At least one local realtor is predicting a two-to-three year market correction that will slow down housing prices in Collingwood.
Rick Crouch is a veteran in local real estate. He’s currently a broker, manager and market value appraiser at Royal LePage Locations North, and is a past president of the Southern Georgian Bay Association of Realtors.
“We’ve seen a bit of a softer market this year overall,” said Crouch. “We’re going to see a bit of this trend for the next couple years … Market corrections – if that’s what you want to call it – do linger for a while, and there’s nothing wrong with that.”
According to Crouch, both dollar value and unit sales from MLS listings are down 15 and 19 per cent respectively from last year’s totals. But to put those numbers into context, the downward trend is coming on the heels of all-time highs.
In 2016 and 2017 the region reached more than $1.1 billion in annual sales according to MLS data. That’s the first time ever seeing the total that high. Sales for 2018 have reached $804 million, which is down 15 per cent year-to-date from last year.
“We’ve had a strong market for the last 15 or 16 years,” said Crouch. In fact, he said between 2000 and 2017, Canadian real estate values have tripled. “Incomes haven’t tripled.”
At the beginning of last year, Crouch said it was common for a house to sell for well over asking price after a bidding war. That scenario is less-likely now.
“The craziness really started to slow down in May, 2017,” said Crouch. “Clearly buyers, through tightening up of the lending rates – interest rates have crept up a bit – they’ve kind of stepped back. We depend largely on what happens in the GTA and their sales are down significantly as well.”
But it is a slow-down, not an abrupt stop.
By the end of October last year, there were 1,544 single-family homes sold in the Georgian Triangle. This year, there were 1,256. That excludes new builds sold outside of the MLS system. Condominium sales are also down, with 375 units sold this year by the end of October compared to last year’s 462 at this time of the year.
But, Crouch quotes David Foot, author of Boom, Bust, and Echo, suggesting real estate is more affected by demographics than it is by economics.
“People still want to move here, the demand is here,” said Crouch. “It’s not less desirable. But people are going to be a little more picky about what they buy. Our prices are maybe going to drop a little bit.”
As for local buyers or those looking for entry-level homes in Collingwood, Crouch said the further away from Blue Mountain buyers look, the more likely they are to find something in an entry-level range.
“Sales under $300,000 are down by 39 per cent, because there’s just not much to buy,” said Crouch. “Virtually, you can’t buy anything under $100,000.”
Crouch purchased a Collingwood home in 2001 for $167,000. He sold it at the beginning of this year for $458,000.
According to the Royal LePage Winter Recreational Report released Nov. 28, median detached property home prices rose 6.3 per cent year-over-year to $549,900 and condominiums rose 5.4 per cent to $407,000.
“There’s been a big shift in condos,” said Crouch. “The typical condo 20 years ago was a two-bedroom, one or two bath unit at Cranberry … Now they’re building larger units with a garage, three-bedrooms, and two or 2.5 baths. It’s no longer just a weekend condo to come to. Buyers may be looking at retiring to the condo.”
Crouch said many of the properties being sold in Collingwood particularly are being purchased as second properties to be used on weekends year-round. Eventually, those buyers may plan to retire to that property full-time.
Where those buyers might have bought something in the $750,000 price range, they may be making choices to buy something in the $500,000 price range now, whether that’s because of lending rates, or a decrease in housing sale prices in the GTA.
This year, Crouch has seen some home sales fall apart because buyers couldn’t get financing.
“I think, in a lot of those cases, the bank looked at the purchase price and said ‘we don’t think that house is worth that money and we’re not going to mortgage it,’” said Crouch.
However, said Crouch, there will always be those people with so much money, they don’t care about lending rates, average sale prices, or even list prices.
His office recently sold a waterfront property in Thornbury for $1.8 million, which was $550,000 over asking price. The owners plan on tearing down the cottage on the property to build their own unit.
But sales like that are the exception, not the rule. According to MLS data compiled by Crouch, there have been 80 sales over $1 million in the Georgian Triangle Region. There were another 79 in the $800,000 to $999,000 range.
The top three price ranges in the Georgian Triangle are under $300,000 (299 sold this year, 491 sold last year), $300,000 - $499,000 (765 this year and 898 sold last year) and $500,000 to $799,000 (408 this year, 444 last year).
For the most part, those homes are being sold in Collingwood and Wasaga Beach (home sales in Wasaga are almost double that of Collingwood). The town with the next highest sales (in units, not dollar value) is The Blue Mountains followed by Meaford, Grey Highlands, then Clearview.
