The condo market in Barrie went through a 10-day slow period around Thanksgiving, but ramped right back up in November.
Last month, there were a total of 30 condominiums that sold in Barrie, including 21 condo apartments and nine condo townhouses.
The average sale price for a condo apartment in November was $574,043. This was a 26.5 per cent increase from November 2020. Units were selling for 102.5 per cent of their list price, most with multiple offers on the table especially for those that were in a more affordable price bracket or had a premium view.
The condo townhouse sector has completely soared. The average sale price for a condo townhouse last month increased by 34 per cent from November 2020, creating a new record for this sector of the market in Barrie. The average sale price in November was $506,167, the first time it has surpassed a half-million.
Because there has been a huge shortage in freehold houses, demand has increased for condo townhouse. With the increase in demand for these types of units, multiple offers have been the norm causing units to sell for 109.7 per cent of their list price.
The question people keep asking is, will there be a correction?
What do we need for a market correction to occur?
1. We need to see a ‘price bubble’ – that is usually defined as double digit price increases in three consecutive years.
2. We need to see people selling their properties at any price – because of rising mortgage arrears, caused by a spike in interest rates or a jump in job losses.
3. We need to see properties not selling located in areas where no one wants to live.
Note: Barrie is not currently experiencing any of the above.
What do we need for a market pause to occur?
A market pause occurs when people become influenced by outside factors but the underlying economic fundamentals have remained unchanged.
Example No. 1 – 9/11
When terrorist planes crashed into the World Trade Centre, many believed it was not safe to live in highrises. Condo sales declined significantly for three to four months.
Example No. 2 – SARS epidemic
Tourism to Toronto decreased and people refrained from viewing properties. Again, the decline in sales lasted for several months.
Example No. 3 – American financial crisis in 2008
When the real estate market crashed in the U.S., Canada followed shortly after. This market pause lasted about eight months.
Example No. 4 – Beginning of the COVID-19 pandemic
When the world went into a state of emergency in March 2020, people were to stay home and only leave their homes if it was absolutely necessary. There was uncertainty in the real-estate market as there were so many unknowns. This caused a market pause that lasted three months.
As many people compare COVID to SARS, they might think that the markets are the same. Yes, the pandemic is, in fact, an outside factor influencing the market, but the demand to purchase real estate and the desire for viewing properties has not declined in Barrie.
Barrie has been a growing city for quite some time now and the pandemic has simply expedited the desire to move out of the GTA. If buyer demand from the GTA slows down, this could bring supply and demand closer together, but there needs to be a substantial decrease in demand for it to create a market pause.
If interest rates rise in the new year, demand for property might decrease due to affordability as this could influence people’s budgets. This might pull more people out of the housing sector and into the Barrie condo market, causing demand for condos to remain high.
The market that Barrie is currently in is challenging for buyers. However, with the shortage of condos on the market, it is prime time for sellers to list their homes for sale. The condo market is less seasonal than the freehold market and with inventory being so low, condos are selling for record prices.
There are currently 15 condominium units for sale in Barrie, including 12 condo apartments and three condo townhouses, and only 47 houses.
