As we prepare to enter the sixth full week of our new COVID-induced reality, it’s clear no matter where you look that nearly every aspect of your daily life has been impacted in some way. Some situations are stranger than others right now, as going out to the grocery store or an LCBO can feel like a scene straight out of Hollywood.
There’s no doubt that the Waterloo Region real estate market has been impacted in a big way, too. With several weeks of the current state of emergency behind us, however, we’re beginning to get a clearer picture of the toll of the virus and of the resultant shutdown on market activity and sale prices.
I’d like to qualify what follows by saying that this analysis is anecdotal – based upon what I’ve observed over the course of my own business dealings these past two weeks (mainly), as well as what I’ve heard coming from my colleagues, peers and clients. When the KWAR releases its monthly report for April (usually by the 5th of each month) we’ll revisit the situation and deal with some raw figures and statistics.
All things considered though, I’m pleasantly surprised to be able to report that the Kitchener-Waterloo market in particular is demonstrating a great deal of resiliency so far. Even as both the total number of new listings and the overall quantity of transactions are down sharply (for obvious reasons), average sale prices have remained rock-solid. Prices are holding. For now, I’m ready to attribute this stability to two main factors:
- Incredibly sound pre-pandemic fundamentals (a diverse economy, major infrastructure investment, stable core industries – all notions you’ve heard me praising about Kitchener-Waterloo for more than a decade, now)
- A relatively large number of above-average paying jobs with good security and the capability for these employers to have their employees work at or near 100% capacity from home.
Waterloo Region of late has achieved some measure of national and international recognition as a major hub for high-tech and information technology R&D, but our local economy has for many decades previous to the 2010’s been able to rely on a large number of very good jobs in the education, health-care, public service and insurance industries, to name just a few. These aren’t jobs that go away overnight, and many companies are in fact still hiring – meaning that even amid the current crisis, Waterloo Region is a draw for professionals who require long-term housing. That means that people are continuing to need to purchase homes.
These facts are, I believe, reflected in the surprising level of activity we’re continuing to see generated in the Waterloo Region housing market. Upwards of 100 homes have changed hands every week this month so far – and this number is growing. Again – this is anecdotal and my own sense of the situation – but with each passing day I am seeing more and more ‘good news’ stories both on TV and in print. A sense of optimism seems to be growing stronger as experts are getting a handle on the measures needed to reopen the economy, and more civic leaders are relaying analysis that we might be close to turning a corner in terms of our management of the virus. I think this optimism is having an impact on buyers and investors which will translate into an increased rate of sales as we head into May.
Under ordinary circumstances, this coming month would represent the absolute peak of spring market activity. While we won’t reach levels anywhere near that this April or May, I am cautiously optimistic that as we improve at combating the virus and businesses and services slowly start to reopen, we will see a correspondingly busier-than-normal summer market.
All those folks out there who are expecting a new addition to the family, hoping to downsize due to an empty nest, or who might be facing the unfortunate reality of managing an estate sale can’t put life on hold forever. And, until medical researchers develop an effective treatment or vaccine, we Realtors will need to be ready to assist with these major changes in our clients’ lives as responsibly and as safely as we can.
Take care everyone, and I will be in touch with another update soon. Keep safe and stay healthy!