The Real Estate Crystal Ball

March 2016

Our market mystics (l to r), Mortgage Broker from Mortgage Intelligence, Mike Missere, Broker of Record, Mario Tegola of RE/MAX First Choice, Thunder Bay Real Estate Board President, Diane Erickson and Canadian Mortgage and Housing Corporation, Office of the VP, Housing Markets and Indicators Warren Philp

Question: Over the past few months there have been economic reports that Canada’s housing market (largely Toronto/ Vancouver) is overvalued. Are we overvalued or balanced in Thunder Bay?

Tegola: In my view, Thunder Bay’s prices have stabilized and we are now balanced. There has been some downward adjustments on the higher end homes but the lower to mid-range homes are very stable,

Erickson:The market is moving to a balance where we’re not seeing as many homes going over asking. According to our stats provided by OREA (Ontario Real Estate Association), this is the case in the province. Supply and demand have a lot to do with this. That being said we are seeing more listings on MLS than in the past years and therefore more choices for the buyers.

Philp: Our stats show the resale market transitioning from ‘sellers’ to ‘balanced’. Sales in the resale market were unchanged in 2015 compared to 2014 but are expected to fall 1.4 and 3.4 per cent respectively in 2016 and 2017. A cooling market will mean resale prices will rise two per cent in 2016 and one per cent in 2017. With the existing home market moving to a more balanced state, we expect the percentage of units selling at or over list price to edge down. Total housing starts will rise in 2016 on the strength of slightly higher singles and apartment starts. Starts will increase as builders respond to pent-up demand for smaller units by smaller households wanting to downsize.

Let’s talk economic principles, the bigger picture, oil prices. How could that impact the local market?
Tegola: Oil prices have not really affected our local market in neither a positive nor negative way and my prediction is we will have a balanced local real estate market.

I am looking for a good market for the spring, summer and throughout the fall months. Thunder Bay is still one of the most affordable places to buy a home.

Erickson: The lowering of oil prices has an effect on the gas prices at the pumps in Thunder Bay therefore the consumers have more money in their pocket to spend elsewhere; however, it is probably a short lived situation. If a buyer were looking to buy in the rural areas of Thunder Bay that may have an affect
on them.

Question: Let’s talk interest rates – you talk to all of the major lenders, what are they telling you?

Missere: After seeing a gradual rise in 5 year rates over the last two quarters of 2015 we have seen noticeable drops of anywhere between 15 to 45 basis points since the start of this year. I would expect these lower rates for the rest of 2016. Current rates are as low as 2.54% for 5 year fixed which represent 2.10% off the average bank posted rates.

With the jump in appreciation of homes in the last few years many of our clients have used their home equity to focus on reducing their debt by refinancing and through reverse mortgages.

Programs like the Chip Reverse Mortgage frees up cash but requires no repayment until your home is sold. A viable solution for many over the age of 55.

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

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