News From Khatera Osman
March has been challenging for everyone because of the Covid 19 virus that struck the whole nation. Lives of many people are affected as well as their business and its operations were put on halt. People starting to panic and hoarded supplies from the supermarket. I did not imagine that I will go to a grocery without a single toilet paper available! (LOL)
So what is Covid 19?
“COVID-19 is an illness caused by a coronavirus. Human coronaviruses are common and are typically associated with mild illnesses, similar to the common cold. Symptoms may be very mild or more serious. The following symptoms may take up to 14 days to appear after exposure to the virus.
- Difficulty breathing
Coronaviruses are most commonly spread from an infected person through:
- respiratory droplets when you cough or sneeze
- close personal contact, such as touching or shaking hands
- touching something with the virus on it, then touching your eyes, nose or mouth before washing your hands
These viruses are not known to spread through ventilation systems or through water.
What was its effect on Canada’s real estate sector?
So last March 16, Trudeau announced to shutdown non-Canadians entering the country via flights. Doug Ford followed that evening by requesting non-essential businesses to work from home and a week later, he enforced that all non-essential businesses to shutdown in Ontario.
Heres a list of what non-essential means: https://s3.amazonaws.com/files.news.ontario.ca/opo/en/2020/03/list-of-essential-workplaces-2.html
Below is the comparison of sales for Whitby, Clarington and Oshawa from March 9 to to 15 vs March 16 to 23:
Conclusion: Pricing appears to have dipped 2-3% in the past week as expected! Sales have dropped by nearly 40% as well. This week’s sold volume will likely drop another 10-20% from last week’s figures. So what may have caused the drop? After a discussion with many colleagues and based on my own personal experiences with clients this past week, here’s what we came up:
- Buyers don’t want to jeopardize their health by visiting homes, coupled with having the feeling that prices are about to drop. Searching for a home has taken a back seat to more important issues. Residential Investor buyers also have gone quiet for the time being. They too are waiting for prices to drop.
- Sellers also decided to hold off listing until the lockdown is over. Although some are still going ahead as planned because they have a pressing reason to do so. Keep in mind, sellers make the decision of selling weeks before a home hits the market. Homes you see on the market this week, the decision was made pre virus lockdown to sell. I’d say 1/4 of these sellers are going ahead and the other 3/4 are holding off, which is consistent with both our clients and realtors polled.
With these data, we predict that we may experience very low inventory with a lack of new listings coming onto the market, although buyer demand will also be moderate to light. The drop in interest rates is still fuelling very active buyers to want to purchase as their affordability has gone up. Prices will remain steady where they are today with a slight 2% drop, with fewer listing agents holding offer presentations. During an offer presentation pre-virus lockdown early March, it would be common to receive 5-10 offers on a home in the first time buyer range $400-600K, which will dwindle down to 3+/- in the coming weeks, leading list agents to price at market value and accept at any time.
But don’t panic yet! The real estate market is going to have a flood of new listings of sellers who waited to sell when we get back to “normal” post-COVID lockdown. Although buyer demand will be there to absorb these listings. It will be a balanced market all Spring/Summer. Prices will remain steady from their 2-3% drop from today’s figures. A total dip from the peak of last week will around 7%. Months of inventory should get up to around 4-5, indicating a balanced playing field.
Historic low-interest rates, low inventory, buyer demand, coming out of a quiet year in price increase in 2019 would be a recipe for an inferno of sales and price increases. We were seeing this before the pandemic hit.
Anyway, with all these challenges that we whole world is facing, I think it is the right time to wish everyone with blessing and joy not only on this day of trial but every day to come. I hope that this challenge will end soon and will all say “We made it till the end”
Happy Easter and Keep Safe, Everyone!
Investing in the time of COVID-19
COVID-19 has changed life as we know it. It’s still hard to fathom exactly what’s going on, both with the markets, which fell by about 6% in Canada and 8% in the U.S., and in life. My kids are now home all of the time, FaceTime cocktails are now a thing (and more fun than I had expected), and date night consists of a quick trip to the grocery store. Romance in Aisle 1?
I’ve also had a lot of talks with friends about the economy and the markets. They tell me their portfolio is down a ton, I say mine is too, though I don’t know by how much because I’m not checking. I know they’re down by 30%, but I don’t need to obsess over the specifics. I’m not selling because, what’s the point? My portfolio has already fallen and you only lose that money if you liquidate. I still have at least a couple decades to go before I need those savings, and my hope is that the markets, like they always have, rise at some point before then.
About Khatera Osman:
Khatera Osman is a real estate investor. She’s been actively involved in Ontario real estate investing for a number of years. Her mission is to provide quality housing for quality tenants, while at the same time providing an above-average return on investment (R.O.I) for our investor partners and ourselves. It is truly a win-win-win way of investing!
Khatera offers its investor partners hands-free investment opportunities. If you are interested to learn how to earn an above-average return on your investment, backed by a solid asset, and without a hassle of being a landlord, please contact Khatera.
For more information about Khatera and her investment program, please call (905) 447-0366 or visit https://brilliantmove.ca/