Brian O'Donoghue

If you’re planning to buy a home in the next little while, you will likely have to do it sight unseen. Just a few days after the Ontario Real Estate Association (OREA) urged its members to cancel all open houses, the group is now urging agents to stop all person-to-person business. That includes “open houses, and in-person showings, particularity of tenant-occupied homes,” OREA said in a statement Tuesday afternoon. “While clients who may decide to host private showings during this time are making the decision for themselves, tenants often have no choice in the matter, putting the health of all those involved at risk.”

As part of its state of emergency, the Ontario government declared real estate an essential service, allowing home sales to continue. The move was made primarily to allow those who have already bought and need to sell or those who have already sold and need to buy, to finish their transactions.

We as realtors have a responsibility to protect our own safety, as well as the safety of our colleagues, clients, and the general public. We must adapt our practices to ensure that our professional activities are safe and comply with all guidance provided by Health Canada, the Province of Ontario and medical professionals.

We are monitoring developments by the hour and changing best practices by the day. If we all stay home like we are told and do as much as we can remotely, we can do our best to flatten the curve and get back to normal sooner. Conditions and government measures are changing so quickly that it’s too soon to tell what will happen with the real estate market longer term.

However, the reality is that the fundamentals of the market, particularly in the GTA and other major urban centres, don’t change; pent-up buyer demand has been slowing building as the supply of available homes for sale remains scant. Due to the limited inventory available, combined with the population growth in Ontario’s big cities like Toronto, we can expect market activity to resume and recover quickly once we’ve mitigated the health risks from COVID-19 and the financial markets stabilize

The Covid-19 has changed the way we live our daily lives, and it has upended countless business sectors, including our real estate market. Real estate agents, buyers, and sellers are struggling to do business when it’s anything but business as usual. This is a day-to-day situation. We are currently living through history. For Canada’s housing market the immediate future is uncertain. We are trying to find solutions in the era of social distancing and mandatory quarantines. However, we are seeing some steady activity as some appear undeterred. In fact, some buyers have taken encouragement from recent rate cuts implemented to combat the crisis. Lower interest rates can serve as rocket fuel for home prices, but that might not likely be the case this time.

It’s the first week of the “new normal” for everyone after it was announced that ‘Ontario is under a state of emergency’ which is currently in effect until March 31st. We are settling in and are adjusting day-by-day. Most real estate companies have put protocols in place.

• Open houses are cancelled

• Strongly advise the Seller to move out during its listing on the market

• One group of buyers at a time and try not to bring your children

• Don’t touch surfaces only if the agent has provided gloves and wipes

• Limit your showings to 30 minutes

Buyers are still out there, but the market could swing either way. If supply falls, prices may be pushed higher. Home sales in the GTA in February were growing by over 40% compared to last year and prices were growing by just under 20%. Even if some buyers decide not to buy right now, we would still have a competitive market with approximately 2.5 months of inventory. Homes are still selling quickly but instead of getting 10 plus offers on offer night, there may only be 1-3 offers. People still need to buy homes to live in and will still buy and sell for the traditional reasons – divorce, death, desire and relocation.

Stay safe everyone.

Stocks have fallen hard in the last couple of weeks, so does that mean Toronto Real Estate is the new gold? Sales of houses and condos for the first week in March were up 47% over the same period last year and average prices rose 18%. Sales are still strong, there are still plenty of bidding wars, and open houses are still busy. There has also been a sharp decline in interest rates for all kinds of borrowing including mortgage rates. These lower interest rates have sent the mortgage industry into a frenzy, as buyer ’s race to take advantage of cheaper loans. A five-year fixed-rate loan is sitting as low as 2.29%, close to the record low of 2.09% offered in November 2016, after oil prices crashed and the central bank had to cut rates to stimulate the economy. But could these rate cuts be a warning sign about a lack of security for jobs and incomes? The one good beacon of hope is the health crisis appears to be fading in China and South Korea, creating the possibility of future positive surprises.

The Toronto Real Estate board announced the stats for the month of February, and it was all positive news.

For the City of Toronto, the average sale price was $989,218 up 17% from a year ago. The number of sales were up by 31% and new listings were up 6.6%. Double-digit average price growth was experienced for most major segments with detached homes leading the way up 14.4% to $1,485,304.

The condo market is still going strong. The average price for a condo in the City of Toronto is up 18% to $722,675 compared to last February which was $612,488. As market conditions tighten, competition between buyers has clearly increased. Last week 71% of condos sold in multiple offers. That’s the highest percentage we have seen in awhile.

 Businesses all over the world are becoming increasingly concerned about the Coronavirus’s impact on various markets. Could our real estate market be affected? Toronto was one of the first places in Canada to experience Severe Acute Respiratory Syndrome (SARS) related emergencies in 2003. Interestingly, housing sales data from 2003 in Toronto show no apparent signs of suffering. Sales increased in units from the previous year, and similarly, the average sale price increased during the same time period. Coronavirus to date has already claimed more lives than SARS did in 2003. The uncertainty about how long the threat will last and how quickly it can be contained will weigh heavily on the markets. Since the epicentre of the breakout is far from Canada, it is probable that the adverse impacts on Canadian markets will be moderate at worst.

The market continues to pick up steam with freehold listings doubling what they were the previous week. The high-end luxury market saw 30 new listings above 3 million dollars come to market last week with the central core leading the way. But the number of sold properties was down 16% week-over-week. Buyers are circling and they are willing to move quickly when they see a property that ticks all the right boxes. There seems to be an exuberance in the office this week and no doubt that the market is starting to take off.

The condo market took a different direction and saw a 21% drop in new listings last week, and no change in the number of condos sold week-over-week. Condo sales continue to sell above their list price with 67% of all sales happening above the asking price. The majority of sales last week were in the $499K to $700K price range, which is an indication that there are plenty of first-time buyers out there.