Real Estate Deemed Essential Service
Soon after the government started putting restrictions on the types of business that could operate during the pandemic the real estate industry was deemed to be an essential service. It's true, regardless of the world's economic/political climate, property owners are always going to need to buy and sell homes because these types of transactions are most often connected with life stages and as such, life tends to continue on. When Covid-19 started emerging as a serious threat to Canadians in late February, buyers became leery and sellers became extra cautious. Some took their properties off the market entirely while others took extra steps to protect themselves, their families, and potential buyers. Some even managed to snag an extra bottle of hand sanitizer to make available for showings.
The Real Estate Council of Alberta moved quickly to ban open houses as the government announced a prohibition on large gatherings although, "large gatherings" at an open house might be somewhat optimistic these days as most buyers have moved their home search online. The Calgary Real Estate Board (who also service Canmore) introduced new documentation for both buyers and sellers to sign off on prior to showings and included questions such as: Have you travelled internationally in the past 2 weeks? Have you experienced any symptoms of the Coronavirus in the past 2 weeks? Has anyone in your household experienced symptoms in the past 2 weeks? Have you recently been tested for Covid-19?
As most businesses remained shuttered and social distancing persisted, news began to emerge of an interesting and unexpected trend in real estate markets across the country: the number of transactions being completed at dropped significantly however, prices had remained effectively unchanged. The number of new listings hitting the market dropped substantially while at the same time the number of buyers actively searching for a home decreased meaning that as far as supply and demand goes, the overall picture remained relatively the same. Without question, I have come across the occasional discounted property or "motivated seller", but in general, the new listings coming on to the market have been priced pretty much where I would expect to see them had this been a normal spring selling season.
I have been lucky (and extremely grateful) to have been working somewhat consistently throughout the whole ordeal and have experienced a wide variety of circumstances. One trend I have noticed is that Canmore property owners remain very confident in the market and believe that their property values continue to grow year after year. During negotiations there has been little indication that sellers feel the value of their Canmore Real Estate is in danger of going down at any time in the near future. One theory is that the local tourism industry is likely to be quite robust once social distancing measures are relaxed given that international travel may still not be permitted (or appealing). Western Canadians will still want to get away after being cooped up for so long and the Bow Valley may be the obvious choice. A local wedding coordinator confirmed that many guests have simply postponed their plans until later in the summer and other would-be international weddings have rebooked local venues. Given the nature of real estate sales and the fact that the sale is not recorded until the new owner takes possession, we will not fully understand the impact in the Bow Valley until approximately the end of May/Jun. The month of April however (deals that were completed in January and February) saw 19 properties trade hands compared to 34 in April of 2019...a 44% decrease. Numbers for May and June could be considerably less.
When working with buyers there has been an increased level of cautiousness when shopping for their next Canmore Home or Condo. Rather that tour multiple properties that are a broad match, clients have become much more "pointed" in their search and are only viewing homes that may be a serious contender. The virtual tour, while already prevalent in other markets, has come to be an integral part of business here in Canmore given that many buyers live elsewhere and travel to our small mountain town is not encouraged at this time. Personally, my real estate business moved to a fully-paperless model 5 years ago so the process of writing offers and negotiating from a distance was already second nature. In addition, the government implemented new changes to the closing process that enables lawyers to meet with their clients digitally as well, thus eliminating one more person-to-person interaction.
The big question that everyone wants to know the answer to is: what is the Canmore real estate market going to look like after this is all over? While I can't say for sure, I will remain forever optimistic. Buyers who need to buy a home are still going to just like sellers who need to sell their home are still going to list it. At the time of writing this post the provinces are just starting to talk about easing the restrictions and allowing some businesses to reopen. At the same time the weather is getting warmer and people are wanting to get back out and explore the mountains and all the great things that Canmore has to offer. It is unlikely that we will see a return to "normal" market conditions anytime soon and perhaps we are moving towards a new normal. That being said, there are some great opportunities out there for the savvy investor or full-time resident hoping to catch a break in the market and as always, we are here to help!Posted by Ben Maize on