Over the past year, the Canadian real estate market has been in the forefront of headlines across the country. The COVID-19 pandemic has been a catalyst for migration away from big cities to smaller, more rural communities as homeowners hunt for more living space and more green space. The pandemic-based lifestyle changes coupled with low interest rates, have created a red-hot sellers’ market all over Canada. Matt Elking, Managing Director and Partner of Connect, believes buyers are taking advantage of the new digital world and migrating to smaller, more affordable, cities: “I think people have come to realize that it’s a virtual world and so some of the best opportunities have been outside of the core. If you’re not coming into your office, you’re better off living somewhere where you can get more for your money than in the coroner of the city.”
Windsor-Essex County real estate picked up steam in 2020 that has continued into 2021. The region experienced a much tighter market, with homes spending less time on the market in the fourth quarter of 2020 when compared to the same time in 2019. This trend continued and the market became even tighter throughout the first quarter of 2021. Here is what is going on inside this red-hot housing market, and what we can expect as we shift into the second quarter of 2021.
The Windsor-Essex Real Estate Landscape
As 2021 started, the Windsor-Essex market continued to tighten. January posted new records for the month in terms of sales, leading to the tightest market conditions in history with extreme price growth and record low inventories.
As the first quarter has progressed, Windsor-Essex County saw an increase in new listings but it wasn’t enough to keep up with the strong demand, leading to an even tighter market than the previous month.
“February was yet another record month for MLS® home sales in our region,” said Damon Winney, President of the Windsor-Essex County Association of REALTORS®. “We saw an increase in new listings last month but with the continued strong demand, overall inventory is still hovering at the lowest level in history. These factors are contributing to the current very tight market conditions. As a result, we expect the trend of year-over-year double digit percentage price gains that started back in May will continue into this year’s spring market.”
The Windsor-Essex County Association of Realtors reported 1,654 homes sold in the region for the first quarter of 2021 – a 30.76% increase when compared to the 1,258 homes sold in the same period last year. In contrast, available listings have only increased by 0.67% when comparing the first quarter of 2021 to that of 2020. This discrepancy between sales and listings has helped contribute to the increase in prices across Windsor-Essex County. The average price over this period has skyrocketed by 37.60% when compared to the first quarter of 2020.
A key factor contributing to the influx of sales has been the COVID-19-influenced lifestyle changes that we’ve had to endure over the past year. Between the increased time spent at home, the flexibility to live far from your place of work, record-low interest rates, and the general shift in consumer behaviour, real estate markets large and small have exploded across the province, and Windsor-Essex County is no exception to this trend.
What to Expect in the Tight Windsor-Essex Housing Market?
With quarter one closing out in an even tighter real estate market than expected, and interest rates remaining at an all time low, current trends and the forecast for housing market fundamentals suggest that activity will remain strong through much of 2021. With few guaranteed sighs of relief on the horizon, this means that the Windsor-Essex is likely to remain a tight market over the second quarter.
Time will tell is there’s any cooling in the cards this year for real estate market in Windsor-Essex, and across Canada. Until then however, this local market will contend with surging demand as many buyers step up to the real estate plate, eager to lock in current market prices and record low mortgage rates in anticipation of potential interest rate hikes.