Way Out of Balance: a review of the impacts of Covid-19 on the housing market

Under Market Statistics

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Written on October 12th, 2021

Julia Freeman Real Estate

During the COVID-19 pandemic, the demand for housing surged across BC despite a severe recession and closed borders. As a result of the crisis and lockdowns, homebuyers prioritized square footage over characteristics such as proximity to the urban core. This preference shift generated considerable relocation demand as square footage could be more easily purchased in smaller, less densely populated regions. Home prices rose in smaller markets which did not have adequate housing supply to absorb the large and sudden increase in demand. In this Market Intelligence, we use a novel modelling approach to estimate the total number of interested buyers over the course of the pandemic and highlight which regions suffered the most severe imbalances of supply and demand. 

Julia Freeman Real Estate

 

From our analysis we estimate that total demand for housing in the province surged during the pandemic to its highest level on record. At the peak of market activity in March 2021, an estimated 67,000 buyers were searching for homes across BC while only 24,000 listings were available that month. The result was significant upward pressure on prices and transactions often occurring after multiple offers. Ultimately, some portion of this demand was satisfied through sales while other potential buyers exited the market due to affordability constraints or were otherwise discouraged due to dwindling supply.