The Realtors® Association of Hamilton-Burlington (RAHB) reported 1,298 sales through the MLS® for April 2022. This is down 20.7% over March and down 31.3% over the previous year. New listings were also down over last month. RAHB is reporting 2,451 new listings in April, down 5.6% over March. However, new listings are up by 18.2% over April 2021.
Although sales were down, the new listings this month resulted in a more moderate market. Months of inventory are currently at 1.2 compared to 0.7. A “balanced” or “buyer’s” market would typically see 3.0-4.0 months of inventory.
Average prices in the area are still over $1 million, however, slightly down over last month. The average home price in Hamilton-Burlington was $1,013,081 in April. This is 5.6% lower than March but 18.2% higher than April 2021.
The current moderation we are seeing in the market is potentially a result of the recent Bank of Canada interest rate increases–more on that later.
Let’s take a closer look at what happened in the local real estate market last month:
Hamilton Market Activity
| Variable | 2022 | 2021 | Difference |
|---|---|---|---|
| Sales Activity | 783 | 1,185 | -33.9% |
| Dollar Volume | $743,183,472 | $930,677,726 | -20.1% |
| New Listings | 1,466 | 1,707 | -14.1% |
| Active Listings | 914 | 883 | 3.5% |
| Months of Inventory | 1.2 | 0.7 | 0.4 |
| Average Price | $949,149 | $785,382 | 20.9% |
| Median Price | $870,000 | $740,000 | 17.6% |
| Median Days on Market | 8.0 | 7.0 | 1.0 |
| Average Days on Market | 10.9 | 10.8 | 0.1 |
Burlington Market Activity
| Variable | 2022 | 2021 | Difference |
|---|---|---|---|
| Sales Activity | 276 | 401 | -31.2% |
| Dollar Volume | $339,127,574 | $425,859,905 | -20.4% |
| New Listings | 517 | 494 | 4.7% |
| Active Listings | 328 | 250 | 31.2% |
| Months of Inventory | 1.2 | 0.6 | 0.6 |
| Average Price | $1,228,723 | $1,061,995 | 15.7% |
| Median Price | $1,094,500 | $940,000 | 16.4% |
| Median Days on Market | 7.0 | 7.0 | 0.0 |
| Average Days on Market | 9.6 | 12.2 | -2.6 |
Sales Activity
Sales were down in Hamilton by 33.9% over April 2021. There were 783 sales compared to 1,185 last year. Burlington saw a similar decrease of 31.2%. There were 276 sales in Burlington this year compared to 401 in April 2021.
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New Listings
New listings in Hamilton were also down over last year. In 2021 there were 1,701 new listings compared to 1,466 in April 2022 (down 14.1%). In Burlington, new listings were up 4.7% year-over-year from 494 in 2021 to 517 this year.
Active Listings
Active listings in Hamilton were up by 3.5% year-over-year from 883 in 2021 to 914 in April 2022. In Burlington, active listings were up significantly year-over-year. In 2021 there were 250 active listings and in 2022 there were 328. This is an increase of 31.2%.
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Months of Inventory
Months of inventory has jumped in both Hamilton and Burlington. Both regions saw an increase of 0.6 months to 1.2 months of inventory in April 2022. This represents a shift towards a more balanced market since a traditionally balanced or buyer’s market sees about 3.0-4.0 months of inventory.
Average Days on Market
Average days on market have stayed relatively the same in Hamilton. In 2021, listings would stay on the market for about 10.8 days. In 2022, that number rose slightly to 10.9 days. In Burlington, average days on market are down by 2.6 days from 12.2 in 2021 to 9.6 days this year.
Average Prices
Although month-over-month price increases have slowed pace, we are still seeing significant price increases year-over-year. In Hamilton, the average home price rose 20.9% from $785,382 in April 2021 to $949,149 this year. Burlington home prices rose 15.7% year-over-year from $1,061,995 to $1,228,723 in April 2022.
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In the News
The biggest news story this month is by far the latest interest rate hike. On April 13, the Bank of Canada raised its Policy Rate to 1%. This was a 50-basis point increase, which was the largest increase in 22 years. Bank of Canada Governor, Tiff Macklem said the increase was needed to help quell inflation and that the economy can handle interest rate increases as we continue to recover from the economic impact of the COVID-19 pandemic. Macklem says to expect further hikes as the Central Bank aims to reach its “neutral” range of 2-3%.
Shortly after The Bank of Canada’s Policy Rate increase, Bloomberg reported that Canada’s 5 big banks followed suit with an increase to their Prime Rate for lending. RBC, TD, CIBC, BMO, and Scotiabank all increased their Prime rate to 3.2%. The Prime Rate impacts their consumer lending products including variable-rate mortgages, lines of credit, and more.
At the end of April, Bank of Canada Governor Tiff Macklem attended a Parliamentary committee hearing where he said the Bank would consider another 0.50% rate hike at its next policy decision in June. Although nothing is confirmed yet, Macklem said officials have “signaled very clearly” the Bank’s intention to move aggressively to reel in inflation, which has hit record highs this year.
A new market outlook report from the Canadian Mortgage and Housing Corporation (CMHC) projects that home prices in Hamilton will continue to increase over the next two years, potentially hitting an average price of $1.3 million in 2024. The report cites low inventory and high demand as the main drivers of this outlook.
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A Look at What’s to Come
It’s important to note that while sales are down, they are down from the busiest selling period in history. Despite the new balance, we are still in one of the busiest markets we have ever seen.
Buyers should take advantage of current low rates and increased inventory. Lock in your pre-approval mortgage rates now before they rise. The CMHC is reporting that prices in the region will rise by approximately $200,000 per year for the next two years, don’t wait to get into the market.
For sellers, the best time to sell was in January or February. The next best time to sell is right now. At Michael St. Jean Realty, we are advising our clients to sell as soon as possible. Rising interest rates bring moderation to the market, buyers’ budgets shrink, and mortgage payments rise.
These conditions bring more cautious buyers and more inventory to the market. A more balanced market produces less urgency, fewer showings, and fewer offers. The time to sell is right now.
Whether buying or selling, now is a great time to make a real estate move. If you’re looking for advice on your next transaction, consider hiring a real estate agent in Hamilton. Call us at 1-844-484-SOLD or email us here for everything you need to know about buying and selling in this market.
