COVID has been rough on many sectors in the economy however Real Estate data from July and August show pent up demand from the spring has been enough to help markets bounce back, in a big way.
Pent up demand paired with a low supply of new listings (due to the pandemic) and record low interest rates is putting upward pressure on prices. Many analysts expect these conditions to last thru the fall but beyond that is anyone’s guess as the COVID recession has been anything but typical.
In recessions of the past, economic recovery has taken place in a year or longer, on average but the COVID recovery has been swift with sales not only bouncing back but surpassing multi-year records.
Also a-typical is this recessions impact on employment. Past recessions have recorded similar levels of job loss across sectors with impact on low-wage sectors more muted. The COVID climate has been the opposite with low-wage sectors being hit the hardest with above-average wage sectors already rising back to pre-COVID levels.
The early response from policy makers showed lessons had been learned since the 2008-09 financial crisis. The Bank of Canada quickly reduced its overnight rate to 25 basis points. This and many other measures helped to prevent a repeat of the 2008-09 impact and subsequently unleashed a torrent of buyers excited about zero per cent 5 -year fixed rates.
While sales over the summer have been off the hook, supply has been unable to keep up. Due to social distancing measures many sellers wary of showing their home or moving in these conditions have chosen to sideline their goals for now and with stimulus money flowing directly into households, the decision to sideline a near-future-sale has been an easier one.
Click the link below to read more on all the above trends in the British Columbia Real Estate Associations Market Intelligence Memo …
The 2020 real estate market and economy has been anything but typical so its hard to say if current trends will last. What we do know is … now is a great time maximize your homes potential value as the interest rate environment will likely spur on demand into 2021.
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Jenn and Colin