The second to last month of 2018 has come to a close. Overall, November was a very balanced month. We saw a return to a more historically normal November. Last year, buyers were racing to get into the housing market to get ahead of the new mortgage rules that were coming at the beginning of this year. The market is finally settling down and beginning to establish more regular, sustainable growth.
The new mortgage rules chopped about 20 percent off of the average buyer’s budget, creating an extreme sense of urgency. Comparatively, this November did not see sales growth — but it still did see growth in terms of average sale price.
New listings have been going down steadily over the fall season. Inventory is likely to start tightening now. November of 2018 is down 20 percent in terms of new listings, with 813 listings on the market in 2018 compared to 1,017 listings on the market in 2017. Active listings are up from last year by 22 percent, with 1,584 homes on the market in November 2018 compared to 1,310 homes on the market in November 2017.
In the $0 to $500,000 range, inventory is still extremely low — inventory has increased in the higher brackets. We are currently in a seller’s market. We may see ourselves going more deeply into a seller’s market if the inventory continues to tighten.
Average sales price is up 6 percent. We’ve been up consistently almost every month this year. We did have a few months in which our numbers were weak, but again these were being compared to some of the fastest-moving months historically for the market. We were able to retain the majority of the price growth we saw in the spring of 2017.
In 2017, our average sales price was $474,781. In November 2018, our average sales price was $502,070. We’ve crossed the $500,000 mark — and we’ve crossed that mark consistently over the last few months. Moving forward, it’s likely that $500,000 will become the new bar for average sale prices. We remain very affordable compared to the rest of the GTA, and we have further room for growth.
Our average days on the market have gone up slightly — from 33 days to 36 days. Again, buyers had more urgency last November as a result of the new mortgage rules, so it’s normal to see homes sitting a little longer in November.
It’s important to note that there is not one Hamilton market, but multiple markets. Every community, price bracket and housing type may vary drastically in terms of raw numbers. It’s not always beneficial to average things out. There’s a definite split between the markets from $0 to $500,000 and the markets from $500,000 to $1,000,000. Listings in the $0 to $500,000 range are selling quickly and with competing bids in many cases. Inventory is very low in this price bracket.
With the new mortgage rules in place, higher-priced homes are likely to take a little longer to sell — and pricing strategy has never been more important. Thus, when we see the market moving a little slower, it’s often these higher-priced homes that are altering the momentum. West Hamilton is currently over $500,000, Hamilton East is approaching the $400,000 mark and the lower city is moving past the $300,000s. At this rate, it won’t be long before the $300,000 home is likely to disappear on average.
As a whole, the market is very strong and balanced. We continue to be in a low-level seller’s market, and that’s likely to continue as we move into the new year. Meanwhile, it’s been a very normal, healthy and balanced November. As we get into the holiday season, we expect to see the market take a quick pause and then resume into the second week of January.