Windsor Real Estate Blog

The average resale price of a home in Canada was $337,410 in December, according to data from the Canadian Real Estate Association. That was 19 per cent higher than in December, 2008, and sales activity has also increased sharply. The Windsor Ontario real estate market in January 2010 showed an average selling price of $155,819 for real estate in Windsor. This is down 1.7 per cent from January 2009 but total sales of Windsor and Essex County homes were up 54 per cent from January 2009 and 7 per cent above real estate in Windsor sales from January 2008. New Windsor real estate listings were flat in January compared to Windsor real estate MLS listings for January 2009 and 2008.
January was yet another reminder that the Canadian resale housing market is driving the economic recovery in Canada. Unfortunately Windsor and Essex County real estate has not seen the price prosperity in homes for sale in Windsor that is being experienced in other parts of Canada. Another area of economic growth is residential investment which has been one above average growth. The strength in residential construction has been supported by renovation activity – as homebuyers renovate their new purchases, and sellers attempt to add value to their homes before putting them on the market. This activity is evident in both Windsor homes for sale and Windsor condos for sale that have been fully updated or extensively renovated to either recapture lost value or to return a profit on undervalued real estate in Windsor.

Homebuilders have begun to responded favourably to strong housing demand, and in December housing starts rose for a third consecutive month – rising 5.9 per cent from month ago levels. At 174,000 units, housing starts are now up 47 per cent from the trough in April 2009. The strength in starts suggests new homebuilding likely grew in the range of 15-20 per cent in the last quarter of 2009 alone. Again in the local Windsor real estate market housing starts for January were up marginally from the same period in 2009 suggesting that the demand for Windsor and Essex county homes is mostly satisfied by Windsor MLS resale listings.

While the impact of housing demand on economic growth has been favourable, the strength in home prices has gained the attention of policy markers for a different reason. Canadian existing home prices have been heated, growing close to 20% Y/Y in Q4 2009. Not only have home prices retraced the losses that occurred over the very short-lived correction early last year, but they are now well above pre-recession (and historical) peaks. Again this is not the story of homes for sale in Windsor and MLS listing for Windsor and Essex County where average prices are flat to down for the same period.

Policy makers have noted that they are not currently worried about the level of home prices, and this is just one mechanism through which monetary policy is working to help support the economic recovery. But if this momentum continues, it may signal that a bubble is indeed forming and changes in lending policies may be necessary to avoid an overheated housing market. This would have a significant negative impact on the Windsor and Essex county real estate market and signal further declines in prices of homes for sale in Windsor.