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Posted On: Thursday, January 12, 2017
Navigating Collingwood's Hot Real Estate Market by Janet Lees
The past year has seen record sales and record prices for resale homes throughout Southern Georgian Bay, but nowhere is the market hotter than in Collingwood. Drive around town and you will be hard pressed to find a “for sale” sign, and when a particular lawn does sprout a sign, a “sold” sticker follows quickly, often in a matter of days.
It’s no secret that Collingwood is a desirable location in which to own a home. The four-season recreational lifestyle, walkable downtown, and proximity to water and Blue Mountain have been attracting weekenders and retirees for years.
“Collingwood is considered a ‘Primary Settlement Area’ within the Province of Ontario,” says Jen Scholte of Century 21 Millennium Brokerage. “This interest and awareness of Collingwood’s vibrancy is supporting the real estate market throughout the greater Collingwood area.” In October, Collingwood was also named the top community in Canada in which to start and grow a business by the Canadian Federation of Independent Business – the latest in a long line of “lists” that have recognized Collingwood as one of the country’s best places to live, work and play.
But that’s not the whole story. In short, Collingwood is no longer “just” a ski town or a retirement community – it is attracting a broad range of demographics with a variety of interests, and those who buy a home here tend to stay. As a result, the real estate market is booming, and there is no sign of a slowdown on the horizon.
“We hear it all the time: ‘The bubble has to burst!’ But there is no indication for now that this will happen here,” says Sherry Rioux of Clairwood Real Estate. “We have seen an influx of urbanites and retirees looking to improve their lifestyle and flee the larger centres to provide quality of life for their family in smaller resort areas. The beauty of our area is that we are within a short drive to larger centres, and even though our prices are escalating in the area, we are still very affordable compared to the GTA and surrounding areas. With Collingwood being named the number one area for small business development, we are bound to continue attracting residents, which should keep our real estate market steady.”
As we head into 2017, those thinking of buying or selling a home in Collingwood will be in for a wild ride unless they understand the current market and how to navigate it successfully. With that in mind, On The Bay asked a group of local realtors to put the Collingwood market into perspective and provide some guidance. Following are their insights, tips and suggestions to make today’s real estate market work for you.
Supply & Demand
With a growing number of retirees and young families looking for an active, four-season lifestyle, homes in Collingwood are always in relatively high demand. However, while it may seem like demand has skyrocketed over the past year, in reality demand has grown only marginally in 2016. What is really driving the market is supply (inventory of homes for sale), which has decreased. A seller’s market means there are fewer homes for sale than there are interested buyers, so if supply is low, demand doesn’t need to change much to create seller’s market conditions.
“It is important to consider that demand hasn’t really changed dramatically, but the lack of inventory has resulted in buyers having to step to the plate and make a decision as to whether this is the best time to buy, and they don’t have much time to make the decision when they see a property that they like,” says Chris Keleher, broker with Royal LePage Locations North.
With fewer homes on the market, competition for the remaining homes is fierce, and can even result in a multiple offer scenario. “This was a foreign concept in our local market just a few short months ago, but now is a regular occurrence,” says Rioux. “We had heard of this frenzy in the Toronto and larger urban centers, but never experienced it locally; now we are seeing bidding wars, listings being put on market with specific time periods to accept offers, and prices paid to obtain a property that are sky high.” In one example, a condo in Lighthouse Point recently sold for $58,000 over asking price.
The past year has seen average home prices in Collingwood rise to $428,515 from $364,547 in 2015 – an increase of 17.5 per cent. Of those homes sold in Collingwood in October, almost half sold at or over the asking price. For sellers this is great news; for buyers, it means being strategic, acting quickly, knowing your limits, and not getting too attached before the deal is done.
Besides price, being the successful bidder often means making an offer with few or no conditions – no home inspections, no financing conditions, and certainly no condition on selling your current home. This can be stressful and even dangerous as a buyer, so it’s important to know the risks and not become so focused on being the winning bidder that you overextend yourself.
“If you’re a buyer, now is the time to get pre-approved by your bank or lender, and make sure you get all your paperwork to the lender well in advance,” advises Rioux. “A verbal confirmation of approval is not good enough. Begin the process well in advance so you don’t lose your dream home due to financing falling through. If you have a property to sell before you buy, then be aware that a condition based on the sale of your home in order to purchase can be very tricky in this market, and can be the difference between securing a successful transaction or not.”
For sellers, the challenge is to remain focused and not get too greedy – an overpriced home is likely to stay on the market longer and might miss out on the high level of interest newer listings typically garner. On the other hand, if your home is priced right and the offers come fast and furious, you may have to make snap decisions, so know your bottom line and be prepared.
“Finally, if you are selling in a hot market and you have to buy in that same market, you may find a short supply of product at elevated prices,” says Rioux. “The ideal situation can occur for those who have a vacation property to sell and then are willing to wait to buy when the market drops.”
When that might be, however, is anyone’s guess. “With the growing popularity of Collingwood, demand could in fact rise while inventory stays low, making the competition for properties even higher in 2017,” says Keleher.
Collingwood’s downtown core – from Sixth Street to the waterfront and Minnesota Street to Cedar Street – is a particularly hot market where demand is already high. “In some cases, properties one or two streets over from Cedar and Minnesota are starting to attract more buyers at an increasing rate,” says Ron Picot of Chestnut Park Real Estate. The higher demand combined with lack of homes for sale makes the downtown core arguably the most competitive market in Southern Georgian Bay.
“The resulting impact on prices of the increased demand is that a standard 66-foot by 165-foot lot in the core of Collingwood has increased in price from approximately $120,000 four years ago to $275,000 today, and could reach or exceed $300,000 for land value,” says Picot. “With the demand being high, properties are being purchased with the housing on them and being torn down in many cases and replaced with modern larger square footage homes.”
(It’s worth noting that a large portion of the downtown core falls within the Heritage Conservation District, which has strict guidelines for alterations and new construction, so if your plan is to buy in downtown Collingwood and tear down an existing home, check with the town’s planning department before you buy.)
The popularity of the core area is being driven by a perfect storm of demographic groups who are increasingly interested in living centrally. First among those is “boomer” buyers who are moving to Collingwood from the GTA and Golden Horseshoe who want the convenience of being able to walk to shopping, dining and service providers while living in a relatively low-density community. Then there are the “seniors who are moving into Collingwood’s downtown core from the countryside surrounding Collingwood and from the Town of Blue Mountains for the same reason the GTA boomers are moving here and also because their friends are moving into Collingwood,” according to Picot.
But while boomers and seniors might be expected to migrate toward the centre of town, another surprising demographic is also gravitating toward the downtown core: those in the 30 to 50 age bracket, whom Picot calls “Work from Anywhere People.”
“These ‘Work from Anywhere People’ have a big impact on making Collingwood the number one municipality in Canada for entrepreneurial business,” says Picot. “Work from Anywhere People are important to Collingwood’s growth and economic strength, as part of the growing younger demographic of successful individuals, typically with children, who enrich our community mix and permit Collingwood to stand out in contrast to many smaller communities where a significant percentage of the younger demographic is departing for larger urban centres.”
Downtown Collingwood’s chic, friendly vibe with an active lifestyle is also attracting young professionals, says Jen Scholte. “We see younger doctors, dentists, engineers, lawyers and accountants considering Collingwood home. They can live, work and play which is ‘naturally attractive’ as a lifestyle for the millennial professional.”
She adds, “Inventory is very low and finding a small bungalow for under $400,000 with a garage in downtown Collingwood seems impossible; however, it remains one of the desires on almost every wish list we see.”
While downtown Collingwood properties are scarce and in high demand, properties in the wider Town of Collingwood priced in the $200,000 to $600,000 range are also highly sought after, so if you are looking to buy in either of these categories, a good buyer plan is key.
“Our clients want to purchase property in Collingwood so they can ‘get in the market’ while prices are reasonable,” says Scholte. “This investment in either a rental or land can then be reallocated to a home or recreational property in the future.”
How should you prepare for the 2017 market? “If you are thinking about listing in the spring, take the winter season to do your renovations, paint touch-ups and decluttering.,” advises Rioux. “You might even consider having your home pre-inspected so that you have time over the winter to make any repairs and fix deficiencies that could come out during a home inspection. This can save time and money when offers begin to flow in.”
While the Collingwood market isn’t quite as competitive as Toronto, where people are literally lining up to make offers in a particular school district or a desirable area, as a seller you should be prepared for a flood of showings as soon as your home hits the market.
“And if you are accepting offers on a specific date and time, be sure to discuss how you will deal with bully offers and multiple offer situations,” adds Rioux. “With a market this hot, it is important to be prepared to vacate your home sooner rather than later, and have a back-up plan for where you can reside temporarily.”
If you’re thinking of jumping into the Collingwood market as a buyer, start working with your bank or lender to get pre-approved for a mortgage, do your research to find out what area of town best suits your needs and lifestyle, and find a knowledgeable, experienced realtor who can help you navigate today’s challenging market. This is not the time to go it alone.
“It is so dramatically important for buyers to have the correct representation working for them to make sure they have the best opportunity to acquire the property that suits them and their family,” says Keleher. There are so many nuances to consider as the market changes, and it is important to work with a professional you trust to guide you through these nuances and make sure you are able to benefit in the best possible way from their experience and knowledge.” ?