From the Sault Ste. Marie real estate market to the North Bay housing sector, Northern Ontario has been booming since the beginning of the coronavirus pandemic. For years, this part of the province has struggled to attract young families from major urban centres, businesses – large and small – and enough capital to expand its existing prospects. The COVID-19 public health crisis changed everything, and now this region could enjoy newfound prosperity in the post-coronavirus economy.
Sault Ste. Marie is one of these small real estate markets that has witnessed remarkable growth, attracting young families from the Greater Toronto Area. As more households search for a more living space at a lower cost, homebuyers look beyond the GTA and set their sights on small towns and rural communities. But is there enough inventory to satisfy this ferocious demand?
Like other places in the Ontario housing market, Sault Ste. Marie has been experiencing supply challenges, leading to record-setting price growth as demand continues to climb.
According to the Sault Ste. Marie Real Estate Board, residential sales surged 65 per cent year-over-year in February, a new sales record for the month of February. In the first two months of 2021, transactions are already up 58.3 per cent from the same time a year ago. Average prices advanced 20.7 per cent to $218,684 in February, while the comprehensive year-to-date average price jumped 20.4 per cent to $220,230.
The data point to dwindling supplies. When supply does hit the market, it is scooped up almost immediately. New listings soared 48.6 per cent, active residential listings plunged 58.5 per cent, and months of inventory fell from 3.7 months to 0.9 months. Are out-of-town buyers driving this local market?
Sault Ste. Marie Real Estate is Being Scooped up by GTA Homebuyers
For perhaps the first time in the history of the Sault Ste. Marie’s real estate market, bidding wars have become commonplace. Local media reports suggest that properties for sale receive as many as 20 offers, whether for a one-floor bungalow or a two-story house with four bedrooms and two bathrooms. This incredible sales activity is prompting homeowners to list and take advantage of the seller’s market. At the same time, this is potentially pushing local homebuyers out of the market.
One of the main drivers of the area’s housing boom is out-of-town buyers from Southern Ontario. These individuals and families from Toronto, Hamilton and other red-hot markets successfully sold their properties for an incredible profit. This has allowed them to buy homes in Sault Ste. Marie with cash in hand.
This is a remarkable turn of events in Sault Ste. Marie. In the 1980s, a population exodus led to much of the local population leaving the small town in favour of Southern Ontario, whether it was for employment opportunities, education or lifestyle. With more people now working from home and seeking more living space, homebuyers have the freedom to live and work where they please, setting their sights upon quieter communities far from the perpetual urban buzz.
While this might be bad news for first-time homebuyers from the area, it is a boon to the local economy – especially as coronavirus lockdowns are lifted. SooToday.com recently reported on local establishments, despite taking a significant financial hit during the most recent lockdown phase, are experiencing a notable increase in foot traffic.
But could tight housing stocks deter out-of-town buyers over the coming year? This might be a legitimate concern as the same situation is unfolding in many areas across the province, from Thunder Bay to Windsor and Guelph.
Housing Supply in the Sault Ste. Marie Market
Last year, it was announced that the federal and provincial governments were entering into a partnership to invest more than $1 million to develop affordable housing in Sault Ste. Marie. The purpose was to address affordability and supply, with officials noting that this would also support Indigenous families living off-reserve.
“People in Sault Ste. Marie deserve to be able to access the affordable housing they need. This project is an example of strong partnerships coming together to support the most vulnerable and create more homes for people who need it most,” said Member of Provincial Parliament Ross Romano in a statement.
According to the Canada Mortgage and Housing Corporation (CMHC), housing starts gradually increased in January within the region, with developers looking to expand the housing market to help address the new demand.
With interest rates sitting at near-zero, consumer trends evolving, and Northern Ontario continuing to develop, places like Sault Ste. Marie will inevitably grow. But will the region sustain the momentum in the aftermath of the coronavirus pandemic? This is the dominating debate among industry experts as offices reopen and life in the big city adjusts to a new post-pandemic sense of normalcy. Perhaps the rich natural beauty, tight-knit community and amenities of Sault Ste. Marie will be enough to continue to captivate prospective homeowners throughout 2021, and beyond.
For now, as CBC News writes, many parties – businesses, homeowners and buyers – are taking a wait-and-see approach.