Moreover, he said, compared to recent year over year price gains such as three or four percent, that is “not much at all.”
The average price declined from $175,817 to $173,528.
Paine also pointed out that the price only reflects what is sold.
“Especially in January where the sales…..they’re much less than the peak periods of June, July, August.”
Therefore, he said. “January is not really a good month to say, ‘Well let’s see what’s happening with the market.’”
The price drop also goes against the general sales trend.
Actual house sales increased 24 per cent in January.
But Paine said even that figure “doesn’t really mean much” because in January of a year ago the area was caught in a series of Polar vortexes making a most unhospitable climate for people to go out and look at and buy houses.
Sales therefore dropped.
So the jump in sales this January isn’t reflective of a long term trend but simply catching up - or having relatively better weather - compared to the previous January.
“You would expect with that kind of increase in sales that, ‘Oh my gosh, the sale price would be pushed up because there’s a higher increase in demand,” he said.
“But what I’m saying is that I don’t think there is a huge increase in demand.
“Historically there hasn’t been - sales have been the same each year to year - so demand is steady.”
Paine said what people should pay most attention to is the fact the local housing inventory is low.
“The biggest change is we have low inventory and that is creating more pressure (upwards on) prices,” he said.
“So I expect - but it’s not massive - but we’re going to see maybe 5 -6 percentage increases in sales this year whereas last year it was 4, the year before that it was 3.”
Paine wrote off the January price drop as “a fluke, I don’t see any trends for our prices dropping.”
Nor does he agree that Windsor-Essex could be hit by an overall Canadian real estate downturn given overheated markets in cities like Vancouver and Toronto.
“I don’t think we’re in a bubble,” he said.
“The economists I’ve seen who have spoken, they’re predicting that we’re going to increase by 4 or 5% (nationally) for the next 20 years.”
Windsor-Essex by comparison has been in a housing slump or moving incrementally higher, with prices “less than half price the Canadian average,” Paine said.
But with low interest rated and an improving local economy “we have nowhere to go but up.”
Paine said even when the country experiences recession the market in Windsor-Essex doesn’t drop dramatically like it does elsewhere.
“If we look at what’s happening to prices they did drop a bit but I don’t think they dropped in proportion to some other markets.”