The Realtor’s Association of Hamilton-Burlington has just reported our December 2017 Hamilton real estate market stats. It’s now been eight months since Ontario unveiled its Fair Housing Plan and we’re still seeing some ripples in the Hamilton real estate market as a result. We definitely experienced more robust activity than what we traditionally see for the Hamilton real estate market in December. During the holiday season, things usually tend to slow down.
December was the final month before OFFI’s new mortgage guidelines took effect, which was January 1, 2018. The new guidelines dictate tighter mortgage restrictions on all buyers, no matter how big their down payment. The biggest change to these rules was the stress test, which effectively lowered budgets by 20 percent. We saw many buyers rushing to the market after the new rules were introduced in the fall. December’s pickup was likely a result of buyers trying to get into the market ahead of those new rules.
Listings were up only 4.5 percent, year-over-year, down significantly from the previous months. We saw larger increases in listings in September, with a lot of people putting their homes up for sale. That large increase of inventory led to a temporary decline of sales and of average sale prices. Over the course of the fall market, the number of new listings decreased as each month passed and average sales prices recovered due to declining inventory levels.
As of December, sales were down 7.3 percent, which is a big improvement. Average sale prices are up 10 percent. So we’re seeing that as fewer new listings hit the market, average sales prices are adjusting accordingly. When you have a massive flood of listings very quickly, sales will soften. Toronto only saw 0.7 percent gains in December, compared to the 10 percent seen by Hamilton.
This points to the many things we’ve been saying about Hamilton over the years. We really have a strong demand here. The fundamentals of the Hamilton real estate market are very strong. With or without the GTA, Hamilton is a market of its own with a demand of its own, and I believe it will continue to lead the pack as far as price appreciation goes over the next few years.
Average days on market had a 37.7 percent increase year-over-year. Last year an average home took 28 days to sell, whereas this year it took about 38 days. This is definitely an increase, but less of an increase than we’ve seen in some of the previous months. Listing inventory is still up 61 percent year-over-year, with 1,069 homes on the market in December versus 664 in the prior year.
Inventory should continue to tighten over the next few months, and sales should start to balance. Going into the first quarter, we’re going to see month-over-month numbers being compared to what were probably the hottest six months of sales in real estate history for the Hamilton real estate market. As a result, month-over-month sales numbers should appear very weak going into the first quarter of 2018.
That’s my update for December 2017. All things look good and are moving forward in a positive direction.