5 POPULAR REAL ESTATE MYTHS DURING COVID-19
Simply type “real estate” into your search engine and you’re likely to come across a multitude of articles offering somewhat contradictory hypotheses on the future of the real estate market. Like all industries, ours has been shaken by the pandemic and its downturn. While this is a time of uncertainty, too many unfounded rumors and speculations have been circulating about the future of real estate. We wanted to address the disconnect between our experience on the field as real estate agents and what is being said in the media and online. In order to set the record straight and provide a more accurate portrait of the real estate reality in Québec during COVID-19, we wanted to debunk some popular myths.
MYTH 1: COMMERCIAL REAL ESTATE WILL GO THROUGH A MAJOR CRISIS
Why people say this:
The popularization of remote work had redefined our idea of workspace. Some believe that telecommuting will continue to gain popularity and eventually render traditional office spaces obsolete.
Why it’s (mostly) false :
There is no denying that telecommuting is more popular than ever, but companies and their employees know that a formal workspace is essential to corporate culture and productivity. Without a proper workspace, it is difficult to integrate new employees, train and work collaboratively. The social aspect of work is also important in the overall working experience and retention of employees.
In recent months, many workers have been confronted with the advantages and disadvantages of working from home. For example, many parents have struggled with maintaining productivity at work while caring for their kids. Some have also seen the limitations of videoconferencing tools. Zoom is great for quick chats and efficient meetings but it can’t replace all human interactions!
It’s very likely that a hybrid model of telework could become the norm, which would mean that workers would spend at least a few days at the office to meet, make presentations or simply see their colleagues. Rather than the disappearance of large offices, there is likely to be a move towards co-working and flexible working hours.
MYTH 2: CITIES WILL LOSE THEIR POPULARITY DUE TO THE PANDEMIC.
Why people say this:
It’s a known fact, the rate of infection is higher in large cities such as Montreal than in smaller towns. Some believe that the next wave of buyers will prefer to settle further away from busy cities to avoid the increased exposure to other potential pandemics.
Why it’s (somewhat) false:
There is indeed a growing interest for the suburbs and other areas further from downtown, but this trend predates COVID-19. This has more to do with demographics than pandemic. Young families are moving further away from cities to have access to properties that are less expensive and more spacious than in the city.
That said, proximity to city services and entertainment continues to attract a large number of Quebecers. Although the cost of property is higher, large cities offer better access to universities, subways, large companies and, of course, festivals!
MYTH 4: THE REAL ESTATE WORLD WILL GO BACK TO WHAT IT WAS BEFORE THE CRISIS.
Why people say this:
Now that shops and restaurants have reopened and social distancing rules become laxer, some may be under the impression that real estate will soon return to its pre-COVID habits.
Why this is false:
In recent months, the real estate industry has proved its ability to adapt to new technologies. Many clients will continue to prefer Zoom over in-person meetings for security reasons or even because they consider it a more practical option.
Open houses are likely to lose their popularity. Of course, gathering multiple visitors indoors isn’t recommended while social distancing, but that’s not the only reason. It turns out that open houses aren’t a very effective way to attract serious buyers who are ready to take action. Private visits are more likely to filter out curious but non-committed visitors.
MYTH 5: REAL ESTATE PRICES ARE GOING TO DROP
Why this is (partially) false:
Currently, prices are high due to reduced real estate inventory. The market is highly competitive which often leads to outbidding.
On the other hand, as was the case after the economic crisis of 2008, it is possible that more people will need to sell their property due to economic difficulties. If this occurs, prices indeed go down. However, this is not a certainty and is far from being the current reality.
Avoid believing the speculations that are going around and, if you have any doubts, call your broker. He’ll be more than happy to give you the facts!