Housing prices fall in Simcoe County as interest rates increase

The average sale price of a home in Simcoe County dropped more than five per cent from June to July this year, yet sales have also fallen by 15 per cent.

"Yes, they've gone down. In February, the average price was just over a million dollars, and now, it's just over 825,000. But two years ago, it was 600,000, 400,000," said Luc Woolsey, president of the Barrie and District Association of Realtors.

"I don't believe that we're having a housing crisis. We're having an affordability crisis right now because we've had 36 rate hikes in a very short time in just 2022," said realtor Peggy Hill.

Housing prices have dropped by as much as 30 per cent in some areas in recent months, but that only brings consumers back to the prices they saw in 2021, which had double the amount of sales when comparing July of each year.

"I think a lot of buyers are waiting on the sideline to see where the bottom of those prices is going to be. And I do think we've pretty much reached that level now," said Woolsey.

"We were seeing a very sharp decline in prices from February until about June. In July, it still declined slightly, but that curve levelled out, and that price point is kind of where we are now."

Hill says she hasn't seen a July like the one that just passed since 2017.

"It's quiet. It's not dead. Sales are happening every day; however, we just have to reset expectations. It's not February. We have to expect longer days on the market and less showings," said Hill.

Increasing interest rates have virtually washed out any decrease in the asking price.

"Interest rates are going to continue to climb a little bit over the next few months. They have another interest rate announcement scheduled for September, where we expect the rate to be higher," said Hill.

"Something's got to give. The consumer can not be paying interest rates at this price and having housing prices be inflated the way they are."

It's not just the communities closest to the Greater Toronto area taking the financial and real estate hit. All of Simcoe County is feeling the effects.

"We've been equally affected. Toronto's been affected. We've all been affected the same way. If we do see a more rapid decrease in Simcoe County, it's because we had a more rapid increase," said Hill.

Woolsey believes too many first-time buyers get caught up in the idea of the "American or Canadian dream," finding the perfect house instead of just securing an asset they can afford.

"If you can buy something, anything, even if it's not perfect, you buy it, and prices will be going up. They always have gone up in this area, and you'll be able to flip that into a home that's more suitable for you a little later on," advised Woolsey.

The Barrie and District Association of Realtors says if you're waiting but can afford something now, you should buy it because it's not going to get more affordable.