Spring in Junuary?
March 19th marks the first day of spring on the western calendar. On March 19th, we expect the winter weather to step aside for the sunshine and warmth of spring. It is also the time of the year that the spring real estate market typically kicks into high gear; sellers list their homes and buyers begin their dream home search. However, the 2020 spring market has been anything but typical due to Covid-19.
The spring housing market was put on pause across the country for the months of April and May with sales volume off by more than 50% throughout the Fraser Valley and Vancouver from 2019. The question was not just, “Where is the spring market?”, but rather, we began asking, “Will the market rebound and return to typical norms, or is Covid-19 going to keep the sunny skies of spring and sales volume away for an extended period?”
Now fast forward to present day: Canada Day! The forecast is a high of 14 degrees Celsius and rain… not exactly summer weather, so unfortunately no sunny skies for Canada’s birthday. But what about the real estate market? Due to Covid-19, the spring real estate market was pushed off to June. June sales volume were similar or higher volume numbers than 2019 throughout the Fraser Valley and Vancouver. What could lead to a result like this after such a low April and May? A combination of the spring market being moved forward to June, low inventory levels of active and new listings, and pent-up demand of buyers and low interest rates all made for a busy spring market in June.
Throughout the last few months, I have fielded many questions as to what to expect in the market as we move through this time of Covid-19, as well as what post Covid-19 looks like. Questions such as: “Will this market continue?”, “Is it a good time to sell?”, and “Should I buy now, or wait?” My initial response when asked these kinds of questions is, “What are you short-term, long-term goals?” Remember, real estate is generally a long-term decision.
My market prediction for the Fraser Valley and Vancouver will be a strong bell curve of activity for the next few months, just like we have seen in June. I believe that we will see higher than expected sales volume and even some price increases on specific types and locations of properties due to seasonally low inventory levels. This strong market will continue throughout the summer and then start to tail off in late fall into winter. The market will slow down because the spring market flurry has had its day, the pent-up demand of buyers waiting for the “all-clear sign” have bought, and unfortunately, the real story of the damaged Canadian and world economy will become front and center. There will be fall-out in the market; how much, where, and the duration is unknown, but I believe this will happen.
If you are in the market to sell, I think it is an excellent time to be selling. The listing inventory is very low and properties are selling through in 2 to 3 weeks if priced for the market. If your plans include buying as well, you can never really go wrong if you sell and buy in the same market, especially with today’s low interest rates. But, if you are looking for short-term speculative investments, this may not be the right time to be speculating as there are too many unknowns as we move forward. However, if it is a long-term investment buy and the numbers work with the low interest rates, I would always recommend to buy. The most successful real estate investors I have helped over the last 3 decades always look at the property as a medium to long-term hold. The incredible financial results have been staggering for these long-term investors.
Before making any buying or selling decisions as we move forward during and post Covid-19, connect with an experienced agent. Real estate is super hyperlocal: the type of property, neighbourhood, price ranges, and wants and needs of the client play a huge role in what is best moving forward for you as a buyer, seller, or investor. When determining if a real estate agent is knowledgeable and experienced, he or she should: know the area like the back of his or her hand, is active in sales, and has helped 15-20 clients buy or sell in the last year. In these uncertain times, an agent is the key in providing valuable perspective on one’s best plan in our current and future markets. Therefore, make sure you have a knowledgeable and experienced real estate agent working for you.