BY NICK STEWART
The decade-long surge of North Bay’s red-hot housing market has continued through 2006, which saw the second-highest starts since 1992 and the strongest sale numbers on record.
According to a report released by the Canadian Mortgage and Housing Corporation (CMHC) on Feb. 2, North Bay saw 1,446 housing sales in 2006.
Although the average re-sale cost of a house increased from $146,066 in 2005 to $160,106 in 2006, the CMHC’s Northern Ontario Market Analyst says this number can be deceiving.
“There’s actually more activity in the upper end of the market than these numbers would indicate,” says Warren Philp.
“A higher, undefined number of more expensive sales are skewing the average higher than it would be.”
The city also saw 185 new housing starts in 2006, which since 1992 has only been topped by the 2005 total of 220.
However, the president of the North Bay Real Estate Board says a healthy Northern Ontario economy is driving up the cost of construction and materials, reducing the potential number of new homes.
“Our biggest problem is that new housing starts can be $250,000 and up,” says Dave Wylie.
“This makes the construction of new homes very prohibitive for first-time buyers, which is why they so often end up turning to the resale market.”
In turn, this has also contributed to the increase in the cost of mid-range homes.
The strength of the market is such that even the time required to sell a home has dropped. Wylie estimates that a house, normally on the market from 90 to 120 days, would be sold after only 30 to 45 days in recent years.
As supply tightens and average prices rise, more and more people are turning to condominiums to meet their housing needs, increasing values in that sector as well. Condominiums that sold for $85,000 three years ago are now selling in the $120,000 to $140,000 range, Wylie says.
“Before, they’d be on the market and sit for a long time, but now they’re coming on the market, and if they’re in a good building in a nice location, they’re selling right off. Once again, we’re into the trap because the resale will continue to rise because the new condos are getting to be $240,000 and up. The only thing is that the condo market is largely targeted towards, how do I put this in a politically correct way, the more mature buyer.”
As a barometer of how the housing market may turn out in 2007, Wylie points to January, which is traditionally viewed as a slow month.
Last month105 houses were sold, compared to 85 in the same month in 2006, and 66 in January 2005.
January’s sales totaled $15,830,000, a 33 per cent increase over the 2006 total of $11,890,000. The largest amount of activity took place in the mid-range of prices, which Wylie says is between $139,000 and $179,000. In the upper range, more than 15 houses worth in excess of $300,000 were sold.
“So far, it looks like a strong market,” Wylie says.
Philp agrees, attributing North Bay’s soaring housing boom to the city’s strong economy, which is tied to a variety of industries and is expected to stay strong in 2007.
“I see North Bay as the most diverse economy, not as reliant on conventional resources such as Sault Ste. Marie, Sudbury, Timmins and Thunder Bay, which has held its market in good stead,” says Philp. “All in all, I’m quite bullish in what I see happening in North Bay in the coming year.”
