Market Watch – COVID-19 Weighing on The Housing Market
Tightened restrictions as properties continue to swap hands in the midst of the COVID-19 pandemic.
Much of March’s activity began in the first two weeks of the month before the State of Emergency order was put into place. In fact, we had a head start on the spring market that was heating up earlier than expected, but activity seemed to fall off as physical distancing measures took effect.
We’ll need more time to pass to fully understand the impact that the pandemic is having on the housing market.
Ontario – Strong Increase in Sales For March 2020 As a Whole
Toronto, April 3, 2020
ReMax Hallmark Market Report
Ottawa — March Residential Resales Withstand Pressure of World Crisis
Ottawa, April 3, 2020 — Members of the Ottawa Real Estate Board sold 1,525 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,507 in March 2019, an increase of only 1.2%. March’s sales included 1,170 in the residential-property class, up 3.3% from a year ago, and 355 in the condominium-property category, a decrease of 5.1% from March 2019. The five-year average for March unit sales is 1,465.
“Our results show that the Ottawa real estate market seems to have withstood the pressure of a worldwide economic event in March, however in context with our market’s performance up to this point, we can see the underlying effect. Before the pandemic, monthly unit sales were increasing between 10-16% from 2019, while March’s sales were just on par with a year ago. This is an indicator that there has been a slowdown in the real estate market due to COVID-19.” reports Deborah Burgoyne, Ottawa Real Estate Board President.
“Much of March’s activity likely began in the first two weeks of the month before the State of Emergency order was put into place. In fact, we had a head start on the spring market that was heating up earlier than expected, but activity seemed to fall off as physical distancing measures took effect,” she adds.
“Once the Ontario State of Emergency began, our Members and Brokerages rightly began to make all adjustments necessary for the health and wellbeing of our clients and customers. We welcomed the government’s declaration of real estate as an essential service so that transactions in progress could be completed. However, it was not and is not business as usual for our Members. They are heeding government and public health authority warnings and advice and are being diligent in taking extra safety precautions. All this, while still doing their best to help their clients successfully conclude or close real estate transactions that were already in progress,” Burgoyne acknowledges.
March’s average sale price for a condominium-class property was $369,311, an increase of 27.3% from this time last year while the average sale price of a residential-class property was $559,739, an increase of 16.5% from a year ago. Year to date figures show an 18.8% and a 23.2% increase in average sale prices for residential and condominiums, respectively.*
“Our Members are evolving and adapting their business practices by leveraging the use of technology with virtual tours, live streaming, social media, and becoming more creative in their methods to facilitate the needs of their clients who may need to buy or sell right now because of their circumstances.”
“However, for those buyers and sellers who are not in that urgent position, our Members recognize the health and safety of our community is paramount. They are consulting with these clients on a case by case basis and may advise that they should delay the listing of their home or purchase. They are doing what’s best for their clients in the context of government advisories,” affirms Burgoyne.
When asked about the impact of COVID-19 on the number of new listings on the market, Burgoyne speculates, “The shortage of inventory has driven down the number of new listings for the past several years, so we cannot accurately state that the decrease in March was due to COVID-19 where we saw 1,579 new residential listings and 469 for condos. The 5-year average is 2,217 and 665, respectively. I believe that April’s number will provide a truer and more legitimate reflection of the impact of Covid-19 on our local real estate market.”
“In closing, I would like to say that we are grateful to have been granted the essential service designation and are working closely with all levels of government and our provincial and national associations to ensure that we implement the necessary steps and protocols to flatten the curve and remain the trusted advisors that the public has come to expect from the REALTOR® profession.”
In addition to residential and condominium sales, OREB Members assisted clients with renting 746 properties since the beginning of the year compared to 550 at this time last year.
Britsh Colombia – Home Buyers and Sellers Adjust Their Activities in March Amid Challenging Circumstances.
VANCOUVER, April 2, 2020 – Metro Vancouver’s* housing market saw steady home buyer demand to begin March and a levelling off of activity as the month went on and concerns about the COVID-19 outbreak intensified.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,524 in March 2020, a 46.1% increase from the 1,727 sales recorded in March 2019, and a 17.4% increase from the 2,150 homes sold in February 2020.
Last month’s sales were 19.9% below the 10-year March sales average.
“The first two weeks of the month were the busiest days of the year for our region with heightened demand and multiple offers becoming more common. Like other aspects of our lives, this changed as concerns over the COVID-19 situation in our province grew.” Said Ashley Smith, REBGV president.
Daily residential sales on the region’s MLS® were 138 on average in the first ten business days of the month. In the final ten business days of the month, the daily average declined to 93 sales.
“Many of the sales recorded in March were in process before the provincial government declared a state of emergency. We’ll need more time to pass to fully understand the impact that the pandemic is having on the housing market,” Smith said.
“In recent weeks, REALTORS® have been working to help and guide their clients through this uncertain period. Many people have understandably chosen to put their home buying or selling plans on hold for now. Other people have more urgent housing needs and we’re trying to work with them to address these needs in the safest and most responsible way possible.”
There were 4,436 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2020. This represents a 10.4% decrease compared to the 4,949 homes listed in March 2019 and a 10.8% increase compared to February 2020 when 4,002 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,606, a 24.8% decrease compared to March 2019 (12,774) and a 4.5% increase compared to February 2020 (9,195).
“Realtors were named among the province’s list of essential services last week,” Smith said. “This means that we have a responsibility to do what we can to help residents meet their housing and shelter needs while strictly following the most up-to-date public health orders and physical distancing requirements from our health officials and government agencies.”
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,033,700. This represents a 2.1% increase over March 2019, and a 1.3% increase compared to February 2020.
Sales of detached homes in March 2020 reached 852, a 61.1% increase from the 529 detached sales recorded in March 2019. The benchmark price for detached properties is $1,450,700. This represents a 0.7% increase from March 2019, and a 1.2% increase compared to February 2020.
Sales of apartment homes reached 1,179 in March 2020, a 35.1% increase compared to the 873 sales in March 2019. The benchmark price of an apartment property is $687,000. This represents a 2.9% increase from March 2019, and a 1.4% increase compared to February 2020.
Attached home sales in March 2020 totalled 493, a 51.7% increase compared to the 325 sales in March 2019. The benchmark price of an attached unit is $791,800. This represents a 2.5% increase from March 2019, and a 0.9% increase compared to February 2020.
Alberta — COVID-19 Weighing on Housing Market
Edmonton, April 2, 2020 — Total residential unit sales in the Edmonton Census Metropolitan Area (CMA) real estate market for March 2020 decreased 2.59% compared to March 2019 and increased 10.31% from February 2020. The number of new residential listings is down year over year, decreasing 14.01% from March 2019. New residential listings are up month over month, increasing 7.72% from February 2020. Overall inventory in the Edmonton CMA fell 12.66% from March of last year but increased 5.75% from February 2020.
For the month of March, single-family home unit sales are down 2.02% from March 2019 and up 13.59% from February 2020. Condo unit sales decreased by 2.04% from March 2019 and increased by 1.41% from February 2020.
All residential average prices are down to $343,951, a 3.78% decrease from March 2019, and down 1.97% from February 2020. Single-family homes sold for an average of $404,344, a 4.64% year-over-year decrease from March 2019, and a 5.13% decrease from February 2020. Condominiums sold for an average of $218,613, a 2.50% increase year-over-year, and prices are up 2.87% compared to February 2020. Duplex prices dropped 6.28% from March 2019, selling at $313,443, which was a 2.62% decrease from February 2020.
“The Edmonton market prices have declined in March and we saw a slight decrease in year-over-year unit sales,” says REALTORS® Association of Edmonton Chair Jennifer Lucas. “Of course, with the outbreak of a global pandemic and a hard hit to Alberta’s oil and gas sector, this type of market slowing is not surprising. There have been fewer sales of single-family homes, condos and duplexes than in March of last year. Single-family home pricing decreased 4.64%, duplexes are down 6.28%, and condos are up 2.50% year-over-year.”
Single-family homes averaged 54 days on the market, a six-day decrease from last year. Condos saw an eleven-day decrease at 66 days on the market while duplexes averaged 68 days on market, a three-day increase compared to March 2019. Overall, all residential listings averaged 60 days on market, a 9.09% decrease year-over-year, and decreased by fourteen days compared to the previous month.