Spring Newsletter 2020
In Troubled Times .... Alone Together
Photo Source: Nancy Azami
Direct: 418 252-2221
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Right at Home Realty Inc.
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COVID ROCKS REAL ESTATE!
Buyers Isolate. Sellers Lock Down
Sales Plummet. Prices Retreat. Spring Market Swoons!
When I started to write this newsletter in early March, statistics showed a rosy picture with spiking prices and head-spinning sales velocity. Then, suddenly, a seismic BOOM was heard around the world. Covid19 struck. Everything stopped.
A ferocious Black Swan swooped down and smothered the planet with dark wings. This vicious virus ravaged bodies and minds with Biblical wrath. The global economy gasped and convulsed in shock. Within a few weeks, the robust Toronto Spring real estate market choked.
Sales volumes sputtered and residential transactions sank. People hunkered down and socially isolated. Listings were cancelled. Investors dropped out. Pre-construction sales dived. Prices flat-lined.
Buyers sheltered in place and abandoned house-hunting. Some walked away from deals. Many played a waiting game predicting carnage. A few scavenged for bargains. Lenders become cautious, interest rates tumbled and business was asphyxiated by the spreading pandemic.
Scared sellers pondered the grim likelihood of illiquidity Bidding wars vanished. Listings were postponed. Homes took forever to sell. By mid-April, sales rapidly spiraled into a Buyer's Market.
Realtors scrambled to adapt. Marketing shifted from person-to-person communication to online promotion. Clients stayed home and couch-surfed. Open Houses were banned and showings were drastically restricted.
Covid rocked the real estate industry. We pivoted instantly from a "contact sport" to a totally digital world. Realtors embraced innovative technologies to survive. New tech-tools exploded including remote conferencing, 3-D tours, video showings, digital signatures, wire transfers and online legal closings.
This epic paradigm shift to a digital platform will likely persist. Technology is the future of real estate in a post-Covid world. Adapt or perish.
What does the future hold?
At this moment, April 15, 2020, we are at ground zero of the pandemic. Economic forecasts are all over the map. My crystal ball is as clear as mud. Truth is, no one knows exactly how and when the Covid nightmare will end. But, I am confident that this too shall pass. Like Lazarus, the world will resurrect.
My hunch, based on the wisdom of history, is that real estate sales will re-bound. Yes, we are in for some unprecedented turbulence, but, generally speaking, the weather can get stormy, but the long-range climate for real estate is good.
The sun also rises. Amen. (Insert a deep breath here!)
GTA Sales Volumes Drop 67% in April 2020
SOURCE: TRREB Statistics April 1-30th
Emergency measures including mandatory social-distancing and restrictive showing practices shocked the real estate industry in April.
Home sales dropped nearly 70% and condos dipped even more, especially in areas like Brampton, hard hit by unemployment. The great lockdown in early April triggered millions of applicants for economic relief as Ontario workers lost their livelihood.
Home prices were flat in April with the average house costing $820,392, about the same value as last year, but down roughly 10% from the early months of 2020 when prices peaked at over $900,000. Despite Covid's wallop, real estate values in Toronto are showing surprising signs of stubborn resilience ... so far.
Rentals declined by 54% and average monthly rents dropped by 4%, with a typical downtown 2 bedroom fetching $2700. per month, still high but down slightly.
Sharp Decline in Interest Rates in April 2020
One possible silver lining in the Covid crisis is that the sudden drop in interest rates may bring buyers some temporary relief. Purchasers were pushed out of the crazy-hot market in January and February of 2020 when sales volumes were up 45% year over year.
The Bank of Canada cut key rates three times in March from 1.75% to .25% making mortgages more affordable for qualified buyers
Current rates for a 5 year mortgage range from 2.35%-3.25%, the lowest in many years.
Estimates of the recovery time vary from a few months to more than a year. Some forecast a quick V-shaped bounce back. Others predict a protracted U-shape rebound while a few forecast a full-blown economic recession more perverse and painful than the Great Depression. Time will tell.
ADAPTING TO A BUYER'S MARKET
TIPS FOR SELLERS
1. PRICE REALISTICALLY - Set your asking price based on current market conditions. Yesterday's wildly escalating values are ancient history.
2. INVEST IN HOME STAGING - In a fast market any shabby home sells, but in a cautious market your home needs to outshine the competition. Do repairs and upgrades before listing. Investigate the option of virtual staging.
3. BE PATIENT- Traditionally, most homes sell quickly, within 30 days. With restricted open houses, limited showings and nervous buyers, properties take much longer to sell in the current market.
4. SELL BEFORE YOU BUY - Best advice in a shocked market is to play it safe. Ask for a large deposit to insure your buyer closes. Secure a firm offer on your current home before purchasing another property. Otherwise, you may be trapped carrying two homes. Ouch!
5. HAVE A DIGITAL MARKETING PLAN - Hire a tech-savvy realtor and ask for a written plan detailing how they intend to advertise and promote your home online. Also, you will need a strong negotiator to protect you from predatory offers. There will be sharks and wolves in this unstable market.
CLICK BELOW TO WATCH
LYNN'S NEGOTIATION VIDEO
TIPS FOR BUYERS
1. GET PRE-QUALIFIED - Consult mortgage advisers in advance to determine your eligibility and realistic price limits. Banks are cautious and likely to tighten lending restrictions. Shop around.
2. RETAIN AN EXPERT NEGOTIATOR - Find a realtor specialist in your target area with years of experience in all markets. Ask for references. Get the best.
3. ADD CLAUSES AND CONDITIONS - Load up your offer with conditions on inspection, financing
and lawyer's approval. Submit smaller deposits.
Add extras. If showings are prohibited, you can make an offer conditional upon viewing.
4. LOOK FOR MOTIVATED SELLERS - Find vendors who must sell. Ask why they are selling. Search for bargains. If your offer solves a seller's problem, you will likely get a reasonable price.
5. ACT NOW, STRIKE WHILE THE IRON IS HOT -
This is the best market for purchasers in many years.
This is your moment to shine. Be cautious, but be bold.
THE MAGIC OF VIRTUAL STAGING
During the Covid crisis, many home staging companies ceased operations. For safety, they restricted entry into clients' homes. Virtual staging is "touchless" computer technology. It provides a creative alternative to physical decorating and is becoming increasingly popular in a Covid environment..
See below how Virtual Staging transformed a drab empty room into three different décor styles. Purchasers can envision design options without ever having to visit the property.
AFTER VIRTUAL STAGING
The transition is amazing. Virtual Staging rendered three distinct style versions of the same room: TRANSITIONAL, TRADITIONAL and MODERN. I offer this powerful marketing tour as part of my real estate listing package.
BEFORE VIRTUAL STAGING
LYNN'S ADVENTURE IN THE MIDDLE EAST:
ACCIDENTAL TOURIST IN THE DESERT
The Kindness of Strangers
By Lynn Tribbling
So, I broke my leg in Jordan surrounded by Bedouins and camels. It was a sizzling hot day in Wadi Rum, near Aqaba. I was on a "Desert Adventure Excursion" as part of a 21-day luxury cruise to the Middle East. My dream trip was about to turn into a nightmare.
I tangled with the back of a rusty pickup truck and lost. I heard the sickening cracking noise of breaking bones. It was the sound you hear when you drop an ice cube into a glass of water, but amped up 100 times. Pop! Ouch! A sinking awareness swept over me that this was serious. I could not stand or walk. My leg swelled like a grotesque balloon. Camels watched with bored indifference.
Alone, scared, in pain and in the back of an ambulance, swarthy Jordanian soldiers studied me like an alien specimen. I thought: "Okay Tribbling, this wasn't on my itinerary but you can handle this." Truth is, it was hard to be Superwoman with a fractured leg, travelling solo, a million miles from home and not speaking a word of Arabic.
I was rushed to a military hospital where doctors arranged X-rays, a Cat-Scan and a huge plaster cast from toes to hip. I made an executive decision not to stay in the hospital for surgery. Instead, I returned to the ship which became my floating Fracture Clinic for 10 days and my new Mercedes was a wheelchair.
When it was time to go, I was sad to leave this exotic land of sand and minarets. Unexpectedly, I had found comfort in misery. Despite a broken leg, this trip turned out to be a sublime experience filled with helpful strangers offering courtesy and genuine caring.
Enroute to the airport, I struggled to lay out flat in the back seat of the taxi. I warned the driver that I may not have enough local currency to pay for the transfer. This decent fellow replied: “Do not worry Madam, you are suffering in my country, if you have no money, this ride is free." Wow!
This cascade of kind people, touched my heart and helped heal my fractured limb. The greatest good in life is to help others, expecting nothing in return. Compassion is the noblest virtue. It glues us together and keeps the world turning.
Thank you universe. Thank you my new desert friends.
Looking back, it seems Providence placed a series of kind strangers in my path, accidental angels offering comfort and light to guide me through the trauma.
First, there was the Indian gentleman, a retired professor and a passenger on the cruise whom I had never met before. He insisted on accompanying me to the military hospital and stayed all day to help me cope. I offered to compensate him with some kind of gift. He refused and said: “It is my honour and duty to help. You are alone, I could not leave you.”
An alert waiter deftly placed an inverted ice bucket under my huge plaster cast to ease the discomfort. Fellow passengers on the cruise brought plates of fruit and treats to cheer me up.
Later in Dubai, a hotel manager noticed I had been confined to my room for days. He volunteered to take me out for a little "power shop" and attentively wheeled me through the bustling streets with the patience and pride.
I spent a few days in a dazzling 5-Star hotel on the Palm. The stunning opulence distracted me from my challenges. More handsome Arab men in crisp white robes whisked me through the lobby to observe the glittering excesses. They treated me like Cleopatra in a wheelchair and were happy to help. Nice.
WATCH LYNN'S VIDEO BELOW
EMERGING REAL ESTATE TECHNOLOGIES
4. REMOTE DIGITAL SIGNATURES Traditionally, buyers and sellers met with their realtors in person and signed deals at the kitchen table. Hard copies of witnessed signatures in black ink were mandatory. Now, new software solutions like Athentisign allow remote signing with digital signatures. Real estate lawyers are also adopting these digital strategies.
5. TELE-CONFERENCING The Covid pandemic ignited the popularity of online meetings in lieu of face to face gatherings. platforms like Facetime, Google Meetings and Zoom allow business exchanges from the hygienic safely of our own homes.
Social distancing spawned creative solutions for transacting real estate. Computers, smart phones and tablets have replaced open houses and personal viewings.A tiny, deadly virus transformed how we conduct business. These changes are likely to be the permanent face of real estate after 2020.
Covid triggered an immediate switch to digital marketing. Instead of in-person contact for house-hunting, promotion, negotiating or legal closings, buyers and sellers adopted new technologies..
1. 360 PANORAMA TOURS Studies show 75% of buyers start their house search online. They carefully study photo galleries for listings. Dynamic, panorama virtual tours create sweeping, room by room vistas which supplement traditional high-definition still photos.
2. INTERACTIVE 3-D FLOOR PLANS
Using leading edge Matterport camera technology, buyers can now view a home at their own pace, wandering through each room, navigating different angles using an interactive platform. Floor plans can be seen in 3 dimensions.VR headsets allows buyers to travel through a home and visualize the layout as if they are actually in the space.
3. DRONE TOURS Where permitted, small aerial cameras can survey the home exteriors and surrounding areas The finished videos are powerful visual marketing strategies, especially for estate homes and rural properties.
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LYNN'S RECENT SALES
NEW HIGH-TECH LEGAL SERVICES
Responding to the socially distancing guidelines during Covid, an innovative consortium of Toronto lawyers launched a totally "touchless" real estate service.LEXPAND eliminates traditional face-to-face procedures for closing transactions and offers a new streamline remote model. Fees are comparable to conventional closings.
In the USA, creative law firms are now offering drive-through closing services, mimicking the Macdonald's model.
THE FUTURE IS TECHNOLOGY
THE LIGHTER SIDE
Levity lifts us up in troubled times
Enjoy the Video below
Sales Representative, Right at Home Realty Brokerage
DIRECT: 416 252-2221 OFFICE: 416 383-9525
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Socially distancing for now, but
gearing up for a smooth landing soon!
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(**DISCLAIMER: Not intended to solicit listed properties or buyers under contract. All information is approximate and subject to change. Non-proprietary photos courtesy of Google images.E.& O.E. )