Spring is always a good time to assess the health of our local housing market. Early indications nationally point to a strong year ahead with the benchmark price of a home in Canada rising 4.6% in January 2020 compared to the previous year according to the Canadian Real Estate Association.
A snapshot of how our local economy and home market is functioning can be found in the latest Demographia International Housing Affordability Survey. The annual report rates middle-income housing affordability using a “Median Multiple,” which is the median house price divided by the median household income. The survey is endorsed by the World Bank and the United Nations and is used by the Joint Center for Housing Studies at Harvard University.
In the last few years, Thunder Bay went from being the most affordable place to own a home in Canada (2007) to today, which shows us as the 8th most affordable housing market with the median multiple on the line between ‘affordable’ and ‘moderately unaffordable’ according to the survey.
Mario Tegola, a local real estate broker of record with Re/max First Choice Realty Ltd. views the coming year like this.
“I think low interest rates will keep the market brisk, so overall it’s going to be a busy year. Price ranges from 200K to 300K will be in high demand, but also 300K to 400K will be very active. The strong demand neighbourhoods should be the usual…
Mariday Park, Grandview, Current River, Shuniah Area and most of the Port Arthur area. In the South Side, Westfort, Northwood, College Park & Parkdale. Semi-rural properties with acreage
close to the city will be strong. Higher end homes are still in demand but they’re admittedly taking longer to sell. Condominiums are selling very well – with pricing under $300,000 becoming harder to find,” says Tegola.
New home contractor Chris Kelos of C. Kelos Homes says he’s seen a higher demand recently for building mid-size homes over larger homes. “With our aging population people are downsizing and opting for smaller more manageable homes. And with young buyers navigating the stress tests at banks mid-size homes are the preferred option. The new home sweet spot is between 400K and 450K and they’ve been selling very well in areas like Gemstone and Sherwood Estates with larger home plans being constructed in Maplewood and River Terrace where only a few lots remain.
Regarding interest rates, Mortgage Agent Mike Missere of Mortgage Intelligence expected rates to drop further from the reductions that had occurred in the last few weeks.
“In a short period we saw over a half percent drop in 5-year money only to be followed by a bump of a half point
4 days later. What is occurring in the bond and stock markets plus government policy changes influenced by the COVID-19 issue is putting us into unknown territory. I’m not a economist, but I think we’re in for some interesting times ahead”, said Missere.
