“Health Crisis. Not A Housing Crisis.” I heard that expression early in the pandemic. I was fascinated by the interpretation at the time. It was late March and we had entered the second week of our ‘locked-down’ reality. None of us had any concept of what was happening and what our world would become. All we knew was there was this new Coronavirus and it was changing our lives.
A month later, a well-respected Canadian economist stated, “Unlike any other economic shift that we have seen in the past, this one has an endgame. A vaccine."
The above statements allowed our team to maintain perspective and calm throughout the past year. Both statements hinted that irrespective of our current reality, remaining focused on the long term would allow us to guide our clients toward their best real estate decisions.
And what a fascinating year in Real Estate it was.
It started strong.
January through mid-March saw reasonable price gains across all housing types. The buyers, long sitting on the fence, came back determined to buy. As is the norm early in the year, inventory was low. There were more buyers than active listings. The bidding wars were back.
Everything was normal. Listing inventory was catching up with buyer demand. Our market was behaving like every other year.
The NBA shut down. The NHL shut down. The PGA Tour cancelled a tournament. Schools were shuttered for an extended break.
And in Real Estate, activity dropped. Listing inventory came to a stand-still. March Break – the unofficial start of the normal 'Spring Market' – was incredibly quiet.
Mid-March to early May, when the inventory would often rise, we saw almost no activity in the market. Listings dropped. Buyer activity dropped. Sales plummeted.
Mix into this an unseasonably cold month of May. Optimism was almost non-existent for many. A pervasive sense of gloom seemed to hang over most aspects of our lives.
And then…. late May.
It was warm again. Businesses and restaurants started to open. Patio season was upon us. Golf courses finally opened. And wow. It was like someone had turned a switch on. Optimism reigned supreme.
The buyers flooded back to the market. Suddenly, we were seeing our listings book out of available appointments each day. Offer dates were the norm for most listings yet few, if any, actually made it to the offer date. Buyers and their Realtors were tossing ‘bully’ offers like confetti. Houses were on and off the market in a matter of days. In some cases, a matter of hours.
The challenge was that listing inventory never caught up. And for the rest of 2020, inventory remained lower than normal while buying activity continued to rise. Couple this with interest rates dropping from what was a 5-year fixed rate of 3.25% down to as low as 1.5%. Is there any wonder our markets surged?
So where to from here?
I have maintained that real estate has defied all logic of our current reality for most of 2020. Consumer confidence seems artificially higher than it should be. There is so much uncertainty in our world and an economy sputtering along. Yet, optimism remains strong.
All I can do is reflect back on those statements I heard. This crisis has an endgame.
The year ahead should likely continue strong in the housing market. Interest rates will remain incredibly low for a long time to ensure our economy can re-build. Over time, the vaccine will work its way into our lives. When things do get back to a 'new normal', and immigration again swells, our prices will likely continue on their bullish run for quite some time.
As always, we would like to remind you that everyone’s goals are personal to their situation. All decisions should be made after careful discussion and planning. We are committed to helping you make the very best decisions possible with the information at hand. Assisting you and your family move forward with confidence is our primary focus.
Be well. Stay safe.
CURIOUS WHAT YOUR HOME IS WORTH?