The Latest on Covid 19 & The Southern Georgian Bay Housing Market

There have been many articles posted about Covid 19’s effect on the Canadian Real Estate Market along with some of the bigger sub markets (Toronto, Vancouver etc…). These sub markets operate independently of each other. For example, the huge price drop in Crude will have a large effect on some of the Alberta housing markets but will not necessarily influence markets outside of the affected area.

The entire Canadian Real Estate market has absorbed the same blow, buyers and sellers alike have been intimidated by the uncertainty. Covid 19 has not targeted buyers or sellers specifically, so instead of seeing the scales tip from a sellers market to buyers market, or vice versa, we have seen a substantially drop in volume. With the additional mandates set out by all tiers of government, the restriction to essential transactions only, has also impacted buyers and sellers equally (there is likely a small variation from complete equilibrium depending on how many sellers and buyers were left in an “essential purchase or sale” position when the mandate came into effect, but for arguments sake we are going to say it is equal.)

With that said, what can we tell buyers and sellers in our area right now? We can only accurately quantify todays market. Many clients have contacted us asking what the outlook of the market is, unfortunately trying to put a pin in it is truly impossible. Both sides of the coin can be argued. 

Side A: There will be a pent up demand, and when restrictions are lifted there is a buying frenzy. Busy schedules pre Covid 19 kept many at bay. Although some people may not be in love with their home, they subconsciously weigh the options of the effort it would take to move. Preparing the property for sale, sourcing a realtor, the act of moving, finding another property, etc. The compounding of these hurdles often times keep people from moving because life is too busy to factor in the time to complete all of the necessary baggage that comes with moving properties. Given the time that we all have, and lock them in a (full) house that they contemplate daily…..the decision to enter the market seems sensible, when the time is right.

Side B: The housing market is driven by supply and demand. Mortgage deferrals have been the proverbial lifeline for many people amidst the financial burden spin off of Covid 19. Although job loss has been cushioned with emergency wage benefits and mortgage deferrals for the time being, inevitably this support will run out. Some won’t have jobs to go back to, others living off emergency relief funds won’t have the funds to foot the bill once mortgage become due again. This could lead to increased mortgage default ultimately flooding the market with POS’s (Power of sale’s). This increases supply while demand remains the same putting purchasing power in the hands of the buyers. Ultimately this could drive sale prices lower.

These are two scenarios of potentially hundreds. So what should you as a buyer or seller do? Our advice remains the same regardless of the market conditions. If you are making a lateral move, upsizing, downsizing, changing locations, etc, there is no need to attempt to predict the market. The conservative position is to make the lateral move and your foot hold in the market will not change if the market swings one way or the other. If you do try to time the market there is a 50% chance you are wrong. Don’t gamble if you don’t have to. For investors if you are buying or selling, now is the time to exercise caution. Do your research, take the information that is readily available and make a judgement call on whether or not it is time to buy or sell. We can talk you through decision and help you gather the information to make sound judgement. 

Without speculating, what does the data show us for todays market in Southern Georgian Bay (Specifically Tiny Township, Wasaga Beach, Collingwood & The Blue Mountains). At the end of Q1 Southern Georgian Bay saw a rise in volume which tailed off near the end of March. Average sale prices were up and sale/listing ratios were equal. This data doesn’t offer much carry over to Q2 because the market conditions of Q2 only share similarities with that of the end of March. With that said, as realtors with boots on the ground we can offer our first hand experience into what the day to day looks like. Volume has been incredibly low, no surprises there. Some sales have been recorded at well below asking price, others have been consistent with what we would have expected to have seen in Q1. In many cases some sales will be very circumstantial depending on the sellers “need” for the sale. Financial stress and the diluted buyer pool may have some influence on these sales. In April some days volume were as low as a handful of new listings a day.

Day to day it does appear as if the number of new listings is trending upwards as we move into May. This may be in part due to desensitization and our industries ability to adapt, offering virtual “low risk” marketing alternatives. With the economy likely to reopen sooner than later, these numbers will likely begin to rise. Right now our industry has been mandated to only facilitate ‘essential’ transactions. When restrictions are eased, we can assume an increase in volume will follow.

As far as market specific influences, we haven’t personally identified anything that we know is targeting the Southern Georgian Bay market. In Alberta, the influence of the crude oil market is obvious, but our market it is more speculative. Locally, we could see a sell of off secondary homes and cottages as the financial burden increases.

On the contrary, the global recognition of the ability for industry to operate from home may give many city folk alternatives to live where they’ve always dreamed. When Covid 19 is behind us, business will have had an opportunity to learn & adapt to these new circumstances. Remote employees will save on commercial rent and could be widely adopted as the new norm for many industries. These influences as mentioned are speculative, and only our opinion.

In closing, we are here to help. We can assist you in making sound judgement and guide you through the new challenges of this environment. Contact us to see if your transaction is deemed essential, and let us help you plan for the future!



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