Is This The End Of Open Houses?

Opinion | March 23, 2020


My brother and his family arrived safe and sound last week, and we all breathed a collective sigh of relief.

They moved to London, England back in 2016, I believe, although it could have been 2015.  Wow, the phrase “time flies” is an understatement.

They’re quarantined up at their cottage for two weeks, but we’ve been calling on Facetime every day, and if there’s a silver lining in all of this chaos, it’s that I’m talking to my brother and his family more now than ever.

Friday was a long day, and after I put my daughter down to sleep, I had an upbeat call with my bro.

We shared some much-needed laughs, although many of those were at my Dad’s expense.  We were both in agreement that when my Dad’s time on this earth comes to an end, he’ll meet his fate by either falling into a volcano, sinking into quicksand, or getting eaten by a hippo.  Nothing quite like bonding over some playful ribbing of another loved one, right?

My brother said one thing to me that, in hindsight, seemed obvious, but at the time, was so thought-provoking.  It’s so, so obvious, that you’ll all merely assume that you’d already thought of this, but be honest with yourself if you can.

What was this thought-provoking idea?

As my brother stated, “This officially marks the end of the ‘handshake’ as an acceptable social greeting.”

I had truly never thought of that.

But as time goes on, and the world heals, we will likely never shake hands again.

I’m not a germaphobe, but I was borderline in my early-20’s.  I never loved the handshake to begin with.

Now here we are in 2020, and we can safely pinpoint this year as the time, and this virus as the cause, of the official death of the handshake.

I can’t help but think of the parallels to Demolition Man here.  Remember the 1993 blockbuster?  Okay, well the jury is out on whether this meets the blockbuster criteria, but pretend you don’t see the title on your GUIDE on a Saturday night and your heart skips a beat.

There’s a scene in the movie when Sandra Bullock’s character rather bluntly asks Sylvester Stallone, “I was wondering if you’d like to have sex tonight?”

Stallone’s character agrees, but in the future, sex isn’t what it once was.

Here’s the scene:

Not the best quality, but the world is apparently ending, so we have bigger problems.

The future portrayed in Demolition Man doesn’t allow for actual sex, but rather provides for virtual sex.

Bullock’s character, Lenina Huxley, is disgusted with the idea of “fluid transfer.”

TMI on a Monday, maybe.  But you see the parallel here, right?

Imagine telling our kids that we used to shake hands.

I can just imagine my 20-year-old son asking:

“Dad, wait a second – are you telling me that as some sort of ritualistic salutation, you would voluntarily exchange germs with a person?  Was this to gain trust?  Or demonstrate a level of committment, as if to tell that person that you’re in the boat with them?  You can handle their worst, and vice versa?  Why didn’t you just wave like we do today?”

That day is coming, trust me.

Whether we are “social distancing” for another six months, six weeks, or six days, nobody is going to want to shake hands with another person, ever again.  The longer this social distancing lasts, the harder the pattern will be to break.  I asked a person at Longo’s today, “Where’s the tofu?” from eight feet away.  It felt so odd, and yet I feel like we will accept this far faster than we’ll ever back away from it…

One of the more interesting developments in the real estate world over the past 24 hours was the officially-un-banned, but unofficially-banning of open houses in Toronto.

I predicted in a blog post last week that one of the unfortunate, but exceptionally unavoidable social consequences to come out of COVID-19 will be extreme judgment of others.  What they do, how they act, where they go, and what they do or don’t promote.  More on that in a moment…

Most real estate agents concluded that conducting open houses in the era of COVID-19 would undermine our collective attempts to promote social distancing.  As a result, most agents did not open their listings this past weekend.

On Saturday, both OREA and TREB issued bulletins to their members about open houses, although OREA beat TREB by about two hours.

Here’s OREA’s release:

 

Can I still be cynical, even in these dire times?

Perfect.

So just how tough are times going to be when OREA is offering to give back $110 “annually” to real estate agents?  If that determines whether you live or starve during the next couple of months, then maybe you should rethink your future when this is all said and done.

Bottom line, OREA advised us not to conduct open houses, but didn’t ban us from doing so.

Here’s TREB’s release:

 

Once again TREB didn’t “ban” us from doing open houses, but rather advised us not to.

To be completely transparent, I have no idea whether or not such a ban is in either OREA or TREB’s power.

As for showings, well, the show(ings) must go on!  Sorry, bad bun.  Trying to find some humour in all of this.

The real estate market cannot simply shut down.  There are people who both need to buy and sell, as well as those that simply want to.

Precautions are being taken.

Any decent listing agent will supply hand sanitizer and rubber gloves, and leave them by the front entranceway of a house or condo.

Here’s a photo from a listing my colleague visited on Saturday:

I would also add that any decent listing has also been professionally cleaned before it’s listed.

There are no more “double-bookings,” and appointments are being limited to a half-hour.  For those not active in the market, it’s not uncommon for, say, five agents to have appointments on a listing at 6:00pm, which could mean 10-15 people inside the property at one time.  Today, we’re seeing viewings limited to one buyer at a time.

Here’s a listing that shows all of the above:

Many sellers are moving out during their time on the market, to protect the buyers who come through, as well as themselves.

And then some properties that are geared towards investors are being marketed as follows:

If you know the floor plan, the view, and have access to the virtual tour, plus you know the rent the tenant is paying, you can probably make a decision on a unit like this without stepping inside it.  This is certainly not the most effective way to sell real estate, in my opinion, but it’s more than plausible – when there’s a tenant attached.

Last week was a very busy week for new listings, and that surprised me a little bit.

I’ll keep tabs on the market this week, both in terms of new listings, as well as sale prices from last week, and I’ll follow up Wed/Fri with a look at how the market is doing.

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104 Comments

  1. Pingback: Is This The End Of Open Houses? | Real Estate News Group
  2. Francesca

    at 6:54 am

    This past weekend a prominent realtor in my area chose to host an open house and had several of his signs on the roads. The moms in my area who are very active on several neighborhood Facebook sites took it upon themselves to publicly shame him. Several local realtor moms also chimed in saying he should not be hosting open houses during this time. Some even went as far as shaming the house sellers for requesting/allowing one. Unless realtors are expressly band from hosting open houses there will always be idiots who defy logic and recommendations. Not even social media will stop them. One person suggested that he purposely did this for advertising since his sign was in fact the only one visible this past weekend. The irony in all of this is that he may have tarnished his reputation now, leading to less buyers using him in future.

    1. Kate

      at 8:12 pm

      I’m not sure what is worse: the Facebook shamers or the Facebook do-Gooders (humble braggers).

      Basically the church ladies Of yesteryear.

      1. Not Harold

        at 3:49 pm

        Nextdoor.. oh dear god

        See BestofNextdoor Twitter account

  3. Ed

    at 8:30 am

    I can just imagine my 20-year-old son asking:

    “Dad, wait a second – are you telling me that as some sort of ritualistic salutation, you would voluntarily exchange germs with a person? Was this to gain trust? Or demonstrate a level of committment, as if to tell that person that you’re in the boat with them?
    /////////////////////

    Well David I hope your son ends up sounding nothing like this as a twenty year old, cause if he does you might want to check to see if he is a robot.
    Sorry, it made me laugh.
    Happy Monday!

  4. Appraiser

    at 8:51 am

    If a realtor holds an open house and follows the same protocols as showings, ie. one set of buyers through the property at a time, proper hand washing, social distancing etc., how is it materially different?

    I this a a case of TRREB and the ever more useless OREA virtue-signalling?

    1. Apparently Essential

      at 7:31 pm

      LCBO, Beer Store, cannabis retailers will remain open amid 14-day closure of all non-essential businesses:

      “With respect to the LCBO and its operations, whether we care to admit it or not, there are many people in our community who have significant dependence issues with respect to alcohol,” de Villa said. “I think we have to be very conscious of that fact and be aware that if that substance, that provision, is no longer available, that that would lead to pretty significant health consequences.”

      However, de Villa added that the sight of long lineups outside of LCBOs across Ontario is not in line with the province’s guidance on reducing the spread of COVID-19.

      “I’m sorry to hear of long lineups at any facility that clearly is not in keeping with the social distancing advice and very strong recommendations that we’ve been putting out there,” de Villa said. “Being in lineups, in close proximity, less than six feet from another person, is clearly not social distancing.”

      https://www.cp24.com/news/lcbo-beer-store-cannabis-retailers-will-remain-open-amid-14-day-closure-of-all-non-essential-businesses-1.4864797

  5. Jimbo

    at 10:04 am

    I don’t know if it is the end of handshaking, Spanish Flu would’ve ended it in my opinion.

    As for the scene from Demolition Man, I feel like a huge #MeToo movement moment was about to happen!! Forced kiss on someone who was clearly saying no……

  6. whothewhatthewhythe

    at 10:04 am

    I see the Eaton Centre is open with reduced hours. That’s because everyone is aware that you can’t be infected by COVID-19 between the hours of 11:00 a.m. – 7 p.m.

  7. Chris

    at 10:52 am

    “Consumers could face hit to credit scores, jump in payments from mortgage deferrals

    “They’re going to make more money because they’ve just loaned you more,” said Peter Gorham, an actuary with JDM Actuarial Expert Services.

    “I don’t know that I want to say it’s profiting. I would say it’s not costing them a penny.” he said.

    The Canadian Bankers Association issued a statement late Sunday night saying, “Customers should understand that [a deferral] is not mortgage forgiveness. Mortgage deferral means that payments are skipped for a defined period of time, during which interest which would otherwise be part of the deferred payments is added to the outstanding balance of the mortgage.”

    But initially many Canadians looking for deferrals said, after waiting for hours on hold, they were told they didn’t qualify. One BMO customer — who is actually a former BMO branch manager — said he was told he needed a full credit check and credit application and even then the bank would not tell him their criteria for approval.

    “I was on hold for 11 hours [March 19] and then five hours [March 20],” said Lindsay Gillespie, who has a mortgage and a line of credit with FirstLine Mortgages, a division of CIBC.

    “I finally got through and was told there’s nothing that can be done right now, they don’t have anything set up. I was told to call back another time,” she said.”

    https://www.cbc.ca/news/business/mortgage-deferral-rbc-banks-covid19-coronavirus-credit-card-1.5505704

    1. Bal

      at 11:45 am

      The situation is getting worse….honestly I did not even take this virus that seriously….but things are getting darn scary now…

      1. condodweller

        at 2:50 pm

        I’m glad to see more people taking it seriously. Best advice I heard was to treat yourself as if you had the virus and don’t want to pass it on to people and family.

        I know people are in denial but it’s not difficult to see where this is heading. Look at China and Italy. We are only a few weeks behind Italy.

        It was an eye opening comment from a Chinese doctor helping out in Italy. After all the measures they have taken with the complete lock down, he said they are still not doing enough.

    2. Pragma

      at 12:47 pm

      banks know how much cash and stocks you are holding. If you can use those to pay your mortgage then they expect you to do that. They will only look to defer if you are in a desperate situation. They will probably be even more rigid with those holding “investment” properties. I’m not sure what people are expecting…

      1. Appraiser

        at 1:16 pm

        Rob Mclister over @ratespy is apparently hearing reports that some people are lying to their lender about their circumstances, even fabricating stories about losing their jobs, evidently in hopes of double-dipping and scamming the system.

  8. Not Harold

    at 11:39 am

    About the new listings..

    Airbnb is GONE for at least 6 months.

    Anyone that doesn’t have a longer term guest in their unit is at $0 cashflow and is unlikely to get another booking.

    ICE and other notorious high volume buildings are being flooded with sale listings and looks like regular rental listings are also up a great deal.

    Anyone who’s owned their condo for more than 2 years should be OK but anyone who recently took delivery (or god forbid is waiting on status certificate) of a unit meant to be Airbnb’d is going to take painful losses.

    Though ICE could be a good building if it wasn’t a hotel…

    1. condodweller

      at 1:51 pm

      it’s going to be interesting to see how this plays out. It seems to me the natural progression will be trying to find long term tenants to replace over night guests. I’d hate to see the vetting process for tenants going forward. There may be a few people with solid jobs who might get a deal on a rental.

      One would think there will be downward pressure on both rents and investment property sale prices.

      1. Chris

        at 1:58 pm

        You’d think they would move to long-term rentals, but based on the articles I’ve seen talking to AirBnB hosts, many of them are jumping straight to selling. A lot of them are hesitant to take on tenants, particularly when evictions are on hold.

        Getting a tenant who doesn’t pay their rent could be impossible to get out for the foreseeable future, as well as make the home almost un-sellable; after all, who would buy a place that has a tenant not paying rent and who can’t be evicted?

        1. condodweller

          at 2:25 pm

          “after all, who would buy a place that has a tenant not paying rent and who can’t be evicted?”

          Someone who is strong enough financially and is able to buy a unit cheap enough from a desperate seller to make it worthwhile to wait things out without income for a year or so. Everything becomes attractive at a certain price.

          1. Chris

            at 2:54 pm

            Good point! Have to imagine it would be a pretty steep discount, to purchase a tenanted unit, with a non-paying tenant, and no eviction mechanism.

    1. Appraiser

      at 1:27 pm

      I see he alluded to himself today on twitter as a…”meticulous data scientist”

      1. Appraiser

        at 1:41 pm

        Also, still no disclosure that ALL of the data is unofficial and / or based on preliminary reporting. He doesn’t even acknowledge that the source data is from TRREB.

        You would normally expect that a supposed PhD candidate (who also claims to be able to invent algorithms) would be a little more academically rigorous.

        1. Chris

          at 1:47 pm

          Would you also like him to have his tweets peer-reviewed before publication?

        2. Derek

          at 3:27 pm

          What are you on about, Appraiser? Most anyone that reads him knows where he gets the data and limitations of that data. Isn’t it just another week of the same information you were re-posting here? What’s the difference? Praise be to LG 🙂

          1. Appraiser

            at 3:52 pm

            Yeah, I guess you’re right. Praise be! 🙃

    2. Chris

      at 1:49 pm

      Interesting stuff! Curious to see how the weeks develop as this goes on. Glad to see John shared all data on sales, listings, and price, and how they compare to last year.

  9. condodweller

    at 1:46 pm

    David, the most noteworthy of this post to me is the listing with the tenant in place. I imagine it would be difficult to count past listings being sold with tenants in place but it would certainly be interesting to see a future tally.

    I’m curious if banks will help out investors with their mortgage(s) on their investment properties. If not, I’m guessing there will be a tone of new listings?

    Regarding hand shakes, I doubt that a few months or even a year of social distancing will eliminate a tradition that’s hundreds of years old.

    1. Chris

      at 1:54 pm

      I don’t know why anyone would risk buying a place with a tenant right now. The province has put evictions on hold, so if you want to move in yourself, how would you get the tenant out if they refuse to leave?

      Plus there’s talk of an April 1st rent strike in Toronto, and probably scores of tenants who have lost their sources of income. With no eviction enforcement, not much recourse for the landlord, at least for now.

      1. condodweller

        at 2:17 pm

        “I don’t know why anyone would risk buying a place with a tenant right now.”
        This was my point. But if the banks don’t bail people out with their negative cash flowing investment properties and the tenant can’t/refuses to pay rent what choice do they have but to sell? I’d be curious how many new listings we’ll see with tenants attached.

        Worst case scenario is sellers will be begging buyers to take their condos and you can imagine what that will do to prices. The question then becomes at what price would you be willing/able to buy a tenanted condo?

        Best case scenario is the government mandates the banks to “help” out with all mortgages and we just go into a freeze until the pandemic is resolved and things go back to normal.

        It will be very interesting to see how this plays out.

        1. Chris

          at 2:31 pm

          Definitely going to be interesting to see how it plays out. I think government is going to have to step in, in a much more significant way than they have already.

    2. Jimbo

      at 6:45 pm

      I doubt banks help investors and I doubt investors are within 5 months of default without rent payments.

      6 months from now if we are still out of work, all bets are off. This is what I meant earlier when I said we are going to have a choice; economy or society morals.

      1. Appraiser

        at 7:38 pm

        Some mom and pop investors rely on rental income to support their retirement and to pay the bills. Something they scrimped and saved and planned for, all of their working lives.

        Not all real estate investors are multi-millionaires.

        1. Jimbo

          at 5:22 am

          $6,000 -$12,000 in savings per property wouldn’t make them millionaires and should cover up to 6 months of mortgage without rent payment.

          Even if they didn’t have that which would be utterly rediculous IMO, they would have access to HELOC from primary residence to get them through.

          You may have a little more insight than I do on this for sure, but if they don’t have the above then the whole market for that segment has been teetering on the verge of collapse….

          1. Appraiser

            at 7:09 am

            All investors are discreet individuals with unique financial circumstances. Broad assumptions and generalizations are prime examples of pure conjecture.

            The notion that investors can go f$#k themselves, because they all have loads of money in the bank and a giant HELOC to fall back on, betrays a level of naivete and bias that is all too common.

        2. Jimbo

          at 9:41 am

          I’m not saying they can go ____ themselves at all.

          All I’m saying is I can’t see a single person buying rental properties to rent or airBnB without a 6 month contingency fund to float the property. Maybe if they bought it in the last 6 months but to me even that is a stretch.

          How many people are living off the income of the rent coming in without another source of income from a pension+ CPP?

          IOT live off the income coming in from the rent, the outstanding loan must be low giving access to equity from within that property to tap into for monthly payments until this blows over.

  10. Derek

    at 2:04 pm

    Developing story about Province ordering ALL “non-essential” businesses to close. Not clear yet what that will look like…

    1. Chris

      at 2:19 pm

      That should be the final nail in the coffin for open houses. Possibly showings as well. Can’t see those passing the province’s litmus test as “essential”.

      1. Ed

        at 4:43 pm

        Hey, you gotta sell then you gotta sell. Can’t stop that.
        I’ll bet you a nickel.

        1. Chris

          at 4:58 pm

          I don’t think they’d stop all sales. People who need to sell would probably be livid. But they may push for virtual only showings.

          With government telling us all to stay home as much as necessary, hard to imagine them carving out an exception for venturing out to see that new listing your agent just told you about.

          1. Derek

            at 5:14 pm

            Whether there is an air-tight, loophole-free prohibition against in-person viewings or not, I imagine the real issue will be whether or not the buyer pool falls off the cliff for a while. If there is an urgency to sell, will there be anyone with an urgency to buy? I can imagine some deal-seekers and opportunists jumping in to try to take advantage of those that need to keep an active listing during a mandated halt to in-person activity. It is showing your cards a bit, I would think, to keep your listing active or come to market in the first place right now, no? On the other hand, maybe activity just won’t fall below a long term average by any significant degree. Maybe as LG said recently, demand was so strong coming into the spring that things won’t get too bad. And, isn’t it written in stone somewhere that “good listings” will always sell? Anyway, there’s some random thoughts for the day.

          2. Chris

            at 5:30 pm

            All good questions.

            As Rob McLister said the other day, “If I were a renter, I would not be rushing to buy my first house”. So much uncertainty surrounding the economy, employment, the pandemic, etc. Hard to imagine many buyers won’t take a step back until the future becomes a bit less cloudy. But who knows; maybe Toronto real estate truly is the one asset class in the world that is perpetually unstoppable?

        1. Chris

          at 8:55 am

          “ To the people who seem to think they’re invincible: You’re not. So go home and stay home. You’re not just putting yourself at risk, you’re putting others at risk too – nurses and doctors, grocery store workers, your grandparents, and so many others. #StayAtHomeSaveLives”
          – Justin Trudeau

          Real estate agents may have been deemed essential. If you think that means open houses and in-person viewings are as well, you’re naive.

  11. Derek

    at 9:35 pm

    Scott Ingram has a blog post up covering a bunch of issues; at the risk of oversimplifying he offers his best guess as a relatively flat HPI over the next few months.

    1. Appraiser

      at 8:14 am

      As our LG made clear yesterday, prices have been once again galloping ahead at an unsustainable annualized pace(~15%). Inventory is hovering around one month’s worth of listings for both freehold and condos, which is very low considering that it is generally accepted that 4-6 months of inventory represents the mythical “balanced market.”

      What this market needs, and has for quite some time, is a large and immediate injection of new listings. Unfortunately the market says otherwise, as our LG noted, new listings were up 50% the week ending March 14th and just 3% last week. Whether that is because of the March break or COVID-19, is yet to be determined.

      1. Chris

        at 8:28 am

        “You can see that new listings were up 50% the week ending March 14th and were up only 3% last week. I believe this volatility has more to do with the fact that March break fell during the 2nd week of March last year vs the 3rd week this year.”

        – John Pasalis

        1. Appraiser

          at 8:53 am

          LG has spoken. So it is written, so it shall be. Praise be.

    2. Chris

      at 8:29 am

      “Nobody knows what’s going to happen with the pandemic, let alone the economy and the real estate market. I think it’s pretty safe to say a recession is likely, and it could be a severe one. That can’t help the housing market. There will be would-be buyers that will be laid-off. They won’t be able to get a loan until they’ve got a new job – and beyond that lenders like you to be clear of your probationary period (often 3 months). And you figure there will be some extended homeowners that won’t be able to afford their mortgage payments and may be forced to sell. Both of those are headwinds for the real estate market (reduced demand, increased supply). I can’t see a way demand will be increased in the near to mid term (the recent interest rate cuts are ony going to help people that still have jobs).

      If people aren’t going out to look at houses, I don’t think they’ll be buying houses. Checking in with my own clients I’ve seen a few different reasons they’re taking their foot off the gas currently:

      – don’t want to go out of the house (and into the homes of others)

      – lost some money in the market which affected down payment so want to do some more saving (Note: if you’re purchasing imminently I always advise having your money in low risk stuff)

      – waiting it out to see if prices drop

      I see lower demand as a bigger factor than increased supply in the near term, because we’re starting with such low inventory numbers to begin with.”

      – Scott Ingram

      https://areacode416homes.com/what-i-am-seeing-on-the-ground-in-covid-19-times

      1. Chris

        at 11:02 am

        “Way more headwinds (and some real gale force ones) than tailwinds for prices. Other than lower interest rates, only thing I’ve heard that could be counter is maybe some equity shifts to real estate by people that see it as more stable.”
        – Scott Ingram

  12. Derek

    at 12:11 am

    Some Essential services:

    26. Construction projects and services associated with the healthcare sector, including new facilities, expansions, renovations and conversion of spaces that could be repurposed for health care space;

    27. Construction projects and services required to ensure safe and reliable operations of critical provincial infrastructure, including transit, transportation, energy and justice sectors beyond the day-to-day maintenance;

    28. Construction work and services, including demolition services, in the industrial, commercial, institutional and residential sectors;

    29. Construction work and services that supports health and safety environmental rehabilitation projects

    —-
    67. Land registration services, and real estate agent services and moving services;

    —-

    65. Professional services including lawyers and para-legals, engineers, accountants, translators

    1. Chris

      at 8:30 am

      Seems nearly everyone’s workplace is essential. Might have been faster to list the non-essential ones.

      1. Ed

        at 8:53 am

        Stores that exclusively sell ‘Cat apparel’ are closed.

        1. Chris

          at 9:00 am

          Since animal feed stores are essential, you can just swing by Ren’s Pet Depot for your cat apparel needs!

          1. Ed

            at 9:31 am

            Thank you for that bit of advice. I’ll swing by and get Snowball a new spring outfit.

          2. Chris

            at 9:36 am

            Happy to be of service – wouldn’t want you to be deprived of feline accoutrements.

  13. Chris

    at 11:32 am

    “Some of Canada’s largest banks are revising down their growth forecasts once again as industry shutdowns and layoffs suggest the recession will be deeper than originally expected.

    The nation’s economy is likely to shrink by somewhere between 10 per cent and 24 per cent in the second quarter on an annualized basis, the latest forecasts show. That would mark the largest quarterly decline since at least the early 1960s, when comparable data began.

    That would also be much deeper than the current record of -8.7 per cent during the 2008-09 financial crisis. The labour market will take a beating as well with predictions for the unemployment rate to rise as high as 10 per cent. To put that in perspective, Canada’s job market was in fairly healthy condition until a month ago, with the unemployment rate below six per cent, close to all-time lows. The half-million jobless claims filed last week, representing 2.5 per cent of the labour force, has only reinforced the concerns.”

    https://www.bnnbloomberg.ca/canadian-banks-predict-largest-contraction-since-1960s-1.1410941

    In related news, from the Toronto Star today:

    “Canadian job losses could soon jump to almost 3 million, expert says

    The record half-a-million Canadians who filed for employment insurance last week is likely just the first in a series of blows to the labour market by COVID-19, with analysts predicting many more layoffs to come.

    According to Statistics Canada’s most recent labour force survey, 5,992,500 people are employed in the following four sectors, which have been the hardest hit by COVID-19: wholesale and retail trade; information, culture and recreation; accommodation and food services; and transportation and warehousing. Together they employ nearly one-third of Canada’s labour force.

    Not all aspects of these sectors have been affected, but some segments have been forced to close entirely. It’s possible the 500,000 jobless claims filed last week could just be a fraction of the total claims by the end of the month, according to Rafael Gomez, a University of Toronto professor and director of the Centre for Industrial Relations and Human Resources.

    Gomez said that 50-per-cent job losses in the four hardest-hit sectors — or 2,961,250 unemployed people — seems like a “conservative estimate” if the current physical distancing protocols continue.”

  14. Chris

    at 11:52 am

    Scott Ingram’s updated longer term predictions:

    “As far as predicting longer term goes, with things changing daily it’s really difficult to forecast. But the one thing that has been pretty consistent is that for the most part people have been underestimating things. We didn’t go straight to a state of emergency, but stepped up to that point. I think this recession has a chance to be pretty ugly. I know many of these emergency measures (deferred rent and taxes, etc.) and the large jumps in unemployment are unprecedented in my lifetime, and likely beyond. And in that scenario it’s hard to imagine strong demand for housing, especially coupled with looming uncertainty and low consumer confidence. So it’s very conceivable that prices will drop. As one of my Twitter followers mentioned, with basically all assets devalued, it’s hard to imagine house prices not dropping.

    416 freeholds

    With freeholds, I think it’s safe to say flipping should dry up for awhile. First of all timelines might be drawn out on the construction side (harder to get labour crews, could be supply shortages). Secondly, houses may take longer to sell. Thirdly, if prices are dropping, that’s shrinking margins as well. It all adds up to a lot more risk, which should make this segment unattractive. I also think we may see less foreign buyers for the time being. Although my understanding is that lot of foreign buying occurs sight-unseen, you’d think there will be travel limitations, plus with stock markets down worldwide, people have less money to invest in other places. Then again, maybe people double down on the “real estate is a safe haven” mindset.

    416 condos

    Similar stuff I mentioned in the 3 month look applies. I think investor demand will slow right down. A lot of factors (large increases in rental listings were already happening before vacant Airbnbs were thrown on the long term rental market recently, and we know Airbnb measures banning ghost hotels were coming this year anyway which should further increase supply) are pointing to cheaper rent. In fact, a new report shows one bedroom rents in Toronto in February are down slightly year-over-year and down 3.2% from January. We’ve also got calls for a rent strike with one petition calling for the the government to suspend payment to pay rent having over half a million signaturs. Who wants to become a landlord in that environment? Plus the largest reason people were buying these investment condos was for the capital appreciation. Nobody is buying thinking of the risk of prices going down because they only go up, right?

    Add to that the record 29,500 condo completions scheduled in the GTA for this year. (These seems likely to come down due to so many people not leaving homes now.) Now a lot of those will go to end-users that will move into them. But half of the ones in the 416 were likely purchased with the intent of renting out. So add those to the supply of rental apartments I already talked about going up above. Doesn’t look good for rent prices. Some will likely want to cash out ASAP, adding to the resale supply. And of course add in a lot of unemployment. I can’t see any much of a case for increased demand or tightening supply in the mid-term, but the opposite is easy to see.

    The next two months of statistics will be very interesting to watch. March will only partially be under the specter of COVID-19 and things have just begun to shift. So April will be the really interesting one to see.”

    https://areacode416homes.com/what-i-am-seeing-on-the-ground-in-covid-19-times

    1. Bal

      at 12:52 pm

      Chris- I am looking to buy the house, and reasonable prices should be good for me..but for some reason, I believe nothing else matters to real estate other than higher interest rates…..only and only higher interest rates can bring the house prices down…..even if you review 2018 as interest rates started to go up…house prices began to come down. The end of 2019 when everyone realizes that interest rates will come down….real estate market started to heat up.

      .

      1. Chris

        at 1:46 pm

        Real estate is impacted by many factors beyond simply interest rates.

        “We talk about interest rates and we talk about supply and demand levels. But the primary indicator when we talk about real estate is job security.” – Romana King, Zolo

        “I can’t see a way demand will be increased in the near to mid term (the recent interest rate cuts are only going to help people that still have jobs).” – Scott Ingram, Century 21 Regal Realty

        Not to mention, we’ve previously discussed how many big lenders are actually increasing their mortgage rates.

        1. Bal

          at 2:11 pm

          You might be correct….and I hope you are…so I will be able to buy the house 😁….see I have my hidden agenda…lol

      2. J G

        at 4:29 pm

        Bal, are you looking to buy primary residence or investment property? I believe for primary you should buy when you can afford to buy (ie 20% down at least, more if it makes you feel comfortable). Also buy a place that suits your needs (if you have 2 kids, a condo is probably won’t cut it).

        These factors are probably more important than trying to time the market

    2. Appraiser

      at 3:34 pm

      Best Canadian prediction of the year: Garth Turner on real estate (circa 2008) https://www.straight.com/article-177788/best-canadian-prediction-year-garth-turner-real-estate-markets

      “Former Liberal and Conservative MP Garth Turner probably deserves this honour for his book Greater Good: The Troubled History of Real Estate (Key Porter Books, $21.95), which was released last March, less than a month after the Vancouver housing market peaked.”

      “Few people in Boston, where home values doubled between 1997 and 2007, would have then expected, without warning, the worst market decline since 1958,” Turner wrote. “I trust nobody in Vancouver, Kelowna, Saskatoon or Toronto expects that either.” ~Garth Turner

      Predictions are hard, especially about the future. ~ Yogi Berra

      1. Appraiser

        at 3:43 pm

        “Housing market a bubble set to burst, Hilliard MacBeth says: Investment expert sees signs of an overstretched market despite solid growth since the mid-1990s.”

        “In this case, MacBeth says, a hard landing means prices could decline by between 40 per cent and 50 per cent, causing an economic recession.”

        Hilliard Macbeth, 2014.

        That was pretty close. He only missed it by 6 years.

          1. BJA

            at 4:30 pm

            Kint, please stop posting links to twimg. Googling it/them pulls up all sorts of security concerns from the likes of Norton, Twitter, etc. Copy and paste if you must.

          1. Bal

            at 4:59 pm

            Well, well, I guess their predictions did not come true as there was no job loss or higher interest rates in this years….but I know for sure that people who bought on high prices of the beginning of 2017….and only bought for flipping., many of them lost big money…..my neighbour was one of them….

          2. Chris

            at 5:21 pm

            Exactly, Bal.

            Appraiser is getting desperate, so is digging back over a decade for predictions, to somehow try to convince anyone who still places stock in his opinion that Scott Ingram’s prediction today is wrong.

            Not a very compelling argument in the least.

        1. Chris

          at 4:15 pm

          You’re quoting Garth Turner and Hilliard MacBeth as a way to… what, discredit Scott Ingram’s prediction? All predictions? Because let’s not forget you made your own prognostications a few short days ago.

          Otherwise, this just seems like more incoherent ramblings.

          1. Appraiser

            at 4:40 pm

            “The economist realtors love to hate: David Madani stands by 2011 prediction of Canadian housing ‘day of reckoning’
            ‘Enjoy it while it lasts…Tell these real estate people just because it hasn’t happened, doesn’t mean it won’t,’ Canada economist of Capital Economics says” https://business.financialpost.com/personal-finance/mortgages-real-estate/the-economist-realtors-love-to-hate-david-madani-stands-by-2011-prediction-of-canadian-housing-day-of-reckoning

            As we all know, there is nothing more exact than a confident prediction, and if you’re wrong, be sure to double down and ‘stand by’ it stubbornly.

          2. Chris

            at 5:23 pm

            More incoherent nonsense. Try answering the question.

    1. Derek

      at 5:35 pm

      I don’t think Ingram was so pessimistic that it required Appraiser to fire all of the “failed prediction“ ammunition at once. Save some arsenal for later! Are any knowledgeable public talking heads currently calling an imminent GTA RE crash? Who? Further, is anyone predicting what it would look like? Any names I should be following on the Tweety?

      1. Chris

        at 5:42 pm

        Ya I’m not sure what about Scott Ingram’s predictions got him all fired up. Maybe it was because he dared to question Toronto real estate’s “unstoppable” status?

        Most of the reputable commentators seem to be saying pretty much what Ingram said; it’s really hard to see the future at this point, they’re just giving their best guesses, and it’s going to heavily depend on how the pandemic develops.

      2. Appraiser

        at 7:10 pm

        @ Derek.

        Nothing against Scott Ingram. In fact I like him, he seems knowledeable and does some really excellent number crunching.

        But I have yet to meet anyone who can predict the future.

        1. Chris

          at 7:19 pm

          “But I have yet to meet anyone who can predict the future.”

          Ironic, given this chain of comments was initiated with my re-posting of your predictions.

      3. Appraiser

        at 8:18 pm

        @Derek: Regarding knowledgeable talking heads.

        Sorry, I have no recommendations. I stopped listening to “expert” prognosticators a long time ago. Watch BNN. It’s rife with smart sounding, jargon-spewing oracles that have some investors hanging on every word. The people who call in seem lost, looking for a guru to show them the way.

        “Expert” doom and gloomers are a dime a dozen.

        Create your own future, don’t wait for someone else to tell you what it will be.

        1. Derek

          at 8:47 pm

          Ha! True enough, but I need content— to keep me from looking at my portfolio 🤢🤢🤮

    2. Verbal Kint

      at 5:54 pm

      Maybe take the high road, and cut Appraiser the slack that he hasn’t cut equity investors, bears, renters, or people who published (or reviewed) books a decade ago.

      “I don’t have to tell you things are bad. Everybody knows things are bad. It’s a depression. Everybody’s out of work or scared of losing their job.” — Howard Beale, Network, 1976

      We’re all stressed. But Appraiser seems REALLY stressed. Fifty+ posts one day, then totally misreading another poster (with bonus profanity!), now regurgitating decade+ old book reviews apropos of nothing… Some of his posts, which purportedly talk about rando small-time real estate investors, clearly seem autobiographical. I don’t know if he’s looking at vacancies, bad tenants, a drop off in appraisal income, or mortgages coming due for renewal, but he’s obviously really stressed.

      I liked skewering David when he said silly things. Lately I’ve liked Appraiser more, because sillier. But now, in my judgement there’s probably VERY high stress, so I’ll stop responding to him.

      Stay healthy, everyone. Especially you, Appraiser.

      1. Appraiser

        at 6:06 pm

        Don’t you have any goof ball links attached to this one?

        1. Appraiser

          at 7:24 pm

          And Verbal, the whole stress theory – is that the best you can conjure?

          How about another one of those snappy analogies.

          1. Chris

            at 7:27 pm

            Reply to him again in another hour or two. That’ll really prove that he hasn’t gotten under your skin.

      2. Derek

        at 6:14 pm

        Verbal, can you confirm or deny my theory that you are actually a buddy or colleague in the same office as our Host and you text each other to laugh about whether or not Verbal “went too far this time”? 🙂

        1. Verbal Kint

          at 10:47 pm

          At this time, all that I am willing to confirm is that I do not own a pet bear.

      3. Chris

        at 6:31 pm

        You do as you like, Kint. Your comments to appraiser have certainly made me chuckle, but I’ll live without them.

        As for me, I don’t plan on letting up. I’m working from home, doing client meetings through phone and Zoom, so it’s easy enough to post in opposition to his silliness.

        Being stressed doesn’t give him carte blanche to say whatever he wants unopposed.

  15. Chris

    at 5:54 pm

    “Nearly a million Canadians have filed for employment insurance (EI) as the novel coronavirus outbreak ravages Canada’s economy.

    The number of jobless claims received by the government between Monday, March 16 and Sunday, March 22 has reached 929,000, a source with knowledge of the data confirmed to Global News.

    The new figure represents a near doubling of claims since Prime Minister Justin Trudeau said in a press release on Friday, March 20 that weekly unemployment applications had reached the half-a-million mark.”

    https://globalnews.ca/news/6726111/coronavirus-ei-claims-1-million/

    In other news, CTV reporting:

    “Unemployed workers line up at Service Canada to file EI amid COVID-19 pandemic

    TORONTO — Long lines have started to appear at Service Canada locations in the Greater Toronto Area as recently unemployed workers struggle to file applications amid the COVID-19 pandemic.

    At the facility located near College and Bathurst streets, the line stretched around the corner, with each person trying to maintain some physical distance while waiting for help.

    “Nobody is answering anything and of course rent is due in the next few days.”

    At the same time, people who are calling in to Service Canada with questions related to their applications are being placed on hold for long periods of time. One person on social media said they were on the line for four hours in order to get their question answered.”

    1. Appraiser

      at 6:10 pm

      Stop it, you bears are really scaring me this time.

        1. Appraiser

          at 7:01 pm

          No, I capitulate.

          The real estate market is going to crash so hard, nobody will be left unscathed.

          The carnage will be of biblical proportions. Blood on the streets. There will be wailing and gnashing of teeth.

          And it will never ever recover.

          1. Chris

            at 7:03 pm

            Kint was right, you do seem pretty stressed.

          2. Derek

            at 8:30 pm

            Here’s a thought I’m pondering. Now and in the next week or two, are the Davids, Scotts, Johns and Michelles recommending that the first time buyer, move up buyer, and / or investment ppty buyer get in the mix pronto, or wait?

          3. Chris

            at 8:32 pm

            Good question – maybe the David here can address that at some point in the near future.

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  17. Sohan

    at 10:55 pm

    Waste money on real estate, Instead of food. You will be 10 ft. Underground. It will take 30 to 40 years before it will appreciate. Waste more money. I telling you from My personal experience. If you still don’t believe me Good Luck. no Chance.

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