Annual New Year Letter 2021
Well, 2020 is over.
Despite current reflections and retrospect and a great big sigh of relief, in reality we still have a long way to go before the “new normal” takes its long-term root. Many of us now with the new year upon us, are caught between hope for a positive new beginning and fearfulness as to how long real change will take and what it will look like as it transpires and evolves through the course of 2021.
As part of our commitment to our clients and the Real Estate industry, we have undertaken a study and devoted much time researching current economic variables and projections. It’s been interesting to say the least, and ultimately encouraging.
The broad range of advisories coming from sound and (un)imaginable sources, including the Bank of Canada, CMHC, the Chartered Banks, Economist Panels, CREA, and of course the average person with an opinion on a multitude of social media venues, is as broad and diverse as is conceivable.
This past year, beginning in middle March, we met daily every morning and afternoon, on zoom like so many of us – analyzing statistics and trying to predict what direction real estate was to be taking. We spent so much time on our screens that a blur of reality felt normal, and it was almost impossible to differentiate between the cyber and real worlds. So, we made the best of it and kept learning, and learning… and learning. Dylan and I enrolled in every on-line course we could. Fascinating options immediately evolved, especially in the beginning phases of the total lockdown and closures.
Then came the newsroom chatter of every forum. Conversions about the future of Real Estate – opinions, fears, projections on the future went viral and it seemed everyone was an expert.
What we did experience was a fascinating realignment and migration of people back into their homes. Home offices became prevalent while access to entertainment, recreation, and even physical activity all but dried up. The “home as sanctuary” phenomena that we experienced created an inversely skewed increase in value in the suburbs, rural and even recreational areas. How long this will last is anyone’s guess. Offices and ministries closed and the flow of people from their homes to workplaces ceased to exist. Now the question is: What’s next?
We have always found in real estate cycles, that there are those who jump ahead and buck the trends and forge their own paths, despite speculation. We have vaccinations going into play and although in my opinion they’re not fast enough, they are going to end up returning people back to offices, well whether we like it or not. It is a proven fact that functionality improves in a workplace which is geared for cooperation, productivity, and even competition which inspires and directs us. However, that’s certainly not to suggest that the technological and communications electronics that have leapt into this century at lightning speed, are going to slow down. There is no turning back.
This lack of mobility, especially for Canadians where the household debt load was worrying and extremely high has been helped by the sedentary necessities caused by COVID-19 restrictions. Having been confined, nuclear families and close quartered lifestyles have actually saved money. Credit card debt is down, and the burden of household debt has lightened generally. How this has affected individuals and a sense of livelihood and mental or even social health is yet to be determined.
On a macro scale, our debt ratio to GDP is unprecedented. Worse even than during the great depression of the 1930s. There’s going to be some payback time to come and how the Central Bank will deal with balancing interest rates and inflation will be an interesting endeavor. The lack of mobility, shopping, retail, and commerce in motion might hurt in the short term. While individuals have been able to save some money by staying at home, it has also stifled the general economy. Canada is fortunate in that we rely on natural resources and exports. And although we have created an incredibly insulated national environment and protectionist mentality, the government has managed to keep goods and services moving. (Phew)
As people begin to feel more confident through the course of the year and vaccinations roll out, what will happen then to the real estate economies of the country? In the Capital, Real Estate trends will likely shift again with the return to the workplace. Whether we like it or not, employers like to see people working collectively and socially motivated together as opposed to in their private insular spaces, unsupervised at home.
As a team we read countless articles and reports on where the real estate economy is going, and reached one fundamental conclusion: No one really knows for sure! What we do believe however is that the importance of staying advised and informed is crucial for anyone invested. The light at the end of the COVID tunnel shows that there is hope, and although its particularly frustrating right now in Canada, public inoculations are is rolling slowly out and will hopefully pick up speed. We believe that the real estate economy will also remain robust, especially as an industry that has always been enhanced by and made stronger when people are in motion. On behalf of ourselves and our clients, will continue to research the new variables as they evolve. We will stay informed and keep on top of our studies in order for us to best help, guide and counsel our sellers and our buyers and investors.
We are reaching out to you and wish everyone the absolute very best for an upcoming 2021. We had the privilege of so much trust and the confidence of our clients which allowed us to have the single most prosperous year in a decade. It was amazing to grow with Dylan and the team and through all of this while I celebrated my 20th year with the same brokerage, in the same real estate board working with so many of the same wonderful people. We hope to hear from you and please stay in touch.
I’ve always been a lover of famous quotes and somehow this particular one from Winston Churchill during the second world war seems poignant. So in conclusion I’d like to share it with you.
Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Winston Churchill …
Be Well, Stay Safe, Care for Each Other.
Ottawa Real Estate Board News Release Jan 6 2021 – 2020 Results
Canadian Real Estate Industry Forecasts Prices Rising Over 9% Next Year
Warning: Canada’s Housing Market Could Crash in 2021
Analysts warn London, Ont., real estate is poised to become an ‘extreme sellers’ market’ in 2021
5 Mortgage and Housing Market Predictions for 2021
Canadians on the move: Not an exodus, but the re-location trend in Canada is real
Canadian home prices to fall up to 5% in 2021, Fitch predicts
National Bank Of Canada Tells Investors They’re Preparing For Real Estate Price Drops
Canadian recreational house prices soar 11.5% as remote work drives demand in cottage country
Housing market will continue to defy gravity: Central 1 Charts to watch in 2021: The most important Canadian economic graphs for the year ahead
The OLH Team
Patrick O. Smith and Dylan Puchniak
COLDWELL BANKER RHODES & COMPANY BROKERAGE
100 Argyle Avenue, Ottawa, ON K2P 1B6
Office: (613) 236-9551 Fax: (613) 236-2692
Cell: (613) 222-4448 (Patrick)
Cell: (819) 918-0038 (Dylan)