In the latest news, Windsor has been topping charts as the most affordable larger city in Ontario, despite the constant, seemingly overnight jumps that have priced many out of the market entirely. It’s our opinion that the media and repetitive stories about “bidding wars” and “families who’ve written 20 offers” are playing a massive role in the complicated housing affordability crisis we’re currently seeing. A 3 bedroom 1 3/4 story home in Walkerville has become the new Tickle Me Elmo.
A severe lack of inventory is one of the big reason prices continue to climb — a lack that is hugely outpaced by demand. When we started selling real estate the average house prices were less than half of what they are today. Last month’s stats have reported a $571,943 average price, which is nearly 60% higher than April 2020 (when we saw a small slip in the market during early lockdowns). And, our year-to-date average is $530,445 which is 43% over 2020’s numbers. It’s important to understand a few key factors behind why the demand keeps growing faster than inventory can become available. We boil this down to boredom, fear of personal security caused by the pandemic, and just general FOMO (fear of missing out).
A sure-fire way to raise demand for any commodity is to draw attention to the fact that there is a finite amount of it. And, while it is true that the total square feet of Mother Earth isn’t expected to expand and there are more people on the planet than ever before, there is a tactical approach to purchasing something you want without getting into a tizzy. Bidding wars have become a mostly unavoidable norm (again, because there aren’t enough properties on the market) but, if you’re thinking about selling and would need to buy before you do, you shouldn’t be afraid that you have to duke it out in the streets to get what you want. If that’s the continued perception being portrayed, especially while most of us are already fearing for our health, then it’s no wonder people are holding on to what they have like their life depends on it.
The more the process is portrayed this way, the less it makes selling seem like a potentially enjoyable process, and the less inventory will become available on the market. The truth is, there is a civilized way to go about upgrading, downgrading, or relocating, and it has to do with hiring someone who knows how to properly and calmly navigate all of this. Writing twenty offers over two years shouldn’t be the norm when you’re working with a professional — it’s a story that sells newspapers. In fact, working with someone to understand what you can comfortably afford and coming up with a realistic plan to get there can look many different ways, and there are a few out-of-the-box strategies that can make it a lot easier.
We believe the pandemic has caused a fundamental shift in how society values where we choose to live. Even simple homesteading hobbies are making a comeback because we’re all spending most of our time on our properties. But the real question is, do we expect these values to change any time soon, once the world opens, or will this ‘omnipresent fear’ have a lasting impact on what’s important to us? Windsor isn’t an exception; almost all North American markets are rapidly rising, and it’s not just the “rich Toronto buyers” gobbling things up. Sales of investment books like Rich Dad Poor Dad are through the roof, young couples who would normally have spent thousands on a wedding are using their savings towards a downpayment, and current owners are sitting on hundreds of thousands in equity to use towards their new purchases. It’s easy to obsess and wonder if all of this is just part of whatever our new normal is. But it’s worth noting that inventory is beginning to increase just as vaccinations roll out and airlines are starting to reopen. Coincidence? I guess we’ll find out soon enough.
Always feel free to reach out to us with any questions or if you’re wondering how this information might affect your real estate planning, we’re always happy to chat!
