Are people still buying real estate in this market?
Vancouver BC, Canada.
The short answer is yes. But with extreme caution.
No more open houses or regular showings can make any seller feel like we'll never find a buyer for their property. All that foot traffic gives us a sense of activity in the market, it's tangible. In a normal market no inquiries can be interpreted as a lack of demand or a pricing issue. In today's market, we're just not sure because things are changing too rapidly. While demand is available, it's just not plentiful. Pricing on the other hand is a moving target.
A popular listing that would have sold within a few days before the COVID-19 measures now has one showing a week and not a whole lot of inquiries. When we do get a showing, it's a serious buyer. The problem is, most buyers are out looking for deals or at least a pricing adjustment. Their expectation is that the market is unstable and the future looks grim so they should get the pricing to reflect it. That's where the extreme caution comes in and it's definitely prudent.
But what constitutes a reasonable adjustment considering all factors in today's market? It's practical to be cautious but expecting the seller to accept a really low price based on opinion won't get anywhere. We've seen offers between 10-25% discounted on asking price. There's no data to support either side at this point, it's anecdotal and too soon for any seller's to liquidate at steep discounts unless they are in financial hardship.
We'll have to wait until a large part of this crisis subsides before anyone can begin to make reliable valuations for decision-making. For now, deals are still being put together but with acceptable levels of price adjustments. We'll know more next month when the numbers come out.
Let us know what you think. Email us at info@Praedia.ca or call 604.767.8904 if you have any questions.