Prices in Hamilton-Burlington rise 10%, but listings are still off from last year
The average home price in the Hamilton-Burlington market rose 10 per cent in March over a year earlier and that was the biggest jump in the country.
New numbers released by the Canadian Real Estate Association clearly show the country’s real estate market is cooling. The number of home sales, total volume and new listings are all in decline compared to numbers last year in most markets, though nationally home sales rose 2.4 per cent from February to March.
Local home sales climbed close to 5 per cent between February and March but fell on a non-seasonally adjusted basis of nearly 15 per cent between last month and March 2012.
Transactions fell in 90 per cent of local markets year over year, with Edmonton being the only major market bucking the trend. Out of 26 markets, 19 saw double-digit sales declines in March over a year ago.
But average sale price in Hamilton and Burlington in March 2013 was $388,147, a 9.9 per cent hike over March 2012. That compared to a 3.2 per cent average increase in Ontario and 2.5 per cent nationally.
Hamilton was joined by Winnipeg and Regina at the top of the average price gains list.
The local average price climbed 2 per cent between February and March this year.
Ross Godsoe, CEO of the Realtors Association of Hamilton-Burlington, said the inventory of homes for sale was consistently low in 2012.
“When there are fewer choices and more sales, that keeps prices strong.”
He said sales and listings have both picked up in April and he expects throughout the spring the local market will head more toward balanced territory.
A balanced market has a sales-to-new-listing ratio of between 40 and 60 per cent. Above that is considered a sellers market and below that range is a buyers market. That number is at 59.6 per cent so far for 2013. It was at 65.4 per cent for the same period last year.
Total volume of residential sales was up more than 6 per cent to just over $400 million in March over the month before after falling just about the same year-over-year.
“National sales have been holding fairly stable since last summer,” said CREA president Laura Leyser.
“We’ll be watching closely as the spring market picks up to see whether the March sales increase marks the beginning of an improving trend.”
Industry insiders say the Easter holiday and a long weekend at the end of March both cut the month’s sales short. An unseasonably cold spring may also have had an effect.
February national numbers showed actual (not seasonally adjusted) sales came in at 15.9 per cent lower than those of February 2012. That gap shrunk to 15.3 per cent in March.
“That said, the factors that crimped March sales this year were not in play for the same month last year, resulting in speculation that the gap between sales activity this March and March of last year would be bigger than it was in February,” said Gregory Klump, CREA’s chief economist.
“That the gap in fact improved marginally speaks to the resilience of housing demand in Canada.”
Klump said the fall in home sales over last year isn’t surprising given tighter mortgage rules have come into effect.
Yet sellers seem optimistic. Locally, new listings were up 7.2 per cent in March over the month before, much higher than the 3.2 per cent rise nationally. Listings were still down 7.8 per cent locally over the year before.
“It’s official: Canadian home prices are boring and that’s a good thing,” said Doug Porter, chief economist at BMO Capital Markets.
Porter said average and median home prices are up 2 to 3 per cent.
“Shutting out the noise in the monthly data, the main story is that home sales have taken a big step back since last spring but prices are holding up.”
Porter expects annual sales will fall 7 per cent this year.
Godsoe says tougher mortgage qualification rules and shorter amortizations haven’t had a chilling effect on the market because interest rates are still at historic lows.
Courtesy The Hamilton Spectator