It’s easy for us, in this COVID world that we are living in, to lose sight of what is going on around us and forget what things were like prior to the pandemic. Daily, we are faced with a cacophony of information attacking us from all media sources. You can’t turn on the radio or tv without being inundated with the horrific news of people getting sick and dying. This has colored our perception of the future and the world. Truth and fiction have intertwined together to make us believe that the world is over. but the reality is so much further from this lie we have been fed. In the last month, hedge fund companies have made billions of dollars if not trillions. Real Estate Investment trusts and holding companies have bought out billions of dollars of real estate, while the average consumer has sat at home watching Netflix marathons.
Real Estate in the province of Quebec had a very strong start at the beginning of the year, breaking all previous records. We, at North East, had record-breaking months for January, February, and even March. Then the industry got hit with a halt order from the provincial government. The month of April has seen a slow down in the number of transactions that are going on with respect to real estate listings, however, the demand on the buyer’s side has been strong. We have buyers daily, reaching out to us to see if any new listings have gone up. They are looking to lock in pre-approvals so that when the government reopens the doors to transactions they can hit the ground running. They want to all have first dibs on that property that gets listed.
People in the media believe that the price of real estate will drop after this pandemic. This is because fear sells papers and makes for good ratings. The reality is so far from this that its scary. For anyone that has studied Economics in High school, you will remember a little graph that your teacher showed you. It was the Supply & Demand curve. Do you remember what happens when you have a low supply of an item but a high demand? The price goes up. If you have an oversupply of an item and a lack of demand, then the price goes down. It is a fairly basic principle in economics.
What we have seen in the last month is nothing short of a feeding frenzy, people who woke up on January 1st wanting to buy real estate for investment purposes or because they need to move have not suddenly changed their minds. They are now more motivated than ever to make a move. Our web site has seen an increase in its web traffic of almost 800% from the previous month. But because of the government halt, no listings are going up or they are few and far apart. When you ask prospective vendors, they answer the same thing, “Let’s see what happens after the pandemic is over.” But when you ask buyers, they are foaming at the mouth ready to pounce on any deal.
Yesterday, the Provincial Government announced that real estate brokers will be permitted to resume operations effective immediately when it comes to transactions closing on or before July 31st, 2020. This permission has been extended to home inspectors and land surveyors as well. They did put certain rules that need to be followed, such as the signing of all parties of disclosures of their health status as well as their understanding of the fact that entering properties should be done as a last resort. Added to these conditions is the fact that subsequent to entering a property, certain disinfecting measures must be taken as well to protect all parties.
So what do we do from here?
If you were thinking about selling your property, NOW is the time to list it. Many brokerages including NorthEast have perfected the art of listing your property virtually. This limits the amount of contact that you have with brokers and prospective buyers. We have the ability to provide 360 panoramic images as well as 3D renderings of properties. Listing a property on your own is definitely not a good idea. Most vendors who list privately are selling themselves short with respect to how much they can receive for the property they have. In this market, you will miss out on huge opportunities. As well, you will not have the protection that a broker can offer you.
If you were thinking of buying a property you need to have proper representation from your own realtor, as this service is free of charge. This is not the time to go at it alone. Now, more than ever you need the advice and guidance of your own realtor. Many prospective buyers try and do it on their own or go directly to listings that are on private sites, thinking that they will be saving money by doing so. If you do this, you are opening yourself up to huge issues. In many cases when buyers go directly to a listing broker they will be overpaying for the property. This is because when you are a realtor representing a vendor, your mandate is to fetch the highest price possible for a property. While when you hire a realtor to find you a place, you are mandating the realtor to find you the best possible deal. This is conflicting, and oftentimes, the buyer pays the price for it.
At the end of the day, you need to always do what is right for you and not be loyal to one financial institution. In these crazy times, you need the guidance and professional opinion of a mortgage broker. NOT a bank sales representative. A Mortgage broker will always have your best interest at heart. Mortgage brokers are paid on a commission basis by the lending institution not by you, the client. All lenders pay the same amount to brokers so brokers are not biased to one lender or another. A good mortgage broker will be able to set you up with a lender that will provide you with low penalties to break the mortgage, excellent interest rates, and favorable lending conditions. Our mortgage brokers at NorthEast have continued to serve Canadians during this crisis virtually and have petitioned the government and banks to force change in the industry. We are able to conclude mortgage transactions 100% virtually!