If you've been keeping up with the news since the pandemic hit, it's hard not to feel the stress from the headlines. The state of the economy is enough to push you in a circle of panic especially if you're an avid investor. But what is really happening with the financial market? Should we really be worried or are our investments still in good hands? We spoke with VP of Sales and Marketing at Hersh Condos and Real Estate expert Mitch Parker, specifically about the state of the Real Estate market during this global pandemic and the important things we need to be aware of.
Talk to us about the current state of the real estate market and what are the important things we should know?
In the midst of a global pandemic that’s sure to make its way into the history books, I’ve found the only thing that’s remained constant is change. My expertise is in the world or real estate; specifically marketing and sales for large developments and investing to build personal net worth. I consider myself an expert with almost 15 years of experience and surely if I find rapidly changing housing news confusing and contradicting, other people must as well.
Here’s an example of two news headlines I recently read:
- "TD Now Forecasting Toronto Home Prices to Increase By 7.8% in 2020"
- "Moody’s Analytics Predicts Real Estate Prices Could Drop Up To 30%"
So who’s right? What’s really happening in the real estate market? What do I need to know? These two headlines (posted just two days apart) are about as far on opposite ends of the spectrum as could be. The real answer is nobody knows for sure but here’s what my experience leads me to believe.
Naturally, the market has slowed considerably. The number of showings, while up from where they were a few weeks ago, are still down dramatically from “normal” levels with many condo buildings not even allowing potential buyers into the building. The statistics look similar for the number of new listings and closed sales for condos in the Greater Toronto Area are down 81% from this time last year.
That being said, properties are still selling. People that sold before the pandemic need to find a new place, investors are looking for good opportunities, and as interest rates sit at almost record lows, it’s a great chance for people to enter the market and not have to face the fierce competition typically associated with Toronto real estate.
If you have a real estate investment, what are the things to keep in mind right now?
Building financial security through real estate works best when the investment strategy is long term
Building financial security through real estate works best when the investment strategy is long term. Doing so enables you to better withstand short-term market fluctuations and uncertainty like we are currently going through.
Communication in times like this are of the utmost importance. For tenants, you’re going to want to know their financial and employment situation and determine how likely it is that they are able to pay rent on time. Ensuring there’s an open line of communication and a mutual willingness to work together can go a long way. The second person to be in contact with is a great mortgage broker to learn what options are available should you need them. Ensure that you understand the fine print to potential solutions as the cost in the long term may outweigh potential benefits.
Communication in times like this are of the utmost importance.
Lastly, if tenants decide to leave or you’re sitting with an empty suite, don’t skip steps in your due diligence or lower your standards on who you’ll allow to move in. A bad tenant is not only hard to evict (right now, you can’t enforce an eviction), but they could potentially cause damage costing far more than a few vacant months.
If people are looking to sell or buy right now, what is your advice for them? Should they even be considering this or put it in the back burner for now?
Don’t list your home if you don’t have to. This may change in the next 30 or 60 days but right now you’re better off waiting
Don’t list your home if you don’t have to. This may change in the next 30 or 60 days but right now you’re better off waiting. If that’s not an option, you’re going to want your listing to be priced right and stand out above the competition.
Before you actually hit the market fix anything that’s broken, landscape, repaint if needed, and scrub the place clean from top to bottom. Decluttering and optimizing furniture layouts can also help sell faster and for more money.
A great agent can advise on the best marketing strategy and will ensure you have high resolution photos (no iPhone photos), a virtual tour, and possibly even a video walkthrough or tour of the home (think virtual open house). I’d also consider running targeted paid ads on various social media platforms as usage and impressions are as high as ever with everyone at home.
As I mentioned above, this may be a great time for buyers to enter the market. Low interest rates, a recently reduced threshold for the “stress test”, less competition, and motivated sellers could equate to getting a great deal.
What is your prediction on what's going to happen post COVID-19 and what are some things we can do to prepare?
It’s going to take time to recover and get back on track but once we’re in the clear my expectation is that things will pretty much revert back to the way they were before all this happened. We may utilize technology a little differently or wash our hands more often, but our habits are deeply ingrained into our subconscious minds so doing something different for a few months won’t change the way society operates.
Don’t over analyze articles, statistics, and real estate data right now. Chances are next week the headlines will look totally different
Don’t over analyze articles, statistics, and real estate data right now. Chances are next week the headlines will look totally different. Instead, try to maximize the downtime by accomplishing things you normally wouldn’t have the time to do. I’m looking forward to coming back stronger than I was when all this began. Finally, allow yourself to enjoy some downtime. There’s nothing wrong with watching a show or reading a great book. Before you know it, we’ll be back to our busy lives!
Mitch Parker is a real estate expert and the VP of Sales and Marketing at Hersh Condos, one of Canada's leading pre-construction sales and marketing agencies specializing in high rise condominium and townhouse developments. Mitch is also a go-to media expert and has been seen, heard and read on CTV, SiriusXM Radio, Toronto Sun, Huffington Post, and more.