WECAR releases spring real estate market outlook

The spring 2024 Windsor-Essex County real estate market is expected to rebound, according to an outlook released Monday from the Windsor-Essex County Association of Realtors.

WECAR said the prediction is driven by interest rate stability, a strong local economy and growing consumer confidence.

While some parts of the province may be headed for a recession in 2024, Windsor is predicted to buck this trend according to a report released earlier this year.

“We are already seeing a resurgence in buyer confidence heading into the first part of 2024,” said WECAR President Maggie Chen. “Thanks to good economic tailwinds, strong business investment, and stable interest rates buyers and sellers are more confident heading into the spring. That should create a more active spring market compared to last year.”

Real estate market activity in Windsor-Essex has been picking up momentum through the first part of 2024. Year-over-year sales activity and listings are up from 2023 to 2024.

“There's no doubt we're ready for a rebound,” added Dan Gemus, CEO and broker of the Dan Gemus Real Estate Team. “We've been seeing the action in the marketplace picking up over the last month.”

Gemus said spring is naturally a busier time of year, with signs suggesting that will remain true in 2024.

“We are starting to see multiple offers again. Not only multiple offers on the lower price point, which sad to say the lower price point now is the $400,000 or 500,000 average price, but the higher price points as well…the $800,000 to $900,000 homes.”

“It's good news for homeowners that have been looking to make a move. It continues to make it challenging for those buyers that are looking to get into the market.”

 

Interest rates 

One of the variables impacting the real estate market are interest rates.

Interest rates have held steady in 2024, with the Bank of Canada is scheduled to make an interest rate announcement on April 10, 2024. The bank held its overnight lending rate at five per cent in March 2024, marking the fifth consecutive announcement where no change was made.

“New listings are up heading into the spring market and that’s good news for buyers,” said Krista Gionet, executive officer at WECAR. “One important thing to watch is the next interest rate announcement coming from the Bank of Canada in April. While it’s not clear if rates are going down anytime soon, the bank has signaled that rates are likely to be stable as they continue to monitor inflation and broader economic conditions.”

Gemus explained, “Mid year, they're anticipating the interest rates to start coming down a little bit and we anticipate that's going to spur the market further. So that makes us a little bit nervous as realtors because again, we want to see that even market right so what we're seeing now is giving us a little bit of 'un-nervness' I guess, so to say to head into this busier spring“

The only thing that's going to relieve the pressure on the real estate market however Gemus added is adding additional inventory.

 

Getting shovels in the ground

While new listings are up in February 2024, WECAR said Windsor-Essex continues to struggle with building new homes. According to the province, Windsor missed its housing supply target of 953 housing starts in 2023.

That means the city missed out on badly needed funds from the province for housing-related infrastructure.

Chair of the Windsor-Essex Home Builders’ Association, Brent Klundert said many developers are waiting to see if the interest rate will drop.

“Interest rates have a lot to do with the feasibility of these larger scale projects in the city,” Klundert said.“Is it feasible or is that not feasible? And especially at a time when rates are falling, are we in a better position in the upcoming months to start these projects then we're in at the moment right now?”

Chen added that although the city has made good progress on housing permits, shovels are not going into the ground on new housing construction.

Klundert added, “These big projects that are heavily dependent on finance money to get them established and get them going. Of course, they're going to hit the pause button waiting for the rates to come down. And then the other side, the demand side, which is the general consumer for the individual houses, they're in the same boat. They're saying, ‘Well, we'll wait a little bit in order to make this purchase because rates are going to come down.’ So you get this waiting game and it becomes a timing issue more so than anything else.”

“In 2024, Windsor must commit to putting the policies in place to get more homes built,” said Chen. “Realtors are committed to working with the city and its leaders to solve the housing affordability challenge.”

As the spring market picks up, WECAR is promoting the importance of working with a local realtor through its "We Bring You Home" campaign.