Real Estate Talk:
September and the Delta Variant

This summer we all thought we were out of the woods as vaccines arrived

By Joseph Marovitch

September 1, 2021

September has arrived, and the situation is not that much better than before. Interest rates are still low, as is inventory. Sales have dropped, but prices continue to rise at an unexpected pace. Demand has not slowed, but listings are not increasing. Demand is still outpacing supply.

This summer, we all thought we were out of the woods as vaccines arrived. With most of the population vaccinated, the assumption was we were safe from infection. However, many refuse to take the vaccine allowing the virus to continually mutate.

Now, we are in a fourth wave of COVID-19 with the Delta Variant, and once again, we must don masks, social distance and carry a passport. As we are all aware, this is very hard on the economy and the real estate market, especially for buyers.

With most of the population vaccinated, the assumption was we were safe from infection. However, many refuse to take the vaccine allowing the virus to continually mutate.

Many have decided to renovate their homes rather than sell and buy. The demand for renovation has backlogged many contractors, plumbers, and electricians. The CDC has now warned Americans and other countries not to enter Canada unless they are double vaccinated. This is a good thing except for the fact it makes delivery of supplies such as wood, piping, bricks, and other items required to build and renovate exceedingly slow and causes the price of goods and services to rise.

Another effect of the pandemic is rentals. If a home cannot be purchased people must live somewhere. In Montreal, renters far exceed rentals. Apartments and single homes for rent are in short supply. I had the experience this week of searching and finding full-size homes for out-of-town clients.

We searched vigorously for three-plus weeks, trying to find three and four-bedroom homes. Others were searching for the same thing, many others. As we found listings that arrived on the market the day before, brokers informed me the day after that these properties were already rented. To pin down a rental, we had to come in hard and fast with rent at asking or higher, short possession dates and solid reference and credit checks, which we did. In one case, the client had the property rented before even seeing it. Thank goodness they liked the property because the options are limited.

The September market is just as competitive as before. Buyers must come hard and fast with their best offers since there is desperate competition. Sellers can sell quickly if they ask within the market range the house is worth in today’s market. The situation may cause the seller to sell above asking, however, overpricing deters buyers in any market and slows the progress.

‘Buyers must come hard and fast with their best offers since there is desperate competition… The situation may cause the seller to sell above asking, however, overpricing deters buyers in any market and slows the progress.’

With the passports and pressure on those refusing to be vaccinated to get vaccinated, the situation may stabilize in the future. If we can just get our act together, especially those who refuse to believe that millions of deaths have occurred because of this pandemic and more will die, the economy and real estate market can turn around so that everyone can prosper, afford a home, and feel secure.

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Next article: The real estate market and passports

State of the market

According to the Canadian Real Estate Association, home sales across Canada have decreased significantly. In Quebec, active listings have decreased by 33% over the past year, and new listings have decreased by 29%. In July, sales dropped by 32%.

The prices for homes on the other hand, and of no surprise since demand is much larger than supply, have risen significantly and continue to rise. This is what occurs when there are ten buyers for every one item.

‘In Quebec, active listings have decreased by 33% over the past year, and new listings have decreased by 29%. In July, sales dropped by 32%.’

Again, this situation will not last forever, and Quebec is still one of the best places to invest in real estate. Before the pandemic, prices were rising simply due to relatively little political and economic turmoil compared to the rest of the world and financial stability.

One other Montreal factor is that, as an island, we are running out of space to build new. As supply of land dwindles, pandemic or not, prices will rise.

Have a great week!

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Feature image: Daria Shevtsova – Pexels

Other articles by Joseph Marovitch