A growing number of homes in Hamilton are selling for over asking as buyers return to the market

While a majority of homes in Hamilton continue to sell for under their asking price, new local real estate data shows that a growing number of sellers are getting more than what they've hoped for.

April marked the busiest month for houses in the city being sold over asking since last summer, with 233 homes selling above their listed price, according to data provided to The Spectator by the Realtors Association of Hamilton-Burlington (RAHB).

The slow return of houses selling over asking comes more than a year after Hamilton's red-hot housing market started to cool off as the Bank of Canada began to hike interest rates as a way to tame runaway inflation.

However, the number of homes selling for more than asking has been steadily rising since the start of this year, springing from 59 in January up to nearly 180 in March, the data shows.

Hamilton real estate broker Miguel Lima told The Spectator that the growth in homes selling for over asking price is a sign of renewed confidence" in buyers as interest rates have continued to hold steady this spring.

It's a far different story than last spring, which saw many buyers pushed to the sidelines as their budgets were quickly eaten away by high mortgage rates.

Once interest rates started to rise last spring, the number of houses selling for over asking fell dramatically in Hamilton, declining by more than 35 per cent between March and April 2022, according to the data.

It really spooked a lot of buyers," said Lima. Now it seems like they've all come back, all at once."

However, the buyers that are returning have much lower budgets than they would have had last year, according to the RAHB.

President-elect Julie Sergi told The Spectator that homes listed for under $800,000 in Hamilton are highly competitive," as buyers who once qualified for million-dollar mortgages are lumped into that price range.

That's where we're seeing those multiple offers," said Sergi.

While the number of properties selling for over asking continues to grow, a majority of homes continue to sell below their list price.

Nearly 60 per cent of homes - or 396 properties - sold in April went for below their listing price. In March, that portion was more than 67 per cent - or 431 homes.

Since last March, just shy of 4,400 homes sold for below their list price - which accounts for more than 55 per cent of homes sold in the city since that time.

The Spectator requested sales data all the way back to last March, as that was the first month that showed a cooling housing market for the region.

Lima pointed to a number of factors for the reason why so many properties are selling below list price, including a change of demand from Toronto buyers, as well as seller expectations that hinge on prices from last winter, the hottest time for the local market.

Before the market started to cool off, the average price of a home in Hamilton soared to a record-breaking $1,104,163 in February 2022. As of April, it had dropped down to $806,809, although prices have started to trend upward with each passing month.

They're still pricing at a market that no longer exists," said Lima. And even when they do adjust those prices, they're still much higher than what today's buyer is willing to pay."

The worst month for homes selling over asking was December 2022, with just 37 homes selling for more than their price tag. Of the 294 homes sold that month, 247 - or 84 per cent - sold below asking, according to the data.

Coming down the middle are homes that have sold firm at their asking price - however, they continuously represent the smallest portion of sales for the city.

Just 41 homes sold for their list price in April and, since last March, 348 total properties in the city have sold for their listed price.

Lima said those sales are harder to dissect, describing the process of pricing a home as being an art as much as it is a science" for agents and their sellers.

Each situation is different and factors such as the buyer, home, neighbourhood and seller play into the equation, he noted.

You'll never find the exact same scenario," said Lima. There are so many moving parts and variables."

As for folks looking to jump back into the market, both realtors recommend seeking advice from a realtor as the market has been changing on a week-to-week basis," said Sergi.

But what should people expect for the coming months?

It seems like it's going to be like a competitive summer," said Lima. The appetite for home ownership never went away, it was just on pause."

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