The great real estate debate

March 2023

What a difference a year makes. As we began 2022, low interest rates combined with a lack of inventory was the big story that sent home prices up in virtually every location in the country. But as we enter the spring of 2023, with an interest rate jump of slightly more than 3 percentage points in less than a year, the Thunder Bay real estate market has begun to experience the intended calming effects imposed by the Bank of Canada, as central bankers focused on taming inflation.

Karen Hill, President of the Thunder Bay Real Estate Board is upbeat about the state of the current market, if anything she wished realtors had more houses to sell.

“Higher rates have not affected the pricing of lower and medium priced homes. There is strong interest in homes under the 450k price range with anything above that price taking
longer to sell”, says Hill.

She also adds that many agents have a number of interested buyers in hand, but with just under 74 total MLS listings in the City of Thunder Bay as of March 7th (12 of which are over 1 million dollars), many are just waiting for the right home to present itself. And sellers are being cautious too, worrying that if they sell, they won’t be able to find something suitable to buy.

Hill says prices are holding steady, especially when you consider house prices in the city averaged $269,000 pre-pandemic while today the average house price is $339,000.

Mario Tegola, a broker of record for RE/MAX First Choice Realty agrees that higher interest rates have affected the local market. ”I believe the market is more balanced right now and there is a higher demand for rental revenue properties as the rental market is active.

We still have a shortage of listings but I expect to see more listings as spring starts to take hold”, says Tegola.

He also says that prices should remain steady, “I foresee a good stable spring and summer market”, admits Tegola.

According to a recent RE/MAX Housing Market Outlook report, Thunder Bay continues to be one of the 3 most affordable home markets in Ontario. The average home price in Windsor is $649,278, Sudbury is $490,161 and Thunder Bay leads in affordability at $338,366.

Eric Vastamaki, a Sales Representative with RE/MAX First Choice Realty, says although activity has slowed, houses that are priced correctly continue to generate offers and in some cases competing ones. “Recently, I was involved in two accepted offer situations with both offers being accepted within 36 hours of the homes being listed. If the pricing is correct, there will be a buyer”, said Vastamaki.

Vastamaki adds that banks are green lighting mortgage approvals but that some applicants have had to adjust their expectations based on income due to the higher rates and tighter lending rules.

Regarding the new home market, builder Chris Kelos of C. Kelos Homes says there is pent up demand right now.

“We had such a shortage of building lots last year, but with some recent registrations we now have lots to build on”. Kelos also says he’s relieved that some material costs have flattened out. “Lumber prices have definitely stabilized, but unfortunately other building costs such as heating, electrical, drywall and glass have increased”. Kelos also says that with strong demand for entry level homes and mid-range demand more sensitive to interest rates, he will likely need to adapt what he builds to meet the segments of the market that are stronger.

While everyone agrees that 2023 looks to be ‘stable’, a recent report by The Canadian Real Estate Association (CREA) stated that 2024 will be an active year, predicting home sales to rise by 10.2 per cent as markets continue to return to normal with the national average home price gaining 3.5 per cent from 2023 to 2024.

Bill Wrightsell is a marketing consultant and regular contributor to Bayview Magazine. Email him at

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