Hamilton Real Estate Market Bounces Back

Are you looking for guidance on how to buy or sell during the COVID-19 pandemic? We’re always happy to talk about real estate. Contact us

In recent years, Hamilton has been recognized by homebuyers within the GTA for its undeniable opportunities: affordable housing and a reasonable commute. As that recognition grew, so did demand...and prices. The ‘affordable’ portion of the opportunity is slowly starting to fade. The year was off to a good start, with expectations of a great spring market--  the Realtors Association of Hamilton and Burlington (RAHB) at the end of February reported a 25.5% increase in the number of sales over the same time last year, with a 15.5% increase in average sale price from February 2019, now sitting at $646,667. High demand, moderate affordability, and shrinking supply are the current trends dominating the Hamilton housing market. The growing demand, driven largely by the low unemployment rates and the greenbelt and escarpment surrounding it, as well as the steady growth in standard of living, and the easy access to Toronto owing to improvements on the connecting GO trains, has positioned Hamilton as a strong seller’s market

The Initial Market Plunge

However, with the onset of the COVID-19 pandemic that brought not only fear but also a higher rate of unemployment and strict virus control measures, RAHB reported that the real estate market in Hamilton and surrounds was having a tough time getting back to the sales volumes seen last year. Sales were down 42.2% since May 2019, and although April 2020 saw an increased rate of almost the same amount, there were still around 1000 fewer listings for May 2020, with roughly 1000 fewer listings than the same time last year.  Neighborhood data has revealed 55% fewer sales for the Hamilton area.

The Impact of COVID-19 on the Real Estate Market

Although it was deemed an essential service and operations were able to continue, real estate has looked to creative new methods and alternatives to carry on after open houses were canceled as a safety measure. Alternative showcasing methods have been implemented, with 360-degree virtual tours and walk-throughs becoming the new norm on MLS’s, affording potential buyers an opportunity to get a more detailed view of a property before asking for a visit. When visits are scheduled, strict virus control measures are followed: a limited number of people are allowed access, and masks, gloves, and sanitizers are provided for both the realtor and the potential buyers in an effort to keep everyone involved as safe as possible by limiting potential exposure.

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Bouncing Back

Amidst all the fear and uncertainty, the good news is looming for the Hamilton Real Estate market. Bank of Canada was the first to respond, in an attempt to reinvigorate the market after losses related to COVID-19, it instituted several interest rate cuts throughout the month of March-- the rate now sits at a very low 0.25%. Big banks soon followed in their footsteps, and cut prime rates to make it easier for prospective buyers to secure a variable rate mortgage, as well as help those afford a property that may previously have been just out of their reach.  

Hamilton is synonymous with resilience— as it proved during previous economic downturns: during both the 2008 financial crisis and the 2003 SARS public health crisis when home prices and sales volumes actually grew. Although a dip was seen in sales during the Months of March and April, stats show that Hamilton sales have been incrementally increasing for seven consecutive weeks, with the week ending  May 23 back up to 151 sales— which is the same number that was seen 10 weeks prior in the week ending March 28, before the decline set in along with COVID-19 fears and virus control measures. The average home price as of May 2020 was $655,418— this is a whopping 6.3% higher than a month before and 10% higher than the same time last year.

In a release, Kathy Della-Nebbia said that as the COVID-19 restrictions are being eased, consumer confidence is beginning to rise, and she expects activity to be higher in June provided the progress continues, and the weather plays along.

At the moment there is still much uncertainty about how long the virus control measure will be in place and to what extent it has impacted the national and local economies, but following the current trajectory, the trend of healthy demand and increasing prices seems to be the most likely outcome-- especially with the prospect of low-interest rates pushing more potential buyers into the market to take advantage of the opportunity.

“Interest rates are a little lower than what we normally see currently, with that said, interest rates in Canada have been very favorable for homeowners for many years. People who opted to choose variable-rate mortgages in the past are seeing the biggest benefit from this with the Bank of Canada prime rate reduced from 3.95% to 2.45% over a short period of time. When shopping for a mortgage make sure you're working with a Mortgage Broker who has the ability to provide you multiple options, rates are very comparable bank to bank, but the underlying terms within these 20-page mortgage commitments are what make up the biggest financial impact & are what truly differentiates the products from bank to bank,” says Jacob Perez, Mortgage Agent & Partner with Synergy Mortgage Group.

Currently, uncertainty still clouds any reasonable predictions, only once the pandemic blows over and takes with it current unemployment rates, the economy bounces back and life itself reverts back to normal will the true effects be uncovered, at which point we will have a better idea of what the future holds. What is certain though, is that that day will come-- when businesses open their doors, the streets become busy once again with people emerging from their homes after long isolation, unemployment rates drop and this period becomes a memory, a chapter in the history books… but when that does happen when people come out and carry on, they will also be coming out to buy properties, and through all the uncertainty, it seems extremely likely that the current trend of healthy demand and slowly increasing prices will continue from strength to strength for real estate in the Hamilton area.

*All statistics obtained from the REALTORS Association of Hamilton-Burlington.

Are you looking for guidance on how to buy or sell during the COVID-19 pandemic? We’re always happy to talk about real estate. Contact us

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