Limited supply, high demand in hot housing market ‘without precedent’
Some are sounding warning bells but others say market is just simple economics
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
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.