The final month of the 2018 real estate market has come to an end. December 2018 saw a return to what we would consider a more typical December. A typical December is a little slower, with fewer sellers putting their homes on the market and fewer buyers looking as the holidays near.
Of course, last December, activity was up significantly as buyers were racing to get into the market ahead of the new mortgage rules. With mortgage rules being implemented January 1st, 2018, there was a lot of pressure on buyers last December that wasn’t present in 2018. A number of different rules were implemented in the new year, the most significant of which was the stress test ― which essentially cut 20 percent off the average buyer’s budget. With no changes coming down the line this year, we expected a return to a more normal and balanced December ― and that’s exactly what we saw.
The Realtor’s Association of Hamilton-Burlington has released its December 2018 stats. Going through the numbers, sales were down about 27 percent. Last year, 503 homes traded hands; this year, 368 homes traded hands. This drop in sales is likely attributed to buyers last year trying to get ahead of the mortgage rules while they still had that extra purchasing power. Nothing to be alarmed about: It was what we expected.
New listings were down 21 percent, which has been a growing trend over the last few months. Listings being down isn’t a bad thing; inventory is inevitably going to start to tighten as fewer new listings hit the market. A part of this is also attributed to less urgency in December, as December isn’t typically a big month for listings. Most sellers typically wait until the new year. Last year, there was an incentive for sellers to get their homes on the market as buying activity was strong due to the incoming mortgage rules. Many sellers felt it was an advantage to sell prior to the new rules coming into effect.. We had 414 listings last December and 328 as of December 2018.
Active listings are up 25 percent. We do have a bit more inventory this December compared to last December, which has become pretty much status quo. Inventory has been a little higher than we saw last year, but last year, we saw extremely low levels of inventory. Inventory is still fairly tight, and we are still in a low-level seller’s market. Last year, there were 859 homes on the market; this year, 1,074 homes are on the market.
Available inventory is 1.2 months higher than last year. Last year, we had 1.7 months of inventory on the market; this year, we have 2.9 months of inventory on the market. These numbers do vary quite dramatically, depending on the month, and it is expected in December to have a lot more inventory on the market as homes will sit as the market takes a pause for the holidays.
Average sales prices continue the trend that we’ve seen every month since June, up for the month of December by 2 percent. Last December, the average home being sold was $480,412. The average sales price this December is $492,226. Over the past few months, we’ve seen gains much higher than 2 percent, but December being up 2 percent is pretty much in line with our expectations.
The Hamilton market has continued to grow through 2018 in terms of average sale price. Our year end totals will most likely show a decline in sales for 2018, as we saw record numbers of homes trading hands over the past few years. Prices will most likely be up on average for our marketplace ― probably not by record-breaking amounts, but probably strong in comparison to most of the major markets in Canada.
We’re seeing yearly numbers in the negative for some of the largest markets ― most specifically, Vancouver, Toronto, and the GTA. I expect Hamilton to post stronger growth numbers than some of the larger competing markets, as I believe we will buck the trend. We remain a very attractive place from an investment perspective. The Realtors Association should be releasing our final year end numbers anytime now.
Market fundamentals on a local and regional level remain strong. Our homes’ prices still remain a fraction of those just 20, 30 or 40 minutes towards Toronto. With so many positive things happening from an economic and development perspective, I think Hamilton is going to continue to post above-average growth in prices over the coming years.
December tops off a very balanced year: a year that saw a return to a very normal market, a market that should come out stronger than most markets in Canada. Real estate is best viewed from a local perspective, and I think we’re going to really show dramatically different results from many other communities. This again leads to the notion that Hamilton is a unique place and market, and it’s a unique time in our history as we continue to undergo a massive revitalization of our city after decades of decline.
That’s just a quick update for December ― look out for our 2018 Hamilton real estate market year in review, which is coming in a week or so, as well as our 2019 market outlook, where I will detail exactly what we expect to see in our marketplace over the coming year. As a whole, the takeaway is that the market is positive, stable and balanced. We anticipate a fresh start in 2019, with no government intervention or significant changes on the horizon. Everyone’s anticipating an even stronger 2019.
