As inventories of resale homes remain low and prices continue to rise, buyers may have to look a little farther afield to find their oasis. Best advice: be patient!
stories by Emily Worts
illustration by Shelagh Armstrong-Hodgson
“Bullish from Mulmur to Meaford.” That’s how local realtor Rob McAleer, sales representative with Chestnut Park Real Estate, describes the local housing market. With sale prices smashing past records, it seems that with a new decade comes new highs. Though local realtors can’t predict the future, their insights, based on the last months of the last decade, tell us there is nowhere to go but up … in prices that is.
Over the past year there was a noticeable jump in properties selling over the $1 million mark, and though the high-end properties tend to stay on the market longer, if priced right they are moving.
But as prices increase, the number of sales has seen some levelling out in the past year. Gone is the frenzied panic of multiple offers, replaced by calmer, educated offers from buyers who are willing to wait for the property that is right for them. On The Bay sat down with a host of local realtors to get a read on the local real estate market as we head into the 2020s.
The average residential
sale price was lowest
in Wasaga Beach at $450,000
and highest in the Town
of Blue Mountains at $715,000.
Inventory
Southern Georgian Bay continues to struggle with a shortage of homes available for sale, while the appetite for homes in our region remains high. The supply problem creates both positive impacts (record sales for sellers) and negative impacts (lack of affordability for some potential buyers). In 2016 our market tipped from a strong buyer’s market into a balanced market and then quickly transitioned to a sellers’ market. For the past three years, low inventory and the type of inventory are the only things holding this area back.
“The area has a lot of positive momentum, new businesses are popping up all the time and there is no shortage of activities for people all year round,” says Josh Dolan, broker with Royal LePage Locations North. “Sales could be higher if we had better product to sell. In short, we need ‘good’ listings.”
With increased demand, of course, prices follow an upward trajectory. “It is hard to find something under $300,000 and everything under $600,000 seems to sell very fast,” says Dolan.
Across the region, there is currently an average four-month inventory of active residential properties for sale, well below the traditional eight to 12 months that existed before 2016. Supply is tightest in Collingwood, with just under three months of inventory available, which means we continue to see multiple offers, especially on properties priced below the half-million-dollar mark.
GTA Effect
As prices in the GTA continue to elude first-time buyers, many are considering alternatives and investing in Southern Georgian Bay, which is relatively more affordable.
“The strength of the GTA market will continue to positively affect our local market,” says Sue Creed, managing partner and sales representative with Forest Hill Real Estate Collingwood. “Buyers who can no longer afford to buy in the GTA will be drawn to Collingwood’s affordability, and leverage remote work opportunities.” And for first-time buyers who are struggling to get into the GTA market and don’t have the option of working remotely, purchasing a weekend home up here, while renting in the city, allows them to build equity.
“The millennials are struggling to get into the market,” says Cheryl MacLaurin, sales representative with Chestnut Park Real Estate. “Here they can buy a weekend place, work like crazy during the week, and relax here on weekends.”
Renting in the city where you work, and buying where you recreate on the weekends, can be more achievable and signals the growing trend of the ‘reverse cottage.’
Demographics
The lifestyle Southern Georgian Bay affords translates to a demand for both full- and part-time residences; from starter homes and condos to acreage with a view, the offerings span the spectrum of demands. “Our communities continue to be a diverse mixture of young people, new families, entrepreneurs, artists, professionals and retirees,” says MacLaurin.
For those who want to live and work in the area, our local employment market is strong in many sectors. Combine work opportunities with the federal government’s revamped mortgage stress test, which makes it easier for borrowers to qualify for loans, add down payments of less than 20 per cent, and what was once unobtainable may be achievable. First-time home buyers might now be comfortable buying in the $600,000 range, the median price for homes in Southern Georgian Bay.
And the baby boomers continue to move in every direction.
“They aren’t necessarily downsizing but transitioning from weekend properties for an in-town lifestyle or looking for full time over part time residences in Southern Georgian Bay,” says Melissa Worts, sales representative with Royal LePage Locations North [full disclosure: Worts is the writer’s sister].
Casting a Wider Net
Although prices may be friendlier here than in Ontario’s urban centres, there are significant differences in supply, demand, and prices throughout our area. As a result, home prices remain out of range for many in the region’s hottest markets, forcing buyers to set their sights on surrounding communities. The average residential sale price was lowest in Wasaga Beach at $450,000 and highest in the Town of The Blue Mountains at $715,000 (Collingwood’s average price was around $550,000). If you are willing to drive just 20 to 30 minutes, you can save yourself a bundle of money.
Buyers are catching on to this, so demand – and prices – are on the rise in places like Meaford. “Meaford is a hot area,” confirms Worts. “Outlying areas are increasing in value because there is nothing available elsewhere. It’s about managing expectations and buying where you can afford.”
New Highs
In the past year the area has seen a big jump in properties selling over $1 million. In 2019 there were 23 properties in Clearview alone that sold for over $1 million, up from just 10 in 2018.
“One of the listings we sold in Mulmur smashed the highest residential sale record for our entire service area (Mulmur to Meaford). It was listed at $6,850,000,” says Rob McAleer. “This demonstrated that our area is attracting a new level of purchase for very special properties.”
Home prices remain out of range for many in the region’s hottest markets, forcing buyers to set their sights on surrounding communities.
And it’s not just the prices of elaborate 200-acre estates with pristine forests, European-influenced chateaus and three-acre ponds that are soaring; new bars are being set for in-town properties as well. The Creemore market is subject to what local realtors call the ‘Sarah Richardson effect.’ The TV personality and home show host spent a lot of time and money renovating a main street heritage home in the small village while televising the transformation and then flipping the home, catching the area’s highest in-town price ever recorded. “She really shone a light on the community with her project house set in the town. It set a new sales high and set new expectations,” says Cheryl MacLaurin.
The Sarah Richardson Effect, known as the HGTV effect elsewhere, means buyers want a decorator’s house and they will pay a premium for the latest design trends, without having to endure a renovation.
“Buyers from Toronto are often double income,” says MacLaurin. “They are busy professionals, and most want something they don’t have to worry about. That, or they want a really big project, like building from the ground up.” Despite the jump in sales and price tags, higher end properties are understandably harder to sell, and they remain on the market longer. “Buyers can be picky and they aren’t really in a rush for these higher end properties,” says MacLaurin. “Recreational properties are totally discretionary. Unless the property ticks all the boxes, people don’t have to buy.”
What’s Moving
The market in 2020 has been described as a balanced market with a slight tendency towards a seller’s market, but that all depends on what price point you are looking at.
“In general, homes selling under $400,000 have a lower than average days-on-market and are selling quickly, often with multiple offers,” says Sue Creed. “Homes selling for over $1,000,000 generally are selling close to asking price; however, they are experiencing a slightly higher than average days-on-market.”
Homes in the lower price points are still the ones moving the quickest, attracting buyers of all ages, but what is considered ‘low’ has changed dramatically in the past few years.
“It wasn’t that long ago that homes in the $300,000 to $399,999 range sold best in Wasaga Beach, but given how few listings there are any more in that price range, the range has definitely bumped up to the next level,” says Scott Campbell, broker with Royal LePage Trinity Realty. “It is worth noting that 60.7 per cent of our sales this year are between $400,000 and $599,999, and the reason for that is largely due to the fact that many of our buyers from the GTA (who are typically downsizing) feel most comfortable buying in this range given the levels of equity they still wish to keep to enjoy their retirement.”
New Homes
New developments are popping up faster than ever. Creemore is seeing its first ever new home development, Stayner has several on the go, attracting commuters from the GTA, Barrie and Collingwood, and in the Town of Wasaga Beach alone the building department statistics indicated a 57.7 per cent increase in construction values for the first 11 months of 2019, translating to $83.3 million versus $52 million in all of 2018.
“The town’s construction value statistics continue to look very promising,” says Scott Campbell. “Further looking at housing ‘units,’ there were 298 units built in the first 11 months of 2019 compared to 94 units in all of 2018.”
With demand continuing to outpace supply, the only dark spot on the real estate horizon is lack of affordability for some buyers, says Campbell. “For many of the younger buyers looking to move to, or stay, in our area and for our senior populations, who for generations have raised their families here (and not ‘sold out’ for record profits in the GTA), it can still be a bit of a struggle to buy (or rent) housing in our area.”
Across our area we are seeing very few units at entry-level prices. “Right now we have a strong missing middle,” says Chris Keleher, broker with Royal LePage Locations North. “We need more housing in that range, even if it’s small; we don’t need palatial houses.”
Most new housing developments have some entry-level offerings, but many are listed in the $600,00 to $800,000 mark and are unattainable, even for young professionals. “We’re desperate for that entry level,” says Keleher. “Developers end up selling out their perfect price point units and end up sitting on the high priced units forever. The low prices are gone because it fits the market. People jump.”
Homes in the lower price points are still the ones moving the quickest, attracting buyers of all ages, but what is considered ‘low’ has changed dramatically in the past few years.
Townhouses and apartment buildings weren’t that appealing eight years ago when an entry-level detached home could be purchased for $300,000. Today that same detached home is worth $650,000, so apartments and townhomes are a better bet for those entering the market. “Apartment buildings, some townhouses and maybe a few bigger homes are what we need,” says Keleher. “Times have changed and if you want to get up here, you need entry level. People might need to live in an apartment for three or four years and build some equity.”
What’s Next
Year over year, housing prices in Southern Georgian Bay continue to climb, reaching all-time highs. With all things remaining stable – the global economy, the stock market, interest rates and quality available product – local realtors project our market will continue to see steady growth in terms of sales and prices.
“With interest rates projected to stay relatively unchanged in 2020 and with net-migration rates (in terms of people moving to versus away from our area) looking so positive, we anticipate 2020 to be another very good real estate year,” says Scott Campbell.
Many factors continue to impact property sales into 2020, with demand leading the way as people look to live, work and play in Southern Georgian Bay. Our market is driven by people of all ages, who themselves are ultimately driven by the desirable lifestyle our area offers. The new decade will require buyers to be patient, manage expectations and cast a wider net in their quest. ❧
