The start of the global COVID-19 pandemic almost one year ago likely incited more economic predictions and forecasts than any other event in our collective lives.
Forecasts on interest rates, unemployment, and general economic activity have been as common as weather predictions. We should remember the warnings that were made a month ago for an early to mid-February polar vortex across Canada. Someone was accurate and other areas felt the blast far worse than us.
Another market that analysts have been observing and subsequently forecasting for the past year is housing, where most indicators are presenting highly intriguing trends for rural and urban municipalities. Statistics Canada recently reported that from July 2019 to July 2020 both Montreal and Toronto witnessed a record exodus of residents to smaller centres in search of more affordable home prices.
The interesting observation is people were probably leaving before the pandemic started in March of 2020. Toronto lost over 50,000 people while the population of Oshawa grew by 2.1 percent, the highest rate in Canada followed closely by Halifax and the Region of Waterloo at 2 percent.
Any predictions of COVID-19 housing price decreases have certainly not materialized across the local market – the increases have been rather astounding. In January 2021, the average price in Waterloo Region for a detached home was $854,000, remarkably close to seven figures and almost 30 percent higher than twelve months ago.
Nicole Pohl of the Kitchener-Waterloo Association of Realtors called our current situation “mind-blowing.” An average seller will get one to two dozen competitive bids and usually closes at 15 percent over the asking price. Overall, supply is not being maintained with the demand primarily originating from the Greater Toronto Area.
Regardless of recent trends and analysis, one simple rule for the real estate market remains. If you are buying, particularly an initial home purchase, rising prices are not good. If you are selling, you find a totally different narrative.
More changes across the local and national housing markets over the next year are likely, however current conditions clearly indicate the Region of Waterloo is a great place to reside.
Written by Art Sinclair