Coronavirus Crisis: A “Scary” Period for the York Region Real Estate Market

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In March, the real estate board reported more than 1,400 home sales in York region, up 7% from the same month in 2019, with average house prices up 13%.

The majority of sales in the GTA occurred in the first half of the month – or the pre-COVID period – and sales in the post-COVID period, down 16% from the same period in March 2019, according to the data.

“The demand for homeownership has remained strong enough compared to listings to keep the average selling price above last year’s levels, including the last few days of the month,” said Jason Mercer, chief market analyst at TRREB, in the report.

Since most real estate transactions take 30 to 60 days to close, King said housing markets will be affected next month to the next three months.

“It’s temporary,” she noted. “Overall, in the long term, like the stock market, real estate is constantly on the rise. In the long run, we will see a correction. “

However, it is impossible to predict how long the impacts will last.

Wealthy communities like York Region generally take longer to feel the economic impacts and, therefore, can eliminate them later, said King.

As Canada’s third largest business center, York is known for being a rapidly growing community with a wealthy population, mainly concentrated in the southern cities of Markham, Vaughan and Richmond Hill.

In March, the majority of homes sold in York were in these three cities, according to the TRREB report.

Richmond Hill and Vaughan, with an average home price of $ 1.1 million and $ 1 million respectively, currently rank third and fourth among the most expensive municipalities in the GTA, according to Zolo.

In this high-priced market, condominiums and townhouses will be the first affected and single-family homes will be the last, said King.

HANG YOUR HOME IF YOU CAN

Now is not a good time to sell, said the real estate expert.

Building on past experiences, King said, the market will begin to see an increase in mortgage defaults and panic sales and those who own property as investments will be the “first victims” of financial problems. come.

“The biggest takeaway,” King said, is that owners don’t have to “crystallize the loss” if they don’t need it during this temporary situation.

While the housing market in York is expected to plummet, King noted that real estate is still a “very good asset” to keep during all market cycles.

She suggested that homeowners continue to pay the mortgage as best they can, instead of deferring payments, which would only add interest to the debt owed.

For those who are on an accelerated payment plan, they can choose to revert to a monthly payment to help them overcome financial difficulties.

She said the homes “will continue to be the backbone of a very stable safe egg nest” when the coronavirus crisis is over.

However, King also warned that there would be a prolonged recovery.

IS THIS A GOOD TIME TO BUY?

Yes.

This is a great opportunity for tenants with reliable income and a down payment to enter the market in the midst of the coronavirus crisis, said King.

“There is a lot of uncertainty. For all of those who are selling right now, I would say they are selling out of desperation, “she said, adding that lower transactions would eventually lower prices.

The only factor that has a major impact on the housing market is the job market, said King.

People tend to make big purchases like buying houses if they feel secure in their jobs, even during an economic recession, she noted.

The Canadian labor market has undoubtedly been hit hard by the pandemic where more than a million people have reportedly filed for employment insurance since mid-March.

In this economy, home sellers will have to adjust or lower their price expectations or they will stay in the market much longer, she noted, while home buyers can be “very aggressive” in their grand strategy.

However, housing market decisions should not be made solely on the basis of market conditions, said the expert.

“This data should inform your decision as long as it is based on your own personal financial fundamentals,” she said.


HISTORY BEHIND HISTORY: Journalist Sheila Wang contacted real estate experts and TRREB to find out what the coronavirus pandemic means for the local housing market and what people can do.

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