A lot has happened social-economically in the last 30 days, and even though this month is yet to finish (as I’m writing, it’s the 28th of March 2022) some details can be noted.
There is chatter around the water cooler of life regarding a multitude of things: base mortgage increases, lack of inventory, buyers increasing, cost of buying skyrocketing, coming provincial elections, and since this is the day after the Oscars – (spoiler alert) – Will Smith. But today I’m going to go over some basic data and try and showcase some rationale.
The Rising, and Steadying, or Sale Prices
Below is a graph pulled from data in the WECAR system, showcasing information based on the following criteria – which is general in definition: Area (Windsor Essex County), Transaction Type (Sale, Residential), Timeframe (September 2021 – March 2022). Pretty general but will give a good barometer of what’s happening. Photo 1 – List Price vs Sale Price; Photo 2 – Sale Price vs List Price Ratios.
List Price vs Sale Price
Pulling the data from the Windsor Essex County Association of Realtors (WECAR) database, we can clearly see the large increase in median sale price vs list price, as listing has not changed much. The increased demand and record low inventory surged prices from buyers who have been priced out of other larger markets is the largest culprit for such an increase.
Closing Price to List Price Ratio
In the same timeframe (Sep 2021 – March 28th 2022), we see the general median closing prices represented as a percentage – in this case, over asking to list, people were spending on residential homes. This is across the market as a whole of all residential sales.
It’s not nice to see if you’re a first-time buyer, but the good news is the flattening, and that’s likely due to the next photo, which details the increase in homes for sale on the market.
Buyers Haven’t Stopped Buying, We Just Have More Homes
The increase in inventory allows for the rampant increases in prices to stabilize – but nobody knows for how long of course. While the prices are not increasing at the same astronomical rate, they still are growing slowly on a median cost per sale outcome. Are the homes likely to drop in closing price? Not likely. Especially now as the City of Windsor won an incredible bid for a world class manufacturing facility (great news for the everyone).
So, What Does This All Mean?
It’s positive news in my opinion. The rapid rate of the sale price of homes was not good on a macro level for the area. Stability is good, and hopefully we can have constant steady growth that’s fed by economic investment and better quality of life for all. I’d still like to see the province and our financial industries find options for first time buyers, but one thing at a time.
For the short term, I believe we will still see growth of the sale price of homes in much smaller margins, and increase in inventory similar to years past for the next few months. We will still be around the $700k for the average price of a home (taking into consideration all homes sold in the county), if not edging closer to $750k, but we will hopefully have more inventory for first time buyers as well. Those homes, they will be marginally more affordable (I predict) with less competition as the inventory increases in the short term.
