What it’s like to sell a house during a pandemic

Andrew Ryan and Meaghan Granville had been casually looking for a forever home for a couple of years. They wanted more space for their three children, aged 2, 4 and 6.

They found the house of their dreams in February. It was a bit of a stretch but they figured they could finance the purchase by selling their investment property that was actually their first home.

When they outgrew that two-bedroom semi, they moved to a slightly larger home nearby, the place they will keep in lieu of the one they are selling.

No sooner had they inked the deal on their new place when the stock market crashed and the NBA shut down. Suddenly, potential home buyers were losing their jobs and open houses were cancelled due to COVID-19 restrictions.

"It kind of felt like the sky was falling," said Ryan. "Our expectations (of what they could expect to make on the sale) dropped drastically in that time period and our anxieties went through the roof."

They considered different scenarios for how to handle the possibility that their house might not sell, such as asking the seller of their new house for an extension on the closing. Ryan said he wondered if they should wait and try and sell in May.

In the end, they took the advise of their realtor Sandra Sheffield of Royal LePage and listed right after the Easter long weekend.

Their story is a bright spot on the Toronto housing market where the pervasive narrative is that nothing is selling in this unprecedented spring.

Their rental property, a two-bedroom semi near Runnymede Rd. and Annette St., was listed for $989,000. It drew six offers and sold for about $200,000 above list price in under a week.

Sheffield, who raced to help the couple prepare the home for sale and map out a marketing strategy, says there is a disconnect between the grim COVID-19 narrative and the reality that even in the most difficult circumstance, people still need to buy and sell houses.

The six offers on the Ryan-Granville property came from a field of 22 "highly qualified and highly motivated" buyers who toured the house at 51 Lincoln Ave.

"Five of them are still looking for houses," said Sheffield.

COVID-19 brought the Toronto region housing market from sizzle to fizzle almost overnight. Resale home sales were already hot in February - up 45.6 per cent year over year. That continued into March with 49 per cent more sales year over year in the first 15 days of the month.

But once the public health restrictions kicked in midmonth, sales plunged 15.9 per cent below the same weeks last year. It got worse in April with a 69 per cent year over year sales decline in the first 17 days, according to an unusual midmonth report released by the Toronto Regional Real Estate Board (TRREB) last week.

Prices have been less impacted. But the 1.5 per cent year over year decline in the first part of April, comes mere weeks after the 14.5 per cent year over year price gain in March.

Data-tracking realtor John Pasalis, the president of the Realosophy brokerage in Leslieville, doesn't dispute that sales have tumbled but they are still happening.

His numbers show a 57 per cent year over year decline last week (ending April 25). But that was still an improvement over the previous week when sales were down 71 per cent compared to the same period in 2019.

Supply, which influences prices, is also tighter, said Pasalis. There were about 250 fewer homes listed last week than three weeks ago. At the same time, sales were up by about 200 homes.

The numbers are small. But Pasalis said, "It's important to remember that we are looking at weekly figures and, considering only 740 homes sold last week, an increase of 200 sales is pretty big."

Ontario Real Estate Association President Sean Morrison said the housing supply shortage that the Toronto region was experiencing before the COVID-19 crisis continues to be a factor in the current situation.

"Before we came into this pandemic we had a supply and demand issue. That gets exasperated in a market like this where people have a vital need to transact," he said.

"That's a short-term effect. In my own business I have a lot of people who are waiting to put their house on the market or waiting to transact when this is all over. There will be that pent-up demand in the future," he said.

Meantime, Morrison said realtors are adapting to the COVID-19 health protocols, while still facilitating transactions for consumers who must buy or sell.

The economy had been shut down for about three weeks by the time Sheffield and her High Park clients nailed down the listing price of the Ryan-Granville home.

"We had enough data at that point to see that the low-prices and multiple offer strategy was working, which is the best way to get the best price because you're really letting the market speak for itself," she said.

But the property couldn't go on the market until after Easter because it was rented. The sellers were reluctant to ask the tenant to move during the COVID emergency so Sheffield helped the family find another rental. The house then had to be cleaned, staged and photographed.

Then they had a video shot with Ryan himself narrating, telling the story of the family's connection to the home.

"We wanted to make the house as clear as possible to people before they stepped through the door. We didn't want them to have any surprises. So the video was very important, it was very personal," said Sheffield.

"I have a system for my listings," she said. "The four-page checklist grew to five over this because we added digital components which I hadn't done before."

As soon as the house hit the market, Sheffield said her office was juggling showing appointments. Normally agents like buyers to run into one another at tours because it creates excitement. But that can't happen now.

After a bully offer on the Saturday before the offer date, Sheffield worked the phones on the Sunday and five other buyers came forward with offers.

Jenelle Cameron of Re/MAX Hallmark Realty said new rules around showings didn't stop 75 people from touring a one-bedroom, East York bungalow she recently sold.

Buyers also have the option of doing a 3-D tour or she will conduct a FaceTime tour for them.

But, she said, "People are still getting out to see stuff. At the end of the day it's still hard to buy a home virtually - a condo maybe. But a house, I think you still want to feel it." said the Re/MAX Hallmark Realty agent.

There are rules. The home must be vacant while it's being shown. Only one buyer at a time can tour the home and visitors must fill out a form vouching that they are following safety protocols. They are asked not to touch anything and agents go in ahead to turn on lights and open closets. After the tour the house is sanitized.

Cameron's listing was priced at $599,000 and sold for $800,000 after 22 offers on a designated selling date.

"I didn't price it at what I consider to be really low because, given the situation, I didn't know it would go. It was just a one-bedroom place and not renovated or anything," said Cameron.

The first time Royal LePage's Sheffield worked with Ryan and Granville, was after the economic downturn of 2008 when they bought the semi they have just sold.

Back then, she said, real estate dragged the economy out of the recession.

"It was first-time home buyers that did that," said Sheffield.

Pasalis thinks the real test for the market will be six or more months after the COVID-19 shutdown ends.

"That's when mortgage deferrals will come to an end," he said. "We'll see how many people still have jobs and for business owners if their business survives."