COVID and the real estate market so far

Real estate markets across Canada have been experiencing unprecedented price growth since the pandemic started.  Record low interest rates and travel restrictions meant more people shifted their attention to homeownership.  Some of the sale prices we’re witnessing in the Halifax area are shocking, even for someone who looks at prices every single day.  A Bedford townhouse that sells for $735,000.  A Hydrostone Row house at $750,000.  While we in Nova Scotia baulk at these prices, those from other areas of the country like Ontario still see our little province as affordable.  Those who own a home and are looking to upgrade at least have solace in knowing their house has appreciated as well.  However, I feel horrible for first time home buyers in the current climate. They’ve yet to get on the ladder.  High rents and aggressive price growth mean that many are not able to save their down payment fast enough to keep up with the market.

April Stats

The average price of a single family home in the Halifax Regional Municipality is now $476,000, a 37% increase from April 2020.  The number of homes for sale is down by 68% while year to date sales are up by 49%.  I have data back to 2008.  For April, 756 sales represents the most we’ve ever seen over that period . The average time it takes to sell a home is down 66% and sellers are now on average, getting 115% of their asking price.  

How has another COVID lockdown affected the real estate market?

Dr. Strang has informed us that home buyers no longer have the option to travel between communities to look at homes.  Realtors are able to attend on behalf of the buyer to complete a virtual tour, as long as it is deemed essential. I.e this is not the time to be looking for a cottage property or investment.  Not everyone is comfortable with purchasing a house without physically stepping inside.  As such, the number of accepted offers in the last two weeks has dropped by 34% in comparison to the two weeks leading up to lockdown.  The number of new listings has also dropped by 35%.  Things are taking a brief pause from the relentless pace of the past year.  Recently, a handful of our buyers were able to get offers accepted.  After working with them for several months, the slow down is likely the reason they were successful.  Buying via a virtual tour comes with inherent risk, but also with less competition.

What’s next?

We have a number of listings where we’ve chosen to delay the start date.  I’m confident that Nova Scotians will do what we’ve done several times already - lockdown early, follow the guidelines and beat the virus back.  We’ll continue to play our part, only conducting business that is essential.  Our sellers don’t need to risk having people through their homes at the moment.  Competition is down as well, meaning they would likely sell for less than when restrictions lift.  When they do lift, pent up demand will almost surely mean the market continues its relentless march.   

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