What a difference 30 days can make. Last month at this time our headline was A Big Jump In Home Sales In February. This month, our business has completely pivoted. We're constantly changing disposable gloves in every home, sanitizing door handles and light switches, we've quickly adopted to the virtual way of showing homes, have started doing virtual open houses instead of in person, and are listing and staging homes over Google Meets!!! (For a guy who has always embraced technology in our business and used it for efficiency, I can't say I am upset at the way we are starting to do things).
The market itself has been severely impacted, there is no sugar coating that.
From the Calgary Real Estate Board:
- By the end of March, sales activity had fallen 11 per cent compared to last year. This is 37 per cent lower than long-term averages. The drop in sales pushed March levels to the lowest recorded since 1995. - New listings dropped by 19 per cent this month. This decline in new listings compared to sales caused supply levels to ease and helped prevent a larger increase in oversupply. Overall, the months of supply remain just below five months, similar to levels recorded last year. - Prices were already forecast-ed to ease this year due to oversupply in our market. In March, the citywide benchmark price was $417,400. This is nearly one per cent lower than last year’s levels. - Price declines will likely be higher than originally expected due to the combined impact of the pandemic and energy sector crisis.
I like to watch the daily sales stats. You can tell a lot by the market when you do that over a period of time. Check out yesterday...
We have been deemed an essential service, and that is where the market is at the moment. People that "want to move" are not, and all the people that "have to move" are. This will evolve as the new reality sets in, and may even change by next week. The wild card in all of this is the oil crisis that is going on, which was brewing before the COVID crisis took hold.
Everyone has theories on how this is going to play out, but we are at a time where we are creating history...there is none to look back on for guidance in this situation.
My thoughts are that this is going to go one of two ways when we get back to a new form of normal living:
1. The cabin fever effect will kick in. Once everyone starts feeling optimistic about getting past this, they will come out of hiding in full force, and the spring market will just be delayed by a few months. We could see a short term surge in purchasing and selling, as people take advantage of a temporary market pull back. Let's call it a hard bounce. People will be kicking themselves for not buying during the COVID outbreak of 2019.
2. The market softens further in Calgary. Not only have people temporarily lost jobs, but how much longer can a lot of companies hold on? Will there be jobs to go back to at the end of the outbreak? Will oil rebound once this is over, and what shape will the global economy be in, let alone local economies?
I for one am not opposed to prices coming down globally on a lot of things, housing being one of them. I think of my kids, and how buying their first home is going to be a challenge. A global reset might be a really good thing.
For the full market stats for April, click the image above
Nobody really knows how we are going to come out of this. That's part of the excitement. There is going to be a lot of opportunity and change after the COVID outbreak is under control, and I think we will be better people for it.
In the meantime, stay home, stay safe, and I hope you and your family are healthy and enjoying the time together. Think about our crazy North American lifestyle...we've just been given permission to stay home with our wives, husbands, partners, kids, pets. Take advantage of the time.
Data supplied by CREB®’s MLS® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.
The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.