It’s a wrap on 2019 — and the 2019 Hamilton real estate market. It was a very interesting, very positive year overall. I’m going to save my full year recap analysis of the Hamilton real estate market for another post, but for now, here’s what we’ve seen through December.
December really capped off a consistently positive year, despite a sluggish start driven by the new mortgage rules. We saw a significant pickup in activity in the second half of the year, and December as a whole ended up very nicely. Getting to the numbers, sales were up 11% in December, with 388 homes sold last year, and 425 sold this year.
For new listings, the trend continues. New listings are currently down 2%, with 340 last year, and 334 this year. Likewise, active listings are down 11%. Last year, 822 listings were active, and this year there are 735. With fewer new listings coming on the market and sales being way up, inventory is shrinking — and of course, months of inventory is decreasing quite quickly.
This year, in December, we had 1.7 months of inventory available. Last year, there were 2.1 months of inventory available. This is a trend we’ve been seeing as the fundamentals of the market take over, following the sharp shocks the market experienced.
As we saw with the mortgage rules, and the provincial government’s fair housing plan, these things are nothing more than temporary distractions. They changed nothing fundamental in the market. The fact is that we have far more buyers than we have homes in the market; we have a massive supply and demand imbalance.
Buyers are jumping into the market in greater and greater numbers, and sellers have realized they don’t need to sell their homes, because their values are going nowhere but up.
We’re seeing a severe shortage of listing inventory, and it’s expected to get worse based on what we’re seeing. As a result, prices are currently up 8%. Go back ten to twelve months, and we were in a very low, single-digit territory for average price growth.
In Hamilton, prices have continued to go up every year since 1996. For a very short period of time we saw average price growth soften, going up at less of a rate. But now, we’re seeing that increase — and that trend has continued throughout the year. It’s expected to continue through 2020.
Why are we seeing this? There aren’t enough new listings coming to market. The inventory we did have, which flooded the market following the release of the Fair Housing Plan and New Mortgage Rules, is now being eaten away. We’re almost back to the levels we saw previous to those policy interventions in the market. Months of inventory is down, less inventory is available, and more buyers are lining up. Anyone who tries to tell you that supply and demand isn’t the reason we’re seeing these increases doesn’t understand the situation.
Average time on market decreased by 6.3 days. In 2018, it took about 41.4 days on the market for a home to sell. This past year in December, it was 35.1 days. These numbers will fluctuate from month to month and season to season, so we are over the 30-day mark. We were a bit lower through fall and spring, because they are seasonally busier months. So you’ll see these things fluctuating. But the trend is clear: Days on market are decreasing. This number will tighten up and come down a we get closer to spring.
So, overall it was a very positive month for a December. These are great numbers given the time of year. Most communities throughout the Hamilton region average sales prices up for the month. I don’t want to harp too much on December, because we’ve got a fairly large end-of-year update and recap coming, so I’m going to save a lot of the information that I’m planning to share for that article.
Of course, the LRT in Hamilton has been officially canceled. In a separate article, I’d like to speak on that as well, and what we see as the impact of that announcement. However, it was a very positive December, capping off a very positive year. All signs point to an even better 2020. We will be back to you soon with a full update on 2019.
