Is the Sault Ste. Marie housing market one of the hottest in the broader Ontario real estate sector?
While sales activity has simmered down to kick off 2022, prices have skyrocketed to an all-time high. It makes sense, considering that, according to a recent study by U-Haul in January, Sault Ste. Marie is one of the most popular cities in both the province and in the rest of the country.
The reason? Cheaper housing, the report noted.
“People were in search of cheaper housing as they worked from home. As time has passed and things are shifting closer to normal, we are starting to see that trend reverse. Ontario is still the economic centre of Canada and offers a high quality of living, thousands of job opportunities and attractive salaries.”
(And in case you’re wondering what the most popular city to move to was over the last year, it’s another northern Ontario hot-spot: North Bay, Ontario.)
Will Sault Ste. Marie maintain this growth in the coming months? It’s hard to predict, but the local real estate market had a decent start to the new year. Let’s take a look at some recent data.
A Look at the Sault Ste. Marie Housing Market
According to the Sault Ste. Marie Real Estate Board, residential property sales tumbled 2.4 per cent year-over-year in January, totalling 123 transactions.
Despite the slight drop to start 2022, home sales remained more than 20 per cent above the five-year average and 49.1 per cent above the decade-long average for the month of January.
Meanwhile, the average price in the Sault Ste. Marie Housing Market soared at an annualized rate of 33.3 per cent, to a record high $296,281 in January.
This increase could be related to the housing supply shortage in the region, in the face of high demand.
The number of new listings rose 5.4 per cent year-over-year to 136 units. However, by the end of the month, active residential listings had plunged 31.3 per cent to just 90 units. This is the lowest number of active listings in January we’ve seen in more than 30 years.
New listings sat 6.1 per cent below the five-year average, while active listings were 72 per cent below the five-year average.
Months of inventory, which represents the number of months it would take to exhaust current inventory at the present rate of sales activity, measured in at 0.7 by the end of March. This is down from one month at the same time a year ago. To put these numbers into context, the long-run average for the month of January is seven months.
The good news is that these tight housing market conditions could improve in the coming year. According to Canada Mortgage and Housing Corporation (CMHC), housing starts more than doubled in December from the previous year, with 13 unit starts. Throughout 2021, housing starts totalled 110, up from 71 in the previous year.
So, can the Sault Ste. Marie housing market sustain this momentum?
Speaking in an interview with The Sault Star, Tracey Rutkauskas, president of the Sault Ste. Marie Real Estate Board said it can be challenging to predict where prices will be in the coming months or years.
“This is a very volatile market, and it relies on so many other factors and market conditions that it is very hard to predict the future,” she told the newspaper.
At the same time, according to the 2022 Canadian Housing Market Outlook Report, markets like Sault Ste. Marie would benefit from this seller’s market.
“Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further,” stated Christopher Alexander, president of RE/MAX Canada, in the report.
Small Town Ontario Shines Bright
As noted by the U-Haul study, small towns, suburbs, and rural communities continue to shine bright in the country’s most populous province. The Ontario real estate market has plenty of places suitable for your needs. Whether you desire the sounds of nature or the hustle and bustle of the big city, a professional real estate agent can help guide you through the transaction.