The Hamilton-Burlington Realtor’s Association has released Hamilton’s February 2018 market stats. This is the second month into the 2018 real estate market — and the second month following the new OFFSI mortgage rules. At this time last year, we were experiencing one of the hottest markets in Hamilton’s history. Stats are calculated based on the year-over-year numbers, so our current numbers are being compared to one of the hottest markets ever. This can make the market appear as though it’s doing worse than it is.
Listings are down about 13.3 percent versus last February. This is likely due to sellers holding off on listing their homes because they are worried and are wanting to see how the new mortgage rules will impact them. We’ve had a bit of a reversal here as we’ve gone from having too much inventory throughout the second, third and fourth quarter of 2017 to now being in a position in which we don’t have enough inventory. It’s not that the demand from buyers isn’t there, because it is, but sellers were reluctant to put their homes on the market in February.
We’re seeing incredible activity on our listings. Our agents are experiencing multiple offers on many properties. We’ve seen a lot of the inventory that had been sitting from the later part of 2017 begin to sell, and things are quite busy. It’s a good time to be a seller given that there is little competition on the market and there are still many buyers in the market looking for a home.
At the same time, as the rules have tightened, everyone’s budget has decreased by 20 percent. Consequently, we’re seeing an exodus from the Greater Toronto Area. Hamilton has benefited as the influx of people seeking detached, townhomes and semi-detached homes has increased quite substantially. Hamilton is being buffered by the large pool of GTA and surrounding area buyers who are coming to seek affordable product in Hamilton.
Sales are down 38.8 percent, which is a fairly large number. Again, these are numbers being compared to historical highs from 2017. We saw incredible activity through the holidays and through the winter last year, which is not normal. Looking at these numbers, it’s not something to be worried about. Our current low inventory environment is also going to have a drag on sales. We have a lot of buyers looking for properties, but we don’t have a lot of properties to sell them.
Average sale prices were still up 2.4 percent. This is an incredible number given that we were seeing double-digit price increases last year, throughout the winter and spring season — anywhere from 20 to 25 percent on average. The fact that we are actually 2.4 percent higher than the average sales prices from last February is extremely significant. It shows the resiliency of the Hamilton market, the opportunity here, and really this is the polar opposite of what nearly every community across the Greater Golden Horseshoe is experiencing.
These are Hamilton only stats. Hamilton-Burlington is a single real estate board, so they clump our stats together when they speak on the news. If you eliminate Burlington from the numbers, Hamilton’s numbers are drastically better and look very different. Hamilton’s average sales price is up 2.4 percent, whereas average sales prices in Burlington are down 8.7 percent. Looking at any metrics, you see the same results, with Burlington’s numbers looking very different.
Average days on market are up 63 percent. In February, listings took an average of 36 days to sell, as opposed to 22 last year. We had almost no inventory last year; inventory was at one of the lowest points in history. Comparing a more balanced market like we’re experiencing right now to February of 2017 will naturally show a drastic difference. End-of-month listing inventory — even though we have a fairly low level of inventory — is still 64.8 percent higher than last February. So we have much more inventory than last February but still not enough to service all the buyers that are coming.
The media is definitely going to play up the negativity in the coming months. Just a word of caution: Do not overreact. There’s no reason to be negative about what’s going on. We are just comparing our numbers to the numbers from those five very unique months — and our values are still up, even in comparison to those months.
If you’ve been thinking about selling, there hasn’t been a better time — inventory is low, demand is high and competition is low. As we enter into spring, more competition will enter the market. With competition, homes typically take longer to sell and sell for less money. There are still buyers in the market who have pre-approvals in place from the tail end of last year, but that won’t last long.
For buyers, there’s nothing to fear. The market here has held up very well, and the prospects for Hamilton are very positive. So far everything seems to be on track. CMHC has predicted that prices will increase about 2 to 4 percent over the year even with higher interest rates factored in. Hamilton is up 2.4 percent, and everything seems to be in line with analyst expectations. It will take some time for things to settle down, we’ll see how things play out over March. In the meantime, the market is moving.