Today we focus on what the current real estate and mortgage market landscape looks like so you can plan your next move.
Prior to the pandemic we were living in a multiple-offer situation on properties being purchased throughout the GTA. The lack of inventory in the market brought more attention to what properties were available which will likely result in rising prices over time.
Though the pandemic definitely cooled the market as shown by the number of sales per month falling, prices stayed relatively the same with incremental moves downward (the condo market experienced a relatively greater fall vs that of semi and fully detached homes, ballooning the overall numbers). Throughout the height of the pandemic, open houses were banned. Being an essential service, the real estate market was surprisingly active as top brokers and agents moved to online virtual tours and physically-distanced showings while adopting protective practices for the tenants, clients and themselves.
As of the end of July, prices are stable and slowly increasing. If you are wondering when we can expect home prices to fall, the reality is that lack of inventory in certain major home types are driving the prices in an upward direction. Activity was steadily on the rise out of June into July in terms of units being sold. That same multi-offer situation previously in the GTA is back and we have even seen that extend to areas outside of the GTA. This could be the result of so many people now working from home and not being tied down to the GTA, giving them an opportunity to relocate further from the city. This is definitely good news for many as the opportunity to gain homeownership, which was perhaps unattainable before, may now be a reality. With Canadian interest rates at historical lows, homeownership is even more within reach.
If you are planning to reap from these advantages, remember that it is not all about interest rates and be sure to weigh out factors such as penalties, porting, and prepayment terms when deciphering your mortgage type. Many Canadians attempted to break their existing mortgage during the pandemic and were met with extremely high penalties, handcuffing them to the struggle of carrying their existing mortgage during these difficult times. Alternatively, those whose penalties are fair are able to refinance or switch their current mortgage to take advantage of the lower interest rates. Some lenders are currently offering cashback opportunities that can cover the penalties of switching or restructuring, therefore saving hundreds and thousands over the life of their term, depending on your situation. These savings can even be reinvested into your mortgage, paying it off sooner. If this opportunity applies to your or someone you know, it is well worth the effort.
We can pat ourselves on the back as we have endured a level of challenge only portrayed in movies. Though there is still much work to do, we now have an idea of what it takes to survive in this type of environment. Many of our friends and family are not back to work. They have risen to the challenge, setting their sights on new forms of income, bettering themselves by going back to school, and/or taken the time to reconnect with themselves. No matter our situation, as we move further into the second half of 2020, be proud of your accomplishments and stay positive, while looking for new opportunities in others and within ourselves.