The real estate market in two northeastern Ontario cities has cooled off in recent months after two years of price increases, according to local realtors.
In Sault Ste. Marie, the average price for a single family home has stabilized at $320,000, according to Jonathan Mogg, president of the Sault Ste. Marie Real Estate Board.
“That’s actually really encouraging for the buyers now because it was just growing at an unsustainable pace for a while there,” Mogg said about the market during the last two years.
“It was absolutely exploding.”
Before the pandemic, Mogg said the average house price in Sault Ste. Marie was around $200,000. That increased by 33 per cent in two years.
Mogg said the Bank of Canada’s recent interest rate hikes have helped cool demand from prospective homebuyers.
“It’s kind of caused some buyers to be a little more cautious in terms of affordability and is kind of a major driving factor as to what is cooling off the buyer’s market,” he said.
Mogg added that bidding wars are much less common today than they were even just a few months ago.
What he calls a “return to normal” means buyers can be more picky because homes are staying on the market longer.
“We really are happy with the way that things are starting to return to normal,” Mogg said.
“And that’s the biggest thing that we’re starting to see is, you know, it’s a normal market again. And that’s really encouraging for everybody on both sides.”
More stability in Greater Sudbury
Homes are also staying on the market longer in Greater Sudbury, said David Kurt, the broker of record with Lake City Realty in Sudbury.
“Right now, buyers have a lot more opportunities to look at a house a couple of times before deciding, make an offer, and then maybe even make a conditional offer,” Kurt said.
Kurt said the average price for a single family home in Greater Sudbury was $443,000 in July.
Despite big price increases since the pandemic started, Kurt said houses in the area remain affordable compared to other parts of Ontario.
“In Ontario, the average price is over $1 million,” he said. “We’re still 50 per cent of that. So we are so cheap relative to what else is out there.”
Kurt said higher interest rates have helped cool demand in the housing market, but there’s also an emotional component that has led to less demand.
“When the market went up, they (buyers) thought, ‘If I didn’t buy today, then I would never be able to afford to buy,'” he said.
Kurt said increasing real estate prices during the pandemic also led to many more realtors in Greater Sudbury.
Before the pandemic, he said the city had about 338 real estate agents, but that has increased to about 450 agents today.
“So there are a lot of new agents out there and there’s going to be a lot less transactions happening, which means a lot of these agents are not going to be making money to be able to survive,” Kurt said.