The Christmas trees are down, the New Years’ Eve noisemakers are put away for another year and the numbers are showing how Real Estate finished 2021.
2021 was a year that took everyone by surprise. Beginning with a lockdown, more lockdowns, a new variant that seems to be sweeping across our country to a banner year for home sales.
Here is a quick breakdown of year-over-year changes for the most popular types of homes in Oshawa, Whitby, and Clarington.
Oshawa:
Detached Homes:
Dec/20 $724,000
Dec/21 $1,035,000
+43% increase (year over year)
Semi-Detached:
Dec/20 $593,500
Dec/21 $821,500
+38% increase
Townhomes:
Dec/20 $635,300
Dec/21 $828,700
+30% increase
Clarington:
Detached Homes:
Dec/20 $787,600
Dec/21 $1,109,000
+41% increase (year over year)
Townhomes:
Dec/20 $651,300
Dec/21 $887,600
+36% increase
Whitby:
Detached Homes:
Dec/20 $945,800
Dec/21 $1,259,300
+33% increase (year over year)
Townhomes:
Dec/20 $729,800
Dec/21 $1,013,000
+39% increase
When you look across the Durham Region homes of all types increased an average of 33% from $778,000 to and a new high of $1,033,000!
For someone who is in the market every day, these numbers are not shocking. I see them increasing daily, however Real Estate is like the computer business, when you are not interested in buying a new piece of technology, you really don’t pay attention to the costs increasing (or decreasing.) However, for people who move every 5 or 10 years tuning into the changes can be a bit of a shock.
One upside is (and please do not take this the wrong way, it is just the reality of where we are currently) that buying a home in the market is still marginally more expensive to carry than the rents locally.
Here is an example; Semi-detached homes can be found in Oshawa for around $800,000. With a 10% down payment, the cost to carry the home, mortgage, and taxes, is around $3,300/mth. A quick check to compare renting a similar home in Oshawa shows that rents would run between $2,700 – $2,900. For around $400 extra a month a Buyer could be living in their own home. Further research reveals that rentals have jumped almost as much as home prices have. The average basement apartment is in the $1,700/mth range and an upper main floor flat is around $2,200.
Assuming the Buyer finds a home for $800,000 and moves in this month. How will buying now vs. buying later affect them?
This brings us to the predictions of Royal Lepage and Re/max. Both companies have released reports predicting how the prices will trend in 2022. A word of warning, predictions are opinions, educated opinions, however, they are done using the “crystal ball” approach, similar to what I do, when I offer my thoughts on where prices are heading.
Here is what they had to say:
Remax – Home prices in Canada will increase by 9.2% in 2022 and the Durham region will rise by 7%.
Royal Lepage – Home prices in the GTA (they did not break down areas) will rise by 11%.
If we revisit predictions for 2021 both of the companies forecasted that Canadian Real Estate prices would increase by 9% (prices actually increased by around 20%.) Again, these are just educated guesses.
So, their crystal balls indicate the semi-detached home we just bought for $800,000 will be worth between $856,000 and $888,000.
If the home is valued at $888,000 that means that after a year the home has increased $88,000, plus the Buyer will have paid off about $22,000 in principle, totaling an increase of $100,000 in equity. This is why buying now is so critically important.
If we look at how 2021 started off and used it as a guide for this early part of the year, buyers started buying early and the bidding pushed the prices up. This was coupled with rock-bottom levels of homes for sale. The result was in Oshawa, Whitby, and Clarington, the average detached home increased in value 12% for the month of January alone. Homes in Whitby jumped by $115,000 during the single month. As we begin 2022, we are starting the year off with even lower inventory than last year, indicating that the prices may do something similar.
My 2022 forecast looks something like this – by year-end detached homes will be in this range:
Oshawa – an increase of 22% Detached home prices $1,263,000
Clarington – an increase of 18% Detached home prices $1,308,000
Whitby – an increase of 15% Detached home prices $1,448,000
Lofty predictions when I look at them. I feel Oshawa has an opportunity to increase more due to the fact that the prices have always been lower than Whitby and Clarington. The outlier is the government doing something to shock the market into some form of a decline, as they did in 2017. For Sellers, it might be worth considering selling, knowing what the values are currently.
As I said before, opinions are like… um,… fingers. Everyone has them, and personally, I am sitting with 2 thumbs up. Let’s revisit my predictions in February to see how this month shapes up.
If you have any questions about the above information, or if you are in need of selling or buying I can be reached at linday@buyselllove.ca