What a difference a month makes. At this time last month, Toronto sales and prices were increasing year on year at breakneck pace. On March 15, the market hit the pause button as social distancing practices came into effect. Despite Covid-19 protocols in the latter part of the month, the blistering activity in the first 2 weeks of March resulted in double digit increases in sales and prices.
See table below (you will need to download images) for a snapshot of Toronto’s real estate March 2020 results.
The market will be paying close attention to April’s full month results to get a better indication of the impact of social distancing and the government’s response to the struggling economy.
Even though real estate is deemed an essential service, real estate activity is governed by all other aspects of pandemic life including: PPE, hand sanitizers, disinfectant wipes, face masks with virtual open houses, employment confirmation immediately prior to closing and 10% deposits the new signs of the times.
During these times, the utmost priority is to be socially responsible while safeguarding loved ones and offering help where possible to those in need. As we stay in and keep an eye on the market, friends and clients ask what’s next for the real estate market given the far reaching social and economic toll of the pandemic. At this time it’s difficult to predict what will happen to the real estate sector. Given the unprecedented nature of controlling the outbreak and rapid unemployment, we often look at past occurrences in an effort to extrapolate potential outcomes.
At the risk of aging oneself, we experienced significant events that impacted local real estate markets where we lived; in Hong Kong during the 1997 Asian financial crisis and SARS in 2003. More recently, we withstood the tumult in the real estate market caused by the 2008 subprime mortgage crisis and in 2017 with the onset of the fair housing plan and non-resident speculation tax (NRST). During these times, we saw how uncertainty resulted in a rapid price declines followed by a rebound over the medium to long term.
The following table shows the length and price declines from various shocks to the market.
The table outlines that the longer it takes to recover, the deeper the impact on prices. There were bleak periods in these events as well and when normalcy resumed; so too did the real estate market. While we are still in the initial stages of the Covid-19 pandemic, many of you have asked if now is an opportune time to purchase real estate. My sense is that prices have recently pulled back and based on anecdotal evidence we are probably closer to Q4 2019 price levels. There will be opportunities now especially if you purchase and do not need to sell a property. Message me if you’d like to share your current situation and we can discuss further.
It is our hope that the pandemic while disruptive and unsettling will come to pass sooner than later and the longer-term macro-economic reasons will still hold that make Toronto a great place to live.
Shen Shoots the Breeze
For most of us, staying at home is the most responsible thing we can do. Now that life has slowed down considerably, here are a couple of things I’ve been up to:
For those of you who know me, I love to cook and love to try new recipes. Early this year, I was toying with the idea of mastering bread making but I didn’t have the luxury of time to spend a day monitoring my bread dough. With the pandemic and onslaught of breadmaking social media posts, this was as good as time as any to start. I started with no knead bread, made yeasted desserts, dinner rolls and also stayed up til 3am one night waiting for my sourdough bread to bulk ferment. I would say the best return for one’s time is Mark Bittman’s No Knead Bread Recipe. Bittman also has a Youtube video if you want to see a demonstration. If you want bread the same day, follow the recipe but use very warm water (130F but no hotter) instead of room temperature water and let it proof for 4 hours. From there you can put the loaf directly into a very hot Dutch oven. Also, use all-purpose flour and not bread flour; my friend tried it with bread flour and for some reason the dough was very runny and too goopy. The biggest challenge is whether or not you can find flour or instant yeast in your local supermarket.
We have watched more TV shows and movies in the past month than the past 2 years. We’ve enjoyed The English Game and Drive to Survive series on Netflix. I recently purchased the entire Anne of Green Gables Collection staring Megan Follows – that is my favourite adaptation and it brought me back to my childhood years. Do you have any favourite series you’ve been watching during this pandemic?
If you find TV too boring and want to connect with friends online but want to do more than just talk, our friends introduced us to Codenames online. It was the closest we felt to being in each other’s living rooms during these strange times. Have you discovered other online games that you’re willing to share?