MUCH NEEDED SUPPLY GAINS IN 2022

PRICES REMAIN ABOVE 2021 LEVELS

Hamilton, ON (January 4, 2023) – 2022 marked a year of adjustment in housing demand across the REALTORS® Association of Hamilton-Burlington (RAHB) real estate market area as sales activity eased by 30 per cent over the near-record highs achieved in 2021. Rising lending rates, previous price gains and limited supply options weighed on potential purchasers. At the same time, new listings continued to grow in the region, but only for homes priced above $800,000. The pullback in sales was enough to support inventory gains across all price ranges by December. While inventories have nearly doubled, levels reported in 2022 are still nearly 20 per cent below long-term averages for the region. Moreover, supply levels remained well below typical levels for homes priced below $600,000.  

The pandemic, combined with historically low interest rates, created an exponential surge in housing demand. Supply could not keep pace, resulting in price growth that far exceeded expectations over a two-year period. 2022 saw conditions start to shift back to a more balanced market. Improved supply is an important component to stabilizing both sales and home prices.” 

Lou Piriano, RAHB President.

Across the RAHB real estate market area, easing sales and rising supply have shifted the market from the extreme sellers’ market conditions at the beginning of the year to one considered relatively balanced. The shift took some pressure off home prices, which hit a record high in February but declined 25 per cent by December. While the price adjustment within the year was significant, it is important to note that as of December, prices remain over 16 per cent higher than pre-pandemic levels. On an annual basis, prices are still nearly 10 per cent higher than in 2021. 

If higher lending rates continue, they will weigh on home sales in 2023, however; the dip in prices coupled with better supply choice could start to support a more stable market for the foreseeable future.”

Lou Piriano, RAHB President.
Average for homes in the Hamilton/Burlington/Niagara areas

Hamilton saw 6,923 sales in 2022, activity eased by 32 per cent from last year’s record high. Rising lending rates, limited supply choice and earlier price gains were all contributing factors. As the year progressed, new listings increased and inventory levels rose from record low levels. This helped shift from a strong sellers’ market to one relatively balanced.

The adjustment in the real estate market also weighed on home prices which started to trend down in March after hitting a record high. As of December, benchmark prices dropped by 25 per cent from the peak and 15 per cent compared to December 2021. Despite the adjustment in prices, levels remain over 16 per cent higher than prices reported at the end of 2021.

Sales activity fell across all property types this year. Despite a drop in sales, the apartment condominium sector continued to outperform the long-term average for the area, as more inventory relative to historical levels gave consumers more choice in this property category. While the shift away from a seller’s market did impact home prices, the adjustment from the peak has been more significant in detached and semi-detached properties. Nonetheless, the downward pressure on prices did not offset all early gains, as annual figures were still positive across all property types.


NEIGHBOURHOOD MARKET REPORTS

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