No reason to worry yet about drop in Windsor housing sales, realtor says
After a rip-roaring year for local real estate in 2017, housing sales in Windsor and Essex County plummeted in January.
Residential sales fell more than 21 per cent — year over year — from 364 units in January 2017 to 286 last month, according to the Windsor-Essex County Association of Realtors.
“It’s a big number — it is a concern,” said association past-president Kim Gazo, a sales agent at Deerbrook Realty.
But not to worry, at least not for now, Gazo insists. She said the sudden market softening in home sales was consistent across the province. In fact, the local market fared better than elsewhere, with sales in London, for example, down 29 per cent for the same period, while the Toronto region saw a 22-per-cent dive in the number of homes sold in January.
And while home prices fell an average of four per cent in Toronto, and rose by single digits in London, average home prices jumped 27 per cent in Windsor, from $219,000 in January 2017 to $278,000 in January 2018.
“That’s one thing that was really outstanding — the (sales) numbers are down, but the prices are up,” Gazo said of the record-high local home values.
One of the reasons for that, she said, is that there is a relatively small inventory of homes on the market.
“When the listings are down, sales are down,” she said. That leads then to “the same people battling over the same houses,” she added, thus putting upward pressure on property values.
Another big factor was the tightening of mortgage regulations effective Jan. 1, particularly requiring applicants to pass a “stress test” ensuring they could meet payments should interest rates rise, as they are expected to do this year.
“The main effect is on first time homebuyers,” said Gazo. “You have to be able to keep making payments if interest rates go up by two per cent.”
She said the “silver lining ” of that change — designed by government to help cool off overheated real estate markets like Toronto’s — is that prospective homeowners and real estate investors have begun eyeing more affordable markets like Windsor’s.
“It’s pushing investors to areas they might not have previously considered — it definitely puts more attention on our real estate scene,” said Gazo.
But with all that potential buyer attention comes the need for more local inventory, she said: “We need to build.”
As reported in Monday’s Star, new housing starts in January took a steep nosedive over the same month a year ago, with no new single-family home construction permits issued last month. City officials, however, said that a number of new residential subdivision plans are expected to be getting the green light in the coming weeks.
Sales and listings numbers are usually low at the start of the year. January 2017 saw 587 real estate listings for Windsor and Essex County, a figure that doubled in February and increased 10-fold to 5,887 by July.
An advantage to listing now, said Gazo, is that there is less competition among sellers. By the spring and summer, it’s the buyer’s market that heats up. Last year brought record local sales, and multiple buyer offers were common, especially in the most desirable neighbourhoods.
As for this January’s low sales numbers, Gazo said it’s not a big worry — yet.
“If dramatic declines continue in February and March, I think then we can start losing sleep,” she said. dschmidt@postmedia.com Twitter.com/schmidtcity