Last week we discussed a topic that everyone seems to be talking about: Bidding wars. Some of the cause and effect for these trends are hard to pinpoint. Today we are going to expand on some of the factors leading to these Bidding Wars, with some that are less obvious.
Migration To The Area
As explained last week, part of the population growth that is occurring in the area comes from elevated levels of immigration. The other part of the equation is the people migrating to the area from other parts of Ontario and Canada. One large drag we had back during the economic downturn was people moving out west for Jobs after being laid off in the auto industry. With the rebound in the auto industry and the downturn in the oil patch, this trend has reversed. And not just out west, but from other population centres in Canada as well.
People Choosing Windsor-Essex As A Retirement Destination
As the population of Canada ages with the Baby Boomers, a large segment is hitting or will soon hit the traditional retirement age. Some of these boomers are choosing to retire in lower cost areas such as ours to boost their retirement balance sheet. Moving from high priced markets such as Toronto or Vancouver to ours provides a way for them to access the equity in their home and in many cases buy a similar home and put a very significant sum in the bank to fund their retirements. To add to this, the area boasts some of the best weather, easy access to the US, wineries, and more – all perks to retiring in Windsor-Essex.
Increased Investment From Out-Of-Towners
A lot of real estate investors invest based on economic fundamentals, something our area didn’t have for a long period of time. That has changed and so has the appetite to invest in our market. Leading indicators such as economic growth, low unemployment, population growth, new construction, etc. have all been very supportive and investors have followed. Traditional investor segments of the market, such as multifamily, might be the hottest markets of all. In fact, the inventory of investment properties is so low its makes it extremely tough for buyers in this market.
Unseasonably Good Weather This Winter
The prognosticators were calling for a brutal winter in our area this year. Didn’t end up playing out that way (fine by us ☺). In fact, people were golfing in February this year in our area! This balmy weather pulled up some of the traditional spring market activity and definitely added to demand. This is a seasonal effect but no doubt helped the statistics to start the year.
Those are some additional factors that have resulted in the continued bidding wars. Next week we will exhaust our analysis to wrap up our thoughts on the subject. Have you seen any of these factors playing out too?