The limping economy may be breathing some cold air onto the red-hot Sudbury housing market, but high-end activity continues to elicit cautious optimism from the city's real estate players.
Although sales have fallen 11 per cent around Sudbury, reaching 2,275 sales year to date as compared to the 2,528 sales in 2007, resale prices have continued to spiral upwards.
November 2008 prices rose more than 17 per cent, reaching $185,531 in 2007 to $217,487 this year.
Bidding wars have since died down considerably as the once-standard trend of multiple offers on a single listing has dropped off.
"I have clients that are holding off on buying because they find it too absurd, too much hype," says Fran Lariviere, president of the Sudbury Real Estate Board and a broker with Remax Crown Realty.
"They have friends who bought the year before for $200,000 and now they're looking at $250,000 and I can understand why they might step back. But we're still doing really well here in town, and I'm feeling pretty good about what we're likely to see in 2009."
Forecasts from the Canadian Mortgage and Housing Corporation (CMHC) indicate that the double-digit percentage price increases seen over the last few years will begin dip in accordance with the economy. However, prices are still projected to increase another 4.5 per cent over the coming year.
As brokers begin to educate sellers on their new position in the market, the fever of overestimating the true value of one's home has calmed. In fact, many sales through the end of 2008 are a result of this readjustment, says Lariviere.
For now, though, higher-end homes which are reasonably priced continue to be a real igniter for the market.
As an example, Lariviere says that in New Sudbury, there were 489 sales in the higher-end range of $260,000 to $350,000. This represents nearly 100 more sales than in the same range in 2007, and more than twice as many sales than in the "average" range of $200,000 to $220,000.
This same trend is reflected in the custom housing market, according to Paul Corsi, the newly-elected president of the Sudbury and District Home Builders Association.
At an average of $450,000, custom homes are still moving briskly, and even firms that are building in the $250,000 to $300,000 range are having difficulty keeping up with demand, he says.
More than 600 new housing starts were seen through 2008, as compared to the 587 in 2007. This contrasts strongly with the level of activity in 2001, which bore 191 new starts.
"This year was sensational, needless to say," says Corsi, who also serves as project manager for J. Corsi Developments Inc. "It's been really tough to keep pace, and I think we're all just taking a deep breath now that the summer is over."
While some general wariness hangs over the sector, there are no blatant red flags for the future of local housing construction. In fact, Corsi says there's still such a high level of construction activity in the city that crews sometimes have to be brought in from other cities across Ontario for certain projects.
Much of this interest may be attributed to the overall lower price of housing in the city as compared to the provincial and national averages, he says. Sale prices in Ontario and across Canada are expected to reach an average of $306,500 for 2008.
Factor in the the four-laning of Highway 69 and the addition of things like the Northern Ontario School of Medicine, and Sudbury continues to remain an attractive market, says Corsi.
Lariviere agrees, and although she thinks some of the bloom has come off the rose, she's quick to provide the situation with some perspective.
"I've been doing this for 20 years, and I didn't think prices could continue up the way they've been for the last little while. To me, this is still a very good market."
www.sudburyrealestateboard.on.ca
www.sudburyhomebuilders.com
www.cmhc-schl.gc.ca
