The month of April has given us our first full month of statistics on how the COVID-19 lockdown has effected the Greater Toronto real estate market.
The results clearly show that we have effectively entered a “pause” in the marketplace. Listings and Sales are down by 70% overall.
This reveals several trends:
there are deals still happening albeit at a much slower pace. Further, I would suggest that these transactions are either ones that we planned/started pre-COVID and also transactions that for various reasons needed to occur (eg. someone moving to Toronto. someone who had already sold their home and needed to find a new home).
On a positive note, selling prices generally stayed in line with last April’s selling prices. That is, there were no big overall “price adjustments”.
What these stats indicate is that the vast majority of buyers and sellers stayed on the sidelines during the lockdown. This is exactly what we should have been doing, so kudos to helping to flatten the curve.
Extrapolating these numbers further with an eye to the future of what we can expect with real estate values is not going to be pretty.
We are not in a normal operating free market economy. With the banks agreeing to defer mortgage payments currently, we are not yet seeing the true impact of the economic deterioration hitting the real estate market. But, when these mortgage deferrals expire, you can certainly expect to see a great number of homeowners needing to sell. Unemployment is the kryptonite to real estate values and unfortunately, we already know that job losses are significant. The mortgage deferral program was a necessary intervention by the government but it also effectively just “kicked” the day of reckoning down the road a few months.
Hopefully, it will provide some homeowners with time to adjust to the new reality but alas, there will be many who simply cannot adjust to our new and lesser economy and will need to sell their homes.
We are advising anyone considering to sell their homes to do so sooner rather than later as we fully expect values to take a hit in the coming months and years ahead.
Sorry, we do not have better news to report but we believe in being forthright and honest in our opinions of the real estate market.
Stay Well, Stay Safe and Breathe,…..this too shall pass.