The SCHOLTE PROspective - Volume 1, January 2021

Posted by Super Admin on Friday, January 15th, 2021 at 11:03am.

Welcome to the SCHOLTE PROspective. 

Mike Scholte holds an Honours Commerce degree in Economics and Finance. Throughout his career, he has worked as a Real Estate Broker and Manager, Commercial Lender, Financial Planner, Residential Mortgage Lender, and Business Coach. Mike has helped people and businesses grow since 1995. Mike represented the real estate industry as President of the Southern Georgian Bay Association of REALTORS® in 2020.

Statistics are often difficult to interpret and can be somewhat misleading when trying to apply to a practical decision such as a home purchase or sale. It is our intention to be your guide when reading housing statistics so you are able to navigate news and opinions and ultimately filter what is important in your decision-making process.  

The Southern Georgian Bay region of Ontario encompasses Meaford, The Blue Mountains, Collingwood, Wasaga Beach, Tiny, Penetanguishene, Midland, Tay, Severn, Georgian Bay Township, Severn, Grey Highlands, and Clearview Township. Being geographically significant in the area, it’s further broken down into  Western and Eastern Regions. Statistical reports are more relevant when they focus on a specific area; for example, details on a specific street in a specific community versus Ontario or Canada. In REALTOR® talk, we refer to this analysis as a CMA (Current Market Analysis) and these are provided in listing preparation or prior to an offer on a property.  CMA statistical analysis is very narrow in proximity to give the best insights and accuracy for your specific transaction. We recommend using local REALTORS® as they are immersed in the local market and will offer both qualitative and quantitative perspectives unique to your property.  

For the purpose of this discussion, the focus is on the Western region of Southern Georgian Bay. The goal is to provide answers to the general question “how’s the real estate market?” The trends indicated herein are consistent with the Eastern region however a future report will provide more detailed statistics and analysis.

Key Metrics of Real Estate Economics


Months of Inventory (Absorption Rate)

Months of Inventory (MOI) is a helpful statistic to answer the question... “How's the Market?” Simply, it is a measure of how fast all the existing homes on the market would last given the current pace of sales assuming no new listings were added (Economists love to put in assumptions).  Generally, greater than 6 Months of Inventory implies there is surplus inventory and therefore indicates a buyers market... buyers will have choice.  Less than 6 Months of Inventory would indicate a shortage of inventory, thus a seller's market.  A balanced market would fall around 6 Months of Inventory indicating the market is in equilibrium (supply equals demand). Given the unique nature of the Southern Georgian Bay market, it is more practical in our region to reduce these standards as follows: greater than 3.5 months would indicate a buyers market, less than 3.5 months would indicate a seller's market and 3.5 months is our market equilibrium.  This assertion is based on observations of our marketplace and the influences unique to the typical buyer or seller in our market. Currently, December 2020’s MOI In the Western Region was 1.3 months indicating a strong Sellers Market.

Sales to New Listing Ratio


Another useful statistic is the Sales to New Listing Ratio which can be used to determine if the market favours the Buyer or the Seller.  It is the ratio between the number of homes sold versus the number of new listings entering the market. In a balanced market, the ratio would be 1:2 or 50%.  A higher ratio implies a seller's market while a lower ratio implies a buyer's market. Looking at our regional numbers, the first half of 2020 the market remained fairly balanced until it began a steep climb for the remaining two quarters. December ended with a resounding 112% Sales To Listing Ratio indicating a severe shortage of new listings.  The December 2020 Year-to-date sales to new listing ratio ended at 77.6% confirming the year favoured the seller.

Average and Median Prices

The average price of a real estate market can often be misleading, however, it is commonly used in media and day to day discussion. The average is the middle number when looking at an array of data.  An example would be a series of sales of $100,000, $105,000, $145,000, and $200,0000. The average sale price is ($100,000 + $105,000 + $145,000 + $200,0000)÷4 = $137,500.  Where this can be misleading is if one sale is excessively large or small, it can skew the results significantly. The median price is a better statistic to review as it is the middle number in the series of data and not affected by outliers and does not swing wildly due to extreme anomalies.  As you can see, both the average and median prices have been climbing over the last 5 months of 2020 and this trend is consistent with year over year growth for the last 10 years.

From Quantitative to Qualitative Analysis

In addition to a technical review, it is prudent to look at the strong local fundamentals of our region to determine who and what is driving demand. The Southern Georgian Bay region is located within very close proximity to the Greater Toronto Real Estate Market who are one of our main market influencers. A trend that has been growing over the last several years and has accelerated due to the Covid 19 Pandemic is the movement from metropolitan communities to the “Exurbs”. This phenomenon was first identified in the US and is the increasing relocation trend to prosperous districts outside a city beyond the suburbs.  These settlement communities tend to be self-contained with good sporting and leisure amenities, and a sense of community which is often missing in urban centres.  As more and more businesses are accommodating work from home, consumers are seeking communities with strong and reliable high-speed digital accessibility, better air quality, less congestion, and larger properties for increased privacy and security.  Coupled with this trend is the retirement population looking to liberate equity from the robust Toronto market and retire to a community with four-season lifestyle amenities including active volunteer service opportunities, a vibrant arts and culture community, and diverse recreational pastimes.  Housing choice options are also varied ranging from freehold, condominium, land lease retirement communities, great lake waterfront, and rural acreage properties.  This region also has exceptional road infrastructure,  excellent regional hospitals,  quality public, Catholic, private schools and Georgian College.

In addition to the social trends noted above,  lending rates continue to remain at historical low levels. The net effect of these low rates are to stimulate the economy and increase the affordability of homeownership.  It is unlikely to see a significant rate increase in the foreseeable future.  On the negative side of mortgage financing,  there has been a noticeable change in lending requirements as mortgage providers tighten their policies as a result of Covid 19.  It is still uncertain as to how lenders will accommodate income loss due to mandatory lockdown and government income support. It is likely that there will be an increased presence of alternative lending and private financing in the wake of Covid 19. A success strategy for 2021 is to consult your REALTOR®, Mortgage Broker, or Financial Planner well in advance to ensure you are financially organized and properly advised of your options prior to a purchase or sale. In a market that favours the seller, there will be pressure on financing conditions within an offer.  

2021 Predictions

Based on the historical trends observed in 2020, and forecasts into 2021 we are anticipating another growth year in the Southern Georgian Bay region. With the uncertainties of Covid 19 and the anticipation of vaccines available in the 3rd quarter,  expect market fluctuations in the short term with an average price increase expected between 4-5% in the first quarter. The expectation of buyer activity continues to grow as a result of city migration will put pressure on property inventory, this will maintain the market favourable to the seller. That being said, with the above seasonal temperatures, the anticipation of new housing starts, and the opportunity for property owners to realize gains on their personal or investment properties, the inventory gap is expected to narrow in the coming months. It is expected that a segment of the market will take a wait and see approach which will make room for the serious investor to capitalize on the opportunity. 


There is no doubt 2020 was an exceptional year of change and adaptation which will affect the economy for years to come. The Pandemic has accelerated the growth in our region and allowed opportunities for sellers and buyers alike. The Southern Georgian Bay region has become a desired market for real estate investment and will continue to grow and develop for years to come. If you are new to the area...  Welcome!  If you are interested in purchasing or selling, reach out to The Jen Scholte Team and we would be happy to lead you home.  

Mike Scholte holds an Honours Commerce degree in Economics and Finance. Throughout his career, he has worked as a Real Estate Broker and Manager, Commercial Lender, Financial Planner, Residential Mortgage Lender, and Business Coach. Mike has helped people and businesses grow since 1995. Mike represented the real estate industry as President of the Southern Georgian Bay Association of REALTORS® in 2020.

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