The Realtor’s Association of Hamilton Burlington has just released October’s market stats. It’s now been six full months since Ontario’s Fair Housing Plan was announced back in April. When the plan was announced, we saw a rush of listings hit the market in May, as many were scared that the market was going to crash. In June, July and August, we saw listing activity slow down as people started to realize the world wasn’t going to come to an end. Inventory tightened and sales prices held up. With the sudden 50% increase in inventory prices did soften from their peak in May (+25%) but held steady between 11 percent to 13 percent up year over year. Things hovered there for June, July, and August.
Come September, we saw a massive rush of inventory again hit the market; sort of a ‘mini-May’ in a sense, where we saw this flood hit the market and inventory increase very quickly.
Average sales prices softened again because of the increase in inventory, which is very normal when you see that many listings hit the market. September was a record month as far as new listings. In October we saw a tightening in sales. Sales are not down as much as they were last month. Last month, we saw a 22 percent increase in listings, resulting in a negative 23.4 percent in sales. In October we saw fewer new listings at 14.2 percent and sales down only 8.4 percent. That’s a big difference.
As a result of less inventory hitting the market, sales are down in smaller percentages and inventory is starting to tighten once again. It’s the same thing we saw after May. To put things into perspective, our sales-to-new-listing ratio in September was actually 44 percent, which was taking us almost to the point of being in a buyer’s market; 44 percent was still considered to be relatively balanced but very close to becoming a buyer’s market.
In October, the sales-to-listing ratio sat at 69%. We are now at the low end of a seller’s market, which is a big change from the last five or six months as we were sitting in balanced territory until October.
Buyers who have been waiting to get into the market need to get in now.
Days on market averaged about 29 days versus 21 days in October 2016. Historically, however, things are still moving very quickly. In inventory, we’re up 50.7 percent. This is why we’re seeing average sales prices soften and why we’re seeing homes sitting a little longer. It’s all supply and demand. With 50 percent more supply on the market, this is to be expected.
We are following the same path that we saw out west. At this point, both the Hamilton and Toronto markets appear to have stabilized. Inventory has started to tighten. We’re now moving from a balanced market into seller’s market territory. Once that occurs prices will pick up and inventory will start to decrease, which will fuel this even further. The market appears to be on it’s way to recovery following a bumpy second half.
Sellers need to be realistic about the market. Strategic pricing has never been more important.
Many agents and sellers are pricing homes based on sales that took place earlier in the year. You must accurately and strategically price your home. With so much competition on the market, your home must stand out. It’s critical that agents have a strong, robust marketing plan in order to get homes sold quickly, and for the most money. Now is not the time to play games.
Buyers, this is your last chance to get into the market before it moves further into sellers market territory, putting you at a disadvantange. In addition, you have less than 60 days to act before Canada’s new mortgage rules come into place effectively reducing your budget by 15-20%. If you have been ‘timing’ the market in hopes of capitalizing on the turbulance we have been experiancing since May, this is your signal.
It will be interesting to see how things go in November. I expect to see further tightening in inventory, fewer new listings, stable prices and a continued rebound in sales.
