A new report warns Hamilton’s real estate market will stay red hot as others across the country start to cool.
That good-for-sellers-bad-for-buyers news from the Conference Board of Canada’s resale market snapshot, issued Friday, signals increasing competition for homes and rising prices across the market.
Robin Wiebe, the board’s senior economist, said the trend is being driven by simple supply-and-demand economics — there are more buyers than sellers in the market and that’s not going to change any time soon.
“The market in Hamilton is still pretty hot, but it’s at the upper end of the balanced range,” he said. “That means it’s a good time to sell your house, but it’s not a good time to be buying.”
In Wiebe’s analysis, while sales cool in 17 of the 28 major real estate markets in the country, strong demand here means Hamilton sellers can look for year-over-year price increases of 7 per cent.
The demand for houses here will be driven by several forces — including a generally good economy and low interest rates — factors that could be strong enough to result in multiple offers for some properties.
Realtors Conrad Zurini and Judy Marsales say that’s already happening in a small way in Hamilton.
Marsales, of Judy Marsales Real Estate, said she knows of one property that attracted 11 offers before selling and another that drew nine.
“It’s a lack of supply that’s pushing up prices in Hamilton,” she said. “We’ve been seeing pretty steady demand.”
Zurini, of ReMax Escarpment Real Estate, said the intense competition for homes is sparking rising single-family sales and prices in previously docile parts of the city, such as the east end.
“We’re seeing multiple offers for entry-level single family homes because a single-family dwelling is very high on most people’s agenda.”
Statistics from the Realtors Association of Hamilton-Burlington and other studies of the market support the Conference Board outlook.
For September, there were listings of 1,949 properties and sales of 1,319. That left an end-of-month inventory of 2,847, down more than 10 per cent from the same month in 2014.
Properties are also selling faster than in 2014 — number of days on the market fell to 33 from 39, while average prices jumped more than 8 per cent to $449,233 from $412,089.
Across the country, the Canadian Real Estate Association reported September sales were down 2.1 per cent compared with August with more than half the markets studied reporting declines. Prices, however, continued to rise. Compared with September 2014 sales were up less than one per cent.
The national average price for a home sold in September was $433,649, up 6.1 per cent from the same month a year ago. Excluding Vancouver and Toronto, the average was $334,705, up 2.9 per cent.
A report earlier this month by Central 1 Credit Union, the trade association for co-op financial institutions, reached similar conclusions and predicted Ontario home prices, sales and starts will keep rising for the next two years.
For the Hamilton-Niagara area, Central 1 saw “substantial upward price pressure” because market conditions remain tight.
“More supply is needed to satisfy growing demand and cool price pressure. While prices have risen consistently around five to seven per cent annually since the recession, a nine per cent gain in 2015 is foreseen followed by 10 per cent in 2016,” the credit union concluded. “New listings are rising, but need to increase at a faster pace to accommodate the expected increase in sales. More new construction will fulfil some of this supply need.”
On the construction side, Canada Mortgage and Housing Corporation reported earlier this month housing starts in the Hamilton Census Metropolitan Area (including Burlington and Grimsby) were trending up at 2,059 units in September compared with 1,826 units in August.
The standalone monthly SAAR was 1,860 units in September, practically unchanged from 1,892 units in August.
Article is courtesy of Steve Arnold at the Hamilton Spectator