Home prices expected to continue climb in 2022
Think housing prices in Pelham might abate just a smidgin in 2022? Think again.
The number of homes on the market may be down from last year, but the prices are up. Way up.
A house recently offered for sale in Fonthill, listed below $900,000, sold for $1.2 million.
Multiple Listing Service (MLS) data indicates that 16 homes were sold in Pelham in January 2021 at an average price of $844,000. In January of 2022, 13 sold at an average price of $1.074 million, a jump of 27 percent.
Across Niagara, house sales were down ten percent this January compared to January last year, but the average selling price skyrocketed by 33 percent to $749,000.
Niagara Association of Realtors (NAR) president Doug Rempel, of Bosley Real Estate in Niagara on the Lake, represents NAR’s 1400 members. He laughs when he reads pronouncements from media pundits who suggest that a housing bubble is about to burst.
“Nothing could be farther from reality,” said Rempel. “2021 surpassed our expectations, and there are solid indications that we should be optimistic and confident about sales in 2022.”
Interest rates on mortgages, one of the best influencers of real estate sales, are projected to stay historically low, even if they rise slightly in the second and third quarters of 2022. The supply of homes on the market may continue to wane, but Niagara remains an attractive retirement option for buyers from the GTA and other parts of the province where housing is more expensive. And with low supply and high demand, Rempel thinks that prices will continue their upward trend, reaching possibly a ten percent increase from 2021. The pandemic caused some homeowners to delay stepping into the market, but as winter fades, many realtors expect to see growth in supply, he said.
“I think that we’re going to see much more multi-generational living in the future,” said Rempel. “It's nothing new, because historically that was the pioneer experience, and practised by many new arrivals to the country. Baby Boomers, who traditionally have downsized as they age, are choosing to renovate the homes, making room for either family members or caregivers. Millennials are starting families and preferring home ownership over rentals, and are competing for a much reduced pool of properties.”
Millennials are starting families and preferring home ownership over rentals, and are competing for a much reduced pool of properties
Housing affordability has been at crisis levels for the past couple years, prompting Ontario Premier Doug Ford to appoint a task force to deal with the issue. A boost in the supply of homes is part of the solution, and the government has proclaimed that it is committed to building 1.5 million new homes over the next ten years.
Another potential panacea is to relax certain municipal zoning rules in urban neighbourhoods, which currently ban anything but single-family homes. Though this approach helps municipalities reach provincial density targets, it prompts pushback from many residents who feel that the move would negatively affect the character of their residential area.
Last fall, Prime Minister and Liberal Leader Justin Trudeau, in full election mode, said that his party would ban blind-bidding on home sales, a practise that some believe drives up prices. The Canadian Real Estate Association (CREA) immediately fired back at the proposal, arguing that a ban would infringe on the rights of sellers, and that housing prices are driven fundamentally by supply and demand.
Pelham has the second highest overall housing prices in the region, topped only by Niagara-on-the-Lake. It comes as no surprise to Rempel, who sees Pelham as a very desirable community.
“I remember many years ago, friends who worked in customer services in the aviation industry said that a whole group of Air Canada pilots and support staff had discovered Fonthill, and had established something of a new-resident beachhead,” said Rempel. “My wife and I came to visit, and really enjoyed the ambiance.”
