May has passed and the Realtor’s Association of Hamilton-Burlington has released our monthly market stats. Reviewing the numbers quickly, they look very much as we expected them to. Though the media will indicate that these numbers are down, I must again stress that this is only a result of the way that the statistics are being reported. In fact, our numbers are very good: We’ve kept a large percentage of the gains that we saw last spring, and the market is beginning to recover from the psychological impact of the Fair Housing Plan and the new mortgage rules.
If we were to rewind 12 months exactly to May of last year, May would have been the absolute biggest month of 2017. It was the month where we saw the highest average sales price increases, bordering on 30 percent. Inventory was extremely low and the market was as hot as it’s ever been. Though the Ontario government had released the Fair Housing Plan a number of weeks prior, the plan had not yet impacted the market. After May, buyers and sellers got scared and pulled back. We saw prices stabilizing, and sales coming down from peak levels.
Prices did not fall in 2017; prices were up significantly by the end of 2017. They weren’t up 30 percent, but in Hamilton, they were above 20 percent — and I would say that’s an absolutely fantastic result, one that most cities and housing markets would only dream of. Had the housing plan not been released, we probably would have seen even greater numbers. As far as the goals of the plan — which were to slow the price increases, not to decrease prices — I would say those goals were accomplished, though I don’t agree with the methods taken. In time, all of these metrics would have stabilized on their own, but politics always prevails.
As I’ve mentioned in the last couple of months, Hamilton had a fantastic year in 2017. We were one of the only communities to see significant year-over-year average sales price growth, whereas most of the Greater Golden Horseshoe saw declines. Since the Fair Housing Plan was released, we posted average sales price gains every single month until March of 2018. At the end of last year, I had mentioned that moving into the new year, we would be hitting a bit of a rough patch as far as the statistics are reported.
The Real Estate Board reports stats on a year-over-year basis by month. When they release numbers for May 2018, they’re comparing them to only May 2017. Instead of giving you a month-by-month, which shows you where things are trending, they’re just comparing them to the same month from the year prior. This gives you a very narrow view of what’s going on in the market, and the media reports based on this. It’s very easy to look at the numbers and just say positive or negative, good or bad — and that’s what we’ve gotten.
At the end of April last year, the housing plan was released. We didn’t feel the effects of this in May — the market kept moving in May — but by the end of May and the first week of June, you could feel that everything started to pull back. From there, the market came down a notch from its peak in May, and then held steady. This is the final month that our numbers will be compared to last spring’s hot market. Though we’ve heard a lot of negative news because of the way this is reported, we are going to see a turnaround soon, as our current numbers will be compared to the more realistic and stable months that followed.
Sales are down 26.7 percent — not as bad as the previous one or two months. If there was more inventory, sales would be higher. Average sales prices are down 5.1 percent, which is absolutely incredible, given that we were bordering 30-percent average sales price growth this time last year. So when people talk about the fact that the market has tanked or home values have dropped and everything’s horrible — last year, our home values went up exponentially by the end of the year. If you’re narrowing it down on a month-by-month basis, we lost 5 percent off the 30 percent that we gained in May of last year. We held on to the majority of our growth, and that’s absolutely fantastic.
Average days on market are 107 percent higher than last year. Last year, the average house sat on the market for 13 days. This year, 27 days. We are still achieving less than one month average time on the market, which is taking into account everything from houses that are sold within a few days to homes that have been sitting on the market for a few months. This is still a very fast, busy market. Many communities are sitting at 60, 90, or 120 average days on the market. Being below 30 is not slow unless you’re comparing it to the spring of last year.
Inventory is up 24.4 percent versus last year. Overall, we do have more inventory than this time last year but we have less new inventory coming on to the market, as listings are down. The inventory we have is still better than last year, but we are starting to sell through it.
That’s just a quick update on the numbers for the month. Things are positive month-over-month. Sales are increasing, prices are increasing, we are through the Fair Housing Plan; the psychological effects should now come to an end. Moving into the second half of the year now, I believe buyers have adjusted to the new mortgage rules, and at some point sellers are going to have to realize that the sky’s not falling. Over the next few months, there will be more positive commentary in the news based on the updated reporting, and I think sellers will start jumping back into the market.
Hamilton has a ton of growth ahead of it, and we’re really just in the first few innings of what is to be a really great turnaround and revitalization story for a Canadian city. Values here have nowhere to go but up. We remain extremely affordable; average sales prices are still half to a third of the price of markets that are less than an hour outside of our city. Expect our values to catch up to the rest of the GTA and the Greater Golden Horseshoe.
Sellers — it’s a great time to be in the market, with such low inventory, and values stable and growing, and sales doing quite well. Buyers — there’s really no reason to hold off, things are only going up, and the quicker you can get into the market the better it is for you, as we see nothing but positive price appreciation projected for the foreseeable future.