Lim­ited sup­ply, high de­mand in hot hous­ing mar­ket ‘with­out prece­dent’

Some are sound­ing warn­ing bells but oth­ers say mar­ket is just sim­ple eco­nom­ics

The Hamilton Spectator - - LOCAL - JON WELLS jwells@thes­pec.com 905-526-3515 | @jon­jwells

Warn­ing bells are be­ing sounded in some quar­ters about an over­heated hous­ing mar­ket that is trend­ing to­ward fewer listings, higher prices and yet in­creased sales, at least lo­cally.

But the pres­i­dent of the Realtors As­so­ci­a­tion of Hamil­ton and Burlington sug­gests the sit­u­a­tion is nei­ther wor­ri­some nor dif­fi­cult to un­der­stand.

“It’s Eco­nom­ics 101,” said Lou Piriano. “There is less sup­ply, and more and con­stant de­mand.”

A re­port re­leased Wed­nes­day by the Cana­dian Real Es­tate As­so­ci­a­tion de­scribes a “se­vere” short­age of homes avail­able for sale “par­tic­u­larly in and around Toronto and in parts of B.C.”

The re­port said “the im­bal­ance be­tween lim­ited hous­ing sup­ply and ro­bust de­mand in On­tario’s Greater Golden Horse­shoe re­gion is with­out prece­dent.”

And an econ­o­mist was quoted in the Toronto Star say­ing that the hous­ing mar­ket in Toronto “and any city re­motely within com­mut­ing dis­tance is over­heat­ing, and per­haps dan­ger­ously so.”

In Hamil­ton-Burlington, the num­ber of prop­er­ties listed in Jan­uary was 1,139, down 9.7 per cent from Jan­uary of last year — but sales of all prop­er­ties were up 17.4 per cent.

“There is less prod­uct and just as many peo­ple want it,” Piriano said.

That in­flu­enced the aver­age home price ris­ing 12.8 per cent over this time last year.

Piriano said it’s prob­lem­atic to fo­cus on na­tional fig­ures when just one hous­ing mar­ket can dis­tort the num­bers but said the GTA con­tin­ues to ex­ert tremen­dous in­flu­ence on Hamil­ton’s mar­ket.

Fif­teen per cent of all home sales in this area are done by Toronto realtors. How hot is the mar­ket? It’s just one house, but anec­do­tally it per­haps rep­re­sents sto­ries that area home buy­ers and sell­ers have been telling of their ex­pe­ri­ences:

A cen­tral Moun­tain home on De­soto Drive, near Up­per Welling­ton Street and just north of Stone Church Road, listed Feb.6 for $599,500 and re­ceived 18 of­fers, ac­cord­ing to Mis­sis­sauga-based ReMax re­al­tor Carl Schuy. It sold a week later, on Mon­day, for $740,000.

In an email, Schuy said the lo­cal mar­ket is be­ing driven by “an in­flux of GTA buy­ers look­ing to take ad­van­tage of lower price points and mar­ket con­di­tions with the sale of their own home due to low in­ven­tory and ex­tremely high de­mand.”

The aver­age price for a home in Hamil­ton-Burlington has climbed to $440,000. Piriano con­cedes that fig­ure is be­yond the pale for many buy­ers, but he added that higher-priced homes are skew­ing the aver­age.

“The good news is, if I’m a buyer, there are op­por­tu­ni­ties out there, there are deals to be had … And it’s way cheaper than Toronto.”

He said that in 44 years as a re­al­tor he’s seen it all, but this hot mar­ket that shows no sign of cool­ing “is not like any­thing I’ve seen in the past. It has a life of its own.”

(It) is not like any­thing I’ve seen in the past. It has a life of its own. LOU PIRIANO HEAD OF REALTORS AS­SO­CI­A­TION

BRAYDEN SWIRE, PHOTO COUR­TESY OF CARL SCHUY

This house at 38 De­soto Dr. on the Moun­tain was listed on Feb.6 for $599,500. Af­ter 18 of­fers, it sold for $740,000 on Mon­day.

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