On a cold day in January last year, Michael Perkins and Christopher Charles ventured from Toronto to Innisfil, Ontario to view a newly listed property. When they arrived, the Victorian parsonage, adorned with snow-covered evergreen boughs and twinkling lights, appeared in the darkness like a scene from a romantic Christmas comedy.
The acre of land overlooking farmers’ fields was also a big draw for the couple, who like many city dwellers struggled to socially distance amid the strict pandemic restrictions in place at the time.
They knew they had to act quickly to have a chance of buying the house at the asking price of $999,000.
“The property has parking for 12 cars and the driveway was full,” says Perkins. “The market was very hot out of town at the time.”
The couple quickly submitted an offer for $1.1 million and gave sellers two hours to respond. “It was a very Toronto offer, for sure,” Perkins says of the bullying offer. “We were very lucky that they accepted.”
Mr. Perkins and Mr. Charles were part of a wave of people living in dense urban centers who uprooted their lives to find bigger homes with more abundant outdoor spaces – a response to a pandemic that had kept them in the lurch. narrow inside and isolated from the world. The phenomenon has been partly blamed on house price inflation in smaller communities and rural areas, including places where the market has been disrupted in the meantime.
But by the time the depths of winter arrived a year later, the couple began to broach a new subject: country life was turning out to be less idyllic than they had anticipated. They are now part of a cohort of people going the other way, abandoning their brief flirtation with a quieter life at a time when they thought the price of their country home was still high.
“I enjoy the city more now than even after living outside,” says Mr Perkins. “We are part of a larger group that left at the start of the pandemic and realize how much they miss the city.”
Mr. Perkins brings up the restaurant scene in Toronto, like their old haunts in Greektown, and the possibility of impromptu get-togethers like an after-work drink or dinner. “It just doesn’t work when you live an hour away.”
Both also felt the isolation of the quiet country road.
“There are no passers-by in front of the house. Nobody walks down the street with their golden retriever,” says Perkins. “There is no place to meet people. There’s no public park where we all hang out, or even a cafe.
Dr. Charles is a doctor who works long hours at the Royal Victoria Regional Health Center in Barrie. The couple found their social life revolving around the hospital.
They also loved hosting friends from Toronto who came to visit, but gatherings required a lot of planning. With no gourmet shops or Greek bakeries, all meal preparation had to be done at home.
“There’s a lot of pub food here,” says Mr Perkins.
Real estate agents in outer suburbs and riverside towns say they hear the same laments more often these days.
Many shoppers have come to terms with their newfound access to forest trails and fresh air, and can’t imagine returning to Toronto’s crowded sidewalks and congested roads. But some agents who spent the first two years of the pandemic advising townspeople about the ins and outs of septic tanks, ice jams and unreliable WiFi are listing the same properties again.
Shawn Lackie, realtor at Coldwell Banker RMR, said he believes the flight from major cities has paved the way for the current housing downturn. The Canadian housing market has seen corrections in the past, but this one is different, he says.
“I’ve never seen him before; because people could work from home, all values in outlying areas spiked,” says Lackie. “Then all of a sudden, culture shock set in.”
Mr. Lackie, based in Port Perry, Ont., worked with buyers in Toronto early in the pandemic. People migrated to towns like Bobcaygeon and Lindsay in the Kawartha Lakes in search of backyards for their newly adopted dogs. He warned some young city dwellers of the lifestyle change they would face.
Eventually they realized the town had no Starbucks and the bars closed at 11 p.m.
Lackie says high gas prices are forcing employees who have to return to their offices in Toronto to rethink their commute, while higher interest rates are making large mortgages difficult to pay off.
He’s had conversations with quite a few potential sellers who are considering a return to town. The dilemma many have now, he says, is that they will likely lose money if they try to sell a property they bought when the bidding wars were raging. Sales are slow and months of inventory are piling up.
“Get used to commuting” is his best advice to homeowners caught in this situation. Lackie expects listings to increase as more homeowners face financial hardship.
The trends can be seen in the numbers from the Canadian Real Estate Association. Many of the regions that saw the most dramatic gains in sales and house prices at the start of the pandemic are now seeing the steepest declines.
Bank of Nova Scotia economist Farah Omran sees a recalibration of the housing market taking place across Canada.
The most recent data shows single-family homes led the price drop, she notes. In the single-detached segment, sales in the suburbs fell more than in the downtown area.
“It makes sense, as a reversal of pandemic conditions that led to significant price appreciation in this segment is now underway,” Ms. Omran said.
The biggest declines in sales are occurring in regions that have seen the greatest divergence between price and revenue, she adds.
Of the 31 markets tracked by Scotiabank, St. Catharines, Ont., had the lowest sales-to-listings ratio at 32.5 in June, followed by Barrie at 32.7. London, Ont. is third at 38.7.
In hard-hit St. Catharines, the average price fell 10.2% in June compared to June 2021.
In Innisfil, Mr. Perkins feels very lucky that he and his partner were able to sell the house recently and turn a profit on the trade. He had spent many months of the pandemic overseeing the renovation of the 150-year-old house.
The property had been well-maintained by previous owners, Mr Perkins says, but it needed a little sprucing up. The works included upgrading the electrical service, adding new bathrooms and renovating the curved Victorian staircase.
During the darkest days of January and February of this year, the couple began talking about their return to Toronto.
After seeing house prices skyrocket in smaller centres, they thought they could put the equity into buying a small house in Toronto. They put the house up for sale in July and sold it for $1.725 million.
Dr. Charles will continue to work in Barrie and the couple are looking for a home in Cabbagetown or their former neighborhood of Riverdale. He decided to turn his experience in home renovations into a career in real estate, specializing in the century-old homes that are more prevalent in Toronto.
And with no clear forecast for how long the real estate market in Canada will continue to decline, Perkins believes an investment in property in the city is more solid in the long term.
“Toronto will be much more stable than those smaller markets.”
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