Sudbury real estate market goes boom

By Wendy Bird

This past year’s hot housing market in Greater Sudbury is one reason why local realtor Fern Cormier says today’s $200,000 home is the old $100,000 home of five years ago.

“Prices went up 20 percent over 2006 and the Canada Mortgage and Housing Corporation (CMHC) is forecasting those numbers will go up at least another 10 percent in the next year,” said Cormier, who works with Royal Lepage North Heritage Realty.

“I think that’s very conservative because we haven’t seen a shift in inventory. The inventory bump that would be needed to cool prices isn’t there. The demand is outstripping supply four-or five-to-one.”

According to a housing market outlook report released recently by the CMHC, Greater Sudbury’s local economy will lead to continued growth of the city’s housing market in 2008.

“Solid nickel prices and the resulting bonuses being garnered by miners are helping the Greater Sudbury housing market set new records,” said Warren Philp, CMHC’s northern Ontario market analyst.

“Widespread job growth is attracting people to Greater Sudbury. The latest migration data shows such inflows have increased Sudbury’s population for the fourth consecutive year.”

Cormier agreed, noting that “when you look at the long term plans of Vale Inco or Xstrata Nickel, they’re not talking about making one or two year investments. They’re talking about 10-, 15-, and 20-year programs (that represent) tens of millions of dollars.

“They’re talking very openly about the fact that they’re having a hard time hiring people. The jobs they provide are very good paying jobs.”

Cormier added that from 1993 to 2000, Sudbury was well behind the provincial average in terms of housing prices, so the city is in now in a “catch-up” phase.

“Our prices and our numbers are still in line with the averages in the rest of the province,” he said.

“So, for a lot of people who think this is a bubble that’s going to burst, I don’t think so and neither does the CMHC.

There may be a stabilization (of the market) but we’re not going to see a repeat of 1993 (when the real estate market went very soft).”

Cormier said he still gets a chuckle out of watching parents who come along to shop for houses with their children in today’s hot housing market.

“It takes (the parents) a lot longer to get used to the prices than the kids because they remember when they bought a home for $60,000, and that was a nice house.

“But back then mortgage interest rates were in the double digits. Today’s interest rates are much, much lower, so in the long run their monthly payment is probably close to what mom and dad might have been paying.”

Borrowing power is much higher than it was five years ago, even for first-time homebuyers.

“It’s been a very good year for realtors across the board,” Cormier said.

“And if anything the field has become more competitive in a good market like this.”

It’s not uncommon for people to interview realtors before listing their homes.

Homes are selling quickly throughout the city, but Cormier noted that the property hot spots can be found in the South End, New Sudbury, Lively, as well as in Azilda and the Valley. The West End and Gatchell are popular with first time homebuyers.

“It’s been an encouraging year for us, as realtors,” Cormier concluded.

“Because it goes beyond that we’re earning more money. It really is a statement about our community and it instills a sense of pride — that we are worth something. There’s a lot that goes into that on a psychological level.”