All around Ontario there is talk of a “housing price bubble” and a “hot seller’s market”, along with the fear of prices collapsing. In Sarnia, Lambton we have only seen a slight increase in home values and solid house sales. Some people are wondering why prices are going up in our area, when our population seems to be stable with near zero growth. There are several factors influencing the local real estate market, including retirees coming in from other areas, as well as newcomers replacing our retiring workforce. This is increasing home values locally, but not pushing them to extreme increases like we are seeing in the GTA (greater Toronto Area). If you draw a circle from the center of the GTA reaching out 180 miles or 290 kilometers to Sarnia-Lambton, the prices go from extremely high there to moderately low here . People that are no longer in need of close proximately to GTA jobs, either by working at home or retirement, are cashing out of their home’s equity there, and buying elsewhere in the circle. Factors such as mass transportation routes, health care facilities, social and entertainment amenities, and moderate climate are all influence people’s locational requirements out side of employment centers. Extreme increases in home values are driven by people moving into an area and causing shortages in housing stock, therefore pushing prices up. The GTA and Vancouver are the destination of most of the migration to Canada from all over the world, thus causing extreme price increases in those markets. The respective provincial governments, in an attempt to slow down the price increases, have imposed new taxes and regulations for these areas. They are just slowing down the upward price pressure, but not solving the many problems caused by all these extra people coming in.
Traditionally home prices fall or collapse when economic times turn downwards, and jobless people can no longer afford their homes, or increasing interest rates make home ownership unaffordable, forcing people to dump their homes . Sarnia-Lambton real estate values are not being affected by an extreme influx of people or major new jobs growth. Our modest gains in value are from modest gains in people coming in for various reasons. We can conclude that if there is a major correction in home values in the large urban centers , the smaller centers like Sarnia - Lambton won’t be as severely affected. It is still important to do your home work before you buy, and not get caught up with emotional buying or being pushed into an overpriced house, because you think the market is hot and you may miss out. We will continue to experience modest price gains to housing because we are so low compared to the rest of the province. Be cautious and fully understand the market value of what you are buying. The help of an experienced Broker, with your best interests in mind, is your best bet in ensuring that your purchase is the right one for you and your family at the right time.
If you have any questions or have a topic you would like to addressed, please email me or call 519 383 2566