Real Estate Talk:
The rental frenzy?

The “not so frenzied” rental frenzy in the new normal

By Joseph Marovitch

Every year in the months of May, June and September are when most leases expire. Most do not move; they renegotiate the rent and remain where they are. For others, a move is required due to wanting a smaller or larger space, employment relocation or any number of reasons.

However, this year is different. COVID-19 required people to remain indoors. Therefore, when the leases expired while at the same time the economy crashed causing a lack of income, the lessees did not move and the lessor received no rent. Restrictions are being slowly removed so the economy can get back on its feet, even though the curve appears to be increasing rather than decreasing. Infections and deaths continue to rise. The easiest thing to do in this situation is to stay right where you are. In past years, when leases expired at this time, rental units would be snapped up as fast as they entered the market.

Today, people are hesitant to show their spaces and if they do, the landlord must take great precautions to ensure everyone’s safety. Documents must be signed by all parties to the effect that they are not sick, have not been in contact with anyone who is sick or showing symptoms, that the visit and move are a necessary priority. Everyone must follow protocols during the visit, and all must wear masks, gloves, disinfect and touch nothing.

Documents must be signed by all parties to the effect that they are not sick, have not been in contact with anyone who is sick or showing symptoms, that the visit and move are a necessary priority.

Should restrictions become less stringent, we should see a good amount of action in the rental market. There is an unfulfilled need to relocate. Life goes on, circumstances change and the pent-up rental market may explode in the next few months.

For those willing to venture out to see units, and for those landlords prepared to open their doors to visitors, now is a good time to negotiate a good rent and have your pick of units.

For everyone else who is hesitant to risk their well being, at a later date, the market will be open but I suggest, find the unit you like quickly and make a deal because rental units will not last long on the market once the market fully opens.

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Next article: Where the income property market is and where it’s going

State of the market

The market is beginning to move with visits and buyers at a slow and cautious pace. Only priority transactions may take place and must close on or before July 31. For the moment, new listings are permitted but new listing transactions may not take place until August 1 or later.

Buyers are nervous to visit, and sellers are wary of visitors who may be infected. The situation has led to a drop in price across the board. Visits are permitted for those that must move but under rules of engagement to ensure safety. Those that are visiting are serious buyers otherwise they would not risk their lives.

‘… there are indicators in the economy which would lead many to believe real estate prices have dropped and will not reach previous heights prior to the crisis, any time soon.’

At the same time, buyers are aware they are one of the few and as such will offer lower prices than pre-COVID. Motivated sellers may want to compromise or choose to wait it out. However, there are indicators in the economy which would lead many to believe real estate prices have dropped and will not reach previous heights prior to the crisis, any time soon.

Please remain safe and take all precautions for yourself and all those around you. With adjustments, we will get through this and find peace of mind.

Let’s not forget that people with cancer are vulnerable too!

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Image: Pixabay

Other articles by Joseph Marovitch