It has been a year like no other. Month after month, real estate markets across Canada are setting record highs in both unit sales and average prices, while simultaneously reporting record low inventory; a reality which surely cannot stand the test of time. Competition among buyers has led to bidding wars in major cities and smaller more rural areas alike; and Windsor-Essex real estate is no exception.
Arguably one of Canada’s most well-known border cities, Windsor-Essex sits directly across the Detroit River from Detroit, USA. It’s a city that appeals to both big city dwellers and those who prefer rural communities due to its vast geographical landscape and seemingly endless career sectors. Over the course of the last year and a half, Windsor-Essex has seen a real estate boom far greater than any in recent memory.
Windsor-Essex Real Estate Market Enjoys More Record-Setting Activity
The County started off 2021 with a bang; setting record month after record month in terms of homes sales, sales volume, and average home price. While the numbers have decreased slightly as the spring season has rolled on, the region is still going strong. The MLS System of the Windsor-Essex County Association of REALTORS® recorded 778 units sold in May 2021, a marginal decrease of 0.38% compared to April 2021, but a strong gain of 76.8% compared to May 2020. While sales may be slightly slowing compared to earlier this year, May 2021 sales were still 7.9% above the five-year average and 15% above the 10-average for the month. Damon Winney, President of the Windsor-Essex County Association of REALTORS®, makes note of this minor month-to-month decline: “home sales may have cooled slightly from the white-hot pace earlier this year and late last year, but remain historically strong.”
When looking at the metrics on their own, it would appear that the Windsor-Essex market is having no issue with supply, as the number of new listings in May 2021 was 51% above the number from just one year ago. The month saw 1,111 new residential homes hit the market, the largest number of new listings for the month of May in five years. However, the uptick in new listings is not enough to account for the increase in demand, meaning the region is enduring a slight supply issue. With sales being so high, and new listings not quite keeping pace, the inventory of homes in Windsor-Essex is on the decline. At the end of May, there were 582 residential units on the market – a stark contrast from May 2020, and a decrease of 42.8% from this time last year. This is also the lowest number of active listings for the month of May in more than three decades!
Lack of inventory, coupled with ultra low interest rates can only lead to one thing – sharp price increases across the market – and Windsor-Essex is following the trend. With home sales for the first five months of the year 61.3% greater than the same period in 2020, and new listings not keeping pace, the average price in the area for homes sold has come in at $551,915; a sharp increase of 44.1% compared to this time last year.
In terms of the year-to-date average price, the County saw a substantial 42.8% increase compared to the first five months of 2020, with the average price clocking in at $524,167 – proving that as the year progresses, the price is only going up. Damon Winney credits the low inventory rates with the skyrocketing prices: “New listings have rebounded significantly but still not nearly at the same rate as sales, which hasn’t done much to lift overall supply levels from record lows. Without a substantial boost in new supply coming onto the market it’s likely that we will continue to see significant price growth in the near future as potential buyers compete for a very small pool of available listings.”
What to Expect in the Windsor-Essex Housing Market This Summer?
As spring transitions to summer, it is expected that new inventory will continue to be outpaced by sales. This factor, coupled with competition amongst buyers, is assumed to fuel further price increases for properties within the communities of Windsor-Essex. As interest rates continue to remain low across the country, and homebuyers continue to migrate away from the Greater Toronto Area, anticipate real estate metrics across the board to set new monthly records as the second half of 2021 begins.