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The impact of the second Shut down on Real Estate in Niagara.
Dated: January 26 2021
|The impact of the second Shut down on Real Estate in Niagara.|
Covid-19 has impacted, on some level, every area of our lives. It has changed the way we shop, eat, spend money and even the way we buy and sell Real Estate. Those looking to buy or sell a house face new challenges in our local Covid-19 market that are almost opposite to what you would expect. I am going to go over 5 major Real Estate changes that have occurred due to the Covid-19 pandemic in our area.
There is NO inventory to sell.
Although generally there is less inventory in January and February historically, this year due to Covid-19 lockdowns, and I believe the fear of allowing strangers to view your home while you are living in it, there are only a small handful of properties currently for sale in our area. This is creating a fierce sellers’ market with competing offers and desperate sellers. Finding the right property takes time, patience, and having the ability to be aggressive in your offer to purchase.
Low interest rates.
Financing rates for purchasing or refinancing a home are at an all time low. This is providing purchasers with more buying power to compete in this aggressive market and driving the current Niagara house prices higher. At the same time, it will also provide relief for those struggling with reduced income to refinance their current properties and possibly lower their mortgage payments or consolidate high interest. This in turn could reduce the amount of people who may be forced to sell their homes due to financial difficulties.
Landlords are on high alert
With news of tenants not paying rent and the Landlord Tenant board being behind, and hesitant to evict, it can be difficult for a landlord to navigate the current market. Do I just sell my investment property, how much help can I provide to my tenant before I end up in trouble with my own finances, and what do I do if I end up with a tenant who has difficulty paying rent? Is it better to leave my rental property empty currently until things calm down? Many landlords are finding themselves in precarious positions. This is causing new rental applications to be highly scrutinized. You almost need to have better credit to rent a property than you need to buy a property. Those who are self-employed, laid off, or experiencing any financial changes during the COVID-19 challenges may find it exceedingly difficult to find a landlord willing to rent to them. We all understand there are people having genuine financial difficulty. Landlords and Tenants alike are experiencing the crunch of COVID. I recently had a client who would have been an excellent tenant declined for 19 rentals due to self-employment status, I had to engineer a solution with one of my investors to hold private mortgages for her to 100% loan to value financing so she could purchase a property instead. This financing was expensive but ended up being her only option for housing after months of failed rental applications.
Use of technology
Real Estate agents, along with buyer and sellers, now need to have savvy technical skills. Everything from marketing the property to signing the contract has become a technical process. Virtual open houses, electronically signing documents, the use of video calls, and social media marketing tools have become a cornerstone for Real Estate professionals. This does change the client experience. No longer will you sit down with your agent at the kitchen table and go over contracts to sign. Now those documents will be in your email through a documentation signature platform. It’s much easier to sign documents this way, you just point and click. However, it is imperative you and your agent take the time to go through the documents and what they say. Sometimes this step is easy to overlook when not in person. My solution to this issue is to review the documents through a zoom call, to ensure we are all on the same page before signing any contracts for Real Estate transaction. Good communication is now a key to proper client service and safe Real Estate transactions. Although many agents, including myself, had adopted these technologies prior to COVID-19, we would still adjust our process to the client needs, now we are limited in our ability to help buyers and sellers who may not enjoy the use of technology. We have all had to get creative and change our usual business processes to adapt to this new culture. However, this can be challenging for those who are not technically inclined, both agents and clients alike.
I have seen over the past COVID-19 months Real Estate Agents in our community work hard to support their communities. This is not new, most of us are community oriented, however, as a community many agents have gone above and beyond. I am especially proud of Royal LePage and all our agents who have delivered meals, donated to project share, picked up groceries for people, and been available anytime for socializing by phone or zoom for those shut in. We have supported each other through zoom wine nights, weekly Royal LePage zoom meetings to stay up to date with the latest safety protocols and market issues, and helping agents with showings when required. Our management has scoured the region for hand sanitizer, face masks, and other PPE to provide for us to keep our clients safe. They have created new signage, new office protocols and maintained an exceptional level of service to their agents. I want to take this public opportunity to thank our Royal LePage management team for their awesome response to all the difficult challenges COVID-19 has presented to us as agents. Without them we would not be able to provide you with the exceptional safe service we provide.
With the Real Estate market still strong, and Agents and Buyers and Sellers working together we have been able to minimize what could have a complete disaster for the Real Estate market. Real Estate is one of our key economic drivers. I encourage everyone; Landlords, tenants, industry professionals, buyers, and sellers to continue to work in good faith and kindness to each other. This will assist greatly in keeping our market and economy on track in the coming months ahead.
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