Sometimes when things are shifting so quickly, it's important to look at things on a weekly basis, instead of waiting for monthly data. This is one of those times. Two v interesting things in my 416 active listings this week.
1. Freehold listings (lowrise) went ⬇️ /1
It was only 11 listings (0.7%). It could be because of March break (which it really doesn't feel like now, eh?). Last 2 years it also went down in March break week. Then the next 2 weeks went +5.1%, +8.0% in 2018, and +5.3%, +11.2% in 2019. I doubt we'll see that bounce. /2
More interesting one is condos which went ⬆️200 listings. That 12.2% week over week increase is the largest jump I've seen since I've been tracking (Aug 2017). Now condos aren't as seasonal as houses, and last year's March break condo listings went up 4.5%. /3
Theories as to the jump:
1) Condo buyers (and end-user sellers) not likely to have kids in school (doesn't explain magnitude of ⬆️)
2) Airbnb investors bailing. With travel ground to a halt, Airbnb is crickets. Tough to carry with 0 income.
3) Other investors getting out /4
Some Airbnb examples here from @dima_nomad /5
For regular mom & pop investors, if renters get to pause paying rent due to COVID-19, that's a lot of negative cashflows in condos. Especially for the ones that are already cashflow negative to begin with and just banking on appreciation. /6
I've long maintained the next recession is going to hit the condo sector worse because of all the investors. Carrying a negative cashflow condo is okay when you're working, but what if you get laid off? Then all of a sudden that negative cashflow doesn't seem such a good idea. /7
It's not to say all investors are going to panic and rush to sell their places at the same time. (Then again, have you tried to buy toilet paper lately?) Many will still be employed. Definitely Airbnb investors hit hardest as income drops to zero and only grows back slowly. /8
Other weekly thing I looked at was sold over asking (SOA). For freeholds was no difference in week ending Tuesday. Actually went higher. But this is the first full week of big-time measures, so the next one will be big to watch. /9
Same story for condos. Actually continued to climb last week. We'll see where it lands next week. Stay tuned... #TOre /10
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