Build over buy? Why Windsor's hot real estate market has some opting for new builds
'You can build for sometimes cheaper than you can buy right now'
As Windsor's real estate market soars, becoming the hottest in the country, some folks looking for new homes are giving up on the resale market — and turning to new builds instead.
When Brenda DeBlauw lost her husband in December, she quickly decided to make the move from Burlington to Windsor, where she's originally from, to be closer to her siblings and their families. But the stress of the bidding wars caught up to her quickly.
"It caused so much anxiety," DeBlauw said.
"You're afraid of even going into it, because you know you're not even going to get it. Especially when it's a hundred and fifty thousand over bidding, I just didn't know what to do."
After a couple of months of unsuccessfully trying to break into the market, it was suggested to her that she consider a new build, and she was quickly swayed.
"With a new build, you know what you're going to pay, and you get what you want to get. And you're not having all this anxiety and aggravation," she said.
She recently signed a contract for a town home in Windsor within her budgeted range of $450,000 to $500,000.
DeBlauw said that with homes going way over asking, and then likely also being in need of upgrades, a new build was the best option for her in terms of value for her money.
Cheaper to build?
This shift toward new builds is unlike anything Lorraine Clark, the president of the Windsor-Essex County Association of Realtors, has ever seen before in her 30-year career.
"People are tired of the bidding wars. So what they're doing is if they can afford to wait six months to build the home, they're staying with family members. They're staying at their cottage. They're doing all kinds of alternative housing in order to avoid the bidding wars," she said.
"Because you can build for sometimes cheaper than you can buy right now."
Home sales continue to skyrocket in Windsor-Essex. In September 2020, the average price of a home sold at a record $419,711, up 29.6 per cent from September 2019, according to a recent report from the Canadian Real Estate Association. It says the combination of strong demand and record low overall supply continues to drive prices up.
Further to that, according to a survey from Royal LePage released Wednesday, housing prices in Windsor saw the highest increase across Canada during the last quarter.
'New home demand ... is amazing'
Broker of Record Joe Montaleone, with Century 21 Showtime Realty, explained that affordability — and availability — are big reasons why more and more folks are being drawn to new builds.
"The new home demand right now is amazing," he said.
Montaleone, who has been in the business for 31 years and has been working with developers and builders since the start, explained that the unfortunate part of the resale market is that you don't know what you'll end up having to pay to get a product, and sometimes, you might be paying more than what the home is really worth.
Plus, there simply aren't enough listings out there to meet the demand.
"That's why in the end, they're also saying, 'OK, if I can't get a home, I'm tired of the chase. My best solution is, let's go into a condo. Let's go into a town home. The price is the price. We know what we're going to pay.'" he said.
Montaleone says he wishes there were more new home products available right now, because they're selling out quickly, even though it can take six to nine months for a new build to be completed.
The City of Windsor says it's seen an increase of 6 per cent in the number of building permits issued for single family homes in the last year, from September 2019 to September 2020.
That said, the average construction of a new single family house in Windsor was valued at $402,000 in 2019, but has gone up to $426,000 in 2020. That does not include the land value.
And still, Montaleone said that more and more first-time home buyers are being drawn to new condo or town home builds, in ways that they weren't a year ago.
"That's the most affordable product today," he said.
"I believe that these builders and developers are seeing a continued trend again because of affordability. And I don't see it slowing down."
Will be strong for the next few years, developer says
Ezio Tartaro of Gintar Homes, a residential construction company, says he's certainly seeing an increase in demand of about 10 to 15 per cent compared to same time last year.
"We think it's actually going to be strong for the next few years," he said.
"If you take an existing home and it doesn't necessarily check all the boxes of that individual homeowner, the renovations they would have to do or the updates, it might be actually much more economical for them to just to build new."
DeBlauw is waiting to find out when she'll be able to move into her new home before she sells her house in Burlington.
She said she's excited for the new chapter her new build allows her.
"It's like a new beginning. At my age I didn't think I'd ever be doing this," she said.
"But I am looking forward to it."