Business As Usual?
Business As Usual?
Not really, but I can tell you that there are indications of ‘normalcy’. As the prospect of pandemic restrictions becomes more of a reality, I am seeing glimmers of hope! Whew…it’s been a long 8 weeks of isolation. I am receiving inquiries from prospective buyers and in fact, this week have helped two parties with offers. On the listing side, I am actively working with many Sellers who are busy getting their homes ready to list once the province loosens our mobility restrictions. Listings have dwindled over the past few weeks and if you compare the numbers for April for the City of Guelph, they were 154 compared to March’s number of 297 new listings. The number of properties having list price reductions increased over the past few weeks as well.
Moving forward, we will see a “’New Normal” for acquiring real estate. The challenges posed by the pandemic have upended the traditional business model for buying and selling that we all have been used to.
Video-Only Home Tours: Public open houses are not allowed in Ontario and are strongly discouraged in other Provinces. Buyers and Sellers are instead relying heavily on virtual tours, which let people see inside a home via online video. We are also seeing some clients that are willing to negotiate without ever stepping foot in the property. We have always believed in professional photography and floor plans – they are a great way to help sell a home and provide buyers with as much information as possible.
Drive-by Home Appraisals: A home appraisal is usually required to get a mortgage and normally, an appraiser would tour the home to assess its condition as part of the evaluation. The new normal has appraisals done remotely with appraisers utilizing other standards to evaluate.
Unaccompanied Home Inspections: Many home inspectors have strict COVID protocols in place which means going through homes by themselves and sharing photos, videos, and reports with clients remotely. If you’re buying a home, make sure nothing gets lost in translation. Review the materials carefully and ask questions about anything that’s unclear. Home inspections are still something that my team and I recommend and we really don’t want to see you not have one done.
Coronavirus Clauses: Home purchase agreements usually outline penalties for not meeting deadlines or for canceling a deal but now many real estate agreements include clauses to shield buyers or sellers in case they have to delay because of coronavirus-related issues. These addendums may address such things as the unavailability of inspectors or appraisers, a buyer’s inability to travel to sign documents, or business or government closures. More clauses to the ever-increasing length of offers.
Quieter Closings: Traditionally, closing paperwork was completed in your lawyer’s office with papers being signed and keys exchanging hands. Now, for the most part, closing paperwork is being done electronically with video Zoom or FaceTime calls to witness live signatures, scanned or emailed documents, and lockboxes being left on properties with keys inside for Buyers to access on closing.
These are some of the new methods of transacting real estate business in Guelph. In addition to group team and company meetings via Zoom, face masks, protective gloves, Lysol wipes, and hand sanitizer it is certainly evident that a new norm has spawned.
Looking to the future, I see some brightness. Prior to the pandemic hitting we were poised to have a market that mimicked 2017…in a nutshell, a banner year. With uncertainty looming, buyers essentially put themselves on the sidelines to wait things out but I believe they will be back once this environment eases. Yes, there are sectors in our community who have been hard hit financially like the restaurant, travel, and tourism industries and that will definitely have some effect on the market but we still have the benefits of ultra-low interest rates and lower restrictions on borrowing. I know it is hard to believe but in some cases in Guelph, we are still witnessing multiple offers with selling prices landing well above asking. If our restrictions ease soon, Royal LePage Canada has forecasted that we may even see a 1% price increase in home values!
So, it may not be all doom and gloom but time will certainly tell. Perhaps all of this chaos has helped make the process of buying and selling homes more efficient… and that is a good thing. It sure is a far cry of the way we did real estate when I started 32 years ago.
Feel free to reach out if you have any questions about our market. I am happy to help answer your questions, help you prepare your home for sale, and shed some light on when is a good time to buy.