With the economy uncertain because of the COVID-19 virus, there is much speculation on how it will affect the housing market, especially in what has been traditionally some of the busier months in the year.
What we know is that has been a sudden drop in economic activity across the country and it will likely continue for the next couple of months. This will likely affect the housing market in the next little while.
The reality is that nobody knows what is going to happen but there is reason to be somewhat optimistic.
According to the Real Estate Board of Greater Vancouver, home sales totalled 2,150 in February this year which was a 44.9 percent increase from the transactions made in February last year.
February sales were also a strong 36.9 percent higher than the number of homes sold in January which is 42.4 percent higher than January 2019.
However, the spread of the coronavirus will probably put a damper on the stats for March and most likely April and May as well.
Thankfully the B.C. government says construction sites can continue to operate despite social distancing measures meant to curb the coronavirus pandemic which means that major building projects are still going ahead. But this could change at any moment.
The Pros And Cons of Buying Or Selling
Buyers are still making offers, especially in the entry-level priced homes (under one million) which means it may be a good time to buy if you have job security and are very sure of your mortgage qualification.
If you’re an investor who can hang tight for the next couple of months with the uncertainty, you might think about jumping into the market.
Although the negative impact of COVID 19 might last through the next three months or so, conservative expectations are that the market will bounce back this Summer.
Advantages of buying now:
- Less competition and no crowds!
- Sellers may be prepared to negotiate a much lower price ( Re-Sales), Good Buyer Incentives at some new developments (not all).
- Historically low-interest rates.
- Realtors and Developer Sales Teams are being very creative and accommodating to help Clients through their purchasing process whilst reducing their exposure to Covid-19.
- Contracts can be signed digitally. Realtors will do phone or video conference calls as opposed to meeting in person, whenever possible.
Challenges of buying now:
- Harder and possibly impossible in some circumstances to arrange in-person tours of properties or sales centers. Alternatives are video tours, virtual tours and photos.
- There will be more buyer vetting: sellers and realtors will do more vetting of a Buyer’s capacity to buy and level of interest before arranging in-person appointments and writing offers.
- Market uncertainty. Although the market was very brisk in the first part of 2020 and expectations were that there was going to be a hot Spring market, we have no way to predict the short term fall out from the Covid19 Virus and its long-term economic impact to our local economy.
- Potential closing complications: Due to possible quarantines or sickness caused by covid19, the Vancouver real estate board is advising that closing documentation be prepared and signed by Buyers and Sellers as early as possible in the process after subjects are removed, just in case the parties to the contract or their lawyers or realtors get sick or are quarantined.
- Potential delays for presale completion if construction is delayed.
We know it’s a challenging time for everyone and we hope that it won’t last too long. Nobody knows what is going to happen with the market but we are hesitantly optimistic that the housing market won’t get too affected by the coronavirus and the stagnant economy.
If you have any questions about the housing market or whether you should be buying or selling, please give us a call and we’ll give you an honest opinion.