Now that 2020 has come to a close I wanted to take a moment to look back on the year that was in the Orangeville Real Estate Market, what trends we saw over the past year and what this means for home buyers and sellers as we enter 2021.
New Safety Protocols
Probably the biggest change in our business over the last year has been how COVID 19 has changed the way we conduct our business. We have reduced the number of face-to-face meetings we have, complete screening questions prior to showings, wearing masks and gloves in client’s homes and so much hand sanitizer. As an industry, we have adapted to keep our clients safe while still conducting the business of real estate. I think the current way business is being done will continue for the foreseeable future. Masks, distancing and emphasis on cleaning will be the norm of the next couple of years as people get vaccinated, and we see how that impacts our society.
Seasonal Shift Due to COVID
The first wave of COVID 19 hit just as the spring real estate market would traditionally be heating up. The coronavirus quickly moved from something we read about in the news to all anyone was talking about and we were into the first lockdown before we knew it. While this made for a very slow April and May the real estate market quickly recovered as the economy started to open back up and the late spring market hit through the summer months. It was a very busy second half of the year in 2020 and continue to see active buyers in our market looking to purchase properties as soon as they come on the market. I think we will see the real estate market ebb and flow with this pandemic and while I expect there to be a more normal seasonal market in 2021 this will hinge on how trends continue with COVID 19 and what our governments do to combat the spread of the virus.
Low Interest Rates
The government has taken some extraordinary steps to try and keep the economy moving forward during the pandemic and the Bank of Canada has done its part keeping interest rates at all-time lows. The low interest rates have trickled down to the banks and right now five-year fixed mortgage rates are below 2%. With “cheap” money available to buyers and investors the result was an increase in active buyers in the Orangeville market in 2020. The Bank of Canada has indicated they project the policy interest rate to remain at current levels until 2023, which should keep mortgage rates low and there should continue to be buyers active in the Orangeville real estate market.
Low Inventory
Going into 2020 I had commented that there were a low number of homes available for sale and if inventory levels remained low that prices would stay strong in the Orangeville area. Well due to several factors over the last year inventory has gotten even tighter and as I am writing this there are fewer than 10 homes available for sale in Orangeville. With there being more buyers than sellers in the market last year we saw prices increase by 13.61% in 2020 and prices appear to be accelerating into the new year. I think this trend will continue, at least in the short term. From people I have spoken with there are 2 main reasons they are not selling their home, one due to COVID 19 people are concerned about the health of their families if they allow access to their home for showings. Until there is a real solution to the COVID 19 virus and people feel more secure that the risk of community spread has been substantially reduced this will continue to be a factor in the real estate market. The second reason is due to the low inventory levels potential sellers are concerned about finding a suitable home so they want to buy before they sell, which creates a bit of a chicken and egg dynamic. With both of these factors at play, I don’t foresee the usual balancing of our market by way of increased inventory until the second half of 2021 at the earliest.
Working From Home
Another trend that was top of mind over the last year was people working from home. There are many industries where this was never considered an option in the past but due to the global pandemic, there was a need for employers to be flexible and for employees to adapt. I recently read a report that 29% of Canadians are working from home and for some, this will be a reality for much longer than originally anticipated and may continue for years to come. As a result, home buyers are looking for a little extra square footage in their home to allow for a better home office set up.
Migration Away From the City
In 2020 there was a trend of people looking to move away from the larger urban centres into more rural areas. There are two main reasons for this first is more densely populated areas have seen higher instances of community spread of COVID 19, and second with working from home the daily commute is no longer as big of a factor in the home buying decision. I can envision a situation where some people will be working from home for 3 or 4 days a week and only need to be in a physical office location 1 or 2 days a week, thus making a long commute much more palatable. I think this is a trend that will continue as more people want to live in less densely populated areas and closer to nature wich will help keep demand high for properties in Orangeville and the surrounding area high because of our proximity to both, great outdoor activities, and the GTA.
2020 was a year of change and adapting to a new reality. There were some significant trends in real estate many of them I can see continuing into 2021 and beyond.
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