Buyers line up after pause on showings
There’s a feeding frenzy on new listings in Montreal, thanks to pent-up buyer demand following the month-long pause on real estate showings in Quebec due to COVID -19.
Bidding wars are now breaking out over modest bungalows and homes are selling over the asking price within a week of hitting the market. Realtors also report a noticeable surge in sales activity in recreational property hot spots such as the Laurentians and the Eastern Townships, as well as small towns at the edge of the city.
According to Daniel Dagenais, Managing Broker for Sotheby’s International Realty Quebec, the lineup of buyers has grown since sales paused in March, yet uncertainty about the economy has caused some would-be sellers to hold off on listing. The result has created an imbalance in the market, with a big pool of desperate buyers all vying for the same few homes.
Consumer confidence is a critical “X” factor in real estate economics.
“It’s not just having a good job and good money, if you’re uncertain, your level of trust is low,” Dagenais said. “You could decide that it’s not time to make a move and just wait.”
Real estate activity resumed May 11 after more than a month on lockdown. According to Centris data, although the volume of sales in May dropped by 41 per cent compared to 2019, the median price of a single-family home in the CMA increased by 9 per cent to $370,000.
The drop in sales is because there are so few homes on the market, not a lack of interest from buyers, realtors say. While there’s a trickle of new supply now coming onto the market, when the pandemic hit there was already a shortage of homes for sale.
According to Royal Lepage broker Sean Broady, buyers are lining up to buy everything from starter homes to luxury listings.
“People are worried about a possible second and third wave of the virus,” Broady said. “But they’re not downsizing. They’re upgrading.”
Before COVID, the hottest markets in Montreal were tony boroughs close to town. Now, some of the most vibrant activity is in markets on the outskirts of the metropolis.
“I’ve never seen it busier, which has taken me by surprise,” said Anne-marie Ashcroft, a broker with Berkshire Hathaway Home Services Quebec.
Ashcroft specializes in selling high-end homes on the outskirts of the city, in Hudson, St-lazare and Rigaud. She’s getting two to three times the number of calls she’d expect on her listings, mostly from buyers looking to move away from the city.
Broady, Ashcroft and Dagenais have all observed the same trend: after months of being sequestered at home, many families have decided they want to buy a home with more room to cocoon. They want a yard where children can play, a pool or patio for entertaining friends, or room in the basement for a home gym.
After months of working from home at kitchen tables, others have decided they really do need two home offices. Those whose employers are receptive to allowing staff to continue working from home on an ongoing basis have also realized they no longer need to factor in commute time when choosing where they want to live, which has made it more realistic to live an hour or more outside of Montreal.