The Realtor’s Association of Hamilton-Burlington has released our market stats for June 2018. Not only are the statistics as we expected, but they show the resiliency of the Hamilton market — and are likely to begin ushering in a more positive sentiment throughout the news media. This positive sentiment will drive price growth and activity in the latter part of this year, making now an ideal time to get into the market.
June was a very important month. The Fair Housing Plan was released at the end of last April, but we didn’t really start seeing the impact of it until the beginning of May and early June. Again, based on the way that the real estate industry reports its statistics, they are always being reported on a year-over-year, month-by-month basis. Whether prices are moving up or down doesn’t matter; all that matters is how this year’s June compares to last year’s June. I’ve talked about why I believe this isn’t a productive way of reporting statistics, but that’s how it’s done. Consequently, the stats can be misleading at times.
At the beginning of this year, I said that home values would appear to suddenly drop in March, April and May because our monthly statistics would be compared to March, April and May 2017 — three of the busiest months in real estate history here in Hamilton. Last June things settled down after the Fair Housing Plan was released in April. Though we didn’t see much change in May, June really saw the fear begin to wash over the market.
This isn’t the only problem with the statistics. Our board clumps Hamilton and Burlington together, but Burlington is an entirely different market and has fared very differently following the Fair Housing Plan and the new mortgage rules. If you look at Hamilton’s statistics alone, we are back in positive territory for average sales price growth. However, Burlington is down almost 5 percent year-over-year, and including it in Hamilton’s statistics is misleading. Communities along the Greater Golden Horseshoe are seeing similar results, with their average sales price growth still down. Hamilton has remained resilient throughout all of this, posting higher growth than almost any other community in the Greater Golden Horseshoe.
Before I get into Hamilton’s statistics, let’s discuss Toronto, which is posting large price gains. The market has been heating up over the course of the entire year and bidding wars are commonplace downtown. Things in Toronto appear to be really moving forward in a big way, which, of course, is good for the region as a whole. Toronto is back in action. It’s almost as though a switch was flipped as of the first week of July. We went from doomsday articles to, suddenly, Toronto is breaking records. The narrative did a complete 360 literally overnight. Again, this is because of the way that stats are reported. This does impact the psychology of the marketplace.
Now that we’ll be in mostly positive territory for the rest of the year, we anticipate a busier market. The media will play into this notion that the market is recovering and that things are going up, so that should lend a hand to rising prices.
Now for Hamilton’s stats. We are seeing listings down dramatically, minus 21.2 percent. Inventory is tightening. We have fewer listings placed on the market this June versus last year, which saw some of the lowest inventory in history. Inventory is very low, which is why homes are still selling quickly in Hamilton and many with multiple offers in the more affordable price brackets. That’s something to take note of here.
Sales are down 17.2 percent — but sales were at record highs at the same time last year. If you look at the trend, sales have been picking up month-over-month, all throughout this year. We saw sales down over 40 percent over the last 3 months, so being down less than 20 percent is positive. It’s important to remember that sales are not prices. Sales are just the number of homes trading hands. Sales are down, but values are not, and sales are still trending upward. Average sales prices in Hamilton are up almost 2 percent, which is a large difference to even our next door neighbour, Burlington.
If you read between the lines, things look very different in different parts of the community. When you’re looking at freehold homes, they’re up almost 2.5 percent, while condos are down slightly. Because of the new mortgage rules, we’re seeing the higher end of the market softening and dragging down average sale prices. Despite the fact that the average home is increasing in value, the higher end is having a negative impact on prices. Values in some communities within Hamilton are rising much faster than others as a result. The more affordable districts such as the Hamilton Mountain, Hamilton Centre and Hamilton East will likely see much higher price appreciation this year than communities such as Ancaster, Dundas and Waterdown. Homes priced $0 to $500,000 are moving very, very well.
Average days on market is 28. We are still below the 30-day mark, which is absolutely fantastic historically. We were 17 last year, so it wasn’t that big of a jump — and that was incredibly fast. Of course, that’s taking into account homes that are selling in a day and homes that are sitting on the market for six months because they have been priced incorrectly. Inventory is up a bit over last year, but by only 7.8 percent. Last year, we had 1,566 homes for sale. This year we’ve got 1,618 homes left on the market at the end of the month.
As expected, the psychological impact of the Fair Housing Plan has run its course. Things are back on a positive trajectory, at least as far as the media is concerned. It’s almost laughable to compare news articles written over the last few months to the articles that came out in the first week of July. We now expect the psychology of the market to turn increasingly positive throughout the second half of the year, as the narrative in the media supports this. We expect a good second half here in Hamilton. Values are increasing, sales are increasing, and it’s a good time to buy and sell.
