What price progress? The real estate market may be telling us.

BY JIM PITT
Special to the VOICE

Many of the letters to the editor in the Voice begin with a similar refrain: When we moved here, or, when we were growing up here, Pelham was a great place to live. It had a small town charm and it was friendly.

The letters then expound on the many reasons that this may no longer be the case. This small town charm was the major factor many used to decide whether to buy a home and raise a family here.

Pelham, meaning Fenwick and Fonthill primarily, was a much sought-after destination in the Niagara Region, second only to Niagara-on-the-Lake in property values.

In fact, as recently as December 2014, Pelham had the highest average home prices in the Region. This has changed rather dramatically. The latest MLS Niagara statistics, for December 2017, show a few trends that are continuing and a couple of interesting take-aways.

The following statistics have been lifted directly from the MLS Niagara website. I will be looking at the Region as a whole and the Towns of Pelham, Port Colborne and N.O.T.L., because these towns have about the same population sizes.

Overall prices in the Region continue to rise. From December 2016 to April 2017 (the peak), average prices went from $321K to $453K and have since fallen back to $386K. That’s a 41% increase to April followed by a 14% retreat to December. Still, a large price rise year-over-year.

In N.O.T.L, prices began the year at an average $624K in December 2016, peaked at $829K in April and have since fallen back to $723K in December 2017. Prices went up 32% to April and have since retreated 12% for a year- over-year return of 20%.

In Port Colborne, prices began the year at a modest, by Niagara standards, $264K and climbed to $283K by April. But by December the prices had reached $372K, for an annual return of 41%. Port Colborne is the one of two exceptions to the overall price rebalancing that is occurring Regionwide . Lincoln is the other.

In Pelham prices began the year at $461K and climbed to $553K by April, a return of 20% in just four months. By December, prices had rebalanced to $433K, a drop of 21%.

Wait, how can that be.

House values in Pelham have erased all of the gains made in 2017. Indeed, if you look at December 2015, the average price of a house was $426K, meaning that average house values in Pelham have risen just 1.6% over the last two years.

But if you go back one more year to December 2014, average prices were $486K. That means there has been an average loss of $60K since this Mayor and Council took charge. Ouch. How can this be?

Of course, a lot of factors are involved in the price of houses. More expensive homes are becoming increasingly difficult to finance, with all of the rule changes now in place. Spending $500K and more to live in Niagara will allow for many choices of locales. The cost of ownership and the ability to cover those costs with the income a family has at hand is certainly a major factor.

Towns like N.O.T.L. are not often places in which young families can start out because of the high costs associated with living in a charming small town like N.O.T.L. Wealthy Boomers from the GTA have migrated to that area and the prices there reflect that demand. Port Colborne also has much to offer. In exchange for a considerably smaller amount of money, a buyer can live in a small town with plenty of facilities, including an indoor pool, markets, lots of free parking, and a real downtown that is accessible and inviting. In other words, the old saying that real estate is about three factors, location, location and location, is very true as the numbers seem to indicate.

Then we come to Pelham.

One can speculate about why prices here have not really budged for two years. One possible explanation could be that Pelham has lost the desirable location label that drew so many here to stay.

As a prospective home buyer in the Region or coming from outside the Region to purchase, a drive through Pelham can be a daunting task. Traffic is slow and frustrated by the proliferation of traffic lights. The downtown lacks parking and has some empty store fronts. The shopping area has been shifted down Highway 20 to largely open fields of grass and mud, so, visually, prospective buyers are less than overwhelmed with positive images of their new home. The overall discount, franchise nature of the new shopping mall—bargain groceries and a Dollarama—doesn’t exactly convey small-town coziness, either. Transit Road, Buffalo, closer to the mark.

Prospective buyers, upon educating themselves about this new place, may have looked into what the future holds for the town and decided that living in a town that has a rather ambitious growth plan is not for them; after all, they were looking for small-town charm. Other factors that could be in play involve this town’s governance and finances.

Much has been written about arenas and land deals. Much more has been written about a local government that is uncommunicative, secretive, probably incompetent, or even potentially corrupt.

To a prospective buyer, looking for the rural idyll they so much desire, Pelham may have lost its charm and become just another place where one can buy a McMansion set three meters away from another McMansion. If this is the case, then home prices will continue to rebalance until they find their true value. It’s anyone’s guess what that might be.

Ask yourself this question: Based on what you now know of this town and its growth and governance, if you were moving within the Region, or into the Region, where would you place Pelham on your list of places to spend a half million or more?

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