Ok so maybe it’s too soon to stop worrying altogether. Although, after many weeks of uncertainty, it looks as though economists are sallying forth with fresh predictions about what a recovery will look like.
After a very strong first quarter in housing, all bets are off for the next 12-18 months. Even as the various levels of government start easing distancing restrictions, consumers are likely going to be much more apprehensive about the process of shopping. This may mean an increase in available listings on the market – at least relative to the number of active buyers.
The number of listings may also be influenced by forced sales. Many of the businesses most hard hit by the pandemic will be back in operation at some point. Although, there are significant numbers that will be forced to close down entirely. The knock-on effect on the unemployment rate in Canada may be lasting. A certain number of those unemployed will be forced to sell their homes without having an income to support their mortgages. Banks can not/will not defer mortgage payments indefinitely.
Some market watchers project as much as a 5-10% price reduction in the GTA. This is good news for buyers and tough news for sellers. That said, the largest impact will be felt near the top of the market. The affordable zone where the majority of buyers are shopping will not be as hard hit.
Long story short: it’s going to be a wild ride for both buyers and sellers in the coming year. There will be large swings of supply and demand.
For those buyers who are gainfully employed without any risk of unemployment, this may be an opportunity. They will be able to make offers without entering into a bidding situation. With a number of buyers on the sidelines and some listings sitting on the market longer than expected, it may be a good strategy to keep your eye on the market and pounce when the right listing pops up.
For those of you hoping to sell your existing home and buy in the near term, now would be a prudent time to reconnect with us to discuss how the effects of COVID-19 may impact your plans.
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