The demand for local properties has grown so hot, one home on the west Mountain sold this week for $101,000 more than the owner’s asking price. The Appleford Court home was on the market for only seven days and was shown 219 times. In the end, 56 offers to purchase were submitted.
For listing agent Devon MacArthur, of Re/Max Escarpment Realty Inc., that’s an unheard of level of demand.
“At its height we had 10 or 12 agents in the house at the same time, it was kind of chaotic,” he said. “This kind of interest in one property is absolutely unknown.
“The sellers had a long night Tuesday with people coming in the snow storm to see the house,” he added.
The property, a three-bedroom, two-bathroom fixer-upper in the Upper Paradise-Mohawk Road area, was listed for $279,900 and sold for just under $381,000. That’s a premium of more than $27,000 over the average price for Mountain homes in January.
George O’Neill, CEO of the Realtors Association of Hamilton-Burlington, said while the Appleford sale is unusual for the sheer number of offers it attracted, it’s not unusual in the current market for Hamilton homes to draw multiple offers and sell over the asking price.
“I think people are rediscovering Hamilton and realizing they can get a much better property here than in Toronto for the same money,” he said. “There’s a real shortage of listings now, so it’s a good time to sell your house.”
O’Neill said the issue for the local market is soaring demand in the face of short inventory. In January, for example, the local association listed 1,110 homes across the area and sold 735. That’s a decline of almost 17 per cent, and the lowest number of January listings in 10 years. Sales rose almost eight per cent. Average price was $459,204, up 7.5 per cent.
O’Neill added the fact that a property sells over the asking price doesn’t mean it sold for more than it’s worth – market value is decided by how much a buyer is willing to spend and how much a seller is willing to accept.
Despite the imbalance between supply and demand, a study by RBC released earlier this week concludes homes are still affordable in Hamilton.
The bank’s fourth quarter Housing Trends and Affordability Report concluded it takes about 35 per cent of a local family’s pre-tax income to service the cost of owning a home. That includes mortgage payments, utilities and property taxes. Nationally, the figure was 46.7 per cent. That’s the highest the measure has been in the past five years.
For RBC economist Robert Hogue, it’s a chick-and-egg situation. Better value here draws more potential buyers, which pushes up prices.
“Hamilton has a long way to go before it has the kind of affordability issues Toronto is facing,” he said.
Conrad Zurini, president of Re/Max Escarpment Realty, said another factor supporting affordability in Hamilton is the wide range of price points in the local market. Average prices in January ranged from $251,000 in the east end to $627,769 in Burlington.
“The beauty of the Hamilton market is that we have so many price points, there’s still a lot of choice out there,” he said.
Zurini added there’s also an element of marketing involved – you increase the number of offers you get by listing the property at a price below comparables in the area.
courtesy of Hamilton Spectator
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