December 10, 2024 | Community: Hamilton
THE O’REILLY GROUP IN THE PRESS | The Hamilton Spectator Article ft. Luke O’Reilly | Why are so many homes in Hamilton selling under-asking?
By: Fallon Hewitt – Reporter for The Hamilton Spectator
Full Article on The Hamilton Spectator can be viewed by clicking here
Less than one in three homes sold in Hamilton this year went for above their asking price, according to new data from the Cornerstone Association of Realtors.
The finding is a sharp departure from just three years ago, when the vast majority of homes were selling above-asking.
“It’s a very noticeable shift,” said local real estate broker Luke O’Reilly. “The data doesn’t lie.”
Are you ready to make Hamilton, Ancaster, or Dundas your new home? Start by downloading our Buyer’s Guide right here.
In some parts of the city, like Hamilton Mountain, the reversal is especially pronounced.
There, 33 per cent of homes have sold for over their asking price as of early November 2024, compared to 86 per cent in 2021.
In Stoney Creek, 24 per cent of homes have sold above-asking this year. Three years ago, it was 80 per cent.
The same pattern is evident across the Hamilton area.
It started in early 2020, when the local housing market caught fire during the pandemic. Buyers were in a frenzy amid historically low interest rates and scarce supply.
The scorching market continued for nearly two years, until it was doused by a series of interest rate hikes from the Bank of Canada (BOC) starting in spring 2022.
With many buyers sidelined by steep rates, sales in Hamilton have at times fallen to historic lows — even as more and more homes hit the market.
Local real estate agent Michael St. Jean had a front-row seat for the reversal. In 2020, he said, things were starting to “ramp up” and by 2021, they were positively crazy.
“You had more people chasing fewer homes,” he said. “It just drove the competition up.”
High demand drove prospective buyers into cutthroat and crowded bidding wars over underpriced homes, which led to nearly 78 per cent of residences in Hamilton selling for above-asking in 2021.
For example, one detached home in Dundas sold for $1,153,000 in 2021 — it was listed for $749,900.
Knowing the local market is the first essential step when buying a home. The posts below will help:
In Hamilton Centre, a two-storey home sold for $551,000, more than $200,000 over its asking price of $349,900.
As competition increased, so did average sale prices in the city, which peaked at $1,013,485 in February 2022.
Less than a month later, the BOC announced its first rate hike — and as more increases stacked up, the market cooled rapidly. By the end of that year, fewer than 56 per cent of homes in the city were selling for above their asking price.
In some parts of the city, the change was particularly dramatic. In East Hamilton, 59 per cent of homes sold for above-asking in 2022 versus 84 per cent the previous year. And in Glanbrook, 57 per cent sold for over their asking price, compared to 83 per cent in 2021.
That decline continued in 2023, as interest rates soared. That year, roughly 35 per cent of homes in Hamilton sold for above-asking, according to the Cornerstone data.
In Hamilton Centre, the number of homes that sold for more than their asking price dropped to 36 per cent in 2023 from 77 per cent in 2021, while in Waterdown, it fell to 32 per cent form 78 per cent in that same two-year span.
“You can just see the downshift in demand happening,” said St. Jean, who noted that high inventory levels gave buyers more choice and led to fewer bidding wars. “And it hasn’t really changed yet.”
The slide bled into 2024, with nearly every part of Hamilton experiencing yet another drop in the number of homes selling for above-asking. East Hamilton, Hamilton Centre and Dundas were the only areas that were stable or slightly recovered, the data shows.
Curious about family-friendly neighbourhoods in Hamilton? Learn all about it in Top 5 Hamilton Neighbourhoods for Families
O’Reilly told The Spectator the lower city likely fared better as it is “generally more affordable,” while Dundas remains “highly sought after” with little supply.
“The lower-end market has maintained its competitive nature,” he added, noting it’s not uncommon to see multiple offers on homes priced around $650,000.
Meanwhile, roughly three-quarters of homes that have sold in Ancaster and Flamborough this year have gone for under the asking price.
For example, a bungalow in Ancaster sold for $1.95 million this year, after it was listed $2.29 million and spent nearly three months on the market.
And in Flamborough, a bungalow sold for $1.65 million, after it was listed for $1.9 million and sat on the market for 259 days.
Neither St. Jean nor O’Reilly were shocked by that, with both noting the average price of homes in those areas remained well over $1 million as of October.
“It’s not surprising to see the luxury market slow down at a time like this,” said O’Reilly.
“It’s really the top that is going to suffer the most,” added St. Jean.
But it’s possible the tides of the market will turn, with the BOC starting a new cycle of interest rate cuts.
Last month, Cornerstone reported 576 home sales in Hamilton — a year-over-year increase of 27 per cent. The average home price in the city also grew by more than five per cent to $821,512 compared to October 2023.
And with the bank expected to announce further reductions, both St. Jean and O’Reilly anticipate the market will continue to rebound in the new year.
“I think we’re likely to see consumer confidence come back,” said O’Reilly, “It’s setting us up for a very active spring market.”
While O’Reilly doesn’t foresee a return the frenzied activity of 2021, St. Jean thinks it’s possible with many buyers waiting to re-enter the market.
“The dynamic is about to shift,” said St. Jean. “It doesn’t take much to swing these numbers up.”
Are you ready to start the hunt for your next home? Our Hamilton and Ancaster real estate agents can guide the way. Reach out to hello@theoreillygroup.ca or call 905-512-5323 to take the next step.
We're On Your Side
Whether you’re selling or buying the O’Reilly Group is dedicated to elevating your real estate experience.
