While it’s unknown how the unfolding COVID-19 outbreak will impact the economy in the long-term, BC is facing a sudden stop in economic activity with little guidance to when things may return to normal.
Real estate is a face-to-face business so practices that are necessary to prevent the spread of the virus are at odds with buying and selling homes. We have already begun to experience the collapse of pending purchases due to tightened lending restrictions and/or pre-approval revocations. Similarly, most sellers with homes currently listed are choosing to hold all showings until further notice.
This crisis may produce stronger impacts that can be measured at this time using standard frameworks but based on the scenario analysis conducted by the British Columbia Real Estate Association;
“BC home sales and prices will likely face declines in the spring and early summer but should recover along with the wider economy in the second half of the year, contingent on the outbreak resolving. “
Please read the full 3.5 page economic sketch here …
The simulations in this report are far from definitive, but they provide a framework for thinking through the potential magnitude of the impacts of the COVID-19 outbreak. Most important to remember is that this period, no matter how unusual and anxious it is now, will pass and the economy and housing market will return to health.
There is much we don’t know, but here is what we know for sure …
- Real Estate has peaks and valleys but there has never been a future peak that is lower than the past one.
- Time is your ally. Time can turn any bad real estate decision into a good one. Ie: 5 years or more.
- Equity is your safety net. It can supplement a pension and give you financial options in later years.
- Your mortgage is a forced saving program.
As the situation around COVID-19 continues to disrupt people’s lives, we will be working to update our clients, neighbours and friends on the potential impact this crisis will have on our economy and local real estate markets.
Please consider us a resource and reach out anytime.
Jenn and Colin