charliesangelsperth Metro Vancouver Home Price Forecast - Oct 2020 — Mortgage Sandbox
Metro Vancouver Home Price Forecast - Oct 2020

Metro Vancouver Home Price Forecast - Oct 2020

HIGHLIGHTS

  • The Greater Vancouver benchmark house price has continued to rise; however, condo prices are beginning to drop, and the market is running into strong headwinds.
  • The market has clawed back all of the lost buying activity resulting from the Wave 1 lockdown.
  • Generally, homes with larger floorplans are in greater demand than smaller condos. During the pandemic, people have found that they need more room to work from home and home-school their kids. Often they are moving to the suburbs where larger homes are affordable.
  • Condo active (for sale) listings have risen higher than the peak in 2018, while house sellers have been more reluctant to list.
  • The full impact of job losses will begin to be felt in October when CERB and the mortgage payment deferral programs have expired.
  • We are watching several key risks:
    • There are a record number of condo apartments for sale, and active listings are trending higher at an alarming rate. A flood of supply could cause an acceleration of price declines.
    • Ongoing COVID-19 containment efforts in B.C. New cases are rising and there may be local lockdowns in the future.
    • How well the U.S. manages the pandemic - roughly 25% of the Canadian economy relies on exports south of the border. As well, most tourists to Canada are American. The U.S. has topped 200,000 COVID-19 related fatalities and will likely reach 300,000 by year-end.
    • The CERB program and the mortgage payment deferral programs delayed the impact of the pandemic on housing and they have both expired. We expect this to put downward pressure on home prices, but it's hard to estimate how much pressure and when.

This article covers:

  1. Where are Metro Vancouver prices headed?

  2. What factors drive the price forecast?

  3. Should investors sell?

  4. Is this a good time to buy?

1. Where are Metro Vancouver prices headed?

Home Price Overview

Metro Vancouver house prices have accelerated significantly in the past few months, which has pushed more potential home buyers out of the market.

People planning to sell their home will take heart because home values are near all-time highs. Given the current recession and pandemic, sellers may want to push ahead and sell during the pandemic because there is no guarantee that home prices will regain the recent highs any time soon.

The Coronavirus Pandemic, the resulting recession, and the potential for a second or third wave of infection are now the primary source of uncertainty for home values.

Metro Vancouver Detached House Prices

Vancouver Benchmark House Price A.PNG
Vancouver Benchmark House Price B.PNG

House price growth in Metro Vancouver has accelerated through 2020. The “soft landing” that government policymakers were targeting has not materialized, nor have promises of a ‘market crash.’

We believe politicians are hoping to guide the market toward a typical annual real estate cycle with price growth in the range of 1 to 3% annually – in line with income growth.

Our examination of the five factors driving B.C. home prices leads us to conclude it is unlikely that record house prices will be sustained through the next 12 months.

While ‘benchmark’ house prices have been rising for the region, median house prices paint a more varied picture.

Sample Changes in Median House Price

Sub-market Jun 2020 Sep 2020 Change
Coquitlam $1,300,000 $1,288,000 🡾   $12,000
East Vancouver $1,618,000 $1,552,500 🡾   $65,500
Richmond $1,592,500 $1,529,000 🡾   $63,500
North Vancouver $1,731,400 $1,750,000 🡽   $18,600
Burnaby $1,487,825 $1,540,000 🡽   $57,175
West Vancouver $2,433,000 $2,537,500 🡽   $104,500
Vancouver Westside $3,050,000 $3,244,000 🡽   $194,000
Source: Real Estate Board of Greater Vancouver

There is also an over-supply of houses priced over $2 million. At the end of October 2020, roughly 2,600 houses were listed for sale at asking prices over $2 million’s nearly 40% of all houses listed for sale in the Lower Mainland.

House price growth in Vancouver has been very high. Overall, according to the CMHC, there is a moderate risk of a price correction in Vancouver.

Vancouver CMHC Risk Assessment.PNG

Metro Vancouver Condo Apartment Prices

Vancouver Benchmark Condo Price A.PNG
Vancouver Benchmark Condo Price B.PNG

Metro Vancouver apartment prices have been falling recently. They appear to be falling out of favour as people seek larger living spaces where they can work-from-home.

While the benchmark price has begun to fall, median condo prices are rising in many sub-markets, and this may reflect the recent shift in buyer preference for larger floor plans.

Sample Changes in Median Condo Apartment Price

Sub-market Jun 2020 Sep 2020 Change
Coquitlam $538,251 $535,000 🡾   $3,251
East Vancouver $609,000 $630,000 🡽   $21,000
Richmond $535,000 $540,000 🡽   $5,000
North Vancouver $646,500 $645,000 🡾   $1,500
Burnaby $581,000 $600,500 🡽   $19,500
Vancouver Westside $735,000 $745,000 🡽   $10,000
Source: Real Estate Board of Greater Vancouver

We expect that Vancouver developers will shift toward larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floorplans comes to the market, it may depress the values for small floorplan condos.

At Mortgage Sandbox, we would like to see developers building more 4 and 5 bedroom condos because:

  • Not everyone can afford to buy a house for their family.

  • Many parents who work-from-home and have taken on child-minding find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

  • Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Still a challenge for first-time homebuyers

Although Vancouver home prices have dropped significantly, they are still not very affordable. A first-time homebuyer household earning $75,000 (the median Metro Vancouver household before-tax income) can only get a $300,000 mortgage. To buy a benchmark priced $680,000 condo, a first-time homebuyer needs to save $380,000 cash for a down payment or receive a very generous gift from mom and dad. For most people, that’s just not on the cards.

Vancouver Affordability.PNG

What about the rest of BC?

Read the Victoria Forecast and Okanagan Forecast.

2021 Metro Vancouver House Price Forecast

Metro Vancouver House Price Forecast.PNG
Metro Vancouver Condo Price Forecast.PNG

Peering into the future, some forecasters expect prices to continue rising while others expect prices to drop.

For example, the BC Real Estate Association (BCREA) economist, BCREA is a real estate industry advocacy organization, predicts Greater Vancouver prices will rise 6% in 2021

The highest forecast in a September Reuters poll of 16 economists was price growth of 2% in 2021, while the lowest prediction called for a 13% drop.

Moody’s Analytics, who develop mortgage risk software for Canadian banks, predicts a 7% drop in Vancouver.

Moodys Analytics Home Price Forecast.PNG

CMHC, the government housing agency, predicts a ‘peak-to-trough’ drop of between 6% and 19%.

There is no consensus among economists. Market sentiment and government stimulus have led to price acceleration and record home purchases even though most economic fundamentals have faltered.

Our advice to homebuyers embarking on the most expensive purchase of their lifetime, and sellers who want to get as much equity as possible out of their homes, is to place a little more weight on CMHC and Moody’s Analytics. They may be projecting lower values in the future, but:

  • CMHC sells insurance to banks that limits their losses if a mortgage goes bad.

  • Moody’s Analytics sells software to banks that helps them assess the risk of their mortgage portfolios.

Both organizations are unique to see market conditions across the regions and all the banks.

In the next section, we examine the five factors that drive these forecasts. They will help explain why some several forecasters are anticipating price drops.

For a more thorough comparison of the Coronavirus Recession to the Great Recession and the Great Depression and their impacts on property prices, check out our recent article: “Should I sell my home today?

At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms, and we then present the most optimistic estimates, the most pessimistic prediction, and the average forecast. Do you want to learn more about real estate risk? We've written a comprehensive report that explains the level of uncertainty in the Canadian real estate market.

Our forecast inputs:

2. What forces drive the price forecast?

Mortgage Sandbox 5 Forces Framework

Real Estate Five Forces.PNG

At the highest level, supply and demand set house prices and all other factors simply drive supply or demand. At Mortgage Sandbox, we have created a five-factor framework for gathering information and performing our market analysis. The five key factors are core demand, non-core demand, government policy, supply, and popular sentiment.

In the long-run, the market is fundamentally driven by economic forces, but sentiment can drive prices beyond economically sustainable levels in the short-run.

Below we will summarize how the five factors result in the current Vancouver forecast.

Core Demand

Core demand is a function of:

  • Population Growth: The pace at which people are moving to an area. An average of roughly 2.5 people live in one household.

  • Home Price Changes: Changes in the market value of the desired home.

  • Savings-Equity: How much disposable after-tax income you’ve been able to squirrel away plus any equity you have in your existing home.

  • Financing: Your maximum mortgage is calculated using income (i.e., how much money you can put toward mortgage payments) and interest rates (how big are the mortgage payments).

How have these changed lately?

Vancouver House Purchases.PNG
Vancouver Condo Purchases.PNG

Population Growth

B.C.’s population is almost always growing, but the rate of growth is important for our analysis.

If population growth is the same or lower than in the past, then there is less upward pressure on prices.

At the moment, population growth is lower in B.C. As a result of ongoing COVID-19 related travel restrictions, we may observe lower growth through to the end of 2020 and into 2021.

READ: Fewer People = Less Demand : Easing Population Growth to Weigh on Housing, TD Bank

BC Population Growth Q3 2020.PNG

Home Price Changes

House prices are near records across Metro Vancouver. Prices growth reduces affordability and reduces the pool of qualified potential buyers. In an ironic twist, this means rising prices create downward pressure on prices.

As a rule-of-thumb, home ownership costs are considered unaffordable when they exceed 40% of household income.

In March 2020, Vancouver home ownership costs were 80% of the median household income. In other words, Vancouver home prices had far exceeded economic fundamentals before the impact of the Coronavirus.

However, given that house prices are already extremely unaffordable, the recent price increases will not make homes significantly less affordable.

Savings-Equity

Equity

Existing homeowners benefited from price appreciation, so they had more home equity to use when buying a bigger home.

Savings

Rents were rising faster than incomes, so first-time buyers struggled to come up with down payments.

The stock market has dropped because of the pandemic, so anyone who managed to save a down payment and invested it in ‘blue-chip stocks’ may now find out they’ll need to save for a few more months or years.

Financing

Mortgage Rates

The Bank of Canada has reduced rates dramatically, but mortgage qualifying interest rates have not fallen nearly as much. Also, lenders have tightened their rules so that the lower rates result in interest savings, but rates haven’t resulted in a large lift in home buying budgets.

Employment and Incomes

More than half (56%) of B.C. are still experiencing COVID-related disruption to their employment as of September.

In a March interview, Brendan LaCerda, a Senior Economist with Moody’s Analytics, estimates that each 1% rise in unemployment results in a 4% drop in home prices.

Using this ratio, a prolonged 2.5% rise in B.C. unemployment to 7.5% would result in a 10% price drop and a 5% rise in B.C. unemployment to 10% would lead to a 20% fall in values.

BC Unemployment Sept 2020.PNG

The ‘official’ B.C. unemployment figures unemployed people who are not looking for work (e.g., people who work in industries that have not fully reopened like tourism or hospitality). The true ‘effective’ level of unemployment is higher than the ‘official’ number.

Slide22.PNG

Even after people get re-hired, they will need to be on the job for three months before they qualify for a mortgage pre-approval. Small businesses and commission salesforce have to show 2 years of consistent income to be eligible for a mortgage. Unless banks change their lending policies, 2020 will drag down their mortgage qualifying income until mid-2023 (when they file their 2022 taxes).

Homeownership Costs

In 2020, before factoring in the pandemic, Vancouver raised taxes by almost 7%.

B.C. municipalities are legally prevented from running a deficit, so residents should expect further property taxes increases or reduced services to make up for the pandemic revenue shortfalls. If cities put off infrastructure and capital spending, then the deferred costs will eventually result in higher taxes.

B.C. has also seen a meteoric rise in home insurance, which for condo owners leads to higher monthly strata fees.

Property taxes and strata fees are factored into your mortgage affordability calculations, so an increase in taxes lowers home-buying budgets.

Overall Core Demand

Despite lower interest rates, due to the Coronavirus' impacts, short-term core demand for homes will likely be much lower as we head into 2021.

YTD Vancouver Home Purchases.PNG

Non-Core Demand

Non-core demand represents short-term investment, long-term investment, and recreational demand (i.e., homes not occupied full-time by the owner). Here is where foreign capital, real estate flippers, and dark money come into play. It also includes short-term rentals, long-term rentals, and recreational property purchases.

Since non-core demand is ‘optional’ (i.e., not used to shelter your own family), it is more volatile than core demand.

Foreign Capital

The following factors are likely reducing foreign capital inflows:

We expect there will be relatively low foreign investment in Canadian real estate until travel restrictions are lifted.

Long-term Rentals

Rental investments are a significant driver of home prices.

During the wave 1 lockdown, the B.C. government suspended the enforcement of evictions for non-payment. Beginning September 1st, renters were then required to pay their monthly rent in full and pay any rent arrears accrued until the end of August.

For example, a tenant who typically paid $2,000 per month and couldn’t make their April, May, June rent payments would need to pay $2,800 per month for the 10 months beginning October 1st to pay back their arrears.

Some advocates now fear that there will be mass evictions and homelessness. How will tenants repay three to six months of rent arrears?

On the other side of the coin, if there are mass evictions, will landlords now struggle to find new qualified tenants?

As well, most International students are now barred from entering Canada.

All of these factors have led to falling rents across Canada.

BC Rental Trends.PNG

This negative news will discourage new rental investment until rental rates stabilize. Rental investors will simply try to time any future property purchases for the end of the Coronavirus containment period. They will avoid properties with tenants who have outstanding rent arrears.

Short-term Rentals

International travel restrictions will make many short-term rentals unprofitable for the foreseeable future. Statistics show that, since the travel restrictions were put in place, international travel to Canada has dropped 98 percent.

Fewer investors will be buying real estate for short-term rentals until travel restrictions are lifted.

Travel to Canada Aug 2020.PNG

House Flippers

With Coronavirus containment efforts underway, house flipping will be very risky, so we expect serial flippers will stay out of the market until they see a bottom to the market.

It may be 6 months to a year before the market finds a bottom and the flippers emerge to pick up some bargains.

Dark Money

Dark money is the proceeds of crime or money that are transferred to Canada illegally. Dark money includes funds earned legitimately that are transferred illegally from countries with capital controls (e.g., China) and legitimate earnings moved from nations subject to international sanctions (e.g., Iran, Russia, and North Korea).

To hide the illegal nature of the funds, it is laundered in the real estate market. Sometimes, the property's true owner is hidden by using a Straw Buyer, and other times the property is owned by a shell company.

Sometimes a real estate agent or lawyer will accept the illegal cash to help the nefarious individuals hide its true origins. In 2015, a B.C. realtor was caught with hundreds of thousands of dollars in her closet at home.

We see no evidence of a diminished role for dark money in local real estate.

Overall Non-Core Demand

The net effect of all the recent changes will reduce capital inflows toward residential real estate for non-core uses, putting downward pressure on Metro Vancouver home prices.

Government Policy

Governments have shielded Canadians and the housing market from the impacts of the pandemic induced recession using the CERB program, mortgage payment deferrals, and suspending tenant evictions. Most of these measures have now expired.

Mortgage and Housing Agency Tightens Mortgage Rules

Effective July 1st, CMHC has made changes to their mortgage rules that disqualify roughly 10 percent of potential homebuyers with Fair-Poor credit. The remaining buyers who qualify for a mortgage will be eligible for 10 to 8 percent less money.

The purpose of the change is to protect taxpayers from having to cover the costs of bad loans.

These changes effectively offset any benefit that lower qualifying mortgage rates provide.

COVID-19 Support Measures

Mortgage Payment Deferral

A typical mortgage deferral is an agreement between the borrower and the lender to pause or suspend mortgage payments for one or two months. For the Coronavirus, they have extended this for up to 6 months.

After the agreement ends, your mortgage payments return to normal. The mortgage payment deferral does not cancel, erase, or eliminate the amount owed on your mortgage. The borrower still accrues interest that will have to be paid.

A Canadian with a $250,000 mortgage who defers their mortgage by six months adds approximately $4,000 in accrued interest to their mortgage balance.

IMPORTANT: Statistics in August, show that 11 percent of Vancouver mortgage holders were still reliant on mortgage payment deferrals. Mortgage deferrals expire after 6 months and that means by October, many of these deferrals will expire. Unless these borrowers have found new work, they will fall into default.

Toronto Mortgage Deferrals - Aug 2020.PNG

Short-term Rental Regulation

In the City of Vancouver, short-term rentals are only allowed in principal residences. If it is a condo or rental apartment, the operator must have permission from the landlord or strata. Similarly, in Richmond, short-term rentals can only be operated from a primary residence, with the operator occupying the lot at least 185 days each year. Burnaby is the last of the five largest Metro Vancouver municipalities considering restrictions.

A recent court decision upheld a strata corporation’s restrictions on short-term rentals. In the case, the condo owner was ordered by a B.C. Civil Resolution Tribunal to pay $46,400 in fines.

Speculation and Vacancy Tax

At the end of 2019, the annual Speculation and Vacancy Tax rate on foreigners quadrupled from 0.5% to 2.0%

Beneficial Ownership Registry

B.C.’s Corporate Beneficial Ownership Registry comes into effect in May of 2020. This may reduce dark money in B.C. real estate and improve collections of foreign buyer taxes.

Overall Government Influence

Overall, the government is now unwinding many of the programs supporting home values through the recession. Compared to three months ago, there is now much less support from the government to maintain home values.

If prices continue to rise aggressively or suddenly drop dramatically, we should expect policy interventions to moderate the market. Unfortunately, our inability to predict government actions adds uncertainty to future home valuations.

Supply

Supply comes from two sources.

  1. Existing sales: Existing home sales are sales of ‘used homes.’ They are homes owned by individuals who sell them to upgrade, move for work, or some other reason. The Real Estate Board of Greater Vancouver only reports existing home sales and listings.

  2. Pre-Sales and Construction Completions: Most new homes are sold via pre-sales before the construction has started. These are predominantly apartments and townhomes. Data on pre-sales is private and difficult to find, but construction starts (reported by the government) are a very accurate lagging indicator of pre-sale activity.

Rising supply releases the upward pressure on prices caused by demand.

Months of Supply of Existing Homes

Month of Vancouver House Supply.PNG
Months of Vancouver Condo Supply.PNG

There is almost half as much house supply today as there was in January 2019.

Vancouver Active House Listings.PNG
Vancouver Active Condo Listings.PNG

There are a record number of condo apartments for sale, and active listings are trending higher at an alarming rate. A flood of listings could cause an acceleration of price declines.

Coronavirus short-term rentals sold or converted (medium-term impact)

International travel restrictions will continue to make the short-term rental business difficult through to the end of 2021. The drop in bookings may force many owners of apartments primarily used as short-term rentals to sell their condo or repurpose it for long-term rentals adding up to 4,900 homes to the market.

We surveyed over 50 Canadian real estate agents, and 50% had observed a majority of short-term rentals being listed as long-term furnished apartment rentals. 25% expected Airbnbs owners would sell their homes to cash in the capital gains.

Mortgage Delinquencies and Foreclosures

Data indicates that more Canadians are missing their monthly payments, and it appears more Canadians are over-extending themselves. Surprisingly, the increases in delinquencies are led by Ontario and British Columbia, and not Alberta.

According to Equifax, the credit bureau company:

“Mortgage delinquencies have also been on the rise. The 90-day-plus delinquency rate for mortgages rose to 0.18 percent, an increase of 6.7 percent from last year. Ontario (17.6%) led the increases in mortgage delinquency followed by British Columbia (15.6%) and Alberta (14.8%). The most recent rise in mortgage delinquency extends the streak to four straight quarters.”

A recent survey by MNP reported a staggering number of Canadians are stretched to their limits:

“Over 30 per cent of Canadians say they’re concerned that rising interest rates could push them close to bankruptcy, according to a nationwide survey conducted by Ipsos on behalf of MNP, one of the largest personal insolvency practices in the country.”

Although the CMHC can help Canadians via Canadian lenders by refinancing mortgages, it will not help overextended Canadians who chose to finance their homes with private mortgage lenders.

Antrim, one of the larger private lenders in B.C., has lent $500 million in British Columbia. 1,529 of their mortgages are in Metro Vancouver, with an average weighted interest rate of 8%. Most of their mortgages need to be re-approved every 12 months.

Slide270.PNG

Baby Boomers Right-sizing?

According to a recent survey, 26 percent of B.C. Boomers who own their home had most of their retirement savings tied up in real estate.

Nationally, many Boomers want to live in their homes forever, but for many that will not be possible. Most of them are not on track to have enough savings in retirement. The Coronavirus Recession won’t help.

An RBC survey says, “Over the coming decade, we expect baby boomers to ‘release’ half a million homes they currently own—the result of the natural shrinking of their ranks, and their shift to rental forms of housing, such as seniors’ homes, for health or lifestyle reasons.”

We prefer the term '‘right-sizing’ because most boomers selling a house buy luxury apartments with large floor plans in buildings with shared pools, saunas, gyms, and party rooms. That hardly sounds like a step down.

As baby boomers begin right-sizing and list their million-dollar homes for sale, they will add supply in what is considered the luxury market. If not enough Gen-X and millennial buyers are to buy these expensive homes, there is a risk that this may depress prices at the top of the market, compressing prices for townhomes and condo apartments.

In the near-term, supply is tight, but there are risks of excess housing supply in the medium-term.

Slide233.PNG

Pre-sales and Completions

New Construction

2020 has seen record home completions and the number of homes under construction is nearly at record levels. As buildings under construction complete in 2021 and 2022, and people move out of their rental or sell their current home, this new supply should alleviate some of the upward pressure on home values.

KEY CONSIDERATION: Condo units completing in late 2021 were sold at peak prices before the recent price correction. These “peak price” condos will be very difficult to flip at a profit and buyers taking possession will have difficulty obtaining mortgages when if the market value turns out to be lower than the purchase price. As a result, peak priced condos may be re-released to the market but with tight sales timelines.

YTD Vancouver New Home Completions.PNG
Vancouver Homes Under Construction.PNG

Pre-sales

Metro Vancouver pre-sales are purchases of unbuilt and completed brand-new homes from developers. Typically, a developer must sell 70% of homes in a building before they can starts construction, so housing starts are a good indicator of successful pre-sales.

Pre-sales have improved slightly, but year-to-date construction starts have been lower than in previous years.

Vancouver Pre-sales.PNG

Popular Sentiment

There's no way of predicting popular sentiment, but sentiment can shift quickly, as witnessed in the past two years.

Canadian Consumer Confidence

The Ipsos-Reid and Nanos Canadian Confidence Index has shown a noticeable drop in confidence. “Consumer confidence among Canadians has improved significantly, buoyed by positive views on real estate. Confidence has recovered remarkably well when compared to the 2008 Great Recession. It would appear that sentiment is the primary driver of real estate market activity because the other four drivers are materially weaker.

IPSOS Consumer Confidence Index.PNG
Bloomberg-Nanos Consumer Confidence Index.PNG

Coronavirus Containment

If B.C. cannot contain the second wave, we expect localized restrictions and lockdowns that will depress sentiment.

BC COVID-19 Daily Cases.PNG

In a nationally broadcast address, Prime Minister Trudeau has clearly stated that the second wave of Covid-19 is already happening across Canada. Chief Public Health Officer Dr. Theresa Tam has said that "Unless public health and individual protective measures are strengthened, and we work together to slow the spread of the virus, the situation is on track for a big resurgence in a number of provinces."

A study headed by Dr. Kristine A. Moore, medical director at the University of Minnesota Center for Infectious Disease Research and Policy, warns that the pandemic will not be over soon and that people need to prepare for possible periodic resurgences of disease. Optimistically, a vaccine will not be widely available until mid-2021, and 70% of the population would need to be infected to provide herd immunity. Unfortunately, more than 30% of the population have conditions that make them vulnerable.

2020 05 03 Three COVID Scenarios - Square GIF.gif

3. Should Investors Sell?

From a seller’s perspective, more changes in the market influence prices downward, so now may be a better time to sell than in two years and the seasonal real estate cycle usually favours sellers in the first half of the year.

We’ve identified several types of homeowners who should look seriously at selling during the pandemic.

With Coronavirus containment efforts, open houses may be impossible. However, you can get a Realtor to help you plan small repairs and improvements to your home so that it will be ready when the real estate market thaws.

Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check our our Complete Home Seller’s Guide.

4. Is this a good time to buy?

Homebuyers who waited now benefit from lower interest rates and prices that are unchanged from a year ago. They can now get a larger mortgage and buy more house with their larger buying budget.

Coronavirus containment efforts may make it more difficult to visit a bank or view homes. However, if you are considering a purchase, you can get a mortgage pre-approval from a mortgage broker and ask a Realtor to monitor the market, all without leaving your home. Then you’ll be ready when the ‘fog clears.’

Looking forward to 2021, prices are unlikely to rise dramatically, so buyers shouldn’t feel the need to rush to an offer. Also, keep in mind that the seasonal real estate cycle usually favours buyers in late summer.

If you want to buy, be sure to drive a hard bargain and cover your bases with smart and educated decisions. Don’t bite off more than you can chew.

Planning to Buy? Check our our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

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