Urban house hunters increase real estate prices in small town southwestern Ontario
The urban exodus has meant massive growth in small towns across the peninsula
Small towns across southwestern Ontario are seeing big increases in housing prices due to house hunters from the city.
Drawn to the single family home that has eluded home buyers in the communities where they live, many are now looking to exurban and rural communities.
Big city buyers scouring real estate listings in places like St Marys, Mitchell, Plympton-Wyoming and Mount Brydges are snapping up the available housing and pushing prices up with it.
"We're certainly not on par with Toronto or even Kitchener-Waterloo as far as how high prices are going but we're certainly getting there," said Sue Fowler, the co-owner of Peak Select Realty Inc in St Marys, Ont.
'We've never seen anything like this'
The veteran real estate agent has seen the price of an average home rise from about $300,000 a decade ago to $626,842 as of November 2021, according to data from the Huron Perth Assocation of Realtors.
In the last two years alone, prices have gone up 66.7 per cent, with homes selling in an average of 11 days at an average 108 per cent of their listed price.
"We've never seen anything like this. It's incredible. It's crazy," she said. "Anything that's priced under $400, 000 right now is probably a fixer-upper."
However, finding a fixer-upper is a tall order, Fowler said on Monday there was only one resale home on the market in St. Marys, with availability at an all time low last year. Most people who already live in town are planning on staying put, which means anyone who wants to move into the community of 7,000 is forced to build.
'A real building boom'
"There's a real building boom here. We have at least four large developments where houses are going up and selling as fast as the architects can do the drawings."
"We need more resale homes and I don't think there's a community out there that can't say the same thing."
With the rise in remote work, exurban and rural areas are starting to look more appealing, leading more people to choose the close-knit neighbourhoods of small communities over the big city.
Ken Patterson, a broker at Exit Realty Twin Bridges based in Sarnia, Ont., knows that first-hand. A transplant himself, he moved from Brampton to Mount Brydges, Ont., in 2018.
"We're seeing people move to the smaller centres to get out of the city, which has caused, obviously, prices to rise."
Due to unprecedented demand, Patterson has seen home prices in Strathroy-Caradoc rise anywhere from 50 to 80 per cent since he came to the community three years ago.
"It's a ripple effect that's inevitable. We've seen it right ot the borders of our province, right to Windsor and right to Sarnia," he said. "Obviously, that's not a pace that is sustainable."
Just as notable is the pace of new construction in the area, which isn't expected to slow down anytime soon, according to projections from Middlesex County.
In a report written by economists from Watson and Associates, the community will need 680 new homes to built each year just to keep pace with the expected rate of population growth.
Even with more homes, Patterson said prices aren't likely to come down, especially if locals have to compete with house hunters from the big city.
"They value things differently than people in smaller centres. They sell their million dollar semi-detached in Toronto or the GTA and they see a house for $320,000, $470,000 and now $740,000. They still seem affordable to people."