IN THE MIDDLE OF MAY, during the height of the coronavirus pandemic, Debbie Turner listed her 1,477-square-foot home for $875,000. It’s a five-bedroom, three-bath bungalow in Grandview Heights, a neighbourhood wedged between the University of Alberta’s research farm and the North Saskatchewan River valley. Turner says she has, for a few years, had plans to sell her home and move to southern British Columbia, near Kootenay Lake. Despite the unique market circumstances COVID presents, she’s stuck to her plan. “There’s no harm listing,” she said the day after putting it on the market. “We’ll see what happens.”
We will indeed. Coronavirus has turned everything upside down and backwards. In the real estate world, open houses are verboten, tours are virtual and written assurances are required to ensure people walking through a home haven’t been abroad.
ANOTHER EFFECT HAS been brutal real-estate numbers, at least since mid-March when governments started giving stay-at-home orders. In Edmonton, home sales went down 55 per cent in April from a year earlier and 36 per cent month-over-month. New residential listings declined 46 per cent for the year and 31 per cent for the month. Overall inventory fell 20 per cent from a year earlier.
Turner is familiar with the numbers. She’s well-versed in real estate; her late husband was a commercial agent and they discussed markets around the breakfast, lunch and dinner tables. She knows Grandview Heights is a desirable community, with its large, subdividable lots, its proximity to the river and downtown and the well-regarded elementary and junior high schools. And she says her home, in particular, will be of interest. “Many of the other houses for sale in the neighbourhood are bungalows that haven’t had a lot of love,” she says. “Dated carpet, no upgrades to the bathrooms or kitchens.” Hers, well-maintained with improvements, is the only move-in-ready place in its price range.
So, despite the gloom, she listed. Her realtor, Leslie Jia, cautioned against the move due to the low number of viewings. He acts mostly for sellers, and has been advising clients to hold back until society gets back to some semblance of normalcy. Prior to Turner taking the plunge, he had just one property listed, and the owner removed it. “I just had a listing terminated because the seller sees no chance of selling,” he says.
In addition to being an agent, Jia builds and sells homes. Wearing a mask and gloves, he tours me through the 4,200-square-foot home he recently built in Windermere. He’s waiting for the market to rebound before listing (as well as for the furniture he ordered from manufacturers in Quebec — they’re corona-slow to deliver too), but when he does, he expects it will be for about $1.6 million.
He predicts a flood of listings over the summer, and is confident that buyers will also come out of hibernation. “If you have to sell in the next two years, seize the moment,” he says. Longer term, he sees trouble, but it has little to do with the coronavirus. Edmonton’s market is still heavily driven by the price of oil, and any rebound will require the global economy to get back into gear to increase demand for fossil fuels. He also cites zoning changes made by the City of Edmonton to encourage more high-density development. He says the changes are happening too fast and will result in a flood of new units on the market, depressing prices.
Jennifer Lucas, the chair of the Realtors Association of Edmonton, points out that prices in Edmonton have been remarkably resilient through the turmoil, down just 3.3 per cent on the year. But she agrees with Jia that the road ahead is long and bumpy. “A lot of real estate has to do with consumer confidence,” she says, “so even post-COVID we have to deal with the fact that a lot of small businesses may not bounce back and there may be prolonged layoffs due to the economy. People don’t necessarily want to pull the trigger on a big decision unless they have to.” On the optimistic side, she says interest rates remain incredibly low and buyers have had lots of time to get their ducks in a row.
It’s hard to say what long-term changes the pandemic might have on the real estate market and the ways we buy and sell homes. Many people have become more comfortable operating digitally, in every aspect of their lives. There may be a persistent shift to virtual tours and electronic signatures. As far as the effects on different kinds of real estate, Lucas offers two ideas; there will be more interest in acreages and large properties as people think more about food security and want space for a garden. On the commercial side, she says more businesses will keep more employees at home more often, and therefore be looking to downsize their offices. Down the road, companies in large spaces may let their leases expire and look for smaller settings.
Turner is sanguine about it all. She knows that many potential buyers will also be trying to sell their own homes, and that there will be second and even third waves of COVID-19 washing over the world. But she’s been planning the move and she’s proceeding. “COVID makes it awkward, no question,” she says. “When I make trips to the Kootenays I have to remain self-isolated, but we can collectively move on or we can stay where we are and be worried about every next turn.”
According to Statistics Canada, the monthly change in the New Housing Price Index (April 2020)
Decline in number of new homes sold, April 2020
Decline in Canadian resale home market, April 2020
According to the Realtors Association of Edmonton, residential unit sales were down in May 2020, compared to May 2019
Decline in residential unit sale prices in May 2020, compared to May 2019