What Realtors think about Covid-19 impact on the Real Estate Market?
Nobody knows for sure what’s going to happen with Vancouver Real Estate once we open the doors for business in May or June. The bottom line is that this Market was incredibly hot going into mid-March. Now many Realtors put everything on pause. Is the Market will be the same as it was prior to Covid? Probably not, but I think it will be pretty strong for a number of reasons – low inventory, low-interest rates, 3 Buyers for very Seller. I do not think we have too much panic here. It will take some time to pick up to its full speed again, but after that the business will be as usual. But if it drops 10%-15%, use it as a Buying window, especially if you are planning to hold that property for a while. As a long term investment Real Estate is very safe, always recovering, and go up in value.
In March 1 million jobs have been lost, which is painful. I think it is going to get worse in the short term.
The big difference between now and 2008, is that now we know when we will come back, most economists are thinking a year from now, when the vaccine will be implemented. But in 2008 we had no idea. July and August is when we start to see the beginning of the recovery. The good news is that some provinces announced they will slowly start to open up in the middle of May.
In the last couple of days, we see the rates are coming down and they will be low for quite some time, which is very good news. It is a positive market for restructuring debt, and it will give us that continuous push that we’ve seen at the beginning of spring.
Also a lot of people have been requesting to have their mortgage payments to be deferred and most major banks are compliant with that up to about 6 months. Couple things to keep in mind. Obviously, if you have money continuer to pay, but if you do not just call them, they are approving the mortgage deferrals for everybody, very simple process. You still gonna pay the interest, tied up to your mortgage at the end of the term. So it is not free, but it can give some people a break, while you are on a break! The hardest part is just trying to get through. They are overwhelmed with the phone calls right now, for example Scotia Bank averaging 20,000 calls a day! But most big banks adopted technology very quickly and you can do mortgage deferral through their website as well.
Bank appraisers are working with some adjustments to their process. They are not allowed to go inside if the property is occupied. They investigate the property by pictures, videos and they drive by the neighborhood as well.
Lawyers are more flexible with their working process. Some do zoom calls with the clients to go through the mortgage documents and e sign the documents. Some still have meetings in person with some safety measures.
Most of the deal that has subjects removed are completing, banks working hard to put those deals through. Sometimes we see challenges when the property is tenanted and the tenant does not want to move out and you can not evict them as well during this emergency time. All Notices of Vacant possession given after March 15 not legal. In those cases we trying to move the date of possession with everybody agreement.
If you pre-approved for a mortgage and lost your job, the bank most likely won’t fulfill the pre-approval, so maybe it is better to start your home search when the times become more clear.
I would like to share the results of the survey that was recently held by REW. Around 640 realtors with experience over 10 years participated in it. So those who have been in the industry and know what they are talking about.
Let’s look into listings impact. 92% are currently experiencing a negative impact on New Listings.
44% have seen a very negative impact and 48% have seen a negative impact. There is a slight improvement in the expected impact of 34% from very negative to 56% negative. They also reported that 40% of Sellers have chosen to withdraw a listing.
Let’s look at the Sales impact. 39% reporting lost Sales as a direct result of Covid-19.
47% have seen a very negative impact, while a further 44% have seen a negative impact on their sales volume. 61% reported that they had not yet lost any Sales as a result of the crisis.
Let’s look into Impact and Recovery time. Direct impact is expected to be between 3-6 months, with an expected recovery of between 6-12 months.
51% believe the direct impact of the Covid-19 will be over pithing 6 months. However, a large portion of 49% realtors believe we may still be feeling the direct effects beyond 6 months.
The vast majority of 63% realtors believe the recovery will take anywhere between 6-18 months to be fully realized.