The Orangeville real estate market saw some significant gains in 2020 with the average sales price of a resale home increasing 13.6%. Now people want to know, what will happen in 2021? Well, I do not have a crystal ball, but with what we have seen over the last few months there are some clues of what we could see happen in our market in the year ahead.
Continued Impact of COVID-19
As we navigate through our daily lives the landscape of COVID-19 continues to change on a day-to-day basis. When we look at the local real estate market this is no different. We will continue with strict adherence to safety protocols when showing homes, and I would expect to see continued shifts in sales activity in our local market due to the pandemic. In my opinion, the most significant impact on the real estate market will be felt through continued lower than normal inventory levels.
Low Inventory
We will continue to see lower than normal inventory levels in 2021. There are two main reasons why I see this trend continuing. First, as touched on above, COVID-19 has caused some people who would otherwise list their home for sale to wait over health concerns. The second reason is that with extremely low inventory many potential home sellers are waiting to buy first before they list their home for sale. This becomes a bit of a self-fulfilling prophecy that because there is low inventory, we continue to have low inventory. I think these low inventory levels will continue through this year, or at least until we see wide-spread vaccination against the virus.
Low Interest Rates
The Bank of Canada has outlined a commitment to keeping its policy interest rate at near-zero levels until the economy has recovered and has estimated that rates will remain at current levels until 2023. This should keep mortgage rates at very attractive levels for the foreseeable future. This “cheap” money will continue to fuel the demand from buyers that are looking to move to Orangeville.
Orangeville is a Desirable Location
There has been an increase in the number of people looking to move away from more densely populated areas and Orangeville is a desirable location for many homeowners from the GTA west that are looking to relocate. Orangeville offers these homebuyers, small-town living, proximity to more outdoor activities, and good access to Brampton, Mississauga, and the GTA west, with greater affordability than these areas. This will help to maintain the high demand for homes in Orangeville.
Higher Prices
The combination of low inventory with high demand in the Orangeville real estate market will continue to push prices higher in 2021. Already, we have seen resale home prices increase in January and I see this continuing until either the number of homes available for sale increases significantly or the demand for housing slows down. For the reasons outlined above I do not see either of these things happening any time soon and I do expect that home prices will continue to increase in 2021.
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