by Mark McNeil Hamilton Spectator
Home sales activity in Hamilton-Burlington suffered a “significant slowdown” in February, plunging 40 per cent compared to the same month one year ago.
The Realtors Association of Hamilton-Burlington said there were 752 residential sales last month, compared to 1,253 in February 2017.
“February’s real estate market experienced a significant slowdown, and that’s compared not just to last year, but to the last 10 to 15 years as well,” RAHB CEO George O’Neill said in a release on Monday. “In fact, the number of new listings was the lowest in the last 15 years, and the number of sales was the second lowest in that same 15-year period.”
O’Neill attributes the slowdown to rising interest rates and new requirements, as of Jan. 1, that new mortgagors pass a “stress test” to prove that they can afford higher premiums in the future.
“I think this is really starting to impact the market given the significant decline in sales,” he said.
The February results come after a tough January that saw 27.2 per cent fewer sales than January 2017, which was also 12.5 per cent lower than the 10-year average for that month.
The development is significant because Hamilton’s local economy has been buoyed by the vibrant real estate market of the past several years. People who buy homes also buy furnishings and hire contractors to do home improvements, fostering economic growth. And a lot of people have made a lot of money buying, fixing up and selling houses.
Prices for residential properties last month fell by 4.0 per cent, to an average of $534,738, compared to $556,996 in February 2017.
O’Neill says that is not a huge decline in prices. But it does stand out as a contrast to the double-digit annual increases the market had been experiencing.
He noted that condominiums saw a 2.7 per cent increase in average price over the same period — $392,448 compared to $382,046. Freehold prices declined 3.6 per cent to $576,935, compared to $598,232.
The question now is whether this is a temporary setback from short term jitters with new market conditions or a sign of where the year is heading, O’Neill added.
“We’re going to have to see as we go forward.”