Home sales losing fizz, but don’t panic, says an expert
Those For Sale signs are staying in the ground longer
Hamilton’s housing sales are losing steam after an overheated market that saw super-fast sales and record prices.
Home sales fell 21 per cent last month compared to a year ago, accelerating the downturn in May, when they dropped 3.5 per cent from a year earlier. There are also more houses on the market and they are taking longer to sell.
“Showings are down. Multiple offers are down, and more sale signs are up and staying in the ground longer,” says Lou Piriano, president of the Realtors Association of Hamilton-Burlington (RAHAB).
There were 2,756 new property listings last month, which is 23.8 per cent higher than the same month last year. In May, Hamilton had a record 3,208
new listings, which was 41 per cent higher than the same month last year.
The average number of days on the market is up from a low of 14 days in April to 16 days in May and 18 in June.
Piriano says that’s still fast compared to the range in a normal market, which is 35 to 40 days.
Paul Anglin, a University of Guelph associate business and economics professor who researches house sales, says: “It looks like the market is taking a bit of a break, trying to process what’s come out of Queen’s Park two months ago with a list of 16 policies to cool down the housing market.”
Ontario government measures taken to cool the market included a 15 per cent tax on foreign buyers in the Golden Horseshoe region and legislation allowing cities to tax vacant homes.
Anglin says it’s too soon to determine if the slowdown is a trend, “especially on the pricing.”
The average house price in June in Hamilton was $537,367, which is up 8.6 per cent over a year ago, but down 11.2 per cent from a month earlier in May, when it was $604,848.
“The lower-priced properties seem to be selling more,” said Piriano. “That will bring the average price down.”
The fewer house sales, longer listings, and lower average price means fewer bidding wars and fewer sales that are thousands above the asking price.
“In the past, I was not surprised to see a house selling at $50,000 over asking,” Piriano said, “but with more listings, there is less reason for buyers to get into bidding wars.”
Piriano said he sees purchasers now putting conditions back into their offers, which he says is good news for inexperienced first-time home buyers.
In the GTA, home sales plunged 37.3 per cent last month compared to a year ago, the largest drop in eight years, the city’s real estate board said.
“There’s no doubt the market has changed,” said Christopher Alexander, regional director at Re/Max Ontario-Atlantic Canada.
RAHB’s CEO George O’Neill in Hamilton agrees that “relative to the last few months, yes, it has slowed down.” But he says sales are still up compared to the 10year average.
O’Neill, Piriano and Anglin all say the slowdown points to a more balanced housing market. “People won’t be rushed so much,” Anglin said.
The three also don’t believe
The latest Hamilton market numbers indicate a slight slowdown in sales.