The past few weeks have felt pretty surreal. Self Isolation is a word we didn’t even know about in early 2020. Now, here we are with mounting cabin fever and anxiety knowing that there’s probably another 30 days of this- at least. Someone told us that this is likely “an event of the century”, where our children will talk to their wide eyed grandchildren about that time when no one could go to the park.
Portions were originally posted by Home Group Realty
However, we still have something in common to bond us in conversation: the Guelph real estate market. Writing for GuelphToday, we need to be on top of the numbers to ensure that what we are providing for the Guelph readers is accurate and fact based.
So looking into what we’ve seen so far, we went from an extremely hot Guelph real estate market in Jan/ Feb/ early March (we posted about it here) to a screeching halt in late March. The conditions that spawned the early 2020 spring market were the same as in 2017, ultra low inventory levels, low mortgage rates and a very confident set of buyers. The impact isn’t necessarily reflected in the Q1 2020 numbers, but it sets off a very slow start to what is traditionally the hottest market of the year.
There are going to be a lot of lessons learned from the COVID-19 event. Contingency and back up plans will be critical moving forward. Our office has done an incredible job of having a contingency plan in place that allowed us to close our offices two weeks ago and continue working without really missing a beat. My home office has now become head office and I’m loving the commute in the morning. Our staff and team are all working from home and following all the guidelines issued by health authorities. Sometimes it’s a little harder to work with kids around, but we’re getting used to it now!
The question on most of our minds is what will our real estate market look like on the other side of this pandemic? We took a stab at it on our last GuelphToday article, which in hindsight was still early days. In our next article on April 21, we’ll look into it a bit further.
Our Broker, Paul Fitzpatrick has his own educated guess that there will be 3 waves in our real estate market going forward for the next 6-12 months.
THE FIRST WAVE is going to be those people that were maxed out and unprepared for any contingencies and emergencies in their lives. Which is fine, as long as life keeps firing on all cylinders. As a result of this pandemic, society’s weak spots have been revealed.
The first wave will be the people that need to sell in order to get out from under a mountain of debt and have either lost their jobs or realized just how economically fragile they are. Buyers here will be opportunity buyers that have cash and the ability to close deals quickly.
THE SECOND WAVE of buyers and sellers will be those people who have come to the realization that this event has shown them a different path. There will be sellers looking to downsize, simplify and consolidate their wealth into more liquid assets. A lot of newly retired or near retired folks will likely be in this wave. I foresee many making life simple again and stepping back from their current lifestyles. This wave will also include families looking to consolidate their lives under one roof. I expect to see an increase in demand for multi-generation homes. These homes were already in high demand with low supply — this will be one area of good news for sellers of these homes in the coming months.
THE THIRD WAVE of home sellers and buyers will be those that are moving up. Opportunities will increase as I predict the inventory of larger homes will start to climb in the coming months. This group of sellers will help sustain the entry level inventory levels. The buyers in this cohort are likely going to be growing families. My prediction, watch the birthrate take a big jump at the end of the year and start of 2021, as one happy outcome of this social distancing and isolation should be a mini-baby boom.
The conversations and advice to our clients and readers has been centred around these likely scenarios. There will be pain, financially and emotionally, no doubt. From this pain and time of renewal there will be opportunities. How you react to this event and the situation you find yourself in will dictate which of these waves may affect you in the market.
We’ll be going through these scenarios and the lessons learned over the course of the next few weeks.
We’ll also be posting our series of talking with the experts webinars that we’ve been running for the past couple of weeks. In times of uncertainty, something positive and productive we can all do is connect and have open conversations about how to handle these situations.
It is extremely important in these trying times that you trust the advice of your Guelph real estate agent. They know the local market best, they are the local real estate expert.