The Windsor area housing market ended 2023 in the doldrums with the average price, as well as number of sales and new listings, all recording their low points for the year in December.
While sales traditionally slow significantly in December, the 226 homes sold is the lowest total since before January 2015. In November there were 319 homes sold.
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The number of new listings (301) was down 500 units from November.
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The average monthly sales price ($514,495) was down just under $15,000 in December compared to the previous month but remained eight per cent higher than the $473,642 average price in December 2022.
“Buyers are basically sitting on the fence, not sure where the market is going in 2024,” said Windsor-Essex Country Association of Realtors president Maggie Chen.
“Sellers are shelving plans to sell, hoping the market improves. That has caused the drop in sales.”
Chen said what the market needs to kickstart higher levels of activity is a boost in consumer confidence that only a Bank of Canada interest rate cut or a statement of intent can provide.
Canadian banks are already moving to lower their five-year fixed rate mortgages, she added, with the bond market rates having receded steadily in the last few months.
“Banks are decreasing their mortgage rates, but the public watches what the Bank of Canada will do,” Chen said. “That’s what will boost consumer confidence.
“If they keep the prime rate at five per cent, I don’t see a big change in the market conditions.”
Despite the persistent decline in listings and sales over the past six months, prices and median prices haven’t been nearly as volatile as they were during the boom in 2021 and early 2022. In July, the average sales price was $554,277, resulting in a decline of $40,000 by year’s end.
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During the boom period average prices jumped by twice that figure in one month.
The market’s median price for the year has consistently been between $510,000 and $520,000 as those trying to sell higher-priced homes have borne much of the pain of the tepid sales. December’s median price was $510,000.
With 999 current active listings, the local market has a 4.4-month supply of homes. A market is deemed balanced if there is a four- to six-month supply of homes when total listings are divided by the number of sales.
“I’m not concerned about the market,” said Manor Realty general manager Rob Agnew. “I like the stabilization that this pause has brought to the market.
“The average sales price has remained strong. I’m looking forward to a very busy spring market when everyone thinks the rates will be dropping.”
Inflation tempering, the bond market declining (a portent for mortgage rates), and the Bank of Canada hinting interest rates may have topped out, said Agnew, are the signals both buyers and sellers have been waiting to see to return to the market.
“Unless you have to sell right now, everyone is holding back,” Agnew said.
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“At some point the floodgates are going to open and I think that’s going to be April. We saw the same pattern following the meltdown in 2008-09, when suddenly there was a real spike in activity after everyone held off.”
Agnew said he expects the price trends in 2024 to reflect a slow reversal of the pattern set in 2023.
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Chen added the volume of sales in 2023 (4,902) is identical to 2012. However, she noted there’s no similarity to the other market conditions during the period following the 2008-09 fiscal crisis.
“We still have strong demand and it’s only the uncertainty of what the Bank of Canada is going to do on interest rates that’s holding buyers back,” said Chen. She anticipates rate cuts will begin to appear in the second quarter of 2024.
“I anticipate some improvement in activity in the spring.
“As far as price goes, it’ll stabilize. It’ll hover between $500,000 and $550,000 for the coming six months.
“We’ll see price fluctuations of about five or six per cent.”
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