Realty Executives of Sudbury Ltd.
The Caswell Team
The Caswell Team
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Our Caswell Team Covid-19 May Client Survey was a complete success. It was successful because of your participation. We sincerely appreciate the time you took to help us help you and our entire Caswell Team family moving forward.
Your responses profoundly helped us understand the general mindset, how you and your family are coping, what your financial views are now and into the near future, some fun stuff that helped us get a personal feel for how you're handling the time in lockdown and, most importantly, your opinions on the real estate market and changes to the processes. You helped paint an invaluable picture for all of us.
In general, we saw two distinct things. One, the majority of you share the same crystal ball visions we've had through this in regards to the real estate market in Sudbury. Two, you've solidfied our opinion of Sudbury's resliency in the face of this and other issues. We're one tough city when it comes to trying times and we've even posted a blog directly related to this.
We'll break down the survey below in relation to the sections within it by providing a brief commentary and highlighting the key points for each. At the end, we've included our overall assessment, our opinions and guidance as we move into this "new normal".
We were very happy to see that no one who took part was diagnosed with Covid-19. That's just awesome news. Slightly over 16% of respondents had been tested for it while only just over 27% indicated feeling symptoms.
When it came to concerns over contracting the virus, almost 70% weren't worried or only mildly concerned, but almost 77% believe it's still scary or are concerned enough that we should remain vigilant. For the most part, the majority are only mildly concerned and cautious when having to go out in public. This is positive to show that we likely won't get complacent as restrictions start to lift.
The feelings you and your family were feeling was a compelling story. The majorty felt stress, anxiety, frustration and boredom. All pretty much guaranteed for most people in this situation. But there were still a considerable amount of people that were feeling depressed. We hope that with the weather getting better and some restrictions being lifted this will alleviate those feelings for you. On the flip side, almost double the amount of depressed were those feeling happiness and at peace with the situation. This is good news.
One of the biggest highlights is regarding a second wave occuring with over 86% saying they're concerned or worried about a second wave of Covid-19. This indicates we all know this isn't going to wrap up quickly and helps to ensure we don't get complacent.
This was very positive news for all respondents. Well over 90% in each question related to your financial position in June, September and at year end are indicating thier financial position would be stable with only 1/3rd of those saying it'll be a little tougher. The stability of the group was further supported with almost 70% of respondents not requiring any of the financial assistance programs that have been put in place.
As mentioned above, this blog on Sudbury's Resliency discusses how we feel we're somewhat insulated from major damage from this with the majority of respondents still working through the quarantine period. Add to that the message above regarding personal financial positions, it was pretty astonishing to see that over 90% see Sudbury's financial position as a whole taking anywhere from a mild financial setback to where 2/3rds of that group stated that they believe the city will suffer severe economic damage. This was definitely interesting to see the conflict between how people viewed their own situation versus how they viewed the area on a macro scale.
One of the biggest shockers is when it came to taking advantage of the low interest rates with 50% saying they weren't even going to bother looking at refinancing while 26% think rates are going to go even lower. Less than 5% have refinanced at the lower rate while the same amount didn't go through with it cause their penalty was too high. But good on them for at least trying!
Refinancing is NOT financial aid - it's just a smart financial decision that costs nothing to have one of our mortgage broker teammates take a quick look at for you. Like those who didn't refi because their penalty was too high, it cost them zero to find that out. As for the rate itself, it is doubtful that rates will decrease any further. The Bank of Canada has already shown how squirmish they get when asked about negative interest rates and with economy slowly reopening and money starting to flow, they'll be looking at other stimulus measures before they'll even consider another rate cut.
For obvious reasons, this was a big focus for us to analyze market perceptions and gauge the movement in the market for the remainder of 2020. Either you've been hearing our advice or our minds are subconciously intertwined when it comes to the real estate market projections.
The concensus around the Greater Sudbury market this year is right inline with our thoughts. Almost 80% believe it will be a little sluggish while a little over 80% believe prices will remain stable or drop slightly. We completely agree with this assessment. Ironically, plenty of Realtors® in Sudbury are advising clients the opposite of what we've been saying. Are they just overly optomistic or might they be putting their own interests ahead of others while they're encouraging buyers to jump into bidding wars these days? We certainly hope it's not latter considering 89% of you believe your house will be worth same or less in the next three months!
Then the question regarding whether you would be making any major real estate decisions was definitely interesting following those responses. Approximately 55% said they wouldn't be making any major decisions for the remainder of the year while 45% said they would be actively looking for a deal, would consider it if the timing was right or are being forced to make the decision. What makes this interesting is when you consider that most people would normally not see themselves making a major real estate decision in any given year, we'd estimate only 25% of our clients would be considering a shift at anytime, yet here we are at almost 50/50.
When it came to the new showing processes, forms being completed and extra sanitation measures, the group was pretty much split when it came to their own home or entering others. Approximately 60% said they would be very concerned with people entering their home or absolutely no one was entering their home. On the flip side, over 60% said, as a buyer, they would have no problem or just be a little more cautious about going into someone else's home. This shows how we're untrusting of others entering our own home, but we're confident in our own ability to enter someone else's properly.
Plenty of listings are coming to market where showings are only available AFTER there is an accepted offer in place. Your responses prove this is horrible advice being given to these sellers. Approximately 70% wouldn't even consider writing an offer without seeing the property first while the other 30% would just use the condition to back out of it. What an absolute waste of time for everyone involved and, worse, sellers have turned away 70% of prespective buyers who wouldn't even bother. Not really a great marketing plan or sound professional advice when you eliminate seven out of ten buyers before you even begin.
In terms of income properties, we see the same concerns you do. Over 97% of the responses stated they would be very worried about tenants not paying their rent or wouldn't even consider purchasing a property in this current climate with evictions being put on hold and renters being told it's ok to not pay their rent if they can't. We agree that tenants should be given some leeway, for sure, but from a buying perspective, this is not the right time to be jumping into the rental game until this dust settles and systems are back online to protect the owner's interests.
As mentioned, 89% of you feel your property will be worth same or less. But when it came to the question about how you'd feel if you bought and the value dropped before you took possession, it came in basically 50/50. Half of you would be ok with it and half of you would be pissed, with even 11% of you refusing to close unless the seller took the lower value (legally, you can't by the way). One of the many reasons we are advising buyers to sit tight. Why would you buy a house when there's a 50/50 chance you won't be happy on closing because of forces out of your control?
The best news for us out of the entire survey was how over 80% of you said your current living arrangement was comfortable and you'd have no problem doing it again. As for the rest, 19% felt they could use a few more amenities or the place was too big or too small. Only 1% of respondents said they absolutely could not do a quarantine in their property. Basically 90% of our clients were good or could just use a few more amenities - that makes us feel good. For the remaining 10%, sit tight and we'll get you the right spot when this is all over!
When it came to amenities, over 40% said they needed nothing else with their house. The most interesting was the second highest (12%) tally was the need for an upgraded kitchen. Guess when we're forced to cook at home, we quickly realize how important a functional kitchen is! Other notables were near the 10% mark who would've liked more outdoor space and a dedicated home office. The low number wishing for more outdoor space shows how lucky we are not to live in overly densly populated areas. The home office number we considered low as people were forced to work from home and we see this number trending upwards as more companies move to a work-from-home business model.
These were as much entertainment as they were informative for us! Let's see what we found out about you and you can see some fun stuff about others.....
We all feel detached. Over 60% of respondents said the first thing they would do when restrictions lifted would be to go see family or visit with friends. We're humans and most of us miss that personal interaction with others. The rest of responses showed pretty even splits with getting out to the camp, hitting the golf course, sitting around the firepit and going out for dinner.
When it came to the kids, almost 68% of our clients didn't have to teach anything (or opted not to!). For those that were teaching, less than 5% said it was fun, 15% said they were getting by ok and 10% couldn't wait to see the tail lights on the school bus! Funny stuff.
The dogs loved it, or will love the next quarantine! Most dog owners reported the same or way more walks than their pup was used to. As we're dog lovers, the best news was 10% of you want a dog for the next quarantine! Here's the City of Greater Sudbury link to adopt a pet or you can check out the Kijiji site here - but we encourage adopting an older pup that needs some love!
Gas purchases was a good supporting statistic to Sudbury's Resiliency. Over 65% of respondents had purchased gas within the last two weeks. This shows that plenty of Sudburians were still active doing essential work or tasks - both helping the local area!
50% of you are keeping up with your daily exercise routine throughout the quarantine. Good stuff. But even better is the 25% who were exercising even more than before! 75% were staying healthy, but that doesn't mean the other 25% were wrong for staying in their pajamas during such a weird time.....
At home cooking became a new world order and almost 75% of you impressed yourself in the kitchen. We wonder how many of those were also among the group that want an upgraded kitchen for the next quarantine. Of the 7% that tried but things didn't work out, you'll likely be joining the 14% that aren't allowed in the kitchen by the time the next survey comes around. But let's also give a "hats off" to the 6% who supported the local businesses with nothing but to-go containers in their fridge!
Again, supporting our resiliency, over 65% were spending the same amount of money while another 14% were actually spending more. That's good for supporting the local economy, as long as you're spending it locally. The over 20% that don't even recognize your account, you're well positioned to get out and support the local economy as things continue to loosen up!
The final question ties in quite a few things above - "During the next quarantine, I must have...." The highest response was 18% wanting more workout equipment. That's pretty close to the 20% that stayed in their pajamas! Regardless, a good healthy response.
Tied for second at 13% each was a personal chef and a bigger liquor cabinet! When you see how many people impressed themeselves in the kitchen, you can understand that cooking once can be lots of fun, but this indicates cooking everyday can become a nuisance. And having to cook every day can probably drive people into needing a little "drinky-poo" to help get through it!
The next two that were basically in a statistical tie probably go hand-in-hand. At 9-10%, a nanny and in-house cleaning crew were desired. We can only assume that you either needed a nanny to watch the kids so you could clean or someone to clean up after the kids while you're trying to keep them busy!
Although we've provided some opinion throughout, and most of you have been receiving our weekly Covid-19 updates, here's our take on everything.
As mentioned, we are happy that the health of our collective family has been largely spared from this virus. But this relates to physical health for the most part. As we shift into more of an economic crisis, we want you to be very attentive to your mental health and those around you. We all like to put on a brave face when facing adversity, but that doesn't mean we should ignore or supress our emotions to a dangerous point. As we all know, your finances and your real estate are meaningless if you're not healthy. Try to stay fit, get lots of fresh air and keep busy when possible - it'll do great things for your physical and emotional well-being.
Although Sudbury is reslient, we are not 100% immune to what is coming down the pipeline. A building can only take so many aftershocks before it crumbles. We're all pretty confident that a second wave is coming, so we'll all see first hand some devastating after effects from this - maybe not to ourselves personally, but Sudbury is a tight-knit community and we'll all know somebody who is in despair. It's important to continue to help out where we can, when we can.
Financially, there will be some serious damage nationally and even internationally. Again, we're resilient, but not immune. The ripple effects will be widespread. When a restaurant closes permanently, their staff is out of work, their suppliers lose a portion of their business, taxis and delivery companies suffer and the landlord is looking for a new tenant. The staff can't afford to go out for dinner with their friends, the wholesalers have to raise prices on the suppliers as more waste is being produced with the lower sales, not as much gas is being purchased for the cars getting people home or food delivered to you and the landlord is late on paying their taxes with no revenue coming in. On and on it goes.
There will be some collateral damage in Sudbury. The downtown core will be in trouble with those small businesses struggling to make ends meet. The interior style malls will suffer to draw in the masses. The arenas and ball fields will be empty for quite some time. The city itself will have decreased revenues, but still have to pay those millions of dollars in salaries and expenses, so taxes will have to increase. The key for each of us individually is to not stop spending to inject some life back into the local economy while still being cautious with our own finances. We'll all be walking a tight rope for the foreseeable future.
When it comes to real estate, our opinion of the market is, as of this writing, in a pivoting phase. Although we're still seeing bidding wars, this is driven by a lack of supply while buyers are trying to jump on the record low interest rates. But we're starting to see plenty of sellers coming out of the quarantine woods thinking they're going to take advantage of the seller's market conditions which is increasing the supply. When we start to see the impacts of all the payment deferrals coming due, this supply will continue to spike.
As we've mentioned before, it is disturbing to see a handful of local Realtors® encouraging buyers to get in the game right now. The savings on the low interest rates they're signing onto for the property they went 10% over the asking price to get, won't cover the value it will drop over the next few months. And we further know that 50% of those buyers are not going to be happy when the value drops on them.
Our prediction is inline with the majority - the Sudbury market will slow down in the next month or so and we'll be entering into a buyer's market scenario. We're already seeing the Toronto market going into a rapid retraction and Sudbury trends are normally six months behind whatever happens down south. That's "normally", but this is moving much quicker and will be far more profound than anything we've seen before.
If you're a seller that wants top dollar just to say they got top dollar, you're window is closing. "Testing the market" in the short term will only have an adverse affect as greater supply will lower prices. To maintain your value, sit tight if you can and let those who desperately need to sell get as much value out of their house as they can.
Buyers, don't get caught up with the "Joneses" right now by following the lead of the handful of Realtors® who are trying to "drive the market" to their needs. There will be plenty of time and options when things settle down and interest rates aren't going up anytime soon. You will see others bragging about the bidding war they just won or an agent posting on Facebook "come get it before it hits the market", but don't take the bait. Playing the long game will hand you the bragging rights in the not so distant future.
If the market is reserved for those who desperately need to buy and/or sell right now, our values should hold in the long term. Once one of these groups decides to over-indulge, they'll actually bend the market in the opposite direction they were hoping it would.
We get it - it seems absolutely strange that your Realtors® are not encouraging you to jump into the market, but we will never be like those that are putting their income ahead of others needs. We owe you Fiduciary Duty where your interests are our best interests. Professionally, ethically and morally, it's the right thing to do. We have no desire to align ourselves with those who are pushing short sighted decisions encouraging people to buy and sell now. We're going to play the long game with you and do things the right way.
Regardless, you are always the boss. What we have provided in here is our professional advice and opinions. Every person, property and situation is unique in real estate and we're always here to discuss yours - just reach out to us to explain your story. As we've mentioned before, we are not judgemental regardless of your circumstances and we want to help you get through these challenging times that are best suited for your needs.