Real Estate Trends – 2020

TRENDS2020

COVID brought a bit of creativity to real estate. Here are some trends that emerged for 2020!

  • SPACE – Everyone wants space! Office space, exercise space, outdoor space. Functionality is top of the list. I think downsizing and tiny homes will be at the bottom of the list
  • LOCATION INDEPENDENCE AND/OR SECONDARY HOMES – Work from home has stirred a bit of creativity in people. We are seeing more buyers of secondary homes and particularly homes in the country or on waterfront. Location is only dependent on internet quality.
  • OUTDOOR EXPANSION – With the inability to travel, more money is being spent on making getaway escapes in backyards with quiet nooks or other welcoming spaces.

 

Also check out Kingston & Area – 2020 in Review

Kingston & Area – 2020 in Review

KAREA_Year End 2020
KAREA-UnitsSoldYearEnd 2020

What a crazy year for real estate. COVID certainly didn’t stop people from buying or selling. In fact we saw an 8% increase in sales over the previous year. I personally feel there were a few converging ideas. Some of them had to do with the trends which I addressed in Real Estate Trends 2020 but I also felt there was a large movement of single family investment properties. With record sale prices (15% over 2019) and with so much uncertainty with tenant rights during COVID, I think these types of investors are thinking its time to cash out while the going is good.

On the other side of the coin we are seeing multi-residential buildings flying off the table including places like Napanee and Gananoque. Toronto investors are swooping in and taking advantage of much lower pricing.

2020 was also the year we had a record number of house sales with multiple offers. My prediction is that 2021 will bring more of the same. Let’s hope I’m wrong!

MOVE-UP / MOVE-OVER!

This year the statistics show a larger percentage of buyers were either buyers moving to larger homes and/or out-of-town buyers. Additionally, unsurprisingly, buyers under 35 years of age are realizing they want more space. These trends will likely continue into next year with some experts also predicting an additional 10% increase in pricing in the Kingston area. It’s all about supply and demand. This is leaving first time home buyers with more frustration as they attempt to purchase a home. Help may be on the way??

The federal government just released details that it will expand the foreign buyers tax on non Canadian homeowners. Currently this has been applied in Ontario’s Greater Golden Horseshoe and Vancouver areas as a way to bring down home prices by increasing supply. This plan obviously doesn’t come without controversy.

The Federal First-time Home Buyers Incentive plan may be an option for some. It’s a shared-equity mortgage with the Government of Canada. Introduced in 2019, it allows first-time buyers to purchase a home 4x the household income. As of the spring of 2021 it will increase to 4.5x . Learn more about this at https://www.cmhc-schl.gc.ca/en/nhs/first-time-home-buyer-incentive

Buyer Beware!

buyer beware

When buying property, one of the biggest misconceptions buyers make is that sellers have to disclose everything that’s wrong with the house. In Ontario, the reality is the exact opposite. We operate by the “buyer beware” doctrine. This means that the burden is on the buyer to ensure they inspect and investigate the property before agreeing to buy it. This can even apply to issues that the seller is aware of.

Buyers are frequently surprised to close on a house just before a large rainstorm, only to find that the roof leaking the next day. The seller could have known that the roof is prone to leaking, but as long as they don’t take active steps to hide that fact, or lie about it, they may not be required to disclose this information to the buyer.

While leaks are the most common complaint, this issue can arise from almost anything, from mould, broken fixtures, or damage masonry. Like anything in law, there are exceptions. You’ll frequently hear lawyers argue about what is a patent versus latent defect, concealment, misrepresentation, etc. But as the buyer, the last thing you want is to have your lawyer argue about major house issues after closing, and then have to decide whether or not you want to sue.

Buyers should enter into the mindset that the seller hasn’t told them anything. It is up to them to discover any issues that are important to them. That normally involves hiring a qualified and trusted home inspector and to make sure to discuss their limitations. Has it been very dry lately? That may be harder to find evidence of a leak. Are you buying in the winter? The ground may be too hard to inspect the septic tank. Even if you can’t nullify the risk, the buyer needs to at least understand that it exists.

As for the Seller? The above would be terrible advice and could see you facing the wrong end of a lawsuit. Make sure to discuss with your realtor and your lawyer if there’s something you think may need to be disclosed.

The foregoing is intended to be for educational purposes only, does not constitute legal advice, and does not create a lawyer-client relationship

Rano Daoud Thomson Gowsell LLP

Will The Bubble Burst?

Real Estate Bubble Search Term

There continues to be conflicting reports in the industry as to what this HOT MARKET means in the long run and if we are in for a down turn. I’m not so sure that consumers are focused on this today but there appears to an uptick in searches for this term. I pulled search terms Real Estate Market” in BLUE and ” Real Estate Bubble” in RED from GOOGLE. Here is what it shows.

Real Estate Bubble Search Term

It appears there was a closer correlation between these two phrases in the spring of 2017 versus what is happening this fall. I find this interesting and may directly relate to the Buyer and Seller behaviour which we are seeing! Toronto, who saw a 215% increase in CONDO listings in September, will be most affected by a price correction than any of the suburbs. This certainly may indicate that price decreases are on the way.

Kingston & Area Real Estate Stats – Sept. 2020

As this year progresses, the real estate market remains unpredictable and crazy. As the COVID cases rise we may see a downward shift in sales activity this winter. I am personally seeing a bit of what I call “OFFER FATIGUE” from buyers. Some feeling a bit of hopelessness. Who would have thought it would be so hard to purchase a home.

But with so much economic turmoil, the question remains as to the effect this will have on the housing market in the coming months. There seems to be consensus that next year we will see a softening of the market. I’m not so certain this will happen in Kingston and Area as we continue to have a greater demand for single family homes, as well as a increasing portion of out-of-town cash buyers .

The impact of COVID-19 on the housing market is complex, and we believe it will lead to diverging price trends among regions and housing categories. The pandemic is affecting demand and supply of various market segments quite differently. It is cooling demand for and boosting supply of rentals in large urban areas. This, in turn, is reducing investor interest in condos. The pandemic is also altering the housing needs of many current owners who look for more spacious properties in less crowded settings. This is simultaneously shifting demand from condo apartments to single-detached homes and other low-rise categories, and increasing the supply of smaller condos in core urban areas. Work-from-home arrangements and the lesser appeal of big-city living (with reduced cultural and socializing opportunities during these times of social distancing) are increasingly driving buyers further away from downtown locations into suburbs, exurbs and even cottage country. We believe this trend will sustain strong demand in smaller markets, putting intense pressure on their housing stock. The bottom line is we expect condo prices to weaken in larger markets next year, while we see prices for single-detached homes remaining generally resilient—albeit increasing at a slower pace. “ RBC

There continues to be a good percentage of homes which are going for over asking price. More people are now offering greater amounts of money to get a home. Recently a house priced at $259,000, sold for $350,000. It had 17 offers. The question is was this house actually only worth $259k or $350k to begin with?

 

AmtOverAsking

Year to date we have seen a 14% increase over same period last year for the Kingston & Area market. September sales were higher and as you can see the days on market was significantly less for the month of September.

Let’s hope for a slower winter for us all!

MoreCities_Sept
KAREA Sept 2020 Real Estate Stats

Kingston & Area Real Estate Stats – August 2020

Despite being in the middle of a pandemic, Canada housing market shattered records in July.  What the fall brings to the housing market will be anyone’s guess.  There are still many uncertainties.    Questions remain as to how the changes to the federal CERB program, which is due to change in October, and the mortgage deferral program, which is set to end around the same time, will effect Buyers & Sellers.  Approx. 16% of mortgagors have deferred at least one payment.   Has this put homeowners into a financial situation in which they will not recover from?   I personally think there will absolutely be casualties which will result in mortgage defaults.   The extent will not be known till later this year and perhaps into next.

Amongst these Canadians, are workers who have not yet been able to get back to work.  The hybrid model for school reopening will leave parents without options for childcare. Those who can go work may be making difficult choices.    And amongst all this chaos is whether there will be a resurgence of new cases.  Let us not forget that the U.S.A. is in the middle of a presidential election!

As you can see… so many questions… not enough answers.  Is it the right time to buy, sell, or hold?  Will prices continue to go up or down?  Each buyer or seller is unique and I’d be happy to discuss your situation in person or by phone.

If you know of someone thinking about buying or selling I’m always looking for more great people like yourself. Always here to help!

Avg Sold per Type Aug 2020

Kingston & Area Stats – July YTD 2020

Kingston & Area Stats YTD July 2020
Kingston & Area Stats YTD July 2020

Last month I showed that the number of sales over the same period as last year was down by almost 20%. July’s sales were strong and the gap is closing-in with now recording only an 8% drop YTD. Still low based on history in the Kingston & area but it shows that despite COVID, people are still buying homes.

Average SOLD price YTD is slightly up over last month with a +11% change.

Average sold price for Kingston & area is now $435,696 with 45% of buyers this year in the $300 k – $450 k price range.

How much over asking price

We continue to see multiple offers on many properties and there appears to be a slight uptick in more aggressively priced offers over last month. But despite this, almost half of all sales were below or at asking price.

Many buyers have been discouraged but if they work with the right Realtor® that can provide guidance, their success in finding the right home will be greater.

Kingston & Area Statistics – YTD June 2020

Kingston & Area Real Estate Stats June 2020
Kingston & Area Real Estate Stats June 2020

COVID-19 and the subsequent lockdowns have certainly shifted our “spring” market.   June has seen the flood gates open as Kingston and area went into Phase 2 of reopening.  Although sellers have not completely embraced listing their homes at this time, we are seeing buyers out in full competitive force.

Our average SOLD price Year-To-Date 2020 has seen a 10% increase over the same period as last year .   Prices prices have been affected by mainly the lack of inventory & the number of buyers.  Listings are down 16% from the same period last year.  To give you another perspective as well, Kingston and area has seen a sellers market for the last 4 years.  So if we compare with the number of houses listed from 2015 (same period), inventory is down 46% from that time frame.   

Recent CMHC rule changes which came into effect July 1st, in addition to mortgage companies increased scrutiny of the buyers employment records due to COVID, are going to make things tougher for buyers.  We are just not seeing the effects of this in Kingston yet.   

MULTIPLE OFFERS
Buyer are increasing finding themselves in multiple offer situations in today’s market.  This is discouraging to many.  To buyers, it appears ALL houses are in “bidding wars” which in fact only 30% of sales sold over asking.   How much over asking is another good question.  This table shows 2019 vs 2020 $$ over ask price.  As you can see the bulk of those which did sell over asking (the 30%), were distributed between $1 – $20,000 .  

% over asking

Without perspective, it would appear that there is lots to get discouraged over.   I strongly encourage you to work with a Realtor® who has their pulse on what is going on in the market and to provide you with advise which will prepare you for what you need to do to BUY or SELL your home.    Additional stress is not what we need right now and certainly not during your house hunting.  This is suppose to be a time of joy.  

I’m always here to answer your questions.  Give me a call!

 

Kingston & Area Statistics – YTD May 2020

Kingston & Area Real Estate Statistics for YTD Ending May 2020
Kingston & Area Real Estate Statistics - YTD Ending May 2020

Kingston & Area Real Estate Statistics - YTD Ending May 2020

The real estate market continues churn for the Kingston & Area markets, but at volumes significantly less then normal!

MONTH to MONTH
Units sold were up by 67% over April 2020 from 177 Units to 295 for Kingston & Area. To put this into perspective… May of 2019 saw 464 sales.

YEAR over YEAR
Kingston and area started off very strong again until the breaks were applied in March. Since then approx. 35% less houses have sold for the same time frame of 2019.

PRICES
Yet… despite COVID-19… prices YTD shows a strong increase of 8%. This is mainly due to the strong start to 2020 but even so, you can see that prices for May 2020 have increased by approximately 7% over May 2019.

CAVEATS
The numbers shown reflect the Kingston and Area which includes Lennox & Addington, Frontenac, Thousand Islands etc. . Price increases in each area, even neighbourhoods, may be completely different and you need to consult a real estate professional to evaluate how a particular neighbourhood is performing.

SUMMARY
We have seen a lack of inventory for the last 4 years. COVID has and will have an impact on both Buyers and Sellers.

Those who have lost their jobs will find it more difficult to meet the demands of the mortgage companies. As household debt increase and the downpayment accounts are dwindling the dream for many could be delayed. Talking with a REALTOR® can assist with your long term game plan going forward.

Sellers are fearful of the associated risk of COVID and may feel that the house values are dropping and feel anxiety and fear.

Things may not be as bad as you are imagining and the best course of action would be to talk with a REALTOR® who is in touch with the market and trends during this new day and talk about your individual situation.

What we know for sure is that homes are being listed and buyers are buying and we are seeing multiple offers again. So this is great news for anyone looking to Sell as it is still a Sellers market!!!

Give me a call to chat about your situation… I love to help!!