As the COVID-19 pandemic continues to wreak havoc on various industries around the country, many are wondering what effect the economic slowdown will have on the real estate market.
Fernie is in a unique position when it comes to real estate, with an incredibly competitive rental market during peak seasons, coupled with a huge demand for short term rental units. As new information about the COVID-19 pandemic has surfaced over the past week, the rental market has seen a large uptick in available rental properties.
Various Facebook groups for landlords and tenants in Fernie have been overwhelmed with vacancy postings as many seasonal workers flee town. Although many rooms and properties may now be sitting vacant because people made the choice to leave Fernie, others are sitting empty because people cancelled their trips to our mountain town.
Fernie Central Reservations, a local company that specializes in short term rentals, has been hugely affected by the pandemic and resulting public health mandates.
“Since the ski resort closed, which was a good decision, I think we got about 95 per cent cancellations within 72 hours,” said Chris Mullin, part owner of Fernie Central Reservations. “We were booked solid. The amount of cancellations we had was pretty overwhelming for us and our staff.”
In order to entice people back, the company offered customers a one to two year credit at their rental properties in Fernie. Although Mullin is optimistic about the summer rental season, he also realizes that might be a bit of a challenge.
“Everyone has been affected by the layoffs and there’s not going to be a lot of revenue for the first little while,” Mullin explained. “The summer is going to be not a lot of people coming to Fernie just because so many people got laid off or have been dramatically affected by [the pandemic].”
In the meantime, Fernie Central Reservations has closed their doors and laid off almost all of their staff.
“Luckily, we kind of got to the end of our season anyways with a fantastic January and February for short term rentals and we were able to get through a couple weeks of March,” Mullin said. “But losing almost a month’s worth of bookings was pretty devastating and having to lay off all our staff was pretty hard.”
Another side of the real estate market is those looking to buy and sell homes amidst the chaos of COVID-19.
Ryan Frazer is a real estate agent with RE/MAX Elk Valley Realty, who said he’s noticed several changes in the industry in Fernie since COVID-19 hit British Columbia. There are less showings for properties at this time, since people are reluctant to go look at houses right now. Frazer said another issue at the moment is the cancellation of all open houses, including weekly open houses for realtors to view properties.
“We’ve shifted to try and do virtual tours because we do a lot of 3D imaging of houses now so we’ve definitely shifted more online,” explained Frazer. He went on to add that he’s been doing video tours of homes for clients, which isn’t necessarily uncommon but has been a technique increasingly used in the past weeks.
Although the pandemic is affecting the real estate market and those who work in it in some interesting ways, Frazer isn’t sure that there will be a hugely negative impact on the market in Fernie in the long run.
“Ultimately, people have to live somewhere and generally people pick more desirable places to live than less and Fernie is pretty desirable even with COVID-19,” Frazer said. “The thing with COVID-19 is that it’s everywhere. It is a worldwide pandemic so to me, once we start seeing some recovery from it, Fernie will probably return to what it was. I can’t say whether prices will go down or up but the reality is that the entire real estate market in the world might be slow for a while.”
With 12 years of experience as a realtor, Frazer said he’s sure of one thing: that Fernie’s real estate market is very resilient. With so many players in the market, including local homeowners, Albertans with vacation or rental properties and a “whole bunch of other ones that people don’t really know about,” the market should be buoyed up.
“It’s not like the market has completely fallen off, I mean, not yet anyway. It’s hard to say whether it will or not. I wish I knew.”
That being said, Frazer noted that several of his clients posted homes for sale in the last week and he’s had considerable interest in them online. Even though it seems like a time of crisis, Frazer said that the best advice for people looking to list their home is to talk to their agents and see what the market will bear in terms of price.
Unfortunately, Frazer, who is also a landlord of three rental properties in town, doesn’t think that the COVID-19 situation is going to improve the market for renters and tenants. The rental market in Fernie has been so competitive for years now, that this global crisis might not mean good news for renters.
“I hate to be the bearer of bad news for tenants but I don’t know that the tenancy situation in Fernie is going to improve that much,” he said.
With that said, Frazer did note that rental prices might drop if too many properties become available and landlords are forced to lower prices in order to remain competitive.
“I’m not willfully blind to what might happen but although we’ve never seen anything quite like this, we’ve seen oil prices tank, we’ve seen coal prices tank, we’ve seen all that happen and the rental market in some ways just stayed fairly consistent through all that.”