Sudbury Market Update

The February 2021 CREA figures show the average price for a home in Greater Sudbury rose from $278,541 in February 2020 to $372,641 a year later.

Where are the prices now?

Join Tristan Ritchie of Lake City Realty as they provide a pricing update, market update and some insights into the best places to be looking for real estate investing opportunities in Sudbury.

Sarah: Tristan Ritchie is a real estate investor in Sudbury but the seventh year of his career as a real estate investor, agent. In 2021, he purchased nine properties and sold over 180 single and multifamily properties in Greater Sudbury. February, 2021 Korea figure shows the average of a home in Greater Sudbury rose from 278,000 in February of 2020 to about 372,000 a year later. Fast forward a year. How is the Greater Sudbury market looking now, just in these days and what are some opportunities that we could still get our hands on?

Tristan: The market is pretty crazy over here. I feel like just in the last two months, right in 2022, as soon as January hit, we saw we don't have enough sales, like the GTA to give an actual average cause it was at over 500 for a little bit, which was crazy from what you just said, the 378, but now it's dropped down to about 477. The rolling average in 2022. That's basically up a hundred thousand from what we were at last year, which is pretty crazy. We're seeing a lot of people slowing down the types of investment they're buying, but the people that are buying are a little bit more serious.

What we saw driving the market at the start in Sudbury was a lot of people investing in the lower end properties. The people that wanted to do it from down South mostly. That's what we say up here. We say down South. Anyone from anywhere from like Barry and Toronto and London a lot of people are coming up here saying, hey we've exhausted. The Windsor market, we heard Sudbury has good opportunities. Three years ago, you could get a 10% cap in Sudbury, which was amazing. Now we're down.

If you're looking at multi-family properties, you're buying around 5.5. Sometimes lower depending on what the rents were because the rents were at an all-time low of a vacancy rate, depending on where you look we're at just below 2 or 2.5 on another website, which is extremely low. Our rents have increased so much over the last three years that when you're buying a property now, often they're under performing market rents. I'll call you to talk about the outside of Sudbury.

Sudbury is a huge area. I saw a few people said they were looking at some short-term rentals. Now, some Airbnbs, maybe. If that is what you're looking for, we've got a couple lakes that want to play in the league. That's pretty popular because you can get a reasonable price. There's a few in town here, but there's also, I don't deal in Manitou an island, but I thought I'd mentioned it just because there's a lot of opportunity for Airbnbs on Manitou and island.

It's still our district. Technically, it's under our board. It's just about a two hour drive from here. I don't do any business out there because I don't want to drive all the way out there, but there are a lot of good opportunities if you're looking for Airbnbs in the Sudbury district. I know some people that are getting 2,500 for a place on the water a week in the summer, it's just the winter. You'd have to take a little bit of a concession and take a little bit less.

In our general area of Sudbury, we have a few of the outskirts. If you're investing in Sudbury, there's obviously our main area, but then there's the outskirts, which is blizzard valley vine tonight, as we call that the valley. As you can see, it's a little bit of a drive. There's Chelmsford as well, which is quite popular. Those historically were a little bit cheaper and easier to afford and to get into the market with this booming real estate market in Sudbury, this is actually a little, like it's almost more desirable to be out here. Because you're closer to scoot trails. You're closer to camp and it's a certain bragging rights that you live in the valley. You live in Chelmsford.

There's still a little bit cheaper, but there's opportunities out there versus in Sudbury wherever everyone's looking. The benefit of being out here in the outskirts is everyone needs a car to get out here and to live that life out there. You're getting people that have consistent jobs that can afford a car. Usually, they're paying for their rent as well. I rarely hear honestly, bad situations with tenants in these outskirts and rents are very similar. They might be a little bit lower in our Sudbury area.

I won't go through all the neighborhoods because there's a lot of them. Obviously, each street differs like I'm sure every city does, but I'll mention some of the big ones. New Sudbury, this whole area here has tenants. If you're investing here, there's very little rough areas are rough areas that either you want to invest in, cause you can get higher cashflow or you want to stay away from because 85% of our Landlord and Tenant Board disputes come from Donovan and Flour Mill, which is this section right here, all these streets back to back. And then right here, this is the Flour Mill. This is Donovan right here.

I know it says that Donovan is right in the middle, but this is actually a decent spot to invest in. It's called uptown and has some nice character homes. I would invest in myself. I would recommend that's a good area to get a little bit more bang for your buck. And then if you're looking in the South end, which is basically anywhere South here, You're looking at the most expensive area, Sudbury. Everything is a hundred thousand more or more if you're on the higher scale.

Those are our areas of Sudbury. It's very spread out. Which is why a lot of people, when they call they're like, oh, what about this little town of Chelmsford? It's a 20 minute drive. But for us in Sudbury, we don't see that. The outskirts are still part of Sudbury, although you need to drive quite a while to get there. That's a general overview. I do have a map that I highlighted certain streets with A, B and C tenants because that's quite important because certain streets are parallel to each other and one's a good street and one's not as good.

I'll go through some of our stats and Sudbury too. As you can see, we were a very standard real estate market until basically COVID we started right before COVID in 2019. That was a pretty crazy year for us until these last three years, we were like, wow. The market's really picking up average house prices at 300,000 and then COVID just shot it up to the air. Then we started seeing mid 300's, then 400, and then now we're close to 500. As I was explaining before, what we really saw was first time home buyers. We had the regular Sunbury buyers, but we're also seeing a lot of people when COVID hit back.

A lot of my friends that got jobs in Toronto that can now work from home, they're moving back to Sudbury. They can live comfy, buy a nice house, and they also still have their income from their job down in Toronto. We're also seeing, like I was saying earlier, the lower price points were getting bought up for BRRRRs. Second units the lower value investors. And then the people from Sudbury that own those, they were cashing out a hundred, 150 grand. They're actually the ones that are buying the higher end properties now that have wanted the bigger step up home because they've made so much on their they're the cheaper investments.

Here's another example of just the house prices, the ups and downs. Obviously, winter's a little bit lower. Our inventory, a number of active listings, that's all across Canada, basically from what I've been hearing has gone down quite a bit. That's also because of the amount of buyers, the amount of new listings actually hasn't changed all that much, although it has been lowered recently.

This was pretty interesting as well. If you're looking to invest in the Sudbury area you halted top 25 Canadian growth cities and greater Sudbury was number. Number three, North Bay was actually number one. Which is also a Northern city, about an hour and a half away from here. Which I thought was pretty interesting. We haven't seen the huge statistics of Canada yet to see what our population has actually gone up to. But as you can see, it slightly increases a couple thousand and then the last. I believe this was mostly the last couple of years that we've gone up to 5,000. But the full statistics or the full census hasn't come out yet, which I'm pretty looking forward to seeing.

In terms of job opportunities obviously the super big developers in Sudbury are seeing an opportunity in Sudbury because they're looking at building the Kingsway Entertainment District. This is going to be a huge arena entertainment center. Right now our arena is very bad for acoustics. Not a lot of entertainers or artists want to come do a presentation in Sudbury. This is hopefully to attract more events in the Sudbury area. It'll create a ton of jobs. It's a huge project. It's just like any big project. There's people that are boycotting it obviously they don't want it in the location it's supposed to be.

That could be important for investing and it's going to be weird right before a raid close to the Sunbury landfill site. It's going to be around here where they're going to put the district. Right down here is called Minnow Lake. And this is like the lower part of new Sudbury. I believe these places will have a lot of value added in the next two, three years. Once they start building and this starts becoming active, this whole hub in this area, I think will become a lot more traffic, a lot more people and more restaurants and more opportunity, which is also close to Costco and best buy and home Depot and all some big stores.

That's the Sudbury market update opportunities right now are the low rents. If you're good at dealing with tenants, the cash for keys. It's very hard to get tenants out on closing and have vacant possession. And because our rents have gone up so much in the last couple of years, that most of the properties that are selling are underperforming rent. You're buying at 5% or 5.5% cap with a potential for an extra 15 or 2000 in some cases, extra rent a month. Once those units are turned over.

That's where I see the most opportunity, but there's also some hidden gems here and there that slipped through the cracks. You can sometimes jump on. And as many of you probably know, there's some wholesalers. I know most of them in Sudbury that are acting in Sudbury. I get a lot of those deals firsthand. Those are sometimes some opportunities as well. That's my Sudbury market update.

Sarah: That is great. Tristan. How long have you been working with investors specifically?

Tristan: Basically, since I started. I was an investor before I became a realtor. Right when I got into the business, I took over. I joined a team at that point before I had my own team and I was taken on by the investor clients. My dad's been investing forever and he kinda taught me. I saw an opportunity helping investors, younger ones as well cause I was younger at the time, not as experienced and it's been a lot of fun since then. Most of my deals last year were investors.

Sarah: Amazing, and you're also working with a lot of investors remotely, too. Taking videos for them, setting them up with your team, like the ones that are not out, near Sudbury.

Tristan: We've probably 30% of our sales last year were people that didn't even see the house. They trusted us enough to go. I take a video and I point out all the defects that I see, just so you're comfortable. That's what you want to see anyways. We always set up a pre home inspection so that you're not only relying on me. You also get the inspection and then if it's the right deal and the right price then we jump all over it. If not, and there's more deals out there.

Sarah: Thank you so much. I think there is one question about what the Kingsway Entertainment District will do to be started and completed?

Tristan: Last year, but they keep pushing it. They said they were going to start in October, like start putting shows in the ground. But as I was saying, there's been a lot of pushback because a lot of people wanted downtown because most cities have their entertainment districts downtown. Ours is very congested where it is right now. What a lot of people that are boycotting it aren't understanding.

They're just not the facilities, the parking for it down there. In my opinion, I say, just get it up. Like it's going to improve the city of Sudbury. Right now, they're planning on building it on the Kingsway, which it'll still be a benefit to Sudbury when they do start. Honestly, I don't have an exact answer.

Sarah: No worries. I know there's a few more questions in the chat. We'll let you just type that away. If you want to answer some of those.