Hamilton-Burlington saw a dip in sales activity in December 2021. Sales decreased by 32% over November and they were down 11% year-over-year. Low inventory combined with the holiday season surely factored into the decrease in sales over this period. At the same time, prices are still on the rise according to the Realtors Association of Hamilton-Burlington (RAHB). The average price for residential properties in Hamilton-Burlington was $931,787 in December 2021, which is an increase of 2% over the previous month and an increase of 27% year-over-year.
Overall, throughout 2021 we saw record sales activity and prices persist through the market. Continued low inventory and increasing demand from buyers contribute to the current competitive market conditions and rising prices–both trends that we forecast will continue into 2022.
Here’s a closer look at what happened in December:
Hamilton Market Activity
| Variable | 2021 | 2020 | Difference |
|---|---|---|---|
| Sales Activity | 532 | 577 | -7.8% |
| Dollar Volume | $458,421,906 | $382,042,902 | 20% |
| New Listings | 402 | 432 | -6.9% |
| Active Listings | 154 | 400 | -61.5% |
| Months of Inventory | 0.3 | 0.7 | -0.4 |
| Average Price | $861,695 | $662,119 | 30.1% |
| Median Price | $820,000 | $615,000 | 33.3% |
| Median Days on Market | 8.0 | 11.0 | -3.0 |
| Average Days on Market | 14.7 | 20.4 | -5.7 |
Burlington Market Activity
| Variable | 2021 | 2020 | Difference |
|---|---|---|---|
| Sales Activity | 136 | 170 | -20% |
| Dollar Volume | $166,100,432 | $164,628,114 | 0.9% |
| New Listings | 108 | 136 | -20.6% |
| Active Listings | 38 | 147 | -74.1% |
| Months of Inventory | 0.3 | 0.9 | -0.6 |
| Average Price | $1,221,327 | $968,401 | 26.1% |
| Median Price | $1,155,000 | $843,450 | 36.9% |
| Median Days on Market | 7.0 | 10.0 | -3.0 |
| Average Days on Market | 13.9 | 25.5 | -11.6 |
Sales Activity
The RAHB reported 811 sales of residential properties through the MLS® in December. This is a decrease of 32% over November 2021 and a decrease of 11% year-over-year.
New Listings
New listings in Hamilton-Burlington were down 50% over the previous month, and down 6% over December 2020. Seeing fewer listings hit the market in December is common during the holiday season.
Active Listings
Active listings in Hamilton homes for sale were down by 62% year-over-year and down 71% in Burlington over December 2020. This aligns with the current environment we are in with ultra-low inventory and high demand from buyers.
Months of Inventory
Months of inventory is also down over last year. In Hamilton, months of inventory is down 0.4 points from 0.7 in 2020 to 0.3 in 2021. Burlington homes for sale also saw a decrease in months of inventory. In December 2020 we saw 0.9 and in 2021 that number was 0.3–a decrease of 0.6.
Average Days on Market
With increased competition among buyers, it’s expected to see homes stay on the market for shorter periods of time. In Hamilton, the average days on market was 14.7 compared to 20.4 in December 2020. In Burlington, the average days on market was 13.9 compared to 25.5. As a seller, now is a great time to sell your home in a shorter timeframe, however, for buyers it means you need to be willing and able to act quickly to secure a house.
Average Prices
According to the Realtors® Association of Hamilton-Burlington (RAHB), prices in the region are skyrocketing. Overall, the average price in the area was $931,787–an increase of 2% over the previous month and 27% up over December 2020.
In Hamilton, the average residential home price increased year-over-year by 30% from $662,119 in December 2020 to $861,695 in 2021.
Burlington prices are also rising, up 26% over last year. Residential home prices went up from $968,401 in December 2020 to $1,221,327 in 2021.
In the News
Bloomberg is reporting that despite new pandemic lockdown measures in Ontario and Quebec–Canada’s two most populous provinces–traders are still betting on a Bank of Canada interest rate hike coming soon. Canadian government bond yields drove higher on the first day of trading in 2022, which was a good indication that an increase is coming. Experts are predicting at least five upcoming hikes, the first of which could happen as early as the next Bank of Canada policy decisions taking place on January 26 or March 2.
As we’ve seen in Hamilton-Burlington, prices are on the rise. The Toronto Regional Real Estate Board (TRREB) is reporting that both the Toronto and Vancouver real estate market ended the second year of the pandemic with record-high sales numbers and prices. Despite low inventory, sales in these areas were strong and in Toronto, home prices were 44% higher than they were in January 2020.
As the federal government plans to increase its national immigration targets to address the labour shortage, experts are warning about how this will impact our already maxed-out housing market. According to The Globe and Mail, with more new Canadians entering the country, we will no doubt fill much-needed staffing vacancies, but it will only drive demand and prices for housing higher.
A Look at What’s to Come
Like almost every other expert and economist out there, we predict that home prices will continue to rise in 2022. However, the increase won’t be as dramatic as we saw in 2020 and 2021. It will be more moderate.
As we enter the busy spring selling season, we forecast that interest rates are also likely to rise. However, we think the spike will be much slower than what others are forecasting due to weak economic growth and high levels of consumer, corporate, and government debt. We predict an interest rate hike that has the potential to moderate market activity without hurting economic growth.
If rate hikes do occur, sellers may want to take advantage of the current market with strong demand and low inventory. Rising interest rates heading into the spring season could bring more inventory to the market, cooling demand and decreasing buyers’ borrowing power.
For buyers, we recommend jumping into the market right away as they face two potential negative headwinds: The first being a continued rise in prices and the second being rising interest rates.
As for the threat of the Omicron variant derailing Canada’s economic recovery and negatively influencing the housing market: we don’t see it having a significant impact. In fact, we believe that it might be likely to fuel activity in the short term, as we have seen in previous waves throughout the pandemic.
Want to learn more about Michael St. Jean Realty’s 2022 market predictions? Michael appeared on CHCH Morning Live recently to discuss his real estate market outlook for the new year. You can watch the full segment here.
Interested in getting weekly market updates, the latest real estate news and exclusive offers on the most recent Hamilton developments delivered right to your inbox? Sign up for our weekly newsletter The St. Jean Report here.
In this market, expert advice makes all the difference. If you have a question about buying or selling your home, call us at 1-844-484-SOLD or email us here.
