Thunder Bay housing market to favour sellers in 2021, prices expected to rise 10%
The Thunder Bay housing market is primed for another seller’s market in 2021, with 2020’s inventory challenges expected to continue. Low housing supply isn’t restricted to this region, with many Ontario housing markets experiencing low supply and rising prices. In lockstep with low inventory and growing demand, the price of single-detached homes in Thunder Bay increased to $278,381 in 2020 (Jan. 1 – Oct. 31) compared to 2019’s average price of $259,553 (Jan. 1 – Dec. 31). Meanwhile, average condo price increased to $275,602 in 2020, up from $250,116 in 2019. RE/MAX expects seller’s market conditions to persist in 2021, with a 10% increase in Thunder Bay home prices, to an average of $273,308.
Thunder Bay currently has about two months of inventory, which should hold steady in 2021. Days on market are expected to decline next year.
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Who’s driving the Thunder Bay housing market?
First-time homebuyers, typically young couples, are expected to continue driving Thunder Bay’s housing market forward in 2021, with single-detached homes remaining in highest demand. Young couples will also drive move-up buyer activity next year – a segment that has been highly challenged by low supply and rising prices.
Thunder Bay has experienced rising demand for semi-rural properties, which has been a common trend across many Canadian housing markets as well as regions abroad, as homebuyers seek more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.
Activity in Thunder Bay’s luxury homes segment held steady in 2020, thanks to stable supply and demand. These conditions are expected to continue in 2021.
Thunder Bay’s hottest neighbourhoods
The three neighbourhoods in highest demand are Thunder Bay’s Northwood, Grandview and Shuniah neighbourhood in the north end, registering the highest number of sales in 2020. Buyers can expect these areas to remain hot sellers in 2021, thanks to their attractive price point.
Thunder Bay new-home construction
On the new-construction front, housing starts are generally slow in Thunder Bay, with new-home inventory and construction falling short of current demand, as is the case with resale properties. Price of brand-new homes are generally higher than their resale counterparts, and like other property segments, is expected to rise in the future.
Canadian housing market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
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Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”