Sellers losing significant value in their homes
Ephraim Vecina
Mortgage Broker News
Sellers losing significant value in their homes will be a prominent feature of the market over the next few months, said Stephen Brown, Capital Economics senior Canada economist.
“Given the huge rise in unemployment and the cash flow problems that restrictions on tourism have caused investors in the short-term rental market, it seems likely that there will be some forced sellers in the coming months,” Brown said earlier this week.
These sellers “will inevitably have to accept lower bids,” with much-reduced market activity compelling them to make their properties as attractive as possible.
And while other observers have pointed to the sector’s remarkable resilience in terms of value, Capital Economics predicted a national price decline of 5% by July.
By the end of this month, the market should also brace for “an even steeper fall” in sales to a “small fraction of their normal levels,” Brown said.
Boots on the ground have confirmed that this trend is already well underway: The coronavirus pandemic is shaping up to be a less than optimal environment for home sellers, London agent Joyce Byrne said late last month.
“Maybe they soften their price, maybe they open themselves up to conditional offers. Maybe they’ll be open to accepting something with a home inspection or other financing conditions attached,” Byrne said.
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