How Did Windsor Become the Hottest Housing Market in Canada?

In the wake of the coronavirus pandemic earlier this year, plenty of unprecedented real estate trends have surfaced. Big-city dwellers are searching for greener pastures in rural communities, quiet mountain towns have transformed into red-hot housing markets*, and smaller municipalities that may have previously been ignored by homebuyers and investors have turned into lucrative opportunities. A lot has happened in the Canadian real estate market this year that will have an impact for many years to come, but could new patterns also emerge heading into 2021?

The Windsor housing market has been one of the most interesting industry developments in 2020. What was once one of Canada’s sleepier urban housing markets due to struggling economic conditions and a lack of prospects, has quickly transformed into one of the hottest housing markets in the nation.

But now it is important to determine if this is a bubble, or if these are sustainable long-term trends. Below we explore the evolution of the local Windsor housing market over the past year, and highlight some trends that might play out as we shift into 2021.

How Did Windsor Become a Hot Housing Market?

During the COVID-19 public health crisis, about five million Canadians are working from home, according to the latest data from Statistics Canada. And surveys show that about half of Canadian workers think they will be working remotely even after the pandemic is over, signalling a long-term shift to how we work.

With the newfound freedom to work at a location of their choosing, many professionals are ditching major urban centres and looking to plant roots in areas where they can expect more bang for their buck.

As more people set their sights upon Windsor to secure their dream home, inventory was not sufficient to satisfy demand. The interest among new and seasoned homebuyers has been fierce this year – and it is anticipated to stay that way – but the lack of inventory is driving up the value of properties. This is a positive sign for those who already own a home in the region, but it might be a case of missed opportunity for some.

When you factor in historically low interest rates and pent-up demand, the situation within Windsor’s housing market makes sense. Despite prices hitting record levels, first-time homebuyers are seeing lower prices on average than in the Greater Toronto and Hamilton Area, which is only driving demand higher.

What do the latest numbers show?

Windsor Housing Market Posts Record Gains

Windsor continued its meteoric ascent in September as the housing market tightened. According to the Windsor-Essex County Association of REALTORS®, residential sales activity surged a record 44.2 per cent year-over-year in September. The average price of homes sold that month climbed to 29.6 per cent to a record high of $419,711. The year-to-date average also advanced 20.2 per cent to $395,008.

The southwestern Ontario city has witnessed explosive growth as overall inventories hover at all-time lows. Active residential listings declined 36.2 per cent, months of inventory fell from 2.2 to one, and new residential listings were up just nine per cent year-over-year.

“Home sales posted the second-best month of all time in September and was by far the highest level of sales for the month,” said Lorraine Clark, the President of the Windsor-Essex County Association of REALTORS®, in a news release. “While new listings continue to rise steadily, the main story again this month is the twin factors of strong demand and record low overall supply, which is creating upward pressure on prices. This has driven the average price to a new record for the fifth month in a row.”

And that is not all.

The Canadian Real Estate Association (CREA) reported that Windsor’s head-turning housing market has created approximately $20 billion worth of personal wealth for homeowners. This estimate makes sense, considering that the average sale price of a home in Windsor has doubled from five years ago.

Under these tight market conditions, development is taking place. The value of residential construction has surged by $35 million this year, led by a six-per-cent increase in new single-family dwellings. This, real estate agents say, will produce enough inventory to eventually diminish the pressure.

2021: Expansion or Correction in Windsor Real Estate?

It can be difficult to gauge if the current housing boom is a sustainable, long-term trend. These are not certain nor normal times for anybody or any industry. For now, real estate agents are continuing to operate and transact safely, leveraging technology such as emails, digital documents and virtual tours of properties. Today, Windsor is certainly one of the hottest markets in Ontario, and everything is tilted in its favour to ensure that the city continues to experience incredible growth heading into 2021 – and beyond.

The post How Did Windsor Become the Hottest Housing Market in Canada? appeared first on RE/MAX Canada.



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How Did Windsor Become the Hottest Housing Market in Canada?