What to Expect When Buying or Selling Real Estate During and After the COVID19 Shut Down
Saturday, June 6th, 2020In March I celebrated my 33rd year as a licensed real estate practitioner. I can tell you that in 33 years, the real estate industry has never had to deal with a situation quite like the COVID-19 outbreak.
Real estate is a unique industry
Real estate practitioners are salespeople whose job it is to market and sell property, but people live in the ‘inventory’ that they sell. This means that the owners/occupants of properties for sale must regularly allow germy strangers into their homes.
It makes me wonder how many times the owners/occupants of listed homes contracted a cold or the flu from a prospective buyer or Realtor® pre COVID-19.
On March 23, 2020 the Alberta Real Estate Association prohibited its members from hosting open houses to protect public safety in response to COVID-19. Real estate has since been deemed an essential service by the Government of Alberta but as of this writing (June 4) the prohibition is still in effect.
In the case of Realtor® scheduled showings in Alberta, prospective buyers are accompanied by a licensed professional who must abide by the Rules and Regulations of the Real Estate Act administered by our regulator, the Real Estate Council of Alberta (RECA), as well as the Calgary Real Estate Board (CREB®) Rules, and the Canadian Real Estate Association (CREA) REALTOR® Code of Ethics.
The Real Estate Council of Alberta, the Alberta Real Estate Association and the Calgary Real Estate Board have all instituted new recommended protocols for property showings and new forms, checklists and health questionnaires for our use.
So what does this mean for someone who is considering either buying or selling a home in Calgary right now?
Buyers wishing to VIEW a home for sale…
Many Realtor®s are offering virtual showing options which can include real time virtual open houses, pre-filmed virtual walk-throughs, or Realtor® only showings using Facetime, WhatsApp, Google Meet, Zoom, or other video meeting platforms to ‘show’ the buyer the property.
For in-person showings, individual brokerages can have different policies. For example:
- The listing Realtor®’s brokerage may require the buyers to complete a health questionnaire (COVID19 Checklist for Buyers) within enough time to allow the seller to review the questionnaire prior to the showing.
- If the seller is uncomfortable with the prospective buyers’ or their Realtor®’s answers, the sellers can refuse the showing.
- If they allow the showing and the home is occupied, the seller may require the buyers to wear masks and gloves and may require a ‘touchless’ showing, where the buyers promise not to touch any surface.
- The seller/occupant will prepare the property by turning on all of the lights and leaving cupboard doors ajar. Only the Realtor® may touch what is required to access and then secure the property after their departure.
Should an offer be made and accepted, the same process is repeated for inspectors, appraisers and service providers who need access to the property during the conditional period.
In general, buyers will need to review the recent sale prices of similar properties, the list price of competing properties and the forecast of market conditions for the market segment of a particular property when choosing an offer value.
Sellers wishing to LIST a home for sale…
As mentioned above, it is important to note that brokerages may have their own policies in place, and may be in addition to the protocols recommended by all of the earlier mentioned governing bodies.
During the process of preparing your property for sale you may require that service providers such as photographers, videographers, measurement specialists and stagers complete the (COVID CONTRACTOR Disclosure Form) within enough time for you to review it prior to their visit.
The MLS® system remains the same except that more Realtors® are including video links.
Where you will likely experience a change due to COVID-19 is during the marketing process for your home. For instance:
- Open houses are currently not permitted.
- Your Realtor® may provide ‘virtual’ open houses or showings.
- Prior to a showing, you may be expected to turn on all of the lights and leave all cupboard doors ajar.
- You may be required to complete a health questionnaire (COVID19 Checklist for Sellers Agents) within enough time to allow the buyer to review the questionnaire prior to the showing.
- You may wish to review the answers from the buyer questionnaire and may accept or refuse the showing based on their answers.
All of this is in effort to avoid those tiny little invisible yet potentially dangerous germs.
How much of this will continue to exist when the economy is fully relaunched and if/when a vaccine is available remains to be seen.
And now for the question on everyone’s minds…
How will COVID-19 affect the Calgary real estate market?
Let me just consult my crystal ball.
The real estate market in general in Calgary has been correcting since the peak of 2014. The apartment market segment in Calgary has been correcting since its peak in 2008. The Chief Economist for the Calgary Real Estate Board, Ann-Marie Lurie, in the updated CREB® Calgary Economic & Housing Outlook has predicted that 2020 sales are forecasted to fall by 22% and that the City-wide benchmark price is forecasted to ease by 3% this year.
In Canada Mortgage Housing Corporation’s Housing Market Outlook SPECIAL EDITION – SPRING 2020 Forecast it predicts that the Alberta MLS® Average Price will drop 9.67% – 16.14% over the next two years.
- Download: Canada Mortgage Housing Corporations Housing Market Outlook SPECIAL EDITION – SPRING 2020 Forecast
- Download: CREB® Calgary Economic & Housing Outlook 2020
Because each market segment, community and price range will experience different levels of impact, it is very important to consult a real estate professional for market specific data.
Weekly sales for homes in Calgary 2020
Having said all of that…I have been tracking the number of weekly sales for detached homes in Calgary, in segmented price ranges, since March 1st. In the $500,000.00 and under segment the number of sales from May 24th – May 30th was 123. May 17th – May 23rd recorded 117 sales. These are the highest numbers of weekly sales since March 1st, up considerably from the week of May 10th – May 16th which saw sales of 87. At the time, 112 sales had been the highest number of weekly sales since March 1st and was only 33 sales lower than the same week in 2019. Clearly there is some pent-up demand.
To see the chart of sales by price range, CONTACT US and we will be happy to send you the data.
In general, sellers will need to be realistic about their list price and should look to the recent sale prices of similar properties, the list price of competing properties and the forecast of market conditions for their market segment when deciding how to price their property.
If you have any questions, please reach out to me via email: susanita@cbcalgary.ca or call us at 403-686-1455. I am happy to discuss your unique circumstances at any time.
Susanita de Diego
