Does anybody else feel like they got hit by a truck in the last 2 weeks?! What a crazy time we are living in. The entire situation escalated so quickly it’s almost hard to process, and even still I’m finding myself struggling to figure out how many weeks its even been since this all started. With that being said, I believe the Alberta government has done a good job of getting in front of things, and hopefully we’ll be able to find some even fractional form of normalcy sooner rather than later.
March sales and listings were slightly impacted by all of this, however real estate is typically 2 weeks behind world events, so we won’t know the full effect until April stats come out. Many deals put together in early March still went ahead as planned, although there were definitely some deals that collapsed as a result of layoffs or uncertainty. We’ve seen many listings cancel, buyers stop their housing search, and sellers opting to delay listing their homes. With that being said, there are still homes being sold. Many people are moving out of necessity, not just want. Job transfers, relocations, divorces, babies being born, marriages, etc all impact the need for housing. If your home sold in March and you’re going to be homeless in April if you don’t buy something, you’re still going to buy regardless of what’s going on.
Sales, new listings, and active listings are all comparable to the same time a year ago. Sales figures in the single family market are holding their own, the 200-400k range was actually in balance in March, and we saw a number of sales over $600,000. I think this was definitely a sign that confidence in the economy was picking up prior to the COVID-19 situation, and record low interest rates on mortgages probably had something to do with it as well.
Apartment condos are still proving to be a tough sale, with just 9 sales in March despite there being 83 available listings. 6 out of 9 sales were under $200,000, and 2 out of 3 sales over $200,000 were in seniors buildings. I suspect activity on seniors condos will likely disappear altogether in April, with higher risk populations choosing to stay put until this all clears up.
Acreage sales were also slow, with only 6 sales despite 97 active listings in Red Deer County. April would typically be when we’d see an increase in activity for acreages, although between COVID19 and the fact that there’s still 2’ of snow in the ground in most places, the acreage market will likely be a late bloomer this year.
We will continue to see sales despite all of this, although I have no idea what to expect in terms of numbers for April. 50% of our usual pace isn’t out of the realm of reality by any means. Buyers are shopping for the best value for their dollar right now, and most very well priced homes are still seeing lots of activity. I’ve also noticed that we’re seeing more showing traffic on vacant homes.
Given that there’s a limited number of buyers out there currently, if your home isn’t one of the top 2 or 3 in its competitive price range, your chances of selling drop drastically. Nobody can predict what the long term outcome of this situation is, however I do know that if it drags on long enough, it will definitely have a negative impact on real estate prices. Real estate prices are controlled by supply and demand, the same as any commodity in a free market economy. If there’s lots of available listings and very few buyers, prices will be driven down. If there’s lots of buyers and low levels of available homes, prices are driven up.
Mortgage deferrals and government subsidies should hopefully stop any desperation selling by people who have lost their jobs or been laid off, which will prevent a clump of desperate sellers from fire selling their homes and impacting prices, at least for now.
