Coronavirus And Real Estate

Sorry to add to the conversation that everyone is talking about these days, but it is a hot topic and whether you like it or not, the Coronavirus is having a big effect on a variety of items these days, just ask anyone playing in the stock market!

But is it going to hit real estate, and if so, how?
Well that question is twofold.

  1. Is it going to affect Real Estate activity?
  1. Will it put pressure on the market to shift downwards?

Well in order for two to happen, then number one must happen first and for a sustained amount of time. It’s pretty early stages right now but this week is when things really hit the fan with the border closures, surge in number of deaths and so on. The weekend of March 14 and March 15 for Open Houses will be a real telling point, as they are our first open houses following the actual ‘pandemic’.

As of yet, we have personally not had any clients outright stop their search or decide not to sell because of the virus. Arguably people sell and buy for specific reasons and will a virus outbreak change that is very subjective.

In order for the virus to really affect our market with downwards pressure, we need to see that activity slow down tremendously. Currently we are outweighed heavily on the demand vs inventory. With all that has happened, should the virus scare people then it will likely drive down that demand. Now that demand needs to keep coming down for 3-6 months before we see things start to decline into a balanced market, that needs to then continuously happen for another 3-6 months to push us further down into a buyers market. So all in all we need another 6 (at the earliest) months of substantial pressure to 12 months in order to see that put us in the other side of the market.

Real Estate works a lot slower than the stock market and it’s cycles take longer to go through. So a lot of the comparisons of what has happened in the stock market vs. Real Estate are two very different scenarios.

At this time it’s really too early to tell what direction it will take, but we are hoping in reading the above, you are able to see what the cycle needs to look like for change to happen. It’s likely we will do another update later in the year to gauge where we have been/are headed next with the virus!

For those of you out there looking at homes now, take the necessary precautions including hand sanitizer, being careful of what you touch, trying not to share pens etc. Wash hands regularly and PLEASE if you are asked to leave your contacts, please do. Not that it will, but should anything happen at an open house, the realtor wants to be able to reach you to advise you get checked by an appropriate health official.
Stay safe out there everyone!

Until next week,

Jay Mcinnes
T: 604.771.4606

Ben Robinson
T: 604.353.8523