Will The Stay-At-Home Order Affect The Market?

Business | April 19, 2021

stay at home

What a lovely little Sunday, I had!

With only one client to show around, I had planned to take a half-day.  But no appointments were permitted on this cute bungalow on Midland Avenue on Sunday, so now here I was, without any work to do!

The morning was a little chilly but that didn’t stop us from getting out and moving about.

Rosetta McLean park was beautiful on Sunday afternoon.  My wife, myself, my 4-year-old daughter, Maya, and my 14-month-old son, Duke, ventured out and walked around, with the kids exploring like they’d never seen anything like it before.  Oh, wait, Duke actually has never seen anything like this before, since he was born one month before the pandemic started last year, and he would have been only a few months old last summer and not able to walk around at his leisure.

I heard the parks were closed, right?

And then suddenly, they were open?

I don’t know.  But I’m also not sure that I care.

Many of you are cringing as you read this.

“What’s he going to say?” you’re wondering.  “What side is he going to take?”

This is what society has devolved into over the last few days as people try to make sense of new pandemic restrictions, as well as make sense of the do-overs and walk-backs that the government has issued in the past two days.

I’m not really on a “side” per se, although I’m shocked at the number of people who are.

Make the mistake of going onto social media and you’ll see, first-hand.  I’m bewildered by the number of real estate agents – those who are public figures, who make their living with their personalities and personas, who are putting outrageous comments into print for all to read.  That goes for both sides of the pandemic “debate.”

I would like to attempt to leave politics out of this today, but that’s tough.  I think all three levels of government have done a poor job with this pandemic, and although it’s the federal government’s job to get the vaccine and the provincial government’s job to distribute it, it seems the province has been taking the most heat.

History will show how the provincial government has made a mess of this, but I only hope that the federal government won’t remain unscathed as they generally have thus far.

When Doug Ford talked about giving the police powers to pull people over to ask where they were going, I think we all felt this was going past a point that is acceptable to the public.

I have been exceptionally careful since all this began in March of 2020 and I have taken very few if any risks.  I’m in favour of the government attempting to mitigate transmission of COVID-19, and I’m in favour of almost all of the precautions we’ve taken, collectively, as a society, thus far.

But we’re at the point now where it’s clear that nobody knows anything.  Not what’s happening today, not what will happen tomorrow, and sure as hell not what to do about it.

So, when in doubt just head to the park and enjoy a Tim Horton’s coffee…

pandemic

Since the pandemic began, we’ve gone through a constantly evolving set of rules, regulations, acceptable practices, and parts of the economy opening and closing.  These have evolved, changed, gone back and then forth again, and been turned upside down and backward as individuals themselves choose what to think or believe.

In the real estate market, we began the onset of the pandemic by basically freezing and not knowing what to do.  Listing and buying activity were both down 80%, with many agents just packing it in for the time being, and many Toronto brokerages actually locking their doors.

Within a couple of months, we were back up and running at “full speed,” and as history has shown, the market ended up taking off like a rocket, pandemic or not.

I also believe that history will ultimately show that the pandemic was a cause of the appreciation in the market, whereas most people would have thought the opposite when this was thrust upon us back in late-March of 2020.

I sure thought the opposite!

How could we not?

But the pandemic caused people to look at their lives and take stock of everything in it.  I have identified over the past year that my family is more important to me than I ever understood.  “When this is all over,” as we continue to tell one-another, I am going to ensure my mother and my father are a greater part of my children’s lives, and I’m going to try to take more time off to spend with them, and my family.

Every single one of us has had those thoughts, both about what we’ll do “when this is over,” but also about the things we value and can change now.

How many people took up some form of exercise during the pandemic or changed their diet in search of better health and fitness?

Who among us developed a love of cooking, or reading, or another pastime that was completely foreign, pre-pandemic?

I bought my house in the summer of 2018, and I did so knowing that this was a “forever home,” so when it came to taking stock of our surroundings during the pandemic, I didn’t feel the need to make any changes there.

But a lot of people did exactly that over the last fourteen months, and they continue to do so.  I’ve experienced just about every “type” of move you can imagine.  I’ve had clients sell their houses and move out of the city, feeling that the outdoors is more important than ever, and trading their 3-bedroom semi-detached houses for acreage up north.  I’ve had claustrophobic condo-dwellers feel the need to get into a detached house with a backyard.  I’ve had clients quit their jobs, start a home-based business, and move to the “boonies.”

Keep in mind, all of this happened during a pandemic.

We started 2021 with record sales in each of January, February, and March, which is to say that each month set a new record for Toronto-wide sales in that individual month.

So can this continue now that we have a new “stay-at-home order?”

That’s the question that was on everybody’s mind in the past week and it’s dominated talk in real estate circles.

In short, the prevailing answer seems to be “yes,” but some cynics among you might argue that this will be our answer no matter what.

I have two listings with offer dates on Monday, both of which I expect to be busy.  Both were listed last week before the stay-at-home order, but both continued to get significant interest through the weekend.

I am bringing two more listings to market this week and I’ve had conversations with both sellers about expectations moving forward.

There’s no real way of knowing what’s going to happen with respect to showings but we all seem to be highly optimistic about the market.

Not a single one of my buyers has changed their criteria or put a hold on their search.  In fact, most seem to be more aggressive now than ever before.

There’s going to be a sentiment out there that “things will slow down” but I think those sentiments are borne of desire.

Buyers want the market to slow down.  They want to see fewer buyers out there competing against them and they hope that the stay-at-home order keeps buyers away.

Sellers want to see fewer sellers out there too.  They’re hoping that a good number of sellers think, “This isn’t the right time,” and delay listing, so that there’s less competition.

And of course, many interested market onlookers would love to see buyers staying at home, interest levels waning, and sales declining.

But is this actually going to happen?

I honestly don’t think it will.

Part of my reasoning comes back to the effectiveness of the stay-at-home order in the first place.  I’m not, in any way, suggesting that people ignore this, but rather I am observing that people are ignoring this, and have been for some time.

I’m not going to any house parties any time soon.  But I am going to run on Sunday night.  Is that allowed?  If it weren’t, would I care?

We’re all going to do as we see fit, and for some of us, that means assessing the rules that are in place and deciding whether we believe in them or not.  I’m sorry to point out the obvious, and this is a classic don’t-shoot-the-messenger case.  I’m merely pointing out what’s going on in society.

There are those that will think now is not the time to be buying or selling a house or condo.

And then there are those that disagree.

I could not believe the battle that was raging on our office Facebook group this afternoon.

Agents versus agents.

One agent saying she would love to see any data that suggests touring houses, responsibly, in masks and gloves, with one other person, is leading to a surge in COVID cases.

Another agent was going on about India having 300,000 cases per day, and Brazil having 4,500 deaths per day, and that all Realtors have a duty to discourage sellers from listing and buyers from booking showings, so everybody can remain indoors.

It went on, and on, and on.

Then another guy starts with the graphs and charts, pointing out that cases declined in January during the previous lockdown.

And another girl talks about how lives around the country are being ruined by shutdowns, and how COVID is killing fewer people than the measures taken to stop the spread.

Yikes!

This should come as nothing new to any of you.  Whether in person (from a distance…) or online, there are opinions raging everywhere.

I’m not going to wade into that today, except to say that I’ll continue to take precautions as directed, and as it pertains to real estate, I’m ready for anything.

I expect the market to continue to be busy, and even if we saw a modest decline in buyer activity, I don’t expect it would make a material difference.

Case in point: do I really need 19 offers on a condo listing?

No, I don’t.

And yes, I will admit that this is not healthy for the real estate market, but that’s a topic we’ve already explored.

But if three of those buyers left the market, truly choosing to “stay at home,” we still would have had 16 offers, and we still would have sold for the same price.

A few buyers leaving the market wouldn’t have an impact.

But what if fewer sellers decided to list?  That’s certainly the last thing the overheated market would need.

There are those out there who believe that the stay-at-home order will actually promote more showings than less.  Schools are closed, people are working from home, and there’s nothing open, and nothing to do.  But, oh, wait – you can go look at real estate.

And then there are those, myself included, that simply look back at the last “lockdown” in January as an indication of what impact, if any, these new restrictions will have.  Recall that January was a record-setting month for the real estate market, and the lockdown didn’t keep any buyers or sellers on the sidelines.

I dunno, folks.  I just don’t see any impact ahead.

I realize that this is a touchy subject.  I don’t want people to think that I’m promoting the idea that real estate enthusiasts should get out there and try to transact during a stay-at-home order, but rather, I’m acknowledging that it’s already happening.

Regardless, a good listing agent can feel his or her way through any market, and adapt on the fly.

Case in point: I had a listing recently that I thought was going to be a gong-show.  It was the nicest place I’ve had in quite some time, staged and showed to perfection, and I told the sellers we would have 50 showings inside of one week.  On the first day of the listing, we had two showings booked.  I told the seller not to worry, and that I would let him know when to be concerned.  After we only had two showings booked on the second day of the showing, I called him and said, “Okay, now we can be concerned.”

Our goal went from holding firm on the offer date and trying to get fifty showings that week, all of a sudden, to trying to work with a bully offer.

We had one lead, and we played it off as though we weren’t interested in working with the bully offer.  Nobody knows whether we’ve had four showings or forty showings, so it’s all in how you play it.

In the end, we sold for the price we had hoped for, via an offer night, but through a bully offer after a limited number of viewings.

You can always adapt on the fly.

No matter what happens in this market over the next day, week, month, or season, all the real estate market participants have to be paying very, very close attention to which way the wind is blowing.  It can change in an instant, and yet many buyers and sellers are too slow to change with it.

When you go from a cool market to one that’s heating up, it means opportunity, and I think a lot of people experienced that in the condo market in early 2021 when they caught some condo sellers off-guard.

Whether it’s pricing strategy, listing strategy, offer strategy, or something in between, any change in market activity is going to change strategies that both buyers and sellers are going to take.

While I don’t expect much, if anything, to change in the next couple of weeks, I’ll most certainly be on the lookout.

Whether the market is up, down, or sideways, there’s always an opportunity to catch other market participants being slower to adapt.

So here’s hoping that everybody out there is still staying safe, responsible, and above all, reasonable.

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22 Comments

  1. Bal

    at 7:04 am

    Will The Stay-At-Home Order Affect The Market?…..NO, only higher interest rates will impact the market nothing else, and i have no clue when interest will move higher. even if move higher….
    By the way little kid’s pic is very cute

  2. Francesca

    at 7:14 am

    My parents sold their detached house in north york ten days ago and had 75 showing and 17 offers. They got way more than they ever imagined or expected. There was no competition in their area so it seemed every family looking for a large forever home toured their place and placed an offer. A week later my parents got involved in a four way bidding war on a large condo in the same area and won luckily. Again not much inventory or choice so hence the under list strategy to prompt a bidding war on the sellers behalf. The stay at home orders and lockdown has only fuelled the real estate market it seems as fewer listings hit the market probably from fear of having strangers inside your house. We sold last November and bought this past January and thought the market was over heated then, but it seems to be way worse now! As long as double bookings are banned and safety precautions are taken I think one can safely list and look at houses or condos during Covid.

  3. Appraiser

    at 7:47 am

    There seems little doubt that the effects of the pandemic are wide-ranging, not the least of which is the effect on our relationships with home and family.

    Home is not just a kitchen and a bedroom anymore, it’s also the office, the gym, the day-care, the classroom and everything in between.

    Many of those that were thinking of moving up or out one day in the future (almost everyone?), have decided to do so.

  4. jeanmarc

    at 8:33 am

    RE will not change in the foreseeable future as interest rates will not be sky rocketing as long as the Canadian government keeps up with their incompetency.

    As the article states, “I think the best policy for Canadians is this: When it comes to COVID-19 you’re on your own. Pretend you don’t have governments protecting you because in many ways you don’t.”

    https://www.theglobeandmail.com/canada/british-columbia/article-canadas-covid-19-travel-restrictions-are-an-inept-deadly-failure/

  5. Pragma

    at 10:33 am

    I just wanted to point out that on an annualized basis housing starts for March were at 335k. The expectation was 255k. The prior month was 250. These are INSANE numbers. If each of these houses is to be absorbed by an end user, we need population growth to jump by ~1m in a year. In normal years we average ~600k and it is safe to assume we’ve had minimal growth in 2020 and will have minimal growth in 2021. Builders are building anything they can, anywhere they can, and selling everything they can. There’s a builder now selling pre-construction homes through a bidding process! If this is not late stage behavior I don’t know what is. This is a big red flag.

    1. Bal

      at 11:49 am

      guess everyone is trying to take the advantage of pandemic…. from builders to lumber companies … like they won some kinda lottery …they are behaving same way how stores behaved beginning of the pandemic regarding hand sanitizers prices ..

    2. Appraiser

      at 1:45 pm

      @Pragma:

      Strongly suggest you familiarize yourself with the terms stock and flow.

      Also, monthly housing starts data can be notoriously choppy.

      In any case, an increase in housing supply would be very welcome.

      Build Baby Build!

  6. Pingback: Best Real Estate Agent In GTA – Will The Stay-At-Home Order Affect The Market? | Toronto Realty Blog!
  7. Marty

    at 1:52 pm

    I’m in a business where I see probably 3-4 Realtors a week (at their listed property usually), and I visit 6 or 8 currently listed homes per week on my own, but often arrive when other agents and clients are arriving/leaving for a showing.

    In the latter case, I’m just inspecting the property exterior so have little or no interaction with the agents and their clients, but from what I observe, they are all using good practices. And in the former case, every agent I’ve met lately has been very cautious about distancing – again, we mostly meet outside.

    I think the business is doing a good job.

    M.

  8. jeanmarc

    at 4:31 pm

    As I predicted one of my responses from last Friday’s blog. Will not impact much in the RE market here in the GTA/Vancouver. Two issues here. a). Loop hole here is how they will determine what is vacant. b). 1% is chump change for foreign-owned property owners. Percentage should be much higher given the low supply. Another incompetency of the gov’t.

    “The federal budget also proposes a national, annual tax on foreign-owned vacant or under-used residential properties. The one per cent tax would begin on Jan. 1, 2022, and would require owners, other than Canadian citizens or permanent residents, to submit a declaration outlining what the property is being used for, with penalties proposed for those who fail to file. This is similar to the speculation and vacancy taxes in British Columbia.”

  9. Condodweller

    at 4:36 pm

    1% foreign home buyer tax in the budget released today.

    The document is not available on the CRA website yet but I have heard anything about other taxes regarding re.

    1. Condodweller

      at 4:45 pm

      Haven’t – swipe error again.

      That 1% is for empty units so hardly any impact. Party continues….

      There is new money for affordable housing but CTV flashed it so fast on the screen I didn’t catch the amount. I think I heard billion so looking forward to see details.

      1. jeanmarc

        at 4:51 pm

        Affordable housing

        As part of Budget 2021, the Canada Mortgage and Housing Corporation would receive $2.5 billion over seven years to address urgent housing needs of vulnerable Canadians. Money is broken down, with some being allocated to building additional units, while other portions would go to supports for low-income earners and women.

        1. Condodweller

          at 5:26 pm

          Back of the napkin calculation brings that to 200-300 million for Ontario. Not bad. I wonder how much of it will ongoing subsidy/aid vs one time charge to build.

    2. jeanmarc

      at 4:49 pm

      Nothing else about taxes regarding RE. Nada, zip……

      Basically, selfie boy claims he is helping the middle class and pushing those in the lower bracket being pushed to middle class. Technically, he is giving the money from one side of his pants pocket and taking back from the other side.

      Who do you think will actually pay for all of this? Definitely not the rich (or ultra rich) since they made a killing since the pandemic.

      1. Condodweller

        at 5:21 pm

        Almost 400 billion deficit is astounding given total debt(Federal) in 2020 was 720 billion.

        I’m guessing this budget is focused on spending in order to get reelected and we can expect the tax increases in a future budget post-election.

        1. jeanmarc

          at 5:29 pm

          .OAS increase for 75 years and older
          .affordable housing spread over 7 years

          Gov’t are notorious for spreading the spending over a number of years to lure the voter in keeping them in power.

          Bottom line is that budget does little for addressing the RE issue. So much for all the rumors.

          1. Bal

            at 6:08 pm

            As expected …we all knew this will happen…no surprise…what is OAS? old age security ? over 75…lollol… i don’t think with this stressful life we will ever hit that age… i will be more than happy if i can even hit 60….lol

          1. Sirgruper

            at 8:14 pm

            Oops. Bingo was for Condodweller

  10. Average Joe

    at 10:45 pm

    Housing will continue to rip – we’ll be dealing with various restrictions until the end of the year at least. There’s nothing to do but think about being in a nicer space and that means buying or renovating. The government could not be signalling any harder that they want borrowing and spending to continue. Looking at the budget released today they are prepared to spend big themselves and they’ll get another four years to figure out how to deal with the debt hangover.

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