There were 1,032 sales reported by the Realtors® Association of Hamilton-Burlington last month, down 20% over last year and down 31% from the 10-year long-term average for the month.
New listings were up in May. Combined with fewer sales, this resulted in a 46% decrease in sales-to-new-listings-ratio. Active listings, or inventory were up 56% over last year and was the highest inventory level for May since 2018.
The benchmark price for the area was up 1% month-over-month and down 1% year-over-year, resting at $868,300.
According to RAHB president, Nicolas von Bredow, the surge in listings and dip in sales can be attributed to “the current high-interest rate environment” with sellers motivated to list properties while buyers grapple with affordability.
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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 | 2024 | Difference |
|---|---|---|
| Sales Activity | 637 | -18.3% |
| New Listings | 1,425 | 14.5% |
| Active Listings | 1,830 | 57.2% |
| Months of Inventory | 2.9 | 92.5% |
| Average Price | $817,283 | 0.6% |
| Median Price | $754,237 | 0.6% |
| Average Days on Market | 22.8 | 16.3% |
Burlington Market Activity
| Variable | 2024 | Difference |
|---|---|---|
| Sales Activity | 242 | -24.1% |
| New Listings | 497 | 14.8% |
| Active Listings | 542 | 81.9% |
| Months of Inventory | 2.2 | 139.7% |
| Average Price | $1,167,717 | 4.0% |
| Median Price | $1,060,000 | 1.4% |
| Average Days on Market | 19.6 | 13.6% |
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Sales Activity
Sales in Hamilton were down 18.3% year-over-year with 637 reported in May. There were 242 sales in Burlington, which was down 24.1% year-over-year.
New Listings
New listings in Hamilton were up 14.5% with 1,425 new listings hitting the market. Similarly, new listings in Burlington were up 14.8% with 497 new listings coming to the market last month.
Active Listings
Active listings, also known as inventory was up significantly in both Hamilton and Burlington. In Hamilton, inventory was up 57.2% with 1,830 homes on the market. Burlington had 542 homes on the market, an increase of 81.9% year-over-year.
Months of Inventory
Months of inventory, was up 92.5% in Hamilton, resting at 2.9 months. Burlington months of inventory was up 139.7% year-over-year with 2.2 months.
Average Days on Market
In Hamilton, homes were on the market on average 22.8 days before selling. This is up 16.3% over last year. Burlington days on market were up 13.6% at 19.6 days on average.
Average Prices
Year-over-year, the average price in Hamilton was up 0.6% coming to $817,283. Burlington prices were up 4% year-over-year resting at $1,167,717.
In the News
Last week, the Bank of Canada was the first “Group of Seven” central banks to begin cutting rates. Policymakers lowered the benchmark overnight rate by 25 basis points to 4.75%, in a move that was expected by most economists.
The BOC also said “With further and more sustained evidence underlying inflation is easing, monetary policy no longer needs to be as restrictive,” and that it would be “reasonable” to expect more cuts if progress continues.
CIBC’s deputy chief economist, Benjamin Tal predicts 3 more rate cuts this year, and 3 rate cuts next year.
Justin Trudeau and the federal government say they plan to make housing more affordable for younger Canadians without negatively impacting the value of homes for current homeowners.
While the statement may seem contradictory, the Prime Minister said maintaining home values was important as many Canadians rely on this value as their “retirement nest egg.” While the most recent changes to housing policy are not expected to make significant changes to affordability, all levels of government in Canada have been pushing developers to build faster.
The Canadian economy grew 1.7% in the first quarter of 2024, which is lower than anticipated. A survey of Bloomberg economists forecasted 2.2% while the Bank of Canada estimated 2.8%.
“High interest rates and slow pre-construction sales” are to blame for the record-low residential sales in Toronto last month. According to the Building Industry and Land Development Association (BILD), sales of new construction homes fell 56% year-over-year in April and were 65% lower than the 10-year average.
BILD is concerned about these numbers and is “calling on all levels of government for quick intervention.” BILD also says without action, these trends could result in “an acute shortage of supply in two to three years.” (Toronto Star)
A Look at What’s to Come
Before it even really began, the Spring Market is almost officially over. The number of homes trading hands is at a decades-long low, however, sellers listing and pricing correctly are achieving positive results. The market has had a few false starts, thinking the Bank of Canada would lower rates, but it didn’t. Many buyers held off, waiting to see if the BOC would finally start reducing interest rates.
Last week, the Bank of Canada officially ended its tightening cycle with a rate cut. The policy rate was reduced by 25 basis points to 4.75%. Pent-up demand is at an incredible level. Record population growth and record-low new home construction have created an imbalance we’ve likely never seen before.
High interest rates are the only reason why the market is stagnant. As rates come down, pent-up activity will be released. However, don’t expect rates to return to the low levels we’ve seen in recent years. Economists like Douglas Porter from BMO are predicting a total of 0.75% rate cuts this year and another 0.75% next year, which would settle the Bank of Canada’s key rate around 3.5%—an overall healthy level.
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.
