The Realtors® Association of Hamilton-Burlington (RAHB) reported 795 sales in August, which is relatively unchanged from July. However, this is down slightly 11% from 2022, when there were 873 sales.
RAHB is reporting that sales in lower-priced homes are improving, however, these gains are not offsetting the decline seen in homes priced above $800,000.
Higher borrowing costs are one of the main reasons for the dip in sales. Inventory remains low, but experts say conditions are definitely not as tight as what was seen in the spring.
The benchmark price for the region also softened month-over-month, resting at $863,700, which is about $10,000 less than July but up slightly over the $857,900 we saw last year.
The Fall Market is already starting and the latest interest rate announcement from the Bank of Canada is sure to inject some confidence in the market, resulting in a busy and active season.
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Let’s take a closer look at what happened in the local real estate market last month:
Hamilton Market Activity
| Variable | 2023 | Difference |
|---|---|---|
| Sales Activity | 480 | -8.6% |
| New Listings | 954 | -1.5% |
| Active Listings | 1,381 | -2.3% |
| Months of Inventory | 2.9 | 6.8% |
| Average Price | $798,786 | 2.3% |
| Median Price | $750,000 | 5.6% |
| Average Days on Market | 24.2 | -10.0% |
Burlington Market Activity
| Variable | 2023 | Difference |
|---|---|---|
| Sales Activity | 180 | -14.7% |
| New Listings | 318 | -13.1% |
| Active Listings | 361 | -18.7% |
| Months of Inventory | 2.0 | -4.7% |
| Average Price | $1,065,651 | 3.3% |
| Median Price | $960,000 | 3.2% |
| Average Days on Market | 22.9 | -11.6% |
Before buying or selling, make sure you’re fully familiar with the local real estate market. You can read our past Hamilton-Burlington real estate market report updates right here.
Sales Activity
In Hamilton, residential home sales were down 8.6% in August compared to 2022 with 480 sales reported through the MLS®. Burlington home sales were down 14.7% over last year with 180 sales reported.
New Listings
New listings in Hamilton were down slightly by about 1.5% with 954 new listings hitting the market in August 2023. There were 318 new listings in Burlington, which is down 13.1% year-over-year.
Active Listings
Active listings, also known as inventory, was down in both cities. In Hamilton, there were 1,381 active listings, down 2.3% year-over-year. Burlington’s active listings were down 18.7% over August 2022 with 361.
Months of Inventory
Analysts use months of inventory, also sometimes called months of supply to determine what type of market conditions we are currently experiencing. It’s a measure that calculates how long it would take to sell off the entire inventory of listings, supposing no new listings come to market. Months of supply less than 3 is typically considered to be a “Seller’s Market” while anything above 3 months is considered to be a “Buyer’s Market” in Hamilton, the current months of supply is 2.9, which is up 6.8% over last year. Months of supply in Burlington was down 4.7% over 2022 with 2.0.
Average Days on Market
The average days on market decreased year-over-year in both Hamilton and Burlington. In Hamilton, we saw 24.2 days on market, which is down 10% over August 2022. Burlington had 22.9 days on market, which is 11.6% down over last year.
Average Prices
Prices in the region softened month-over-month, but looking at the year-over-year trends, we are seeing a slight gain in average price for both markets. Hamilton’s average residential price was $798,796 in August 2023, up 2.3% over last year. Burlington saw an average price gain of about 3.3% with the average price resting at $1,065,651 in August.
In the News
The biggest news item this month is the recent announcement that the Bank of Canada will hold its policy rate at 5%. The announcement was expected by most economists, as the economy took a sharp decline in Q2, hinting that the the historic interest rate hiking cycle was working to cool the economy. Although this likely signals an end to the current hiking cycle, Bank of Canada Governor, Tiff Macklem said the bank would be prepared to increase rates again should inflationary pressures require it.
New data from the Toronto Regional Real Estate Board (TRREB) showed that the market in Toronto slowed in August. Sales in the city were down while new and active listings were slightly up. The average price in Toronto also softened slightly month-over-month, which is the first time we’ve seen price decreases in Toronto in about six months.
The former Bank of Canada Governor, David Dodge recently said that Canada is not likely to return to pre-pandemic interest rates. Dodge said we are likely not going back to the 1-2% interest rates we saw in the 10 years leading up to 2020. Rather, Dodge predicts interest rates will come down in late 2024-2025 and will “hover” around the 3.5% benchmark.
Although the Canadian economy slowed in Q2, new reports show that the labour market is exceeding expectations. In August, we saw 40,000 new jobs added while the unemployment rate remained at about 5.5%. Wage growth is also outpacing expectations, in August wages accelerated to 5.2%, higher than the 4.7% predicted by experts.
A Look at What’s to Come
The Fall Market is officially upon us! The Bank of Canada announced they would be holding interest rates for the time being. This is likely the end of their rate-hiking cycle and was an excellent way to kick off a positive Fall Market.
We expect the fall to be busy and are advising buyers to get into the market now as prices will continue to rise, despite some moderation in price growth over the summer. Demand will continue to rise as Canada continues its aggressive immigration plan. Currently, Canada is welcoming four new immigrants for every home being built. New intel has also suggested that the government has undercounted foreign students and workers by over 1 million per year, which means the supply and demand problem is only going to get worse.
Buyers or sellers who planned to wait to move until rates go down again will likely be caught off-guard. Experts predict that these rates are the new normal and that the Bank of Canada will not bring rates back down to the levels seen in the pre-pandemic years. The new standard will likely be much higher than before, as the BOC brings us back to neutral rate levels not seen since before the 2008 recession.
Our recommendation: buyers should get into the market as soon as possible, and sellers should absolutely take advantage of what is shaping up to be a great Fall Market.
Are you thinking about making a real estate move in the near future? Call us at 1-844-484-SOLD or email us here for everything you need to know about buying and selling in this market.
