Experts provide Windsor-Essex real estate tips and predictions for 2023
'Climate at the moment is very favorable toward the buyers,' realtor says
This year saw Windsor's real estate prices reach their highest point ever — but the market also saw a steep decline as interest rates soared. That has some potential sellers and buyers wondering what 2023 might have in store.
According to a recent report from online brokerage Zoocasa, some buyers might be willing to take the leap and make purchases despite higher interest rates, and sellers who had put their planned sales on hold might not be willing to wait much longer.
Here are some tips and predictions from a local realtor and broker:
Advice for buyers
"If you can buy now, buy now," stressed Mohamed Heddad, a representative with LC Platinum Realty.
"The climate at the moment is very favourable toward the buyers, not as much for the sellers."
WATCH l Mohamed Heddad shares his advice for individuals considering buying a home:
A major shift in favour of buyers is the drop in house prices. In March 2022, the monthly average price for a home in Windsor-Essex peaked at $723,739, but that has sunk back down to $511,275 for November, according to data from the Windsor-Essex County Association of Realtors. That average price was about 10 per cent less than the same time the year before.
Even though buyers would be dealing with higher interest rates due to increases in the Bank of Canada's benchmark rate, there are benefits to buying now, Heddad explained.
First of all, listing prices are more reflective of the selling price than they used to be, he added. Buyers have the "upper hand" and so so they can put in offers with conditions for financing and inspections — things they couldn't do over the last few years due to high competition.
Heddad predicts that when interest rates eventually go back down, prices might start to creep up again with more people coming back into the market, making it more difficult to buy.
Mortgage agent Rasha Ingratta agrees that now or in the near future is a good time to buy a home because despite higher interest rates, with home prices being lower, it's a good time to jump.
However, when making a decision on your mortgage rate, she stressed that it's not a good time to do a long-term rate mortgage.
"What I'm suggesting right now is to go with a short-term mortgage or a variable rate mortgage," she said.
"Interest rates will come back down ... and then you can lock in at a better rate when rates come back down,."
Heddad also predicts that we may have hit the bottom of the market in terms of prices, though Ingratta believes they might keep dropping for the next six months.
Advice for sellers
Sellers are definitely dealing with a very different kind of market compared to a year ago, according to Heddad.
WATCH l Rasha Ingratta shares her advice for individuals considering selling their home:
"When we used to see houses selling in one to two days after they being listed, now we're seeing houses staying on the market for three, four weeks, sometimes even a few months before they sell," Heddad explained.
He expects though, that once interest rates go down by mid to third quarter of 2023, more buyers will come into the market then.
However, if a seller wants to sell a property as soon as possible, whether it be an eagerness to downsize or needing to relocate, Heddad advises individuals to market their property as best as they can by getting professional photos taken and investing in cleaning and staging of the property so that it stands out against other competing properties.
"For sellers, it's so important to make sure that you look at your finance landscape to make sure that you are ready for that next purchase," Ingratta stressed.
She too anticipates a healthier housing market once interest rates go back down which she also predicts for later in 2023.
"2023 is going to be a very exciting year," Heddad said.
"[The market] was not healthy the last few years at all, but we are definitely seeing a more balanced market right now and as I said in the beginning, the buyers have the upper hand. And I believe that they will continue to have the upper hand going into 2023."
The Zoocasa report also predicts that interest rates will catch up to homeowners in 2023.
Heddad said he doesn't anticipate many people will be losing their homes because of that next year, but Ingratta said she is having conversations with clients worried about making payments.
She said there are ways to find short-term solutions to "weather the storm" like stretching amortization to keep payments low to keep people in their houses.
Both Heddad and Ingratta anticipate relief in the year ahead with interest rates going back down.
"You're going to start seeing a healthier housing market where people are buying, people are selling," Ingratta said.
However, nothing is guaranteed. Earlier this month, when the Bank of Canada raised the rate to 4.25 per cent, the bank said it "will be considering" whether or not the rate has to go higher in order to bring supply and demand back into balance and return inflation to target.
As for those fears of buying or selling during a recession?
"Everybody's talking about a recession," Heddad said.
"But at the end of the day, we all need homes to live in."