Low supply, high demand push Hamilton home prices up $215,000 from last October
Donna Bacher, the president of the Realtors Association of Hamilton-Burlington (RAHB), describes the current real estate market in the area as a pot of water on medium heat.
It keeps it at a boil. There's no one coming to turn any knobs off, and water is evaporating," Bacher said.
Limited supply - the evaporating water - and higher than usual sale prices for residential properties - the boiling water - is creating unusual trends in the market, she said, and there is no clear end in sight.
The trends are so unusual that the average residential property prices in the area increased by 27 per cent in October 2021 compared to October 2020.
And according to an Oxford Economics report, Hamilton is the fifth-most expensive city to live in on the continent. Homes in Canada as a whole were found to be 35 per cent more expensive than what the average household could afford to purchase, too.
In October 2021, the average residential property in Hamilton sold for $864,474, compared to $664,478 in October 2020, according to the recent RAHB report, which illustrates the current market trends of low supply and high demand, especially as there were 150 fewer properties available this October compared to last.
Detached homes saw the most significant price increase, jumping $215,000 higher than the October 2020 average, and the number of days these properties sat on the market decreased by seven days.
There's a greater demand for move-up buyers and move-over buyers that are seeking those larger homes," Bacher said, but the increase in prices compared to last October doesn't paint the complete picture.
Bacher said there was pent-up demand" for homes in October 2020, partly caused by the shutdown earlier in the year, so a larger number of dwellings switched hands. This October, there were significantly lower inventory levels and higher demand, resulting in a price spike.
But the spike in price itself is not normal." Homes typically see anywhere between five per cent and eight per cent increase year over year, not the 32 per cent increase seen in detached homes this October.
Despite the increase in cost for homes, Hamiltonians are still signing on the dotted line.
Rob Golfi, a Hamilton-area realtor, said many clients are borrowing money from family members to put a down payment on the homes they're purchasing. Some parents are even refinancing their homes to help their kids, as their properties have built a lot of equity in this pandemic-era market.
Without that extra help, most wouldn't be able to afford a home right now, he said.
Alessia Passafiume is an intern reporter with The Spectator. Reach her via email: apassafiume@thespec.com