A recent report by the Windsor-Essex County Association of Realtors has predicted a competitive housing market in the fall, with prices expected to rise rapidly in the first part of 2024. The current shortage of listings and slow pace of new home construction are contributing factors to this trend. The local real estate market is currently on par with the average sales price and slightly ahead in terms of the number of sales compared to the previous year.
The Windsor census metropolitan area, which includes Lakeshore, Tecumseh, LaSalle, and Amherstburg, is already experiencing accelerated population growth. In the first seven months of 2023, the area has seen a population increase of 5,200, with 4,100 new residents in the last five months alone. This population growth, coupled with limited new home inventory, further emphasizes the demand-supply gap in the housing market.
The president of the Windsor-Essex County Association of Realtors, Mark Lalovich, states that the biggest challenge in the current market is that demand is outstripping supply. The number of listings remains over 20% lower than last summer, with a decrease of nearly 300 new homes listed in July compared to the previous year. Additionally, new home construction has slowed due to rising interest rates, with only eight homes completed in June, far below the targeted number.
In the short term, the resale market will have to compensate for the lack of new inventory. However, if new home construction does not pick up pace, the region may face a surge in demand in the resale market similar to the levels observed during the COVID-19 pandemic. The reluctance of baby boomers to downsize, compounded by affordability concerns and higher interest rates, is contributing to the reduced number of houses available for sale.
In order to stabilize the market and increase supply, Lalovich suggests that sellers may wait to see if the Bank of Canada raises interest rates at its next meeting on Sept. 6. If rates remain unchanged, it is expected that more listings will become available, easing the challenges faced by buyers in the Windsor housing market.
Sources:
– Windsor-Essex County Association of Realtors
– Statistics Canada