With COVID-19 impacting every industry, we spoke with Realtor Jas Takhar on the specifics of how the housing market is being effected. Jas offered us his insight while also outlining some of the key things to consider when trying to buy a home and sell your home, COVID-19 or not.
How is the Coronavirus pandemic currently impacting the real estate industry?
Although it is still probably too early to tell, we have seen that after only 18 days, sales have already dropped by 15.9%. Unlike the drastic ups and downs we’ve seen in the stock market since all this began, it takes time to see changes in the real estate market. Having said that, people still are transacting deals as there are some compelling buying opportunities; these people also recognize that the fundamentals in the GTA remain the same in that demand is higher than supply and luckily when it comes to real estate, we always see values going up and down upwards.
Do all home/condo sales have to be on hold right now?
No. In fact, real estate is still considered an essential service and so land registry office (where title gets transferred) is still operational, lenders are still lending and lawyers are able to do most of their jobs virtually.
How do you think the industry will react when the coronavirus lockdown is over?
We will all have a huge hugging party!
After that, I think what we will find is that all of the buyers and sellers who put their transactions on hold will be motivated and we will see an influx of listings and a great deal of activity on the buy side. Within the next 12 months, we should see that values have adjusted back to normal that prices are increasing at their 40- year historical average of 6.9% year over year.
What are the most important factors to consider when trying to sell a home?
There are three questions you should ask yourself before listing your home:
- What are the current market conditions, in my specific area? You can’t just look at the overall market in a city; there are thousands of micro markets and you have to consider what’s happening on your street and with your specific asset class (ie. condo, detached home, townhome, etc.)
- What are other comparable homes selling for in my area? Some markets mean you list high and negotiate down whereas in other markets you may list low in order to force a bidding war. You always want to make sure you’re being consistent with what similar properties have done.
- How am I going to market my home? Obviously in this day in age you need an online presence, but you also want to pay attention to how you are going to physically market your home. What’s the curb appeal? Does your house need a new coat of paint? Can you declutter personal artifacts? Ultimately you want your home to look and smell like a show room; this will help you get the highest price possible.
What are the most important factors to consider when trying to buy a home?
Your budget will determine what location you will be looking in to, so my advice would be to first meet with an independent mortgage advisor and they will access to all of the rates and terms available to you.
Knowing what your monthly mortgage payment, you then want to consider what all of your other costs will be such as internet, phone, hydro, insurance, etc. as all this will determine what you truly can afford.
Once you know that, make sure you put together the rest of your All-Star team which includes:
- A realtor: you want to work with an agent who knows the area for which you are buying and selling in.
- A real estate lawyer: because your lawyer typically charges you a one-time fee, be sure to get the lawyer involved early on in the process. It will not cost you any more but they may be able to help advise you on clauses and conditions that you should have in your offer as a buyer.
- Inspector: if you are buying a home, be sure to have the property inspected (even in a multiple-offer scenario), if you are selling a home, consider having the property pre-inspected so that you can list your property accordingly and account for any discrepancies.
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