In this article, I’ll discuss the current state of real estate in North America and the Caribbean. Opinions expressed in this article do not constitute professional advice.
I have been involved with real estate marketing for over a decade now. During my career, I’ve seen the market go up and down, there’s been booms and cracks, ups and downs, times to scale back, and times to advertise aggressively, but I had never seen anything like 2021. Properties were flying off the shelves at an unprecedented rate, and this was due to a combination of factors.
Economic factors:
The main driving forces of the real estate market are financial, and this was not the exception. The global COVID-19 pandemic created a unique economic climate where there weren’t many safe investment options. There was no precedent for what was happening. Nobody knew how the stock market would react to the “new normal”, so investors turned to real estate as a historically safe way to store wealth during uncertain times.
Faced with stock market uncertainty, many investors turned to real estate.
Social Factors:
The shift that most of the world took towards working from home meant that most people were suddenly spending much more time at home than they regularly would, and they were more inclined to spend money on upgrading their homes or buying second homes. This shift also created a massive increase in “digital nomads” who turned to the Caribbean, where their dollars could go a long way while they worked from their new condo or villa on the beach.
Due to generalized lockdowns, most office workers had to work from home.
Circumstantial Factors:
Most of North America and the Caribbean experienced heavy lockdowns during the first half of 2020 and then sporadically for quite a bit longer. Most construction projects were stopped or severely slowed down by the pandemic, contributing to higher prices due to a lack of new supply.
When restrictions slowly started to lift, the bounce-back effect was astounding.
Average price for a home in Canada. Source: CREA
2022 on the other hand…
This year so far paints a different picture. In Canada, home prices are going down for the first time in a long time. Things have also cooled down quite a bit in the Caribbean where we’re seeing a decrease in searches for their main keyphrases due to the reversal of the abovementioned factors. Talks of a global recession certainly aren’t helping.
However, crisis creates opportunity. Here in Canada, seniors and small families are still downsizing which of course creates a good opportunity for multiple sales. Additionally, the “price correction” that the market is experiencing may attract younger buyers who had previously given up on home ownership entirely. In the Caribbean, the lower cost of living may contribute to attracting a larger number of snowbirds than usual. I know it’s not as good as selling more than ever at the highest historical prices, but knowing who to target at the right times may mean the difference between a really tough year and a sort of normal one for some agencies.
Real Estate Marketing is what we do every day. Feel free to reach out to us for more info.
