Written by: Mark Salerno (Started April 22nd, 2020)
Well, I think it is safe to say that COVID-19 has affected everyone in one way or another. When talking about Real Estate, where should I start?
COVID-19 aka the Corona Virus has put a stop to most people‘s normal daily activities and duties.
Real Estate is deemed an essential service here in Ontario. So one would think that it is business as usual. Right???
Absolutley not. It is anything but normal. Yes, you can still buy or sell a home. You can still rent/lease properties. So you must be thinking why is this guy making a big deal about it?
How about I start here. March 13th, 2020 was the last day that my office doors have been open. Since that day my assistant, support staff, and personal videographer/editor has been working from home. Including Myself and my Sales Team.
I am literally set up in my dining room staring out my front window as I sit here and write this. I brought home all of my computers, media equipment etc on March the 16th because I knew this wasnt going to be a “few weeks” type of deal. The only time I go into the office now is to check up on our office fish tank or to pick up mail.
So what else has changed or been affected?
TRREB (Toronto Regional Real Estate Board) for the first time ever is allowing members to post listings onto the MLS with the ability to not allow physical showings. Prior to COVID-19 if we uploaded a listing with a note saying “no showings till” we would get flagged and must update listing within 48 hours or be subject to a fine.
Does that mean that you can no longer view a property in person? Not at all. It is totally up to the home owner if they want to allow physical showings or not.
Are “Virtual Showings” a thing?
3D Tours aka “Matterport or iGUIDE”
We have always believed in having a very strong marketing package for our properties and now more then ever this key to success. 3D Tours have been around for a while now. We have used them on many properties in the past, and to be honest it was mostly so we can get a generated floor plan from it. Yes, it also gives the ability to tour the space in 3D but prior to the virus people would just watch the video tour, look at photos and book in an appointment to view the property.
The problem now, a large number or buyers do not want to leave the house in general, let alone to go see a home. So 3D Tours are playing the most significant role they have ever played in the history of Selling Real Estate. People for the most part are doing all of the preliminary showings virtually online, and some are even buying from virtual showings.
I think it is a great idea, however if I am a buyer I want to see the physical property. For condos it is much easier and realistic to buy online virtually, houses not so much. Many other factors must be taken into consideration when buying a home.
Saying this though, I believe that every buyer should be reviewing all of the online presentations prior to seeing a home. I can tell you that most buyers in general right now who are booking physical appointments to see properites are VERY SERIOUS buyers.
Here is a sample for those who are not fimiliar.
How Do I Stay Safe If I Need To Go To a Showing?
Safety is the most important thing right now, not only for myself but for my clients and all home owners alike.
I may be excessive but when I go to showings, I am ready!
I always have gloves, lysol wipes and mask ready. When visiting a property we try not to touch anything that we do not need to. I wipe down lock box, key, door handle and bring in an extra wipe to turn on or off any light switches. For vacant homes lights will usually be closed so this is something we need to do.
However for homes that are lived in it is usually normal practice now for the home owners to leave on all lights, and leave all interior doors open so it limited the amount of contact buyers and agents have to make while touring a home. It feels weird but better safe than sorry.
When it comes to showings most offices now require the showing agent and clients to sign and answer questions from a COVID-19 form to ensure the parties attending the showing are clean from any issues.
Has COVID-19 Affected Sales & Pricing?
We are roughly 5 weeks (April 22nd) into this pandemic and it has had a great affect on the Real Estate Market. However, it may not be what you expect.
Sales Price & Amount of Sales are 2 different aspects. The amount of Sales has dropped significantly. I expect to see a minimum report of 75% decline in the amount of Sales happening in April. Its simple and honestly expected. The amount of people going out to see homes in comparison to a regular market would be down close to 80+%. I see it with our own listings, especially in the luxury sector.
However, pricing has and is remaining SOLID!
(Finished Today April 30th, 2020)
The Last 8 days I have felt a significant difference in showings, inquires, and general interest in the Real Estate market. Most of this insight is from personal Listings and Buyers we are dealing with.
We currently have 23 Active MLS Listings ( 6 For Lease and 17 For Sale) In addition, we also have 5 Exclusive Listings not on the MLS.
In the last 7 days on our Listing Side we have 1 “Sold Conditional” Semi-Detached”, We Sold Firm 2 Exclusive Listings ( PH Woodbridge Condo $880,000, 3 Bedroom Detached $1,188,000)
On the Buying Side we Sold a 4 Bedroom Home in Oakville for $1,150,000.
Booked Appointments in the Luxury Sector have been VERY SLOW.
(1.5 Million + Vaughan/ King example)
TRREB has only reported 6 Sold Properties 1.5 Million or more in Vaughan between March 24, 2020 and April 24, 2020.
Hence the lack of showings. I would be very inclined to predict that number more than doubling for the next 30 day cycle.
I am saying this because I have noticed on a personal leverl properties of mine in which had 0 showings during that same 30 day period over the last 4-6 days not only getting showings but also getting many inquiries.
Saying this, I feel very good about the overall outlook of the Real Estate Market. Considering we are going through a “GLOBAL PANDEMIC” the fact that homes are still being bought and sold for top dollar in most cases is great news.It is obvious we will have a much lower amount of sales due to people staying home.
I am telling my Buyers that this is potentially a great opportunity to purchase without competition. We are actually able to negotiate.
Every seller has different circumstances for selling. Unfortunatly some sellers must sell and that is where you can potentially get a much better deal. However I do explain to my Buyers that you must be realistic also as many home owners are not stuck and are being very patient. (Patience pays, literally)
My Sellers understand this also. Patience, especially in the Luxury Market is key. The entry level freehold market if being priced correctly is selling within a regular timeframe 1-3 weeks.
As the weather gets warmer outside this always brings the sprits up of the general public. I like to stay positive in general. My prediction is that we WILL NOT see a major drop in pricing.
We live in the BEST city in Canada. Toronto. The GTA and surrounding areas will always be the number 1 place for immigration in Canada. Toronto is a GLOBAL city. (Shout-out to Drizzy Drake for helping propel us onto the World stage over the last 10 years.)
If you can just eliminate the “short term” mindset/add some longevity to your thinking and be able to maintain real estate financially, you will see also that Real Estate investing here (Ontario/ Canada etc) is going to be one of the safest investments you can make.
Happy Thursday My Friends!
Mark Salerno @SalernoRealEstate