A Returning to Normal
Nothing seems to affect Behavioural Economics as much as residential real estate. This is not surprising given that shelter is one of the humankinds’ basic needs in sustaining life. Add to that that a home is where we make and raise our children, cohabitate with our significant others and spend the vast majority of our lives.
Therefore, it is no wonder that the residential real estate market has been on a roller coaster ride like never before, given the pandemic.
People tend to overreact when unfamiliar situations present themselves. Additionally, people tend to act in a “herd mentality” in general. There are lots of examples and explanations of why this occurs which I will not delve into here.
But the fact is, the pandemic has caused these wild swings in the real estate market. However, the recent stats provides evidence that the roller coaster ride is coming to an end and carefully get off.
Do not get confused looking a year-over-year stats to glean any noticeable trends as 1 year ago the roller coaster ride (i.e. pandemic) was in its infancy.
Rather, it is comforting in my opinion, to see things slowing down. Buyers are again taking at least some more time in looking at housing options before making a decision. This is rational and we want a rational marketplace. Sellers need to realize that houses are not going to always sell at multiple offers and price and market their properties accordingly.
Buying or selling real estate is a big decision and should be taken with care and careful consideration. Time is not always of the essence.
Breath, relax, get fully vaccinated, enjoy some well deserved time with your loved ones this summer and look at your real estate needs with your eyes wide open, thinking medium to long term.
Thankfully, we are returning to a “new normalness”.
I would be remiss if I did not also share the graph below that I saw when I was listening to Benjamin Tal from CIBC give a presentation on June 17, 2021.
This slide shows how the overall economy has quickly adapted after the devastating 1st wave of the pandemic. As you can see, the 2nd and 3rd waves have barely caused a ripple to the economy. That is not to say that industries (especially the service industries) and people have not been negatively affected. Rather, the graph shows how we as a society have adapted. Lastly, it is worth noting that we could never have adapted so quickly without the advent of the digit world in which we now reside.
Stay Positive & Test Negative 🙂