A cohort of people who left Toronto to move to the country at the start of the pandemic are giving up their brief flirtation with a quieter life and heading back to the city.Supplied
On a chilly day in January of last year, Michael Perkins and Christopher Charles ventured from Toronto to Innisfil, Ont., to see a newly listed property. When they arrived, the Victorian manse, decked in snow-covered evergreen boughs and twinkling lights, appeared through the gloom like a scene from a Christmas rom-com.
The acre of land overlooking farmers’ fields was also a big draw for the couple, who like many urbanites were struggling to social distance amid the stringent pandemic restrictions in place at the time.
They knew they would need to move quickly to have a chance at buying the house with an asking price of $999,000.
“The property has 12-car parking and the driveway was full,” Mr. Perkins says. “The market was very hot outside of the city at the time.”
The couple quickly submitted an offer for $1.1-million and gave the sellers two hours to respond. “It was a very Toronto offer for sure,” Mr. Perkins says of the bully bid. “We were very lucky that they accepted.”
Mr. Perkins and Mr. Charles were part of a wave of people living in dense urban centres who uprooted their lives to find larger homes with more plentiful outdoor spaces – a response to a pandemic that had kept them cramped indoors and isolated from the world. The phenomenon was partly blamed in inflating real estate prices in smaller communities and rural areas, including places where the market has been upended in the meantime.
In January of last year, Michael Perkins and Christopher Charles ventured from Toronto to Innisfil, Ont., to look at a Victorian manse on an acre of land overlooking farmers’ fields.
With an asking price of $999,000, an offer of $1.1-million was quickly submitted and the sellers were given two hours to respond.Supplied
But by the time the depths of winter arrived a year later, the couple began to broach a new topic: country life was turning out to be less idyllic than they anticipated. They are now among a cohort of people streaming in the other direction, giving up their brief flirtation with a quieter life at a time when they figured the price for their country home was still high.
“I appreciate the city more now than even after having lived outside of it,” Mr. Perkins says. “We’re part of a bigger group that left early in the pandemic who realize how much they miss the city.”
Mr. Perkins points to the restaurant scene back in Toronto, such as their old haunts in Greektown, and the chance for impromptu gatherings like after-work drinks or dinner. “It just doesn’t work when you live an hour away.”
The two also felt the isolation of the quiet country road.
“You don’t have people passing by the house. No one is walking down the street with their golden retriever,” Mr. Perkins says. “There’s no place to bump into people. There’s no public park where we all hang out – or even a coffee shop.”
Dr. Charles is a doctor who works long hours at the Royal Victoria Regional Health Centre in Barrie. The couple found their social life revolving around the hospital.
They also enjoyed hosting Toronto friends who came to visit, but the gatherings required lots of planning. With no gourmet shops or Greek bakeries to pop into, all of the meal preparation had to be done at home.
“There’s a lot of pub food up here,” Mr. Perkins says.
Real estate agents in distant suburbs and waterfront towns say they are hearing the same laments more often these days.
Many buyers ended up embracing their newfound access to forest trails and fresh air, and can’t imagine returning to Toronto’s crowded sidewalks and gridlocked roads. But some agents who spent the first couple of years of the pandemic advising city dwellers on the ins and outs of septic tanks, ice jams and unreliable WiFi are listing the same properties again.
Shawn Lackie, real estate agent with Coldwell Banker R.M.R., said he believes the flight from big cities set the stage for the current real estate downturn. Canada’s housing market has seen corrections in the past, but this one as different, he says.
“I’ve never seen it before; because people were able to work from home, all of the values in the outlying areas went sky-high,” Mr. Lackie says. “Then all of a sudden, the culture shock set in.”
Mr. Lackie, based in Port Perry, Ont., worked with buyers from Toronto in the early days of the pandemic. People migrated to towns such as Bobcaygeon and Lindsay in the Kawartha Lakes, seeking backyards for their newly adopted dogs. He cautioned some young urban dwellers about the lifestyle change they would be facing.
Eventually, they realized the town doesn’t have a Starbucks and the bars close at 11 p.m.
Mr. Lackie says high gas prices are making employees who need to return to their Toronto offices rethink the commute, while higher interest rates are making large mortgages tough to carry.
The home required some rejuvenation, including upgrading the electrical service, adding new bathrooms and refurbishing the curving Victorian staircase.Supplied
He has had conversations with quite a few potential sellers who are contemplating a return to the city. The dilemma many have now, he says, is that they will likely lose money if they try to sell a property they bought when bidding wars were rampant. Sales are slow and months of inventory are building.
“Get used to commuting” is his best advice to homeowners caught in that situation. Mr. Lackie expects listings to increase as more homeowners face financial stress.
The trends can be seen in numbers from the Canadian Real Estate Association. Many of the areas with the most eye-popping gains in sales and house prices in the early days of the pandemic are now places with the steepest declines.
Farah Omran, economist at Bank of Nova Scotia, sees a recalibration of the housing market unfolding across Canada.
The most recent data shows that one-storey family homes led the fall in prices, she notes. Within the detached homes segment, sales in the suburbs declined by more than in the downtown core.
“This makes sense, as a reversal of the pandemic conditions that led to a significant price appreciation in this segment is now under way,” Ms. Omran says.
The biggest sales drops are happening in regions that saw the largest divergence of prices from incomes, she adds.
Of the 31 markets tracked by Scotiabank, St. Catharines, Ont., had the lowest sales-to-listing ratio at 32.5 in June, followed by Barrie at 32.7. London, Ont. is third at 38.7.
In hard-hit St. Catharines, the average price dropped 10.2 per cent in June compared with June, 2021.
In Innisfil, Mr. Perkins feels very fortunate that he and his partner were able to recently sell the house and make a profit on the trade. He had spent many months of the pandemic overseeing the renovation of the 150-year-old house.
After seeing the price of homes soar in smaller centres, the couple listed the house for sale in July and sold for $1.725-million and figured they could put the equity towards buying a smaller house in Toronto.Supplied
The property had been well-maintained by the previous owners, Mr. Perkins says, but it needed some rejuvenation. The work included upgrading the electrical service, adding new bathrooms and refurbishing the curving Victorian staircase
During the darkest days of January and February this year, the couple began to talk about returning to Toronto.
After seeing the price of homes soar in smaller centres, they figured they could put the equity towards buying a smaller house in Toronto. They listed the house for sale in July and sold for $1.725-million.
Dr. Charles will continue working in Barrie and the couple is searching for a house in Cabbagetown or their old neighbourhood of Riverdale. He has decided to turn his experience in renovating the house into a career in real estate, specializing in century homes that are more plentiful in Toronto.
And with no clear forecast on how long the real estate market in Canada will continue to slide, Mr. Perkins believes an investment in a city property is sounder in the long run.
“Toronto will be very much more stable than these smaller markets.”
Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.