Hamilton’s spring real estate market warms up with return of competition and ‘optimism’ among buyers

The birds are chirping, trees are budding and bidding wars are returning as Hamilton's spring real estate market starts to warm up.

But some Hamilton realtors say it's more than just the seasonal thaw at play.

Last year marked a tumultuous time for the city's housing market, with the average price of a home in the city soaring to $1,104,163 in February - but falling to $955,658 by the end of the year.

The cooling of the market came as the Bank of Canada raised interest rates eight times between March 2022 and January 2023. However, rates held steady in March and another announcement is set for April 12.

Hamilton real estate agent Michael St. Jean told The Spectator that change in tune has caused some of the worst-case scenario" fears on interest rates to start tapering off, instilling buyers with a renewed sense of confidence.

We've had a real uptick in activity," said St. Jean. It may not be showing up in the March numbers, but it's happening on the ground."

The Realtors Association of Hamilton-Burlington (RAHB) reported that last month was the slowest March in terms of sales in a decade, with transactions down by nearly 44 per cent from the same time last year.

However, compared to this past January, which was the slowest start to the year since 2011, the number of sales has climbed by more than 56 per cent.

St. Jean said on the ground, that activity has translated to homes spending fewer days on the market, the number of homes hitting the market increasing and demand among buyers coming back.

In January, a detached home in the city was sitting on the market for 37 days, but as of March, that number had fallen to around 28, according to monthly RAHB data. While there were just 666 new listings in January, there were close to 930 in March.

St. Jean noted more listings are selling the same day they go on the market, multiple offers have returned for a decent amount" of listings and in some cases, his buyers are squaring off against a dozen others - and losing.

Hamilton real estate agent Sarit Zalter told The Spectator instances of multiple offers completely disappeared" last fall, even if a home was considered to be the best of the best," as the market went cold under rising interest rates.

And in particular, those situations are playing out more and more" for homes listed in the lower price brackets, said St. Jean.

Data from RAHB shows that more than 200 of the homes that sold in the city went for between $600,000 and $799,999 last month, while fewer than 100 homes sold in the $1,000,000 and $1,499,999 bracket.

St. Jean said the jump in demand is a result of higher interest rates, which have eaten away at whatever budgets buyers would have had a year ago.

It's pushed everybody down," he said. That price point has become a hot commodity and you have even more competition down there than ever before."

Meanwhile, inventory levels in the city remain on the low end" when compared to the pre-pandemic market, said Zalter.

Data from RAHB shows there were 1,019 homes on the market last month, while back in March 2019, there were 1,383 homes on the market. However, inventory levels have improved compared to March 2022, when there were just 674 homes on the market.

When it comes to new listings, 928 homes hit the market last month, while in March 2019, more than 1,100 properties had a sale sign stuck in their yard, according to RAHB.

St. Jean noted that the splash of homes some thought may come to market due to high mortgage rates scaring homeowners into selling" has not come to fruition.

Another factor affecting inventory is homeowners locked into low mortgage rates, added St. Jean. Those folks, even if they want to move, aren't budging as they'd likely have to pay more to get less," he said.

On buyers in the market, Zalter noted those making lateral moves have gone away, while those looking to downsize or upsize have come back to the market with optimism."

Those sales are happening again," she said. But we're not hearing from people who don't need to move."

And with no change in the housing situation in the region, which already lacks supply amid increasing immigration levels, St. Jean predicts the local market will likely turn into a pretty hectic environment" once again.

It is inevitable, whether it's starting now or sometime in the near future," he said. Only time will tell."

RAHB president Lou Piriano told The Spectator that folks who are thinking about buying a home should expect higher prices, adding that the market bottomed out" in January and has been springing back ever since.

In January, the average price of a home in Hamilton was $750,529. As of March, it had risen to $793,241, according to RAHB data.

People should find a way to buy now and finance later," said Piriano. Prices are on their way up."

Fallon Hewitt is a reporter at The Spectator. fhewitt@thespec.com