Not all markets were affected by COVID equally in March and April. Hotter markets stayed warm and the cooler ones remained cool. Overall sales activity dropped in March and April as buyers became more cautious as restrictions were implemented, and bank underwriters more careful.
Toronto sales decreased 67%, Calgary 63%, just as it was rebounding after the 2015 oil crash, and Vancouver sales fell 40% over last year, a 40 year low.
In spite of the steep drop in activity, April prices rose 2.5% in Vancouver, as new listings fell 60% compared to last year, as not everyone was comfortable with buyers visiting their homes.
It was their third straight month of year over year increases Calgary prices recoiled 8%, as plentiful existing inventory offset the lack of new listings (down 50%) and the continued economic pain due to the dramatic drop in oil prices.
In Toronto, prices increased 7% for attached homes and less so in townhomes, offsetting a slight 3.5% drop in detached home prices. Although new listings dropped 64%, the average overall price increased very slightly, as there are still enough buyers for available listings.
So basically in the Toronto and Vancouver (and affiliated areas), COVID-19 stalled an overheating housing market ( with multiple bidders and prices over asking), recovering from stricter mortgage rules, and the foreign buyer’s tax. Although there is less buyer competition, there are also fewer listings.
So what's the conclusion? For May and 2020, Calgary buyers have the advantage, as listings are still plentiful. Vancouver and Toronto will return to more of a normal market playing field, as listings are sufficient for demand. Sales are expected to fall, but prices may not.
Once restrictions are relaxed, look for a return to increased price pressure, unless new listings exceed buyer demand.
In Kelowna, we continue to see strong demand and stable prices, (depending on the listing). Additionally, there is continued interest in relocation and development here.With home prices still holding strong, and the surge of property searches, there's still plenty to keep the real estate industry busy!