Is the Sudbury housing market flying under the radar?
As soaring valuations in major urban centres and strengthening sales activity in cottage country continue to drive the headlines, it seems that Sudbury is not capturing the attention it deserves. After years of mediocre growth in its housing sector, the Central Ontario town has been experiencing growth unseen in more than a decade. And all the indicators point to comparable numbers in 2021.
Sudbury joined the broader Canadian real estate market and the bullish trends in 2020, but did it finish the year on a high note? As sure as Sudbury is home to the Big Nickel, just as sure as the small city posted record growth over the last several months.
Canadian Real Estate: Record Growth in the Sudbury Housing Market
It was the best of times in the Sudbury housing market in 2020. Despite the pandemic, recession and job loss, Sudbury, as well as many other Ontario cities, witnessed extraordinary growth.
According to the Sudbury Real Estate Board (SREB), residential sales surged at an annualized rate of 31.7 per cent in December, topping 150 units. This is the first time in the municipality’s history that more than 150 transactions were executed in the month of December. Overall, the Sudbury housing market witnessed an 8.4-per-cent increase in home sales in 2020.
Home prices experienced double-digit growth in December and on an annual basis. The average price of homes sold last month increased by 20.1 per cent year-over-year, to $326,109. The annual average price jumped 14.9 per cent from 2019, to $311,957.
New residential listings edged up just 0.9 per cent in December from the same time in 2019. Meanwhile, active residential listings plummeted 59.6 per cent from the end of December of last year, coming in at 186. This, according to SREB, is the first time in more than 30 years that active listings have fallen below 200.
The number of months of inventory – months it would take to sell current inventories at the present rate of sales activity – was 1.2 by the end of December 2020. The long-run average is 7.4 months for this time of year.
Why Was Sudbury so Hot in 2020?
In a few short months, the Sudbury real estate sector transformed into a strong seller’s market.
“There’s more buyers than there are sellers in Greater Sudbury right now,” said Tyler Peroni, chair of the Sudbury Real Estate Board, in an interview with Sudbury.com.
“In 2020, the appreciation of house prices and the market that we’ve been in we haven’t seen in the city for almost a decade. Even about five years ago, we’d have very little appreciation, between zero and two per cent, because house prices this year have gone up close to 15 per cent, instead of it being an equal market in the last five years with appreciation going up calmly, it’s just hit all at one time.”
One of the biggest factors for Sudbury had been pent-up demand. After a two-month pause in the broader industry, buyers and sellers returned to the market, and the housing sector played catch-up throughout the rest of the year. Real estate agents also facilitated this environment by utilizing digital tools, adopting virtual tours, and adhering the health and safety guidelines laid out amid the coronavirus pandemic.
The other consideration was shifting consumer patterns. While there is some doubt over terms like “exodus,” many households from urban centres relocated to rural communities and small towns. A great deal of the demand for these places, including Sudbury, came from people exiting the big cities. Thanks to remote working conditions, the desire to leave hyper-dense metropolises, and getting more square footage for your buck, Sudbury became a top target.
With historically low interest rates and a federal government putting out all the stops to prevent a crash in the real estate market, homebuyers had more options at their disposal. After many years of one- or two-per-cent growth, Sudbury enjoyed its biggest price growth in 13 years.
Cathy Gregorchuk, the head of RE/MAX Crown Sudbury, said in an interview with The Sudbury Star that demand has been so strong that “there is still a housing shortage in Sudbury.”
Does this mean a repeat performance in 2021?
A Brief Look at Sudbury in 2021
Market observers have been questioning if the broader Canadian real estate sector can mirror last year’s record-setting performance. According to the RE/MAX Sudbury Housing Market Outlook (2021), the city’s housing market is projected to favour sellers this year, rising five per cent to an average price of $327,537 across all property types. Housing shortages, demand from first-time homebuyers, historically low interest rates, and move-up buyers are anticipated to drive Sudbury’s real estate market, from Valley East to the North End. Until new housing supply comes online, the Central Ontario municipality could be one of the province’s hottest housing markets.