COVID-19 could cool London's busy spring real estate market before it begins
Many people looking to buy or sell a home now might be reconsidering
London's busy spring real estate market will likely see a slow down before it even gets started, thanks to the coronavirus pandemic that's sweeping the globe.
The virus has closed schools, businesses, sent stock markets tumbling and put entire industries on pause.
Here in London, the city is not immune to the same forces that are currently reshaping the world. With so many moving pieces around the coronavirus crisis, realtors say there's no telling what long-term effect this will have on the market.
February sales data will be released this week. London and St Thomas Association of Realtors president Blair Campbell said local realtors are bracing for a hit.
'Anticipating a slowdown'
"I think we can say we're anticipating a slow down," he said. "The spring market, until a couple weeks ago, looked like it was going to be a full steam ahead situation and then COVID-19 happened."
With the average price of a home in London beating analysts' expectations for 2020 in the first month of the year, all signs pointed to a repeat of the city's record-breaking 2017 real estate season.
There were 568 homes sold in January, just two homes short of the all-time record for the month. Last month saw 740 homes trade hands, the second best February on record.
The association has yet to release figures for March. Chances are it's not going to reflect the kind of brisk sales the region saw in the first two months of 2020.
Realtors urge 'emergency activity' only
"Unfortunately we don't have stats as of yet," Campbell said. "Certainly we are still seeing sales activity taking place and hopefully it is emergency activity."
People need homes. So when the Ontario government ordered some industries to push pause on economic activity until the outbreak has run its course, real estate was deemed an essential service.
Because of that, homes can still be bought and sold, even during the pandemic, but the association is strongly urging its members to only do so in the event of an "emergency."
"How do you define what an emergency is? It's kind of by a case-by-case situation," Campbell said. "We have clients who are mid-transaction and we want to make sure they're able to close. We have clients that may have bought or sold and could either be stuck with two homes or they don't have a home to move to yet."
Some have no choice but to move
While it may seem like an odd time to consider buying or selling a home, there are many people who have no choice: couples going through a divorce, families making room for a new family member or those looking to be closer to seniors who depend on them for care.
"We can't say in each and every situation what is an emergency and what is not. We have to ask our members and the public to be considerate and put the public health and safety of the community, their family and themselves at the forefront and recognize this isn't business as usual."
It's why the association is strongly urging its members to work from home, avoid face-to-face contact and offer virtual tours instead of open houses, where there is a high possibility of spreading COVID-19.
"We have strongly discouraged open houses at the current time," he said, noting that the Canadian Association of Realtors has even removed the open house feature from its multiple listing service website.
"We've definitely made very strong recommendations not to hold open houses and to limit all face to face contact to only when necessary and when doing so to take all the reasonable precautions," he said.
Pandemic might be an incredible opportunity
Campbell said the new measures are recommendations only and the association has no authority to enforce its will on its members.
"We are an association. We can only recommend to our members. We can't ban them," he said.
With no way to tell how the pandemic will play out, or how long control measures will last, real estate, like many industries, is in a holding pattern until the virus finally runs its course.
In the meantime, Campbell said it's up to consumers and real estate agents to stay calm, take it one day at a time and remember there's the possibility that in five to 10 years time, we might even look back on today as an incredible opportunity.
"Unfortunately no-one has that crystal ball," he said. "It's obviously easy to focus on the negative," said Campbell, adding that this has only been going on for a few weeks.