowdown in the market driven only by the pandemic situation we find ourselves in.
And, you would think that prices are dropping like a stone. Well they are not in many cases. What the pandemic has done is created an even large shortage of homes for sale. Many potential sellers have decided not to move forward and wait till life comes back to normal. Builders can only finish homes that have already had their foundations poured. This will create long delays for many new home buyers. These buyers that have a home to sell will now delay getting their homes on the market. So you can quickly see why there will be a large shortage of available homes to purchase.
If your selling it actually can be a very good time, but we only recommend you go to market is you have to. Job transfer, financial issues or other life events may make selling now important. If that is the case the value of your may not have dropped at all and in fact may be worth a little more. In the last couple of weeks we have had a buyer who was in competition to purchase a home and paid a bit over asking. We then turned around and sold that persons home for $15,000 over asking in just 2 days with competing offers.
The buyers out there now are serious. Yes, the number of showings are way down but those buyers who are in the market are not just browsing or “kicking the tires”. They need a home and are ready to buy.
There are lots of thing we do to keep buyers, sellers and agents safe at this time. We can review all of that and much more if you are thinking of buying and selling. Just give us a call or write. We’re here to help!
Will COVID-19 effect real estate? In our opinion the simple answer is yes. We feel and have seen a slowing of the market. Buyers are not keen to go into other people’s homes, Royal LePage has cancelled and will not hold any open houses in the near future and sellers are thinking twice about listing their homes unless they have to.
This will create a situation of leveling out the market. We expect to see less multiple offers so prices may soften a bit. This is not all bad news. Buyers will have an easier time in buying a home at a more reasonable price and yet the value of homes is still high.
Recently we had two of the exact same model of homes for sale. The differences between the two were minor and in a normal marker should have sold for very close to the same price. The first home went on the market just before all the restrictions and closing were announced. That home received 6 offers and sold for $65,000 over asking. The second home went to market just as all the closings and restrictions were announced. That home received three offers and sold for $41,000 over asking, a difference of $24,000 for no obvious reason except for the change in the market in a two week period.
So, if you’re thinking of buying or selling we offer a bit of advice:
- Still a great time to sell with values still strong.
- Good time to buy with the market value of homes stabilizing and even falling a bit.
- Use online views of homes. Today there are great photos of most listing as well as virtual tours. These will give you an idea if a home is even worth visiting.
- If you are listing your home, use an agent that provides professional photos and tours. If you don’t, you’re putting the sale of your home in jeopardy.
- Be smart! If you’re selling your home have hand sanitizer available for visitors and wipe down surfaces such as light switches, banisters and door knobs with a disinfectant wipe of spray.
- Leave all lights on for a showing especially in the even and instruct your agent to tell other agents to leave all lights on and not to touch light switches or lamps.
- Make sure to go out for a walk or a drive when an appointment is scheduled so that you do not come in direct contact with potential buyers.
- Ask that showing agents let your agent know when a showing is finished so you can be informed and return home.
- If you are a buyer do not go to visit a home if you are ill or have just returned from a vacation. You’ll just have to wait and see what homes are on the market after you are clear of an illness or have finished a self quarantine.
LET’S ALL BE SAFE AND SMART! This pandemic will pass. It will take some time as the experts have said but being careful can not only save you from a severe illness but may save the life of others including your own family.
You can still buy and sell real estate. It will just be different and require a “SAFETY FIRST” attitude!
Stay well and stay safe.
Irwin & Mindi Hartman
← Older posts Newer posts →
It looks like we are into another seller’s market for 2020. The predictions are that the numbers will once again keep Ottawa in the Seller’s market range.
There just isn’t enough housing to meet the demand! Even though builders are building at a fevered pace, they are, in many cases, a year or so away from delivering finished new homes. Plus there just isn’t enough home owners willing to or needing to put their homes up for sale.
WHAT’S THIS ALL MEAN FOR YOU?
It depends on were you fall in the real estate market. First time buyers are going to have to come up with excellent financing well before they can even attempt to bid on a home. They should also be prepared for bidding wars. It has not been unusual over the past couple of years to hear of ten, fifteen, twenty or more offers on the same home. And, in many cases, those homes are perfect for and marketed to first time buyers. Once we get into more luxury homes the demand as would be expected cools off but not that much. We still see many multiple offers on $600,000 to $900,000 homes.
If your buying and selling you have the goods and the bad. You’ll likely get much more for your home than you may have thought but you’ll also pay more for that new home and will have to deal with multiple bids. Again, get prepared. You may have to sell your home first and make a double move until your new home is ready or until you can find one that matches your needs.
The best scenario if for those moving to either a location that is not booming or leaving the housing market all together. Maybe you’re retiring and renting or moving to more affordable cities with a balanced or even buyer’s market. Under these circumstances you’ll reap the maximum benefit of this hot seller’s market.
What ever your circumstances are, a real estate professional can guide you though all the twists and turns in this crazy market. Write of call us today. Helping you is what we do!