Calgary realtors bracing for a 'double whammy'
Price declines already predicted for 2020, now COVID-19 brings more uncertainty
That's how long-time Calgary realtor Len Wong responded when asked how the city's real estate industry is going to get through the tumult we're experiencing because of the COVID-19 pandemic.
"Everybody is still in shell-shock mode," he said from his Calgary office.
No one is willing to predict how the health crisis is going to affect buyers and sellers or prices and inventory. The Calgary Real Estate Board was already predicting 2020 would be a year to forget — and that was before the coronavirus was making news.
The board had predicted a slight uptick in sales but not housing prices because of an oversupply of properties on the market.
The board's chief economist says it's not just the virus that the market will have to contend with but also instability in oil prices sparked by a price war between Russia and Saudi Arabia.
West Texas Intermediate, the North American benchmark price for crude oil, has been hammered by both events.
"We also have to layer in the fact that the energy sector is also facing new challenges," said Ann-Marie Lurie.
Short-term, long-term impacts
Lurie says the short-term blow will be fewer sales and listings. The long-term question is tied to employment and the impact that is going to have on buyers and sellers.
Yes, lending rates are being lowered, but that won't help the tens of thousands of Calgarians who face employment uncertainty.
"What type of challenges might they be facing financially and how are their incomes impacted and for how long," she said.
And this is why realtors say there's too much uncertainty to gauge the impact of what they describe as an unprecedented event.
"Right now, you might qualify [for a mortgage], but in four weeks it could change, right? You just don't know," said Wong.
"Honestly, the virus is a big concern. I'm really worried about the oil prices," he said.
"If we cannot get our prices back up to a reasonable level, we're going to have some big problems here long term, and I think that's my fear right now, is we've got to get oil prices back up."
Open houses cancelled
Wong says his team has cancelled all of their open houses for at least the next two weeks. He's also seen people cancel plans to list their homes, including a woman with a five-month-old baby who doesn't want to deal with the stress of preparing to show her property to strangers whose health status is unknown.
The Real Estate Council of Alberta has posted a series of FAQs for buyers and sellers who may be worried about the spread of the virus. One of the options for sellers is to amend their listing agreement to limit or prohibit viewings altogether.
Justin Havre, another Calgary realtor who is trying to assess how the pandemic will affect his business — and the 60 people who work at his firm — says sellers have the right to defer on showings if they're concerned about exposure to the virus.
Market is 'coming to a crawl'
"Some sellers are, you know, understandably, declining showings. And I think, though, as more and more of this progresses, I think we're going to start to see less and less and it's just the reality of the circumstances," said Havre.
He says everyone has a responsibility — in all businesses and industries — to prevent the spread of the virus, to try and flatten the curve, to slow the rate of infections.
That includes his colleagues and clients.
"A lot of people, from what we are seeing, are kind of putting a pause on it," said Havre.
"The market is slowly coming to a crawl and that is to be expected when everybody is going to be forced to isolate in their homes and not head out and about, doing their normal day to day activities," he said.
One of the biggest challenges is trying to plan a contingency for a crisis that seems to have no foreseeable end.
"It's going to come down to how long is this pandemic going to last," said Lurie.
For that, right now, there is no answer.
Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at email@example.com or on Twitter at @CBCBryan.