It seemed like fate for Mario Castillo to move his family from Ottawa to Smiths Falls, despite some initial reservations.
Mr. Castillo, now the regional general manager for Canopy Growth Corp., says he and his wife had been looking at homes in the Ontario town, about an hour from Ottawa, for nearly five years.
They thought Smiths Falls, located on the Rideau Canal, was beautiful. They’d visit with their three kids on weekends and although they looked seriously at a few homes, it was too far from Mr. Castillo’s job in Ottawa’s east end to make a move.
But one visit to Canopy changed his mind about joining the booming cannabis industry – Canopy has a market value of more than $127-million – and the home he and his wife, Sarah, fell in love with 18 months prior to him being hired was still on the market.
“I quickly realized it was not a bunch of people growing pot in a warehouse,” Mr. Castillo says. “They were all in.”
Mr. Castillo and his family ended up moving to a four-bedroom, Victorian-style home that was built in 1910. The previous owners did all the required updates, including modernizing the kitchen. It’s also three minutes from his office.
“It’s a gorgeous house. We love it,” he says – and they got it for less than the asking price.
Mr. Castillo says his colleagues are asking him for advice: where to move and what to do. The success of Canopy is causing a seismic change in the little town’s real estate market.
There are approximately 750 employees at Canopy’s Smiths Falls headquarters, and with a sudden increase of people coming (or returning) to the little town there have been – for the first time – bidding wars on homes.
“When homes come up for sale, more often than not they are having multiple offers in a short period of time and selling above the asking price,” Smiths Falls Mayor Shawn Pankow says. “It’s something we’ve just never experienced before.”
According to the Ottawa Real Estate Board, the number of homes sold in the Smiths Falls area is up more than 20 per cent from 2017 to 2018. The average price has risen by more than 13 per cent.
Senior leaders at Canopy Growth have told Mr. Castillo of their regrets that they had not started their home searches sooner, because now, “there’s nothing to buy.”
“The feeling about Smiths Falls, or the potential negative feelings thanks to the past 10 years, are dissipating,” he says. “It’s a different town now.”
Ralph Shaw, president of the Ottawa Real Estate Board, says there is “no doubt” Canopy is going to provide stable jobs for years to come and the real estate market will keep growing.
“We were living on optimism before,” Mr. Shaw says. “Now, we’re living on reality.”
Mr. Pankow, who was mayor at the time when Canopy chose Smiths Falls for its headquarters and was just re-elected, says the value of construction projects in town was up to $160-million in 2018 versus a normal year of only about $4-million.
Income from construction permit fees, which typically add $100,000 a year to the town coffers, was up to $2-million in 2018.
From 1996 to 2016, there were 196 new housing units created in the town, Mr. Pankow says. Next year alone, Park View Homes, a developer based in Smiths Falls, is set to build 63 new homes as part of its Bellamy Farm project.
Ken Shelley, an asset manager at Park View, says Bellamy Farm was initially proposed 10 years ago, but there was no demand in Smiths Falls for these homes – about four minutes from downtown – and the project was shelved.
There is a lot of buyer interest now.
“People keep asking about it,” Mr. Shelley says. “Canopy is drawing a whole new demographic to the area. Younger people with younger families… they’re asking, ‘Where can we live? Where can we stay?’ And we’re just hoping to meet that demand square on.”
The first model home at Bellamy Farm will be a 1,700-square foot townhouse with three bedrooms and two bathrooms. It will have a list price of less than $300,000.
Even so, Mr. Shelley admits to some trepidation. “The townhouse development is a new concept for Smiths Falls,” Mr. Shelley says. “We’re swimming in some water and hoping there are no sharks out there.”
Another project of Park View’s, Ferrara Meadows – a 100-home development about five minutes from the town’s centre – has been chugging along for almost a decade, with one or two homes being sold each year. But in the past two years, more than half the remaining homes were scooped up.
The housing shortage in Smiths Falls is forcing Canopy Growth staffers to look outside the town for a place to live.
Montague, the township adjacent to Smiths Falls, has also seen its real estate market spike upward, with sales up 15 per cent and prices up 20 per cent year over year.
Pete Lutz, a real estate lawyer in Rochester, New York, recently sold his lakefront property about 15 minutes outside of town to one of Canopy Growth’s senior executives for more than $1-million.
The demand was finally there from executive-suite types looking for a luxury home to call their own, he says.
Mr. Lutz’s property, an old farmhouse converted to a five-bedroom, three-bathroom mansion on Big Rideau Lake, also includes a separate guesthouse by the water, but he says he probably had the home over-priced initially.
“We loved it, but the problem was its location. It’s not Muskoka … it’s the Big Rideau. You don’t have as many high-end buyers in that market, and our price was high-end,” he says.
“We got more realistic with our asking price but … a higher-end buyer [came] to us that might not have been searching for a home had it not been for Canopy Growth.”
And that’s a common refrain for Smiths Falls these days, according to Rob Garvin, a real estate agent with ReMax who has been selling homes in town for 10 years.
Mr. Garvin says buyers are calling him for homes that were listed more than a year ago asking if the owners were still interested in selling their homes. Clients who were going to hold their homes until the spring market are instead getting surprise offers in November.
“It’s a sellers market and it has been for the last year,” he says. “Just when you think it’s going to quiet down, it’s like, ‘Wham.’”