I wanted to come back to you with a quick update on what's going on in the real estate market as it relates to the coronavirus and just some updates on the economy as well. So, recently I put a poll out on my Instagram account, that asked should realtors be working in the midst of this COVID-19 pandemic? And 73% of you said that we shouldn't and the rest of you were realtors…. Just kidding.
Realtors: An Essential Service
We've been deemed an essential service, that's been deemed by the Ontario government. Our governing body haven't explicitly told us to stop working, but they've certainly made it very, very clear that it is not business as usual. All face to face interaction should virtually not happen. They haven't come out and said it, but you shouldn't really be selling real estate at this point in time. It's more if you have clients that have already bought or sold and they are now waiting to close somewhere in the future. You need to help those clients.
Closing? Expect delays.
There's certainly gonna be situations where there's delayed closings, particularly as it relates to builders, as a lot of sub-trades have been deemed to be non-essential. Builders are now not gonna hit the timelines that they need to hit. There might be delays elsewhere as well, whether it's from a funding standpoint for people who have potentially lost jobs that are now in a situation where the bank is saying, if you're not employed, we are not going to fund this mortgage, you should ask for an extension on that. I've heard of a situation for a seller who is supposed to go into an old age home who actually couldn't, because they were not accepting anybody - nobody was going in or going out except for the absolute necessity. So, they had to delay their closing.
There's this whole ripple effect that we need to help clients through and it doesn't mean that we're supposed to be out there trying to actively sell real estate.
Relief Measures for Homeowners
So what I've been doing with a lot of my time is I've been trying to read a lot and watch a lot of videos and take part in webinars as well to just get my mind around what is going to happen here in the economy and what may happen in the real estate market. In my last post, I touched on this whole idea of the government trying to really support, whether it's through providing EI, whether it's putting pressure on the banks to offer us deferrals, which we've now seen the big six banks do, and we've also seen that trickle down to the smaller lenders as well.
And what I would add to that is this idea of deferral on your mortgage payment, it's awesome for those of you that actually need it. And the majority or a large portion of Canadians are going to need that program because they may not be able to pay their mortgage payments and we don't know how long this may go on, but if we look at other countries that are now starting to come out of it, I think it's easy to see that this could be a three month kind of hold on things where the economy is just kind of shut down and people aren't working.
So, deferring a mortgage may be something that is really, really necessary. With this six month deferral you are essentially kicking the can down the road and they're gonna charge you interest along the way. It's not free, you don't just get to say, “Yay, I don't get to pay my mortgage for six months.” In fact, there is a cost to it. For those people that can manage to pay their mortgages throughout this economic shutdown, you should do that, because it's going to cost you money otherwise.
Outside of that, what we've also seen is the government really push to support employers and all the small businesses out there that have employees. As an employer, I think when you hire someone, you essentially make a promise to your employees to say, listen, I'm gonna support you, I'm gonna pay you, I am going to help you keep food on the table. So the thought of laying off somebody like that is just so, so tough. But the government is there, saying we'll help you, we will support you as an employer to try and keep these people employed versus having them on EI - which we've already seen over 500,000 Canadians apply for since this COVID-19 pandemic has hit Canada.
I think if you've got employers that are on the fence about keeping their employees, something like the government coming alongside of them and partnering with them to keep those people employed and support them financially is gonna make a huge difference because the last thing they wanna do is lay people off. Especially small business, where the person that owns the business and is making that decision is also the same person that's sitting in front of that employee telling them that they are laying them off during this time.
Some encouragement
As more and more information comes out about what our government is doing for our economy and from the health side of things, I have to feel super grateful for how proactive our government has been. And when I look back to 2008 and I look at how well the Canadian government handled that economic recession and how well Canada came out of that… I remember thinking at that time how grateful I was, especially when I compared our country to the United States. They took so, so long to come back. And then, I look at it now, and again, I compare it to our neighbours South of the border, and I think they're gonna be hit in a much worse way than we will be, not only from a health standpoint, but also from an economic standpoint. I feel like our government has done such a good job of being proactive on getting out in front of these things. And don't get me wrong, it's not like the future is a super clear picture of where we're going to be, it's still very uncertain and up in the air, but I would say that I would have to feel very, very positive and very, very fortunate to be living in the country that I do and how our government has dealt with this.
Final thoughts
So, I would say the real estate market is basically shut down for now. Now, I take it as my opportunity to get some projects done around the house, hang out with my family, and one of the quotes I read the other day was from Martin Luther who said, "Let joy be your act of defiance." And I loved that quote, especially in this environment. And I think it's very easy to be fearful and be scared, and don't get me wrong, there's elements of that that creep into my life. There's potentially economic impact for our family as somebody who is self-employed, as somebody who is a landlord and has tenants that may be unemployed, these are all things that I am dealing with and working through. But at the same time, I look at it and I think, man, I've basically been forced to stay at home and hang out with my family, and it reminds me more and more on how grateful I am for my wife and how grateful I am to have these five little kids running around here. Today, we just went for an awesome hike out under the blue sky and the bright sun and the warm weather, and what a blessing that is to be able to go and do those things and to not think, I gotta work. That's something that always hangs over me a little bit and I've basically been forced to say, listen, you can't. You can't work right now.
And I hope that you guys as well can find the joy in this time. I know it feels tough at times, but it is there, so I'm gonna leave it at that for tonight.
If you have any questions or anything you would specifically like me to address, then I would love to do that.