Average home sales price drops nearly 25 per cent over five months in Windsor-Essex

The average price at which houses sold in Windsor-Essex has declined by nearly 25 per cent over the past five months, according to new data from the Windsor-Essex County Association of Realtors (WECAR).

Updated numbers show a consistent decline of the average home selling price month-by-month since March. At the time, houses in Windsor-Essex sold on average for $723,739.

According to WECAR, that number dropped to $557,989 in July — a decline of $165,750 or 23 per cent.

Brian Price, who sits on the board of directors for the Windsor-Essex County Association of Realtors, says the decline can be attributed to the Bank of Canada hiking interest rates which has "made the cost of borrowing more expensive."

Rather than looking at home sales prices as being in decline, Price advises people to consider market prices as "normalizing."

"What's happened is basically the froth has come off of the top of the market,” he says.

But, despite many homeowners choosing to hold on to their properties, supply is outpacing demand, according to Price.

"We are building some inventory. For my out-of-town buyers, that's a good thing because it gives them more options and it gives them more price flexibility as well," he says. "Because interest rates have gone up, the cost of homeownership has gone up, there's less buyers. We have more supply now. We have more choice now."

Real estate salesperson Sandeepp Sampath Kumar, as seen on August 3, 2022, says he's seen more buyers successfully make conditional offers over the past five months. (Sanjay Maru/CTV News Windsor)

For real estate salesperson Sandeepp Sampath Kumar, the current state of the market has given buyers more leverage, allowing them to place conditions on their offers.

"In 2021 and early 2022, most offers were all firm with no conditions," says Kumar.

"Typically, because of how high the interest rates are, they go in with a financing condition, which keeps them secured that if the lender or bank or underwriters disagree with the agreed-to price, they have an exit clause and can back out of the deal if required."

However, Kumar adds it is hard to tell if the decline in home prices is here to stay or just a temporary blip, as future infrastructure projects such as the EV battery plant and megahospital bring new jobs to Windsor-Essex.

"We're going to have more population here which obviously leads to a demand for housing. So this is going to keep shifting the balance between buying and selling," says Kumar.

The number of home sales has declined as well. Data from WECAR shows 698 homes in Windsor-Essex were sold in March, while 393 were sold in July.

"In most cases, homes don't sell right away. That's another added advantage for buyers today," Kumar says. "Buyers can take their time, visit more properties and see what they like."