What to make of the housing market

Jul 22, 2020 | Jeremy Goldfarb


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There has been a lot of debate about housing markets across this country as the pandemic continues into its 5th month (at least here in N.A). Specifically in Ottawa, we have seen record price increases, and anecdotally I can tell you that it is a battle out there. I had a colleague that went through 3 separate bidding wars before actually being able to buy a house (not sure how high they had to bid up on the last one to win the deal). 

 

The question remains though, what to make of the current situation? Is it sustainable across the board, or are we bound to see pockets of strength emerge from the ashes of this fiery housing market? I have attached an article link here that offers a fairly simple overview of the current situation, and drills down somewhat on specific markets. After reading it, and reviewing some of its conclusions, I was left with more questions. 

 

1- if the pandemic persists further remote working remains "a thing" for the foreseeable future, I am not as concerned about the office market as most might be. Those companies that requires space will need the same amount of space or more to adhere to physical distancing protocols. That comment is not specific to housing, but more to office real estate

2- immigration is what keeps this country growing, and it is not going anywhere. It may be on pause, but it will not stop. I don't buy the long term pressure argument on the Toronto condo market

3- in general, things revert to the mean. Even after the Spanish flu pandemic, behaviors returned to a similar state as they were prior to the 2 year event itself. 

4- inventories are lagging in general. With doubt around the commencement of the school year, and permitting for construction projects slowed by the pandemic, supply is going to be ......well.....in short supply for a while. 

 

I think the article helps identify discussion points, but I'm not sure it answers any questions. Anyway...enjoy the read.