Good Morning all! Posted March 24th, 2020
Hope you are staying healthy and mentally strong throughout this crisis!
3 Topics I will cover in this article...
1. Sold statistics from this past week for Oshawa, Clarington and Whitby (please message me for your GTA specific neighbourhood if needed).
2. A discussion I've had with my team and other top Realtors in our area to get a feel for the market on the ground level dealing direct with buyers/sellers this past week.
3. Predictions about what will happen in the local market in the new COVID era we are in and on the week (s) ahead.
RECAP THE WEEK
We are in our second week since COVID-19 has really been heralded by our country as a serious health issue and immediate action was deemed required.
Trudeau's announcement on the 16th of March to shut down non Canadians entering the country via flights. Doug Ford followed that evening by requesting non essential businesses to work from home and finally last night, one week later, Ford has now enforced all non essential business to be shut down in Ontario. I think many of us have been in shutdown mode for a week and half so announcement doesn't change a whole lot for most of us.
1. SOLD STATS FOR MARCH 16-23RD
Oshawa Sold Listings
93 SOLD LISTINGS
53 OF 93 SOLD OVER OVER LIST 56%
57 SOLD LISTINGS
38 OF THE 57 HOMES SOLD OVER LIST PRICE 66%
Clarington Sold Listings
59 SOLD LISTINGS
24 OF 59 SOLD OVER LIST PRICE 40%
45 SOLD LISTINGS
24 OF 45 SOLD OVER LIST PRICE 53%
Whitby Sold Listings
71 SOLD LISTINGS
45 OF 71 SOLD OVER LIST PRICE 63%
41 SOLD LISTINGS
29 OF 41 SOLD OVER LIST PRICE 70%
Conclusion on pricing, it appears to have dipped 3-4.5% in the past week as expected! Sales have dropped by nearly 40% as well. This week's sold volume will likely drop another 10-20% from last weeks figures.
2. DISCUSSION WITH MY TEAM AND OTHER TOP REALTORS IN OUR AREA
After a discussion with many colleagues and my own personal experiences with clients this past week, here is what we have experienced:
Unless a buyer is forced to buy right now (gave notice to vacate to their landlord, sold house, job relocation etc.) they are sitting on the sidelines and have gone silent on their search. They don't want to jeopardize their health by visiting homes, coupled with having the feeling that prices are about to drop. Searching for a home has taken a back seat to more important issues.
Alternatively, there are still active buyers who must buy by a certain deadline.
That is why you see the scorching number of houses going over list price above. Although from the homes collected in the data, it appears over 30% of those solds were data trickling in from the conditionals from the week before. I'm not totally convinced those numbers last week paint the true picture of what is happening.
This week will be a great indication of the immediate impact the virus has had on the market.
Residential Investor buyers also have gone quiet for the time being. They too, are waiting for prices to drop.
Similar situation to the buyers. Only listing if required. We have had many clients decide to hold off listing until the lockdown is over. Although some are still going ahead as planned because they have a pressing reason to do so.
Keep in mind, sellers make the decision of selling weeks before a home hits the market. Homes you see on the market this week, the decision was made pre virus lockdown to sell. Id say 1/4 of these sellers are going ahead and the other 3/4 are holding off, which is consistent with both our clients and realtors polled.
3. PREDICTION MOVING FORWARD
The next two weeks
We will experience very low inventory with lack of new listings coming onto the market, although buyer demand will also be moderate to light.
The drop in interest rates is still fuelling very active buyers to want to purchase as their affordability has gone up.
Prices will remain steady where they are today with a slight 2% drop, with less listing agents holding offer presentations. During an offer presentation pre virus lockdown early March, it would be common to receive 5-10 offers on a home in the first time buyer range $400-600K, that will dwindle down to 3+/- in the coming weeks, leading list agents to price at market value and accept at anytime.
We have already witnessed that yesterday and this am on MLS with less agents holding offers than last week, and less listings coming onto the market historically speaking for a Spring Monday/Tuesday on MLS.
The average first time home buyer cycle is 18 months from the time they decide they want to buy a house, pick an agent/loan approval etc., to the time they actually pull the trigger and purchase one.
Only the buyers in the final stage of their cycle are still active, the others who are still in pre lim stage, have dropped off from viewing properties but will emerge once again post lockdown.
Post COVID lockdown (likely 1 month from today?)
The real estate market when we get back to "normal" post COVID lockdown is going to have a flood of new listings of sellers who waited to sell.
Although buyer demand will be there to absorb these listings.
It will be a balanced market all Spring/Summer. Prices will remain steady from their 2-3% drop from todays figures. Total dip from the peak of last week will around 7%. Months of inventory should get up to around 4-5, indicating a balanced playing field.
Historic low interest rates, low inventory, buyer demand, coming out of a quiet year in price increase in 2019 would be a recipe for an inferno of sales and price increases. We were seeing this before the pandemic hit.
Thanks for tuning in, I will put this same report out next Tuesday and the following Tuesday after that to keep you updated in this changing landscape.
There is so much information floating around on Social Media, I figured I would give our team clients/customers actual sold data and what is happening with Durham Region buyers and sellers.
Also thank you to my colleagues and team members, giving me their time to provide first hand insight into their experiences during this unprecedented time we are in. My team and I would love to hear your comments on where you expect the market to head in the coming days/weeks/months.
Brent Foley, Broker of Record
TFG Realty Ltd. Brokerage