The Realtor’s Association of Hamilton-Burlington has just released its June 2017 market stats — the second release of monthly statistics since Ontario’s Fair Housing Plan was announced in April. So far we have seen a 25.1% increase in new residential listings in the month of June 2017, compared to the month of June 2016. Listings are up for the month, but not as significantly as in May, when we saw a 40.1% jump in new listings. This is all due to Ontario’s Fair Housing Plan. Following its release at the end of April, fearful sellers began to list their homes in record numbers.

Increased Inventory on the Market Sparks a Temporary Drop in Sales

In June, fewer listings came to the market, which may imply that the fear could be dying down and that the market is beginning to balance out. Sales are down 21% for the month of June, versus the month of June 2016. This is a fairly significant increase versus May, where we were down 2%. But this is where statistics can be slightly misleading, as we saw that sudden rush of listings coming towards the end of the month, so they were not really reflected in May’s statistics. In other words, the market was flooded towards the end of May, so we’re seeing that reflected in June’s statistics.

Hamilton’s market in particular is proving to be resilient in comparison to the GTA and surrounding markets, which are seeing anywhere from a 40% to 60% drop in sales — significantly higher than our 21%. Regardless, it’s an artificial disruption that isn’t expected to last. Anyone claiming that this ‘change’ in our market is anything other than a fear driven reaction, is completely off base.

Average Prices Still Up by 12.8% Year-Over-Year

Prices are up 12.8% year over year as of June 2017 over June 2016. The 12.8% is down from the 24.8% in May, so prices are up in June only about half as much as they were in May. But, again, this is likely due to the sudden rise in listing inventory as of last month. When close to 50% more inventory in a month is added to the market in only a few weeks, that is going to give buyers more choice and is going to force sellers to price their homes more aggressively. So this comes as no shock. Listings up 25.1%, sales down 21%, prices up but only half has much as the month prior. It’s all relative. Again, Hamilton seems to fair much better than the GTA as prices in the Greater Toronto Area were only up 6.3%, which is only half the increase we saw in our area. One other drag on average sale prices in June were sellers who had bought a home before listing right as fear hit the market. Many sellers were caught right in the middle of the storm, had already bought a home and were suddenly not receving the activity they were anticipating. This forced many sellers to accept lower offers in desperation, encouraged buyers to make more agressive offers and likely assisted in pushing down the average sale price. As we move forward the amount of sellers caught in this situation will decrease.

The average days a listing was on the market in June were 17 versus 22 in June 2016, so homes are still selling quicker overall in June 2017 than June 2016. At the end of the month, we’ve seen a 35.9% increase in inventory over June 2016 — so, of course, with the sudden rise of new listings we are seeing higher levels of inventory. In the first ten days of July we’re seeing activity on our listings picking up significantly versus the listing activity in June. In the first 12 days of July our team has already sold more homes than we did in the entire month of June. I suspect this is because we are seeing only about half the increase in listings being put on the market in June vs. May.

Now Is A Great Time to Buy

Nothing fundamentally changed due to the Fair Housing Plan, but there was definitely a psychological hit on the buyers and sellers in the area. Still, it’s nowhere near the effects we have seen in other areas of the GTA. There’s a lot of fear in the market and a lot of fear-driven listings hitting the market, as sellers are worried about the negative effects of Ontario’s foreign tax. We don’t feel that these market changes are justified or supported by any real fundamentals, just fear.

Presently, buyers are able to make more strategic decisions and negotiate on their offers. But this could be a short-lived. For buyers right now, it’s an incredible time. It’s probably a better time to buy a home right now than we’ve seen in the past 2+ years. With this increase in listing inventory, you have the opportunity to make an offer on a home with less competition — all depending on what you’re looking at. It’s a great time to get into the market and capitalize on the increased inventory softer prices.

Sellers should be aware that the market is likely to stabilize in the coming months. Month to month listing inventory is already down 15% and activity on our listings has picked up significantly in the last 12 days. Their is nothing wrong with selling right now but we caution sellers against listing simply because of fear. Now is the time to make decisions based on logic, not emotion.

Just a quick update on the market for June. It will be interesting to see where the numbers lie at the end of July. So far it looks like the fear may be subsiding as new listings decrease and activity picks up. July’s numbers will really help us gauge what trajectory we are headed in.