Should You Sell Your Home During the Pandemic?
Updated March 22, 2021
Last year's coronavirus outbreak dealt some staggering blows to Canadian real estate: with declarations of states of emergency and the implementations of lockdown procedures in the spring of 2020, the industry all but stopped in its tracks.
At least, for a brief moment.
In the months that followed, all of Canada’s major markets experienced impressive rebounds, and many are still enjoying strong seller’s markets resulting from a shift in prefrence to home ownership and ultra-low borrowing rates.
As we prepare for vaccine rollouts and ongoing pandemic waves, what should home sellers expect? To help answer that, we’re taking a look at how the national real estate market was affected by the first wave, how the industry reacted, and what this could mean for the (near) future of real estate in Canada.
Sharp declines in early spring
After Canada’s leaders began declaring states of emergency and implementing lockdowns during the latter half of March 2020, the real estate industry saw almost immediate effects. By the end of April – typically one of the busiest months for real estate in this country – national sales had fallen 57% from the previous month, the number of newly listed properties plummeted 56% in the same period, and the national average sale price fell 1.3% from the average in April 2019.1
Of course, it was the early days of the pandemic and experts were still scrambling to understand its transmission, symptoms, and mortality rate. Amidst health officials’ ordinances to stay at home, reports of climbing confirmed cases, shortages of personal protective equipment (PPE), and rumours of fines being handed out for non-essential social activity, people were understandably afraid to house hunt or have buyers inside their homes.
Adaption within the industry
Having been deemed an essential service by provincial governments by late March in the same year, real estate professionals made quick industry pivots to be able to safely meet the needs of clients. Thankfully, much of the technology that allowed them to continue showing homes and communicating with clients was already in place – albeit somewhat on the periphery of traditional real estate practice – such as virtual showings, e-signatures, 3D tours, and so on. In-person showings were, and continue to be, reserved for only the most serious buyers, with much responsibility falling on REALTORS® to manage those interactions according to regional health advisories.
Booming market reactions
By the end of May 2020, the national market was making a strong rebound, with average sales rising 57% from April and new listings up 69% in the same period.2 By the end of June, home sales were returning to "normal levels" for the month, according to the Canadian Real Estate Association (CREA), with home sales rising 63% month over month, listings up 50% month over month, and the national average price rising 6.5% over June of 2019.3
Purplebricks.ca and REALTOR.ca also reported skyrocketing online visits in June, which CREA’s Vice President, Patrick Pichette, suggests may have been due to “Canadians simply having delayed their home buying journey while continuing their search”.4
Through the latter half of 2020, many of Canada’s major markets saw months of record-breaking sales – particularly in Ontario, though the national market also showed impressive figures. September saw the highest national sales of any month in history with a growth of 45.6% year over year, and in the same month, the national average home price surpassed $600,000 for the first time.5 By the end of December, many regions had finished slightly ahead of 2019 in annual sales,6 and both January and February 2021 saw persistent buyer demand reflected in impressive sales numbers.7
However, amidst so much buyer demand, 2020 was marked by lagging numbers of new listings as many homeowners were hesitant to enter the market due to COVID-19 concerns. Following the holiday season when market activity is typically slow, January saw the national sales-to-new-listings ratio hit a record high at 91.2% (meaning that for every 100 listings added to the market, 92 homes sold), and even after a surge in new listings in February, it was still a tight 84% – the second-highest February reading in history and far above the long-run average of 54.4% for that time of year.8
With new listings getting eagerly snapped up, existing inventory levels have been severely depleted, and a shortage of supply is putting upward pressure on prices. As such, strong seller's markets persist in Ontario and in some sectors within the Western provinces (in February, CREA put 85% of the country in seller's market territory), and 12 months since the pandemic altered life in Canada, the national average selling price had risen 25% from February 2020 to a record $678,091.9
What’s next for pandemic sellers?
In a nutshell, the outlook continues to be more positive than it was in back in March and April of 2020. The real estate world has become much safer in terms of preventing the spread of the virus, and the numbers between April 2020 and February 2021 suggest that there is as much seasonal demand, if not more, for homes during the pandemic as there is under normal circumstances. Therefore, we can be hopeful that if further lockdowns press pause on real estate transactions, the market will correct itself in due time.
If you're thinking of selling your home, the best thing to do is consult with a local Purplebricks REALTOR® who can look at the specifics in your market, guide you toward the best decision for you and your family, and help you stay as safe as possible. Plus, Purplebricks supports Canadians by providing full-service real estate experiences with incredible rewards: sellers save thousands in commission and buyers receive $2,000 cash back* when they purchase a home with one of our REALTORS®. Call 1-855-953-9533 to learn more.
1. CREA: Canadian home sales and listings post record declines in April 2020.
2. CREA: Canadian home sales and new listings on the rise in May.
3. CREA: Canadian home sales and new listings up again in June.
4. CREA: Canadian home sales and new listings up again in June.
5. CREA: Canadian home sales and prices set records again in September.
6. Purplebricks Real Estate Market Update December 2020
7. Purplebricks Real Estate Market Update January 2021 & Purplebricks Real Estate Market Update February 2021
8. CREA: February 2021 National Statistics
9. CREA: February 2021 National Statistics
10. CREA: Canadian home sales remain historically strong in October.