The housing market is constantly fluctuating, either because of the season, interest rates, or availability of a given area. In 2020, COVID-19 has affected the housing market more than ever. The pandemic has caused a drastic change in what the market looks like in terms of pricing, showings, and desirable changes. To support the economic and social changes, it’s important to be aware of the different procedural transitions that have incurred.
Major effects of the pandemic on the housing market are:
- Increased selling prices
- New methods of viewing properties
- More perceived benefits of moving
Increased Selling Prices
Since the beginning of COVID-19, the housing market has experienced an upwards trajectory in selling prices. Compared to September 2019, there has been an 18% increase in the selling price of homes in Canada. This has incentivized a significant number of individuals to sell their properties to make a desired move. However, despite high selling prices, there is still a low inventory level that can’t keep up with the increasing demand.
New Viewing Methods
Due to safety restrictions, professionals in the housing market have shifted their focus to new means of showing houses. What are some of the common changes you’ll notice? First and foremost, open houses have been put on hold. Open houses do not allow for social distancing and regulated numbers in the shared space. Therefore, they are an unsafe method of viewing during the pandemic. Second, viewings can be scheduled for a safer environment, but some people feel unsafe doing so. This has forced realtors to be resourceful when showing houses. Finally, realtors have had to improve the digital tools they’ve previously leaned on or did not have implemented. Previously, realtors would provide high-quality images of homes to generate an interest to view a home. However, images are not as effective when scheduled viewings are not available or people are hesitant to attend a viewing. Instead, realtors have taken on 360-degree tours and 3D renders of properties as their digital tools. This will likely be an ongoing method in the housing market even after the pandemic.
360-degree tours and 3D renders of properties have created a safe and immersive experience for home buyers. Home buyers are now able to “walk-through” the house from the safety of their home. More so, buyers are provided with a more complete picture of the environment in which they might live in. By providing virtual tours, realtors are able to inform buyers so as to incentivize them that physically viewing the property is a worthwhile next step.
Perceived Benefits Affecting The Housing Market
For some people, the shift in the housing market during COVID-19 was simply the push they needed to move. The first major, and most obvious, benefit is the changes in cost. The housing market outside Toronto is justifiably less expensive. Therefore, selling a Toronto home to move to a less expensive area is an economically viable decision. Furthermore, lower mortgage interest rates have provided Canadians with the purchasing power to make this choice. The second major benefit is the perceived opportunity to upgrade one’s property. According to a study, 44% of Canadians desire more personal amenities when looking for a property. Again, due to the cost differences of housing outside Toronto, Canadians can receive more for less.
However, the largest reason that has been given was that individuals no longer wanted to live in highly populated areas. Approximately 32% of Canadians no longer want to live in urban centres. Now, while this is not entirely related to COVID-19, the pandemic has been a massive factor for people. Urban centres are at the highest risk for infection due to population density. With that, home buyers feel rural or suburban communities are more sensible options for themselves and their families.
What Does This Mean For Home Buyers?
For home buyers, the current state of the housing market means there are more options for them. Someone looking to sell and buy a home are in a market that could be significantly beneficial to the individual. Home buyers can benefit from selling their home at a high price and receive a mortgage loan with a considerably low interest rates. As well, they can make the move to a different city or better property by leveraging the benefits provided by the current housing market. The most important part of the process? Finding a realtor that accommodates safety precautions and creates an environment to make a confident decision.