Cambridge Housing Market Report

Hamilton’s housing market has been one of the most overheated housing markets in the counntry in recent times as it experienced unsustainable price gains throughout 2021, likely fueled by unprecedented demand. Even though the sales activity has dwindled in the latter half of 2022 due to increased interest rates, the average home price remains above the pre-pandemic levels. The home prices and sales this month were higher than in January, but they were both much lower than in February last year.

The average home price in Hamilton was $800,584 for February 2023, an increase of 6.7% compared to the previous month. Last February saw the average home price peak to an all-time high of $1,013,485, but it has decreased by 21% year-over-year. After the slowest start to the year since 2011, the sales activity continues to remain much lower than last year. A total of 464 homes were sold in Hamilton in the month of February 2023, reflecting a 33% month-over-month increase. This number, however, is a 62.2% yearly decrease in sales activity and a decrease of 37.7% from two years ago.

Canadian home prices have significantly plummeted over the past year after reaching an all-time high in February 2022. The average home price for the Hamilton-Burlington region in February 2023 was $845,892, an increase of 6.9% from the previous month and a 22.9% decrease year-over-year. There were 765 homes sold in the Hamilton-Burlington region in the month, a decrease of 37.3% from February last year.

Burlington has consistently remained the most expensive housing market in the Hamilton-Burlington region. In November 2022, Burlington’s average sale price fell under the $1M mark for the first time since February 2021 and has continued to fluctuate around it over the past few months. February 2023’s average home price of $1,064,513 is a month-over-month increase of 16.2% and a 23.4% decrease from February last year. The 164 sales in February represent a 38.1% year-over-year decrease.

In Haldimand County, including Caledonia, Cayuga, Dunnville, and Hagersville, the average sale price of $613,309 marks a year-over-year decrease of 33.7% and a decrease of 34.9% from the previous month. For Grimsby, West Lincoln, and Smithville, the average price in Niagara North has decreased by 23% year-over-year to $802,558, for a 3.4% monthly increase. Niagara North and Haldimand County are small market areas, and based on the kind of homes sold, average prices may fluctuate from month to month.

Looking at Hamilton’s property types‘ performance,

• Detached homes had an average sold price of $875,388 in February 2023, a year-over-year decrease of 22.8%, an increase of 8.2% compared to $809,019 in January 2023. A total of 308 detached homes were sold in the month, representing an annual decline of 39.5% year-over-year.
• Detached houses, on average, stayed on the market for 26.9 days, and the inventory of 619 homes equaled 2 months of supply.
• The average sold price of semi-detached homes and townhouses in Hamilton was $720,894, up 5.3% monthly from $684,294 in January and down 19.5% year-over-year. A total of 116 semi-detached houses and townhouses changed owners this month.
• Semi-detached houses were on the market for 30.4 days, while townhouses were there for 34.8 days. There were 38 semi-detached homes in the inventory, along with 147 townhouses.
• Condo apartments had an average sold price of $455,698, a decline of 14.2% from $531,397 in January and a decrease of 24.9% year-over-year. The 40 condo sales represent a 56.5% drop from last year.
• Hamilton condo apartments were on the market for an average of 56.7 days in February 2023. The inventory had 174 condo apartments which equal 4.35 months of supply.

Looking at the benchmark prices of different property types, detached houses had a benchmark price of $825,300, 24% lower than last February, and semi-detached houses had a benchmark price of $729,300, 20% below that of last February. The benchmark prices of $637,000 for townhouses and $472,000 for condos were 14% and 6% lower than last year, respectively.

The new listings are down 30.3% year-over-year to 736 in February 2023. Hamilton’s sales-to-new-listings ratio (SNLR) for the month was 63%, an increase from January’s 52.4%. An SLNR of 40% – 60% usually indicates that the market conditions are balanced, and an SLNR of below 40% indicates that the market is a buyer’s market. An SLNR above 60% indicates that the market is a seller’s market.

There were 990 active listings in the Hamilton housing market in February 2023, an increase of 128.1% from a year ago. However, the inventory levels are still lower than pre-pandemic levels at this time of the year. Active listings have increased in Hamilton’s housing market as year-over-year sales have slowed. Months of inventory in the Hamilton real estate market has reached 2.1 months, rising by 280.5% compared to February 2022. The average number of days on the market for a home in Hamilton is 31.2 days, having increased 319.7% from last year.

Following the Quantitative Tightening (QT) measures employed by the Bank of Canada (BoC) to curb the inflation rate, which reached a 39-year high of 8.1% in June 2022, house prices have fallen significantly. The inflation rate fell to 5.9% in January 2023; however, it is still way above the target range of 1%-3%. Rate hikes by the Bank of Canada have been affecting Hamilton’s housing market, as rising prime rates and mortgage rates impact demand for housing.

The house prices in Hamilton are now much lower than what they were at the same time last year, and many buyers who bought houses with a variable mortgage rate last year are feeling the heat of increased interest rates. If the BoC continues to hike its rates, we might see further softening in Hamilton’s housing market. Recent drops in home prices have helped affordability, but increases in mortgage payments have limited the improvements in affordability.