INVENTORY, INTEREST RATES IMPACT REAL ESTATE MARKET

"That's what's scaring people, how high can it really go." – Paola Lawrence

Real estate agents and prospective buyers and sellers are having a much different experience in the market than they did about a year ago.

For Innisfil's Kati Gardner, who listed her Alcona home for sale about a month ago, it's been baffling to see the change.

She's been planning a move to Barrie to give her kids better athletic and academic opportunities and cut down on her commute.

"I have been shopping for houses literally on and off for a year and a half to two," she said.

One house she was interested in last year received about 21 bids. Gardner's bid lost out by about $27,000.

"It hurts — it would have been life changing for me and my family," she said.

Now, with her own house for sale, she's not experiencing the same zeal from buyers.

"Three weeks later it is sitting," she said.

Since the beginning of the pandemic, home prices have risen significantly in Innisfil.

According to Barrie and District Association of Realtors data, the benchmark price for the Innisfil housing market in May 2020 was $541,100. It reached a high of $1 million in February 2022, and was $950,400 in May 2022, representing a 75 per cent move over two years.

After sitting at .25 per cent for much of the pandemic, the Bank of Canada has begun to raise it's policy interest rate, increasing it to 1.5 per cent in June 2022, which affects the interest rates people applying for mortgages get.

Paola Lawrence, an Innisfilbased Real Estate Sales Agent at RE/MAX Hallmark Realty Ltd., and the Lawrence Group, said her experience as an agent this summer is contrasted with last year.

"Last fall I couldn't find a house for my buyer," Lawrence said. "Everything was selling over asking, there was a shortage of listings."

Now there is plenty of housing inventory.

One bungalow she has listed in Innisfil was viewed six times in one weekend and did not receive an offer, despite being priced well, she said.

"It might take a little longer to sell, before it used to be over the weekend," she said. "It's a changed market."

While prices remain relatively high, Lawrence said she thinks this is a lull in the market that will stabilize when there is more certainty interest rates.

"That's what's scaring people, how high can it really go," she said.

For Innisfil resident Gerry Mcconnell, who purchased a preconstruction home in Innisfil in 2020, the last two years have been frustrating.

He said construction of his home has been delayed, and the developer said the pandemic, labour issues, material costs have contributed to the delays.

Mcconnell said the move-in date was November 2021, but the foundation of the home was only just dug.

"They're hiding behind COVID," he said.

He worries that the builder might ask for more money, noting he paid around $740,000, and now the same homes are selling today for $1.4 million.

Rising interest rates also concern him, noting he was pre-qualified for a 1.3 per cent rate.

"You're closer to probably four, maybe five per cent depending on what time everything closes," he said.

STORY BEHIND THE STORY: With interest rates and inventory rising, Simcoe.com decided to look into what impact those changes are having on the local housing market.