Windsor's real estate market is 'affordable' — but how affordable is it for Windsorites?

Windsor's real estate market is booming — but it has some Windsorites feeling left out, unable to seal the deal on finally owning their very own home.

"I'm probably never going to own a home unless the market crashes," said 28-year-old Elizabeth Ward. 

Ward and her partner first started looking to purchase a home a couple of years ago, hoping for one within their $200,000 budget, but they quickly gave up, knowing they couldn't compete with the bidding wars. 

"We kept looking and kept trying but had to give up because there's no way that we could go anywhere near [$100,000], let alone the $200 and $300,000 that some houses are going over now," she said. 

"So, we look and then we get discouraged, and then we give up."

Working in retail, Ward makes between $30,000-$40,000 a year, but together with her partner, their joint income is around $60,000-$70,000. This gets them a pre-approval rate of about $200,000, which she says isn't enough — even during their initial search two years ago.

"We're both making like over minimum wage and this is still kind of where we're at," Ward said. 

'Not affordable for the people who live here'

And yet, Windsor still has a reputation for being relatively "affordable" compared to other markets. 

In January, the average price of a Windsor-Essex home was $492,480 — an increase of 31.4 per cent compared to the same month last year. And yet, according to the Canadian Real Estate Association, that price tag is still less than the average January prices in the London area ($607,431), Hamilton-Burlington area ($787,840) or Toronto area ($967,885).

"We've been bragging about affordability for so long," said Maggie Chen, a broker of record with LC Platinum Realty. 

"But is that what it is now? Is that what it is in 2021?"

Ward said it's true Windsor is affordable — "but not for Windsorites."

"It's affordable for other people in the province. For the locals that live here, it's not even close to being affordable," she said.

"It's affordable to the people with more money who live outside of Windsor."

While Chen, who also sits on the board of directors for the Windsor-Essex County Association of Realtors (WECAR), couldn't quantify what percentage of buyers are from out-of-town, she said that anecdotally — according to what she's hearing from agents — most buyers are from outside of the region. 

What can an average income buy you in Windsor?

According to Windsor's 2016 Census Profile from Statistics Canada, the average employment income in 2015 for full-year full-time workers in Windsor was $64,962, which was slightly more than incomes in London or Hamilton, but about $14,000 less than the average income in Toronto.

So, what can that income buy you?

According to Windsor mortgage agent Rasha Ingratta, today, a $65,000 income could get you a mortgage of about $300,000. 

However, in January 2021, out of 437 homes sold that month in Windsor-Essex, just 67 of them sold for less than $300,000, according to data from WECAR.

That means that for the average Windsorite, only 15 per cent of homes would have met their budget that month. Only four per cent of homes sold for less than $200,000 in January. It was a similar break down in February. 

Further to that, a new federal regulation came into effect in 2018 that puts every lender through a financial stress test, to make sure they can afford the mortgage they're trying to take out. That's raised the bar for all Canadian would-be home-buyers, not just those in Windsor.

There's also been a real shift locally, Ingratta explained, in how much bang you can get for your buck. For example, she said, homes worth $200,000 five years ago could now be selling for more than double the price today. 

"If we can turn back time and the person that makes $40,000 a year, they can afford to buy that home," Ingratta said.

"The $40,000 income person now is really giving up on purchasing a home here unless they have a co-signer or more of a down payment."

'Lower your expectations'

Looking forward, Chen doesn't see the market slowing down.

"I used the word crazy in the very beginning of this market," said Chen.

"Then I switched to insane. And now, I can't even use that word anymore. The market is exploding."

Chen explained that many of her buyers are scared that if they don't jump into the market now, they might not be able to afford it down the road. She acknowledges it's especially challenging for young professionals and younger families.

A number of factors continue to drive prices up, including high demand and low supply. At the end of January, there were 421 homes listed on the market, which is the lowest number that month has seen in the region in more than 3 decades, according to the local realtors' association. 

And with out-of-town buyers coming in, if they've sold a home in a bigger city where prices are higher, then they come to Windsor with an economic advantage that makes then better suited to play the bidding war game, which drives average prices up.

Chen said, it's not impossible to enter the market on a tight budget, but it does mean people need to "lower [their] expectations."

For example, Chen explained, $450,000 could have possibly bought you a 1,500 square-foot, raised ranch, single-family home in South Windsor five years ago — but not today.

"Something around $300,000, still, it's not like it's not possible," she said. 

"It's still possible, however the way the market goes, if that is your affordability, your budget, you might have to act fast — or the only option is to rent and leave that dream behind a little bit."

Windsor still catching up to other cities, Chen says

Meanwhile, Ward continues to keep an eye on the market, but it continues to be discouraging.

"Honestly, it hurts," she said. "I get very upset and overwhelmed by it pretty often."

Not only are housing prices going up, but the cost of rent is also going up — it increased by about 8 per cent last year. She and her partner are looking at larger apartments to rent for their family, but Ward worries about what that will cost them.

"[It] makes us laugh when the banks go, 'We don't want you paying over what you can pay.' But instead they're forcing us to pay even more than that because rent is so much higher than a mortgage would be."

As Ward hopes for the real estate bubble to burst, Chen doesn't see that happening anytime soon. 

"Absolutely not. We are still catching up," she said.