The End of Exclusive Work from Home Has Put Pressure on Small Town Real-Estate
Merrickville Ontario has been dubbed “Canada’s most beautiful village” by the publication Communities in Bloom.
Nestled along the historic Rideau Canal, and only an hour drive from the nation’s capital, Merrickville was a prime destination for remote workers looking for scenic views and large family homes during the pandemic.
Many thought it would never end.
Fast forward to 2024, and according to Stats Canada only 13.5% of Canadians are now working exclusively from home, with another 11.4% working a hybrid arrangement — this is down from an estimated pandemic high of 30% of Canadians working exclusively from home.
With the loss of exclusive work from home arrangements, with 10 interest rate hikes, and with higher gas prices many workers have been forced to leave small towns, downsize and/or move closer to their workplaces.
The result is the real estate frenzy of 2022 has long passed for many small towns in Canada — and a new era of lower prices and more “day of the market” has arrived.
47% Loss in Under Two Years
Take for example this 3 bedroom 1 bathroom home in Merrickville, Ontario:
It’s sold for $570,000 in May 2022, at the peak of the Canadian real estate market.
At that time, it sold for $14,000 under asking after only 7 days on the market.
If we move forward 2 years minus one month, to April 2024, the same house sold for $300,000 – $50,000 under asking after 40 days on the market.
This represents a 47% loss on investment in under 2 years. The largest loss for a single family detached home in Ontario that we have come across.
Real-Estate Depreciation Widespread in the Area
According to the Huron Perth Association of Realtors active listings in their region were 73.9% above the five-year average in March 2024.
As for prices in the area, association data reveals that the average residential price was $579,971 in March 2024, down from $750,000 at the peak of the Canadian real-estate market in Jan 2022.
This represents an average loss of $171,000 vs peak pricing.
While these are large losses, we must remember that most people did not buy exactly at the peak, and that most residents in these areas are not planning on selling — for these folks, these unrealized gains and losses are meaningless.
However, for those who bought during pandemic hoping for permanent work from home arrangements in paradise, these losses can become very real, very quickly.
