The July 2019 real estate market has come to a close, and the real estate board has released our final market stats. It was a very busy month. We are experiencing a very busy summer in general, and the market appears to be hitting its stride.

In July, sales were up 6% when compared to the same time the previous year. Last July, 704 homes traded hands; this year, 747 homes traded hands. Our sales were up significantly here at St. Jean Realty. We sold almost three times more homes this July than we did in July 2018.

New Listings Are Down 2% and Inventory Is Tightening

New listings are down 2%, which is a continuation of what we’ve been seeing throughout the year. Fewer homes are coming to market. Last year we saw 1,133 listings hit the market, this year we saw 1,114. With sales rising but listings decreasing, there’s nowhere for prices to go but up.

This is shown in the active listings. Active listings are down by 15%. Again, a continuation of what we’ve been seeing over the last four to six months. Last year, we saw 1,857 active listings on the market. This year, we have 1,576: significantly lower. So again, we’re seeing inventory tightening. Supply is decreasing, which is what we’ve been witnessing in our marketplace for a number of years.

When the government initiated the Fair Housing Plan back in 2017, we saw listings pick up because sellers were scared. They thought sales prices were at a peak, that prices were going to drop, and that they need to sell immediately. On the other hand, buyers backed off, thinking prices may fall. This was artificially manufactured by the government; the Fair Housing Plan ultimately changed nothing, just impacted psychology. The market activity we experienced in 2017 would have resumed once that manufactured fear wore off. In order to prevent the market from heating up, the government unveiled its new mortgagee rules which again caused a very similar pattern in behaviour. Since that time, sales and prices have gradually picked up.

As the market regains its momentum and moves full steam ahead, listing inventory is going to tighten. We have far greater demand than supply in the marketplace, and buyers are entering into the market as they see home prices rise.

This tightening is also shown in our months of inventory; we’re down significantly. Last year in July we saw 2.6 months of inventory, and this year we only have 2.1 months of inventory available: a difference of 0.5 months.

Supply and Demand Leads to Increases in Hamilton Home Values

Sales prices are up now by 7%. Which, from my calculations, puts us in the top 3 real estate markets in the country for July, beating Toronto, Vancouver, Calgary, Winnipeg and Edmonton.

That puts the average home in Hamilton at $553,749. That is versus $518,683 last year in July. We are extremely affordable. Just 45 minutes down the highway, homes are multiple times the average price in Hamilton. And as we know, we are the largest market in Golden Horseshoe outside of Toronto. All eyes are on Hamilton.

Hamilton continues to outshine virtually every community in the country, and it makes sense. We have a diminishing amount of housing. We are not building enough new homes. We’re not supportive of the type of growth we need. We’ve hit the boundaries of the city, and we can no longer grow out. Whenever a developer proposes anything that goes higher than a single-family home, we see resistance. Something has to give!

On top of that, we have massive amounts of immigration. More immigrants coming into our country than we’ve ever had in our lifetimes. There are far more buyers than sellers; prices are accelerating and will continue to accelerate.

Homes are also moving faster in Hamilton. Average days on market are down 0.2%. Last year, it took on average 29.6 days to sell a house. This year, it takes an average of 29.4 days. Being anywhere in or around the 30-day mark is outstanding.

Rumors of a Slow Down Due to Misleading Real Estate Reports

There have been some misleading real estate reports that state that Hamilton’s home sales are slowing down. But these real estate reports are comparing the summer months to the spring months. Traditionally the spring months usually have a higher number of traded homes than the summer, so this type of comparison isn’t useful.

It’s more useful to compare July 2019 to July 2018 than it is to compare July 2019 to March, April, May, or June 2019, due to the way that the real estate market works. But again, the media can be misleading.

Looking at individual communities in the Hamilton market

Looking at individual communities in the Hamilton market, virtually every community is trending higher year over year. After the last couple of years, we’ve seen some of the more expensive markets such as Ancaster, Waterdown, Dundas, and Flamborough, having softer sales growth compared to Hamilton Mountain, West, East, and Centre. We’re seeing those outlying areas picking up steam.

For Hamilton as a whole, we’ve seen 7% average price growth. But within each community we’re seeing different levels of growth, some higher some lower, and definitely a lot of activity still happening in Hamilton proper.

In Hamilton West, average homes are now over $500,000. Last year in Hamilton West the average price was $482,760. Now we are at $505,637. Downtown Hamilton is catching up to Hamilton Mountain. And believe it or not, it will most likely overtake it.

This is something I mentioned a few years ago: a bit of a rebalancing within our market. In many cities, the lower downtown area is typically the most desirable area of the city. Hamilton Downtown is likely to become more desirable than most parts of Hamilton in due time, especially as the infrastructure continues to grow.

As for Hamilton East and Hamilton Centre, I’ve been talking about the end of the $300,000 home in those areas, and that we will soon see $400,000 or higher on average. Hamilton East is posting over $400,000 in July, with an average sales price of $412,164 versus $397,273 last year. So again, we are right on the cusp of seeing permanent price points above that $400,000 threshold. We’re right on the brink now.

In Hamilton Centre, average prices this month were at $391,372. Last year, the prices were at $383,636. Price points in the lower city are moving much quicker than in many other parts of the city.

When we talk about out-of-town buyers coming into the market to buy, the majority of those are looking at older housing stock in the lower city. They’re looking at the homes they would love to have in the GTA but can’t afford. These are educated, urban people, people who want to be able to walk and have amenities that the mountain and suburbs just don’t have to offer.

All areas in and around Hamilton are posting strong growth. While I won’t get into the details for every single area, the market, in general, looks very positive. The Hamilton market continues to accelerate. It’s been a fantastic July. August is already off to an incredible start, and it looks like we’re going to have a hot summer in the Hamilton market.