The Canadian real estate market has been a persisting headline over the last year thanks to record-setting growth in many housing markets, the migration from major urban centres to rural communities, as well as the industry successfully adapting to the pandemic utilising digital tools. It is hard to pick just one story that has encapsulated the real estate industry in 2020 – and in the early start to 2021.
One southern Ontario city is a great example of how fortunes can turn around in an instant. Prior to the pandemic, the Windsor-Essex real estate market was not quite as red-hot as that of Toronto, Mississauga or Ottawa. However, all that changed over 2020 as Windsor transformed into one of the hottest markets in the province, and in the broader Canadian real estate sector.
Windsor’s growth has been jaw-dropping and record-setting, and the early forecasts suggest that 2021 could be a repeat performance for the city, thanks to a mix of soaring demand, limited stock and ultra-low interest rates.
So, how strong were the trends in the Windsor real estate market last year? Immense, impressive and important. Here’s why.
Here’s Why the Windsor-Essex Real Estate Market Is Still Dominating the Headlines
According to the Windsor-Essex County Association of REALTORS®, residential sales soared, with the number of homes sold in January surging 31.5 per cent year-over-year, a new sales record for the month of January.
Average price also went through the roof in January, climbing 31.4 per cent year-over-year to $492,480.
“Home sales continued at the same breakneck pace they ended 2020 on, with no signs of slowing down,” said Damon Winney, President of the Windsor-Essex County Association of REALTORS® in a press release. “With new listings still tepid since the recovery in comparison to sales, the housing market in the Windsor-Essex County region is experiencing similar trends as other markets in Southern Ontario – the tightest market conditions in history, record low inventories, and accelerating price growth.”
In total, the dollar value of all home sales in January swelled 72.8 per cent to $215.7 million from the same time in the previous year.
So, what are real estate experts saying about the rest of 2021? It could be a rudimentary case of supply and demand.
Will Low Inventories Spur New Records in the Windsor Housing Market?
In December, the Windsor-Essex County Association of REALTORS® warned that the city’s housing inventories are approaching record levels, although some new supply is coming to market over the next several months.
“Looking ahead to 2021 we have some new supply beginning to come back to the market but not nearly enough to keep up with the pace of demand. With inventories testing new record lows with each passing month, we’re likely to see double-digit price growth through the first few months of the year.”
With pent-up demand exhausted and the housing market adapting to historically low rates, industry leaders are combing through some of the more technical data points to gauge where the market is heading this year. These include listings and housing starts.
The real estate association in Windsor found that new residential listings decreased 10 per cent year-over-year to 515. Active residential listings, meanwhile, tumbled 46.2 per cent to 421 at the end of January.
The months of inventory came in at just one by the end of January 2021. This is down from 2.3 months from the same time in the previous year. The long-run average is 4.4 months for this time of the year. Industry experts note that this is a good measurement to better understand where the market is heading since the figure suggests how long it would take to sell present inventories at the current rate of sales activity.
Housing starts are beginning to balloon in Windsor. According to Canada Mortgage and Housing Corporation (CMHC), housing starts increased an astounding 946 per cent year-over-year to 136 in January. Completions fell 65 per cent, from 81 to 28, in January. While these figures are encouraging for some price relief, CMHC data suggest that three-quarters of these new construction projects are rental units.
Windsor: Continued Growth into 2021
The Windsor real estate market could be the hottest in all of Canada in 2021. The RE/MAX Windsor Housing Market Outlook (2021) forecasts an increase in average price of as much as 20 per cent to approximately $478,062 across all property types. Move-over homebuyers will drive demand, while consumers will be searching for townhomes and two-storey detached homes.
Despite the meteoric growth, Windsor is still considered to be one of the most affordable markets in Ontario, alongside London. That said, it is remarkable how much the Windsor real estate has grown since 2019, when prices were a little more than $300,000. It is a testament to how stellar the Canadian housing market is today, as well as how resilient the sector is, considering that this growth has taken place over the course of a global pandemic.