Buying or selling a home in a COVID-19 world
When COVID-19 first hit last year, many people put their homebuying plans to the side. After all, how could you buy or sell a home during a pandemic?
However, while the Manitoba real estate market certainly took a hit during the initial lockdown, it bounced back very quickly. In April last year, Manitoba home sales fell by 30%, and across the country, it was also the worst month for home sales in 36 years. Yet, the Canada Mortgage and Housing Corporation’s early predictions that home prices would fall between nine and 18% by the end of the year were wide of the mark.
Instead, the reverse was true, with 2020 becoming a record year for the Manitoba real estate market. Almost 16,000 homes were sold, up 13% on the previous year, with the average price increasing by over 4%.
A seller’s market
The high homebuyer demand was caused by a combination of very low mortgage rates and the virus, which prompted people to move for a variety of reasons — to buy homes with bigger living spaces, to get out of apartments and into a first home, and ultimately, to make remote working, homeschooling and general self-isolating more manageable.
The increased demand for these homes coincided with a sharp drop in houses going on the market, and this created the seller’s market and bidding wars that are becoming the norm.
Expectations for a continuing seller’s market into 2021
Realty companies such as RE/MAX and Royal LePage expect the unmet demand from 2020 to spill over into this new year. And if the Bank of Canada maintains a low interest rate, which is favourable for those shopping for a mortgage, it is quite likely that even more new homebuyers will enter the market.
Therefore, demand will probably continue to outstrip supply, with the seller’s market expected to continue well into 2021 and prices likely to rise by around 3% year-on-year. So, while this means there won’t be many bargains to be had, if you are looking to sell your home this year, you’ll likely get a good price for it.
The new norms of real estate selling
As an essential service, real estate continues to operate, but it isn’t business as usual. The industry has pivoted extremely efficiently since March of last year. This once very in-person industry has moved significantly into the digital world.
Realtors have changed not only the way they show homes but also how they manage the required paperwork. For example, many home listings now include a virtual video tour of the property, rather than just still photos. Some realtors give virtual livestream tours, where they go through the property with buyers watching from home, able to ask questions along the way.
Realtors are also meeting more of their clients online, in Zoom meetings or similar, and the closing process can now be done digitally. Virtual tools allow buyers and sellers to review documents online and sign them with encrypted digital signatures.
How buying or selling a home changed in a COVID-19 world
If you’re looking to buy or sell a home in 2021, you’ll find it a much different experience from 2019. Safety protocols have changed the way that homes are sold and there are some key areas that are very different:
Pre-approval: Many realtors will want proof that you can afford to buy the home before showing it to you. You’ll need an up-to-date mortgage pre-approval from your credit union or financial institution.
Increased research: Potential homebuyers are doing far more online research of potential homes, in order to limit the number of houses they go to see. Online videos help to narrow down the number of properties they’ll view in person.
COVID-19 declaration forms: These must be filled out by everyone viewing the property, for each property visited.
Physically viewing properties: Gone are the days when you could tour a neighbourhood and pop into open houses unannounced — even pre-COVID. Now, viewings may even be restricted to two people at a time (including the realtor), and are by appointment only. Increasingly, buyers are viewing properties without their realtor present. Viewings are also limited in time and there can be no overlap between potential buyers.
Sanitizing the home: This is the responsibility of the seller. They must wipe down all common surfaces and provide hand sanitizer at the home’s entranceway.
Keeping the home clean: Potential buyers are asked to wear masks at all times when inside and sanitize their hands on entering the home.
While the new normal for homebuying is very different from what we’ve become used to, realtors have been quick to adapt to ensure that the process is still efficient, and most importantly, safe.
How credit unions help you finance your homebuying dreams
At the start of your mortgage and home search, it is a good idea to talk with your ACU financial advisor. Compared to traditional banks, credit unions can often provide a more personalized approach that aligns with your values, such as ACU’s “ongoing commitment to the economic, social and environmental health of our communities.”
Along with local knowledge of the market, your credit union financial advisor can also factor in your overall saving and wealth goals to help determine the right options, not only for your immediate needs, but your long-term financial health.
Once you’re ready, your ACU financial advisor can help you start the mortgage and home buying process by providing you with a pre-approval. This will give you a price range to focus your search, so you know how much you can afford to borrow. ACU offers a selection of market-competitive mortgage rates, allowing you to buy the right home no matter what stage of life you’re in — whether buying your first house or renewing a mortgage on your forever home. (See all ACU mortgage details here.)
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