Seller’s market to prevail in 2021, prices expected to rise 15-20%
The Windsor housing market is likely to continue in seller’s market territory in 2021, with expectations for an active year ahead characterized by growing demand from move-over homebuyers and locals, low housing inventory and rising prices. Low inventory has been a common trend across many Ontario housing markets, putting prices on an upward trajectory. Indeed, the average selling price of homes in Windsor increased to $406,861 in 2020 (Jan. 1 – Oct. 31), up from $335,697 in 2019 (Jan. 1 – Dec. 31). With similar conditions expected next year, the RE/MAX outlook for Windsor residential real estate in 2021 is an increase in average price of 15-20%, to approximately $478,062 across all property types.
Who’s driving the Windsor housing market?
Windsor has seen an influx of move-over buyers from in and around the Greater Toronto Area, popular among those seeking larger homes at a more-affordable price point. Move-over buyers are expected to be the primary driver of market activity in 2021.
First-time homebuyers in the area are typically young families seeking single-detached and semi-detached homes ranging from about $350,000 to $450,000. First-timers who had a difficult time buying real estate are unlikely to find any relief in 2021, with growing demand and multiple-offer scenarios expected to continue due to the housing supply shortage.
It’s not been uncommon in 2020 for first-time and move-over buyers to offer $20,000 to $100,000 over asking in an attempt to secure a property in this seller’s market. This is expected to persist in 2021 as well.
Move-up buyers in the Windsor area are typically young families. There has been some hesitation from them due to the strong seller’s market, with some buyers waiting to see if prices will fall (which they have not) or buying before selling their existing home, which is adding pressure to the limited inventory. Their work-around has been to increase their budget or lower their expectations. This is expected to continue into 2021.
Condominium apartments are very limited in Windsor, with a slim gap between the price of condos and townhomes in the area, reducing buyer demand. The few condos that do exist here are typically popular among retirees and downsizers, thanks to the convenience they offer.
Meanwhile, Windsor’s luxury real estate market is driven by move-over buyers from the Greater Toronto Area and surrounding regions such as Hamilton. Homeowners from these areas have recently seen their home values increase substantially, with many opting to sell and trade up for brand-new luxury homes in Windsor.
Windsor’s Hottest Neighbourhoods
Windsor’s top-selling neighbourhoods in 2020 were Lakeshore, LaSalle and South Windsor, based on the number of transactions. High-demand properties include one- and two-storey detached homes and townhomes, but anything competitively priced in the Windsor area has generally been quick to sell.
Windsor New-Home Construction
Windsor’s new-home construction is booming, popular among retirees and move-over buyers in search of more home for less money. The current rate of construction is barely meeting demand, which is expected to continue in 2021. Brand new homes are prices higher than their resale counterparts, impacted by the COVID-19 related shortage in building materials. However, homes in brand new developments are fairly priced, which eliminated multiple offers and allows buyers to negotiate fairly.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”