New buyers facing ‘fear of overpaying’ despite passing of ‘danger market,’ says RAHB
Back in February, the Hamilton-area housing market was booming like never before. Prices were sky-high, inventory was critically low and homes were flying off the shelves.
It was a market fuelled by a notion known as the fear of missing out - better known as FOMO to many.
But seven months later, much has changed.
Rising interest rates have cooled the city's housing market, bringing with them a marked drop in sales, a decline in home prices and an increased number of days on the market.
Realtors Association of Hamilton-Burlington (RAHB) president Lou Piriano told The Spectator the organization is now seeing buyers who have a fear of overpaying" - or FOOP - specifically those who are inexperienced or purchasing their first home.
It's a real thing," said Piriano. But people have to realize that timing the market is a really bad idea."
Piriano pointed to a pattern of ups and downs in the regional market, which he noted went bonkers" in 2017, but quickly flipped the switch" and quieted down for the next two years.
By 2021, sale prices in the region had skyrocketed to an average of $867,560 - marking a more than 25 per cent increase from 2020.
Piriano said it's not clear what will happen with the market next, noting that change isn't linear and can vary by region.
The market may have a ways to go down, but it may not," said Piriano, pointing to the current conditions. But, one thing for sure is that it always comes back."
In a recent report, Toronto real estate agency Zoocasa said buyers experiencing FOOP should consider the changes that have accompanied the more balanced market," including the return of conditions and more days on the market.
This negotiating power means that some of the pressure has been alleviated from buyers," said Lauren Haw, CEO and broker of record for Zoocasa.
Looking specifically at the Hamilton-Burlington market, the report indicated that homes in the region were going for more than three per cent less than the benchmark price of $885,800 in August - matching a trend seen across the country.
Piriano said while fear is normal for those buying a home, the danger market" of earlier this year has passed and favourable conditions," such as lower prices, have returned.
This is a sweet spot," said Piriano. You just have to go in there with a little bit of faith that over the long run, you're going to do well."
Fallon Hewitt is a reporter at The Spectator. fhewitt@thespec.com