The Halifax Real Estate Blog 2020 Year in Review, by Jeremiah Wallace of ViewPoint Realty (January 1st - December 21st, 2020)
Happy New Year! Are you ready for a wild ride? Well strap in cause it's gonna get interesting!
Going into 2020, we were steeped in a Sellers market that had been established and building since 2018. By the end of 2019, multiple offers and asking/over asking price sales were becoming somewhat normal. So much so, that the trend of the "golden weekend" started to occur as agents clued in to the climate surrounding our market. In short, showings were being held for a few days, offers held off until Sunday and presented on Monday. That type of thing.
Fast forward a few months and the COVID-19 pandemic would set another blow to the already surging sellers market. At first, no one knew how it would affect the market. Some thought that everything would come to a full stop, for awhile at least, then see the downturn of activity. Buyers came out again in full force hoping to capitalize on the situation and snag a property at a deal potential, or at least get into a property at a minimum. Alas, that was not the case. The demand for property remained, while the already decimated inventory continued to decline by sales and lack of sellers coming to market. This activity steadily stoked the fire of an already smoking market.
Already at a record low going into 2020, things did not improve at all in this regard for HRM's inventory. As fast as it was being added, was as quickly as it was being snapped up. The challenge continued in the pandemic, as many sellers put their listing needs on hold since they were likely a bit wary of trains of people in and out of there homes, touching things, coughing on things and the like. This put a pause on a lot of occupied listings, adding to the lack of options available on the market, especially at peak of the listing year. Even after showing protocol was established it was too late, the demand for property and buyer surge had created a buying environment so competitive that extreme overbidding became the norm. It was an incredible year for sales despite the pandemic, with only a short interruption in the surge.
2020 broke a lot of records, and has set up 2021 to do the same, perhaps. As you will see from above, 2020 carried on with the strong sale lead of 2019 and continued its push until March when Covid=19 made its way to the Maritimes. April and May were the hardest hit by the somewhat pause in activity, but quickly regained its footing in June and carried on breaking records all the way to December. A lot of questions came in regarding the reasoning behind the surge, and what were the major factors contributing to this unprecedented time. In my opinion, it wasn't just one factor that put us where we are currently.
As mentioned, we went into 2020 in as Sellers market that had been in place for a couple years already. Things were getting bleaker by the week for buyers, but it was gradual, which is the way in Nova Scotia. The factors that created that market are plentiful. Government contracts in full swing, relocations back in the cycle, immigration and economical factors, along with affordable lending / living options and quality of life wants all created a perfect storm of desirability in Nova Scotia. Based on all of those factors, Covid-19 made many people second guess their current living situation. If they were going to be locked down again, why not do it where it's awesome, which is here in Nova Scotia. People in apartments wanted green space, people in cities wanted to move a little more remotely to have elbow room, people in land locked provinces wanted to be by the ocean etc. Here in Nova Scotia, we have all those things, and at the time, an affordable option at that.
The pandemic also created another unique secondary factor from outside buyers, as they started to identify businesses that could be managed from the home office. "If I can work from home now, I don't need to add the stress of living in a metropolis to do it, I can do the job overlooking the Atlantic ocean". So in addition to regular relocations, we now have people from all over the country (World) looking for a affordable option that aligns with their living wants since they can work from the comfort of their living rooms. Now I say affordable option, since Halifax is still quite an affordable city compared to many around the country, but that may change if it keeps up however, as sale values also achieved record heights and continue to surge.
2020 started off in usual fashion, a general 4-6% annual gain, which is and has been the average (give or take a point or two) for as long as I have been tracking the stats (15+ years), until this year of course which witnessed a 17% gain in 12 short months. More than 4 years (perhaps more) of growth combined, and most of the gain was achieved in the last 5 months of the year. So where does that leave us in 2021? Well, historically, the numbers flux in small waves but nothing like the above in this city. If the current trends continue, this stat will also carry on rising, but when and if we hit that ceiling, the fall is likely to be fast and noticeable.
The question becomes, when will it plateau and turn? Well, in my opinion, I think we are in for another year of record breakers and sustained buyer activity at the least. We are still taking in many relocations, essential and personal choice based, but there are many stuck where they are because of the need to self isolate for 14 days so it's not an option. Couple that with the lack of options and it's almost an impossible task for a lot of people out of province at this point, so they will need to wait until things taper off a bit. How long it will sustain is question.
All the previously mentioned points certainly contribute, but to paint a picture of just how significant the change in the market has been this year, the height of the inventory 5 short years ago was 5,845, and sales of 437 residential units at a average selling price of $274,774 in August of 2015. Fast forward to August of 2020 and there was 1,793 available residential products, 825 sales at an average selling price of $373,143, practically $100k change in that short time on average. Looking at the current inventory level is that much more bleak for buyers at the moment as well.
2020 proved to be one of the most unique years on record, so going into 2021 there is a lot of optimism and hope that we will see things return to a more familiar normal. As far as the market goes, stay tuned to the blog to stay on top of things and get informed! Thanks for stopping by, and be sure to check in next week with the return of the weekly market rant! Thanks for stopping by, and stay safe out there!
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Jeremiah Wallace, CD
Jeremiah has been involved with many aspects of the Real Estate industry for over twelve years. This includes construction, residential renovations, interior design, and investing in various income generating property products..
Photo's by Jeremiah