We were waxing nostalgic the other day while looking back over headlines in the pre-COVID era. Here’s a few:
- Canadians Can Expect A Vibrant Spring Market (January)
- The Toronto Real Estate Market is Suddenly on Fire Again (February)
- Toronto Home Prices Expected to Rocket in 2020 (December 2019)
- Toronto Real Estate Sales Plunge as Virus Weighs On Market (April)
- Canadian Home Sales Had Their Worst April in 36 Years (May)
- Average House Price in May Down From Last Year (June)
Yet here we are. June sales were up, down by only 1.4% over a year ago however the average sales price was up by 11.9%. Sales were up over the previous month of May by 89%. Let me say that again… Sales were up over the previous month of May by 89%. Inventory was down by 28.8% over the same period last year and, coupled with low-interest rates, helped to push prices up. So those are the numbers. We’re moving along very well for the moment and in Durham Region, bidding wars are common with high demand and reduced inventory. But what else is really different from last year?
Uncertainty prevails and the lenders have responded accordingly. Canada Mortgage and Housing (CMHC) made changes to criteria for borrowers with less than 20% down:
1.Beacon Score requirements were increased from 600 to 680
2.The ratio of income to debt used to qualify how much mortgage a borrower can get was decreased from 4.8 to 4.2. Effectively, this means a borrower making 100K per year could borrow 480K before the change, but only 420K after the change.
Two other mortgage insurers in Canada, Genworth and Canada Guaranty have stated they won’t be following CMHC’s changes, for now. We’ve also seen lenders getting stricter with paperwork, taking longer to approve applications and getting much more stringent with self-employed buyers.
For Sellers –
No more open houses
No more offer presentations (mostly). Paperwork all signed digitally, from a distance
Virtual closings with your lawyer
Lights now on before showings and left on after the showings (no touching)
Lots of staging, cleaning and disinfecting surfaces
Definitely vacating for showings
For Buyers –
No, you can’t ride in my car
No open houses to take up your Sundays with
New dress code – face masks and gloves, no bare feet
No kids at showings, just the buyer
Evicting a tenant for vacant possession won’t happen
Seeing 50 properties to find the “perfect one” is a thing of the past
Viewing homes without being prequalified and pre-approved is unacceptable to sellers
Virtual tours and more due diligence before selecting homes to see is in fashion
Seller mindset has changed. They’re more cautious and in many cases, afraid. They want you to visit their home but they want to know you’re in the market and ready to buy, not just out “tire kicking.” They also want to know you’ve done all the proper COVID disclosures with their agent and even signed off on formal disclosure statements. Agents will require your name and phone number for contact tracing. No more blind showings where the agent doesn’t know who the buyer is. In other words, no more taxi service where we just show anything to anyone. And you know what? It’s actually… … …better! All parties seem to be understanding and reacting well since there’s much less wasted time booking showings for properties that don’t meet the requirements. Buyers appreciate less time wasted and Sellers appreciate less intrusions that don’t amount to anything.
For agents, the safety of all involved now comes before landing a sale, at least throughout the showing process and this is good for everyone.
more than ever you’re likely on candid camera when viewing a home. It’s becoming the new normal as nervous sellers want assurance that people are following the proper protocols. Those that don’t do so at their own risk.
Electronic Signatures –
We couldn’t survive without it. We haven’t witnessed someone using a pen in months! We’re using less gas in the tank, and ink in the pen!
I just had to mention a cousin of mine is an agent in Florida and just within the past 2 week he was promoting an open house, (come on down!) and we all know where the latest hot spot is! We may be running a little more cautious up here, but I’ll take it! (I haven’t checked on his status, yet). Hopefully, no covid carriers came through that open house! It’s a different world but we’ve adjusted well.
Stay safe and keep cool!