For years, Northern Ontario has struggled in a myriad of ways. From lacklustre population growth to a paucity of infrastructure on par with other areas of the province, it hasn’t been easy to draw homebuyers to this northern market. By my, how the tides have turned! Despite everything that has transpired over the past year of enduring the coronavirus pandemic, the COVID-19 economy has been incredible for the North Bay real estate market. Whether in soaring sales or sky-high prices, it has been a historic time for this sector. And the gains seen from the nationwide housing boom have seeped into the rest of North Bay’s economy.
Will North Bay become the next big thing in the Ontario economy? Policymakers, advocacy groups, and the broader real estate industry are hoping that this is the opportunity for Northern Ontario to maintain the momentum and take advantage of the newfound growth.
But, as the province and the rest of the country stabilizes, will North Bay return to its pre-pandemic days? Or is this the start of something new and exciting for the municipality? Until that question is answered, the North Bay real estate market is enjoying record-breaking monthly developments.
North Bay Real Estate: Another Month of Record-Breaking Trends
According to the North Bay Real Estate Board, residential sales surged 128 per cent year-over-year in May to 187 units. This was historic. Why? First, the sales activity represented the third-highest level of sales for the month of May on record. Second, home transactions have not been this high in the month of May in more than a decade.
Moreover, residential sales were 19.7 per cent above the five-year average and 21.2 per cent above the ten-year average. Year-to-date, real estate sales have climbed 85.3 per cent from the same time a year ago for a record of 706 units.
On the pricing front, the North Bay real estate market is recording impressive gains. The MLS® Home Price Index (HPI), which industry observers argue is more accurate than median and average price measurements, shows that the single-family benchmark price surged 52.8 per cent year-over-year to $344,300.
The average price of homes sold in May increased 39.2 per cent to an all-time high of $406,633. The year-to-date average price spiked 46.7 per cent to $385,258.
Supply was a significant factor for the Northern Ontario housing sector, with the months of inventory numbered at 0.7 by the end of May 201. This is down from 2.4 months at the end of May 2020. It is also below the long-run average of four months for this time of the year in North Bay. However, housing experts assert that this is a critical figure because it spotlights the number of months it would take to sell current inventories at the present rate of sales activity.
In addition, the number of new listings soared at an annualized rate of 79.5 per cent in May, while active residential listings slumped at an annualized rate of 36 per cent. Also, active listings were 64.6 per cent below the five-year average and 78.4 per cent below the ten-year average.
Is more supply coming to the North Bay housing market? According to the Canada Mortgage and Housing Corporation (CMHC), housing starts rose 18 in April, bringing the year-to-date total to 59 in 2021. Housing completions also edged up by nine, while total absorptions jumped by nine.
Will People Still Move to North Bay?
Many families are still fleeing the major urban centres, even on the other side of the coronavirus pandemic. Since prices have skyrocketed in Toronto, Hamilton, and Ottawa, households are quickly losing hope of snatching up a Southern Ontario detached home in their affordability range…so naturally, homebuyers are looking north. But as the economy stabilizes and society returns to some semblance of normalcy, will people still want to relocate to remote communities?
Ontario has seen a dramatic decline in COVID-19 cases, hospitalizations, and ICU numbers. Plus, many residents are getting vaccinated. This is encouraging more companies to re-open office operations, requiring their employees to return to the workplace. Whether there is appetite to return to working in a centralized location or not remains to be seen, but there are certainly fewer remote work situations than this time a year ago.
If many job opportunities do once again concentrate within the urban cores and more employees lose the flexibility of remote work environments, how may this impact the real estate markets of small towns and remote communities, including North Bay? This is the big question many market analysts are grappling with, especially as the severity of the COVID-19 public health crisis wanes.
What’s Next for the North Bay Housing Market?
Because the province is coming out of fresh lockdowns as a result of the third wave of the coronavirus, real estate experts suggest that the typically busy spring home-buying season might be pushed into summer. In other words, the spring buying would occur in summer, creating a situation of pent-up demand somewhat comparable to what happened in the summer of 2020. Put simply, the North Bay real estate market will more than likely extend its boom heading into the fall, but what happens in the fourth quarter of 2021 may be challenging to prognosticate. Right now, everyone is taking the approach of enjoying the summer and then seeing what happens in September and beyond.
Considering what everyone has endured over the last 16 months, from Southern to Northern Ontario, this is the best prescription!