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Freedom in 14 days! How will the lockdown end affect real estate?

Lindsay Smith

By Lindsay Smith/Real Estate Columnist

Yay! We are heading back to normal in two weeks! Well, maybe not normal, however, if we are blessed with more freedom than we currently have, will the real estate frenzy ramp up or drop off a cliff?

If you are a consumer of Canadian media, you might think a cliff is coming. Mainstream media loves to post headlines to grab interest, even if headlines have little to do with the content that follows. Here are a couple of examples:

“Toronto home prices post the sharpest drop since the start of the pandemic.” National Post. This headline grabbed interest and had no basis of truth. The values have been increasing month by month since the summer of 2020.

“Toronto region’s housing market shows first signs of cooling – sales drop 13% in April.” Globe and Mail. This is accurate… and somewhat misleading. They were comparing April sales to March, the month that recorded the most sales ever for the Toronto Real Estate Board.

I feel that much of what I read about the real estate market is penned by journalists foaming at the mouth, gleefully, anticipating a crash. I am going to stick my neck out and make a few “feet on the ground” predictions.

Let’s begin by comparing the increases in values in the GTA to other markets around Canada and the USA. Keep in mind, the average price in Durham Region has increased approximately 53% year over year. (YOY)

Atlanta, Ga: 18% YOY

Los Angeles, CA: 14.3% YOY

Denver, CO: 15% YOY

Austin, Tx: 22% YOY

Vancouver, BC: 20% YOY (detached homes)

Halifax, NS: 25% YOY

When you look around across the USA and Canada, it is easy to determine that most cities are in markets where the values have increased dramatically over the past year. These increases have taken place amidst differing forms of “lockdowns.” Now that we can see restrictions loosening, will this pent-up demand continue to fuel the frenzy we have seen? Here are a few observations I have pondered over the past few months.

We have worked with three sets of clients over the past month, all who made moves that were for specific reasons – kids. We had a couple in their 70’s move to London to be closer to their children, and the 70-year-old couple, who purchased their condo, did so because they would be a five-minute walk to their kids and grandkids. Another couple sold and are moving to B.C. to be closer to their kids.

One thing this pandemic has brought front and center, is what truly is important to people of all ages. And, funny enough, it is not a new dress, heels, the newest Iphone or that riding lawn mower you had to have because it had a much bigger drink holder. No, it is what really makes people happy and brings them joy. I can see, once the “shackles are off,” people making big, bold moves. Moving across the province, out west or east or south of the border, if even just for extended periods of time.

Another thought I have had, again having chatted with so many people over the past year, is that once people are fully vaccinated and life returns to a new normal, that elderly sellers (or any seller who has put off selling due to fears of the pandemic) will place their homes on the market and sell. In Durham, I have spoken to so many people who are planning on selling their homes, waiting for the process to be safer. This will help to add more desperately needed inventory causing the market to return to balance.

Another idea, (and remember I adore living in Durham Region) is that the people who have moved to the “sticks” from Toronto, with the opportunity to work remotely will, as they get called back to offices downtown, put their homes on the market once they get a taste of commuting. Not only the commute, but many people I have worked with who leave Toronto end up returning, finding the suburbs to be too quiet and lacking the attractions downtown life offers.

I do feel once the economy opens back up, people will be distracted by having the ability to shop in real shops, dine in restaurants and head to sports bars to catch games. This will slow the market down, similar to what Christmas time does when it rolls around; however, once this short-lived distraction is over people will be back to buying homes.

Durham is a destination, and when we see people moving here, not from downtown TO, but from the other suburbs, they know exactly what type of area they are moving to. The big incentive is being able to buy at hundreds of thousands less than they would in many other suburbs. Durham Region’s average home – $897,700, York Region – $1,283,000. This difference attracts buyers like a raccoon to the hummingbird feeder we hung last night.

If you have any questions, or if you can see a real estate emergency on the horizon, I can be reached at lindsay@buyselllove.ca.

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