The rise in interest rates has caused “turbulence” in the Sarnia-area real estate market, says the president of the Sarnia-Lambton Real Estate Board.
The rise in interest rates has caused “turbulence” in the Sarnia-area real estate market, says the president of the Sarnia-Lambton Real Estate Board.
“Those changes have created some uncertainty with buyers who are just questioning when interest rates are going to stop” rising, said board president Rob Longo.
The number of real estate sales in Lambton County slowed in June to a total of 150, compared to 187 the previous month. That’s down about 20 per cent from June 2021.
At the same time, there were 320 new listings in June. That’s up from the 258 new listings locally in May and 90 per cent over last June, Longo said.
“There is now a lot of inventory out there” and buyers can “take their time, look around,” which is a return to more of a “traditional way of buying real estate,” he said.
Longo said the local real estate market appears to be having a “soft landing” after an extended seller’s market, where prices across the country climbed and the supply of homes was tight. Homes sold quickly and often attracted bids over the asking price in recent years, but real estate has cooled recently and some markets have seen prices drop.
“Some of the areas outside of the (Greater Toronto Area) have seen more of a steep decline in pricing and in the market,” Longo said. “We haven’t seen that here locally, although we didn’t also see the sharp incline that they saw” when home prices were rising.
The Sarnia area had a “healthy” increase in prices over the past few years, “but it wasn’t as extreme” as some other markets,” Longo said, “so we didn’t have quite the same decline on the other side .”
In June, the year-to-date median home price in the Sarnia area was $520,750. That was a 20 per cent hike over last year, Longo said.
“What we’ve seen here locally has been more slowing of activity, not necessarily changing in pricing,” he said.
Homes were on the market for an average of eight days and sold for 101 per cent of asking prices in June, according to the board’s monthly report.
Interest rates jumped a full percentage point to 2.5 per cent this week. It was the fourth recent increase by the Bank of Canada in its efforts to fight inflation.
“I’m expecting, hopefully, a rate hold at the next announcement,” Longo said. “Hopefully, this will be the last round of rate increases and people can sort of settle out at that point.”
The Sarnia area was still attracting out-of-town buyers in June, with just more than 50 identified through the board’s voluntary survey. Last month, that number eclipsed 100, Longo said.
“People are still choosing to move here because of all the things we have to offer in Sarnia-Lambton,” he said.