The COVID-19 pandemic has upended the economy and drastically changed how we live and work. While the real estate market in London, Ontario is not immune to these changes, COVID-19 has affected the housing market here in some surprising ways.

If you’re considering selling your house in London, Ontario in 2020 or beyond, how should COVID-19 play into your decision? In this article, we will help you decide by looking at:

· How COVID-19 has affected real estate in London

· Whether you should sell now or after the pandemic

· What the post-COVID economy could mean for Southwestern Ontario, and

· How to minimize the risks of selling your home during COVID

How Has COVID-19 Affected the London, Ontario Housing Market?

Given how much COVID-19 has battered the economy, you may expect Canadian housing prices to have fallen. While prices did drop in March and April when the country went into lockdown, since then they have soared to new heights.

In fact, in September the average price of a home sold in Canada reached $604,000 — a new record and an increase of over 17 percent over the past year. In Ontario, the increase was even higher, at close to 20 percent since September 2019

London, Ontario hasn’t missed out on the boom either. The housing market here is hotter than ever before. In September, the average selling price for a London, Ontario home hit $520,000, an astonishing 28 percent increase over the past year.

Low Rates and Pent Up Demand Fuel Soaring House Prices

With the economy struggling, it may be a shock to hear that housing prices are continuing to set records. So, what’s going on? For one, there is a lot of pent up demand for homes in Southwestern Ontario because people were unable to buy during the lockdown in March and April. The London area remains the second-fastest growing region in Canada, and those new residents need homes regardless of the pandemic.

Another big factor was the decision by the Bank of Canada to slash interest rates to just 0.25 percent, their lowest ever. That led to the big banks offering interest rates of less than two percent on five-year fixed-rate mortgages. Suddenly mortgages became a lot more affordable for more people.

Taken together, the low interest rates and high demand for homes in Southwestern Ontario are creating a red-hot housing market that not even a pandemic can slow down.

Should You Wait to Sell Your Home in London, Ontario?

With home prices rising so quickly, you may be tempted to wait out the pandemic and get a higher price in the future. However, if you’re expecting the same stratospheric increases to continue indefinitely, you may be disappointed. As mentioned, pent up demand from the lockdown is one factor in the price increases, but it is only a temporary factor. Second, interest rates are currently close to zero, so it would be unreasonable to expect them to go much lower.

As a result, the housing market in Southwestern Ontario, including London, will likely begin to stabilize. That means prices will continue to rise, just not at the breakneck rate we have seen this year. So, if you’re looking to sell your home for more money, now is the time to do so.

Could London, Ontario Gain from the Post-COVID Economy?

Another interesting facet of the pandemic is how it could permanently change the way people work — and, by extension, where they buy houses. A survey earlier this year by Statistics Canada found that 25 percent of Canadian businesses were planning on making remote work an option for their employees even after the pandemic ended.

In some sectors, including information and cultural industries and professional, scientific, and technical services — both of which are large in the London area — the percentage of employers who plan to make remote work permanent is nearly 50 percent. For some context, as recently as 2018 fewer than 10 percent of businesses had any remote work options.

What does that mean for selling a house in London, Ontario? For one, secondary cities like London become far more appealing for homebuyers in a world where more people work from home. Workers who were previously stuck commuting to the office in Downtown Toronto now have the option to look for homes much further away from the city. In fact, being pushed out of the Toronto housing market was already fueling demand for homes in London, a trend that is likely to increase as remote work becomes permanent.

Minimizing the risks of selling your home

All of the above suggests that, from an economic perspective, 2020 is still a great time to sell a home quickly in London and throughout Southwestern Ontario. However, you may still have concerns about whether doing so in the midst of a pandemic is safe. After all, in an age of social distancing, limiting your in-person contacts is something that can protect yourself and others.

There are definitely things you will need to keep in mind if you decide to sell during the COVID-19 pandemic. For one, how the pandemic plays out will determine whether you are even allowed to hold open houses. Currently, open houses are permitted in Southwestern Ontario, but they are still prohibited in Toronto, Ottawa, Peel, and York Regions.

Also, you or your realtor may have to take other precautions. Those could include maintaining 2-metres distance during open houses, providing personal protective equipment during viewings, disinfecting surfaces, and recording contact information of visitors for the purpose of contact tracing.

That’s a lot of work and it may put you off of trying to sell your home right now. However, there are alternatives. For example, selling your home off-market with an investor allows you to take advantage of London, Ontario’s high housing prices, while also minimizing the need for open houses, in-person viewings and other face-to-face meetings.

Furthermore, if your home is in need of repairs or renovations, you may be worried about hiring contractors who could unknowingly spread COVID-19. By selling off-market, you can sell your home in as-is condition, while worrying less about letting more people into your home.

This year has probably caused a lot of stress for you already; but selling your home shouldn’t add to your worries. Reach out to a local real estate investor in the London, Ontario area today and learn how to sell your house fast, while keeping you and your family safe.

Interest rates, which are set by the Bank of Canada (BoC), have a major effect on real estate both in London, ON, and throughout Canada. When the BoC reduces its interest rate, private banks typically follow suit and lower their mortgage rates, which in turn encourages people to buy homes.

In response to the COVID-19 pandemic and lockdown, the BoC slashed its benchmark rate to just 0.25%, which resulted in some banks offering five-year fixed mortgages for less than 2%. That has helped keep the real estate market in Southwestern Ontario red hot, even when the economy overall has struggled.

If you’re selling a house in London, ON, interest rates will likely impact the amount of interest you receive from potential buyers. As a seller, you may also be considering buying a new home yourself, in which case interest rates will factor into when you decide to sell your current home and buy a new home.

To help you figure out how interest rates will affect you, let’s take a deeper dive into where interest rates are heading, how they’ll affect mortgage rates, and what all of this means if you’re selling or buying a home in Southwestern Ontario.

Are interest rates going up or down in Canada?

Predicting where interest rates are headed isn’t easy, especially during such uncertain economic times as these. But it’s good to have an idea of where they are likely to be if you plan on selling a home in London, ON.

If interest rates look set to go even lower, then potential buyers may hold off on buying a house so that they can enjoy a break on their mortgage in the future. If that were the case, you’d probably want to wait before putting your house up for sale. But if interest rates look like they’ll go up, you would want to sell sooner as buyers may rush to buy before mortgage rates increase.

It’s hard to say for sure what the Bank of Canada is going to do in terms of interest rates, but we have some idea. The BoC recently released a statement where they said that they “will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved.”

In other words, the BoC isn’t going to start raising interest rates until an inflation rate of 2% “is sustainably achieved.” That last part is important because it means the BoC wants to see the inflation rate stay at 2% for a while before it increases rates. The bank won’t rush into raising rates if inflation increases dramatically one month only to decline again the next, which is a distinct possibility in the age of COVID and lockdowns.

Importantly, the BoC doesn’t expect to “sustainably achieve” that inflation target until 2023, so interest rates are likely to stay at near-zero levels until then.

However, with a vaccine seemingly on the horizon, it’s also unlikely that the BoC will go any lower with interest rates. Earlier in the pandemic, some analysts had suggested that negative interest rates were a possibility, but that’s looking increasingly unlikely now.

But that doesn’t mean mortgage rates will stay low

While low Bank of Canada interest rates have a big impact on mortgage rates, they are not the only factor in determining them. Another factor, especially for long-term fixed mortgages, is the 5-year Canadian bond. The 5-year Canadian bond yield isn’t set by the Bank of Canada, but by the market. That mean it fluctuates daily, so it’s much more affected by current events — like, say, the results of a vaccine trial.

For that reason, don’t assume that mortgage rates won’t rise just because the BoC’s interest rates are also not rising. In fact, with the recent announcement of Pfizer’s successful COVID vaccine trial, many lenders have indicated that rates for some mortgages will start to inch up.

The 5-year Canadian bond yield is currently at 0.46%. While that’s down from the 1.63% it was at in December 2019, it’s up from the 0.32% low in July of this year. If that rate keeps going up or holds steady, expect mortgage rates — especially for the popular 5-year fixed-rate — to go up.

How low interest rates affect selling a home in London, ON

Low interest rates usually encourage a seller’s market. When interest rates are low, mortgage rates are usually also low. In turn, that means buying a house becomes more affordable, so sellers usually have an easier time finding more interested buyers.

But as we’ve shown, interest rates aren’t the be-all and end-all of mortgage rates. With bond yields also going up, mortgage rates are probably going to increase. So, while mortgage rates will likely stay low, the period of ultra-low mortgage rates could be coming to a gradual end.

If you’re thinking of selling a house in London, ON, that doesn’t mean you should necessarily start panicking. As mentioned, mortgage rates are going to stay very low for a while, just not as low as they have been. For now, London and Southwestern Ontario continue to be sellers’ markets and interest from buyers is likely to remain strong, especially if a vaccine in 2021 helps bring even more buyers onto the market.

Locking in super-low mortgage rates if you’re selling and buying

Of course, if you’re selling your home, you’re probably also looking to buy a home. That means low interest rates are going to affect you not just as a seller, but as a buyer too. If that’s the case, you will want to sell your house sooner rather than later in order to lock in low mortgage rates on your new house.

To do that, speed is of the essence. The faster you sell your house, the sooner you can have the money in your bank account you need to begin looking for a new home. Even in a seller’s market, there’s no guarantee that you will be able to sell your house immediately. Your property may be in need of time-consuming repairs, for example, or you may be worried about selling your home during the pandemic. It’s also worth remembering that home sales do tend to drop off during the cold winter months before rebounding in the spring.

One way to get around these potential hiccups is to sell your house for cash to a real estate solutions company. That way you can start the new home search faster and give yourself a greater chance of locking in super-low mortgage rates, especially on popular long-term fixed mortgages.

https://www.519housebuyer.ca/post/what-low-interest-rates-mean-for-selling-a-home-in-london-on

Selling your house in London, ON is a decision not to be taken lightly. But one factor that can make the difference between getting the price you want and one you have to settle for is timing. By selling your house at the right time, you can take advantage of ideal market conditions and ensure you are selling right when demand hits its peak.

While there is no crystal ball to predict with 100% accuracy when you should sell your house, the good news is that right now represents one of the strongest seller’s markets Southwestern Ontario has ever had. Let’s look at five reasons to sell your house in London, ON now rather than later.

1. London Is a Red-Hot Real Estate Market

The real estate market in London and throughout Southwestern Ontario is on fire right now. While there are many specific reasons for this (we’ll get to a few of those below), the main one is a combination of supply and demand. Simply put, there are a lot of people who want to buy homes in London, ON, and not enough houses to meet that demand.

The result is that home prices are increasing, bidding wars are becoming more common and homes are sitting on the market for a much shorter period of time. For example, in 2011, there were over 3,500 average monthly homes on the market in London. This year that figure has dropped to just over 1,000. Meanwhile, during that same period the average home sale price has increased from about $232,000 to over $473,000.

2. Homebuyers Are Looking Outside of Toronto

Whenever we hear about the Ontario real estate market, a lot of the focus is on Toronto. While Canada’s biggest city continues to post strong home sales, a shift is occurring in real estate in Ontario. Cities just outside of Toronto are posting much stronger housing sales, and Southwestern Ontario is leading this trend.

Cities across Southwestern Ontario are seeing annual housing price gains of over 20 percent. In London alone, the average price of a home increased a staggering 28.5% in October compared to the year before. In Toronto, by comparison, sale prices for detached houses rose by 14.8% — still strong, but well behind the numbers in Southwestern Ontario.

While the shift from Toronto to Southwestern Ontario began prior to COVID, the pandemic has accelerated that change. Many people who were once willing to live in a cramped one-bedroom condo in downtown Toronto are suddenly feeling less enamoured with the big city in an age of social distancing and red zone restrictions. That’s especially so given the cost of renting a condo in Toronto is often more than the monthly mortgage payments for a spacious home in London.

3. Remote Work Is Fueling Home Sales in London, Ontario

Another reason that prospective homebuyers are flocking from Toronto to Southwestern Ontario right now is because of the increased ease of remote work. Again, this is an instance where COVID has accelerated a long-simmering trend.

Remote work is no longer the exception, it is the norm. At the start of the pandemic, 3.4 million Canadians switched from office to remote work and about three quarters of them are still working remotely as of August. Many of them are quite happy with that arrangement. An ADP Canada surveyfound that 45% of Canadian workers want the option to work remotely at least three days a week after the pandemic ends.

The result is that remote work is here to stay, which means that homebuyers are looking for more space for homes that are doubling as offices. This is especially true for couples, many of whom are now both working from home.

But many workers will still need to commute into the office once or twice a week even after the pandemic ends. On that front, London has a huge advantage over other cities in Ontario given that it is still within reach of Toronto for occasional commuters.

4. The Holidays Are a Great Time to Sell a House in London, Ontario

December isn’t often thought of as a month when people are looking to buy a home, but it’s actually a great to start taking the steps to get your house ready for sale. While it’s true that sales tend to slow in December, they often come roaring back to life by mid-January, especially when the real estate market is as hot as London’s currently is.

This makes a lot of sense when you think about it. During December, potential buyers tend to put their buying decisions on hold as they focus on the holidays and family gatherings. As a result, by time January comes around there is a lot of pent up demand, and sellers can often attract a lot of buyers during this time.

Also, the holidays are when people tend to take stock of things and make big life decisions. This is when families will have discussions about their hopes and aspirations for the new year, which often includes upgrading to a bigger house. Again, the result is that by January, there is a considerable uptick in interest from buyers, especially in London where a spacious home can easily be found that’s just two hours away from downtown Toronto.

5. London, Ontario Is One of Canada’s Most Desirable Cities

While we’ve mentioned a couple times that more people are buying houses in London, ON because they are fleeing the small spaces and high prices of Toronto, London is a highly desirable city in its own right. It regularly ranks in the top 10 best cities in which to buy a home in Canada. MoneySense, for example, ranked it the second-best city in Canada to buy a home, just behind Guelph.

There are a lot of reasons why London, Ontario is such a desirable place to live. It has a small-town feel, but with plenty of big city amenities. It is home to Western University, one of Canada’s best universities. Residents enjoy access to high-quality schools, hospitals and parks, plus it is a safe city with plenty of things to see and do.

The result is that selling a home in London, ON is easy because London sells itself. With interest in London reaching even greater heights, right now there is a buyer for just about any house. Whether you choose to list your house on the market or go the faster and less risky route of selling your home directly to a real estate solutions company, you’ll benefit from an exceptionally strong seller’s market.

https://www.519housebuyer.ca/post/5-reasons-you-should-sell-your-house-in-london-on-now

Selling a home in Southwestern Ontario in 2020 has felt like being on a rollercoaster ride. After a dramatic plunge in sales during the first wave of COVID, the real estate market has soared back to life. Sales, listings and home prices are reaching record-breaking levels.

Chatham-Kent, in particular, has been a beneficiary of this dramatic rebound. Not only has the pandemic not slowed down real estate in Chatham-Kent, but in some cases aspects of the lockdown even fueled the rebound, including:

· An increase in remote work

· A desire for larger homes (especially for families working at home)

· A move away from the pricey Toronto market and towards secondary markets

With 2021 hopefully bring an end to the pandemic and a return to normalcy, the new year is an exciting time for home sellers in the region. Let’s look at six reasons to sell your home in Chatham-Kent in 2021.

1. Homes Sales in Chatham-Kent Are Soaring

Chatham-Kent is in the midst of a very strong seller’s market. In November, home sales increased by 36.7 percent compared to November 2019 with 134 units sold, a record-breaking figure.

There is even more good news if you want to sell your home in Chatham-Kent: home prices are going up. The average price for a home sold in November was $332,416, yet another record broken. As is the case across much of Southwestern Ontario, home sales are on fire right now with prices and sale at rates never seen before in the region. While the market may stabilize somewhat in 2021, demand for homes in Chatham-Kent is expected to remain high in the new year.

2. Home Inventory Can’t Keep Up with Demand

One reason Chatham-Kent is a strong seller’s market is a matter of supply and demand. There are simply not enough homes to keep up with buyer interest. The months of inventory rate — the number of months it would take to sell every unit for sale at current sales rates — was down to just 0.9 in November, the lowest it has ever been. At the same time last year, the months of inventory rate was 4.7 months.

While there has been an uptick in home listings, it likely won’t be enough to substantially address the housing supply shortage in Chatham-Kent. While that situation presents a challenge for homebuyers, for home sellers it means they can expect high interest from prospective buyers to continue into 2021.

3. Chatham-Kent is a Bargain for Toronto Homebuyers

Home prices in Chatham-Kent are on the rise. As mentioned, the average price of a home sold in the region was $332,416 in November, a 37.1% increase from a year ago. For long-time residents of Chatham, that figure can come as a shock. However, for anyone accustomed to real estate prices in Toronto, getting a home for about $330,000 is a bargain.

As of December, the average sold price in Toronto was $985,000 — a figure that includes condominiums and townhouses, which tend to be cheaper. When looking at only detached homes, the average sold price is $1.5 million — far beyond the reach of the average worker. While the dream of homeownership has become extremely difficult in Toronto, in Chatham-Kent buying a home is still very much a possibility and interest from Toronto buyers is likely to persist in the new year.

4. Remote Work Makes Chatham-Kent an Attractive Real Estate Market

The drive from Chatham to Toronto is about 3 hours. That’s a lot of time to spend in the car if you’re commuting regularly into the city. However, in a post-COVID world where remote work is likely to remain prevalent with only occasional days in the office, then a 3-hour drive doesn’t seem too bad.

A recent survey of Canadian workers, for example, found that 63% described their ideal work environment as being at least half remote work, although the vast majority still wanted some time at the office. That suggests remote work combined with occasional days at the office will become the new norm. So, expect homebuyers in 2021 to be more open to houses that are slightly further away from Toronto, but still close enough that a drive into the city once or twice a week isn’t a burden. Chatham-Kent fits that description perfectly.

5. The U.S. Border is a Selling Point for Chatham-Kent

Chatham-Kent is just an hour from the U.S. border in Detroit. While COVID has dramatically reduced border crossings, that will probably change once mass vaccinations get underway and life returns to normal. The area’s proximity to the border holds a number of advantages for home sellers. Just as with Toronto commuters, commuters who work in Detroit but live in Canada can easily take advantage of Chatham-Kent’s low prices and small-town lifestyle.

American homebuyers, meanwhile, are drawn to Chatham for both its lifestyle and the fact that the U.S. dollar goes further here. Plus, Canadians who don’t work across the border still enjoy benefits from being close to the U.S., such as access to shopping, lower gas prices and the big-city amenities of Detroit. Once the border does open up, expect interest in Chatham-Kent to increase from both Canadian and US buyers.

6. Chatham-Kent Has the Lifestyle ‘X-Factor’ Homebuyers Want

Another way that COVID has upended the housing market is in how it has changed what buyers want in a home. The attraction of a big city like Toronto has long been that, in exchange for paying a higher mortgage and getting less space, homebuyers enjoy enhanced lifestyle amenities, like restaurants, bars, theatres, and parks within walking distance. Obviously, those amenities are much less common or harder to access now, which has left homeowners feeling like Toronto’s high prices and cramped living conditions are now longer worthwhile.

The result is smaller communities like Chatham-Kent find themselves offering the sort of lifestyle “x-factor” that previously helped drive up Toronto real estate. A survey by Realtor.com, for example, found that homebuyers’ top priorities in 2020 were finding more space and living in a better neighbourhood.

With larger homes, plenty of outdoor recreational activities and a thriving arts and culture scene, Chatham-Kent gives homebuyers the space they want without sacrificing the amenities that make city living appealing. That lifestyle factor is not going away anytime soon and will continue to draw interest from prospective homebuyers in 2021.

https://www.519housebuyer.ca/post/6-reasons-to-sell-your-home-in-chatham-kent-in-2021

Ontario is in lockdown again due to COVID-19. As of December 26, most non-essential services and businesses across the province will be closed. These restrictions will remain in place for all of Ontario until January 9, 2021 and for Southern Ontario until January 23, 2021.

Fortunately, real estate is considered an essential service, which will soften the blow on homebuyers and sellers. However, many activities and services related to real estate will be restricted due to the lockdown.

Let’s take a closer look at what lockdown means if you are buying or selling a house in London, ON, or in other areas of Southwestern Ontario at this time.

Specifically, we’ll focus on:

· What real estate activities are allowed during lockdown

· How restrictions will change the way homes are bought and sold

· How the lockdown will affect the real estate market

· What to expect in terms of the lockdown’s impact on real estate throughout 2021

What’s allowed in real estate during Ontario’s lockdown?

As mentioned, real estate is an essential service in Ontario. This means that realtors can keep operating and real estate transactions can continue as before. Likewise, the construction sector is also an essential service, so construction work on homes and condos will not be affected.

But some things will change for the real estate industry. Perhaps the biggest impact is that open houses are prohibited. Scheduled in-person showings are still allowed, but they should only be used when absolutely necessary. The Ontario Real Estate Association (OREA) has a guide on when and how to conduct in-person showings safely.

As is the case with all workplaces that are deemed essential services, real estate offices must implement certain safety measures, including:

· Screening visitors and workers before entering

· Wearing personal protective equipment (PPE)

· Capping the number of people admitted into offices so that a 2-metre distance can be maintained between everyone

How will lockdown affect selling a house in London, ON?

The major change if you are trying to sell a house in Southwestern Ontario at this time is that in-person showings may drop considerably. But the sector is better prepared for this disruption than it was during the first lockdown.

Digital tools are extremely useful during this time. After the experience of the first lockdown, many realtors and home sellers are already setup to handle this change. A digital showing is not as novel today as it was during the spring lockdown. Many realtors will now have the tools and experience to conduct digital showings effectively.

If a prospective buyer insists on an in-person showing, however, more safety measures will need to be implemented by the realtor or home seller. This includes disinfecting all surfaces, wearing PPE and maintaining 2-metres distance between people.

As we’ve pointed out before, if you are concerned about showing your home during the pandemic, one way to minimize your risk is by contacting a real estate investor. That way you can sell your house in London, ON, off-market, which allows you to minimize your exposure to other people while still getting a great rate on your home.

What will happen to the Southwestern Ontario real estate market?

There will likely be some effect on the Southwestern Ontario real estate market because of the lockdown. The prohibition on open houses and the decrease in in-person showings may push some prospective homebuyers to delay their buying decision until after the lockdown ends.

However, there are reasons to believe that this lockdown’s effect on real estate will be limited, especially when compared to last spring’s lockdown.

For one, the lockdown is coming at a time of year when real estate sales are low anyway. December and January are typically the slowest months of the yearfor real estate sales. The current lockdown will have much less of an impact on total sales for 2020 or 2021 than if it came during the more active spring and summer seasons.

Second, because real estate is an essential service, transactions that were already in process just prior to lockdown should have no trouble closing.

So, while it’s reasonable to expect a slight dip in home sales in Southwestern Ontario during lockdown, overall the impact shouldn’t be too severe.

Will there be a long-term impact on home sellers in London, ON?

Looking beyond the 4-week lockdown, you can take comfort in the fact that the real estate market is expected to remain very healthy throughout 2021. The Canadian Real Estate Association (CREA) predicts that home sale prices across Canada will rise by 9.1% in 2021, with Ontario seeing the biggest increase in the country at 16%.

It’s also worth noting that most of Ontario’s increase is coming not from areas in Southern Ontario outside of Toronto. This includes Southwestern Ontario, where towns and cities like London, St. Thomas, Woodstock-Ingersoll and Brantford have seen prices rise by over 20%, among the highest in the province.

One caveat to mention is that actual sales activity is expected to decrease in Ontario in 2021 by 3.3%, making the province the only one in Canada which is predicted to see a decline in total home sales. However, this is not a sign of weakness in the real estate market, but actually an indication of its strength. Total sales are likely to decline simply because inventory is low.

In other words, home sales have been so high in recent years that there are now fewer homes available to go on the market. Hence, although sales may decline, prices will continue to rise.

Another reason that the lockdown will have very limited impact long-term is because, as mentioned, construction is an essential service. New residential developments will continue to be built, which will help address the supply issue somewhat.

Finally, we know from the first lockdown that the real estate market is capable of rebounding quickly. While the rebound is likely to be less dramatic this time around that is only because this lockdown’s impact on real estate is likely to be limited.

So, to sum up: lockdown will affect real estate, but mostly in terms of open houses and showings. For an even more secure way of selling your home in Southwestern Ontario during this uncertain time, talk to a real estate investor. An investor can help you take advantage of the current strong real estate prices in Ontario, while also minimizing the need for open houses or showings.

https://www.519housebuyer.ca/post/what-ontario-s-lockdown-means-for-selling-a-house-in-london-on