February 2023 Market Stats

LISTINGS & SALES DECLINE YEAR OVER YEAR 

Hamilton, ON (March 2, 2023)

February closed out with 765 sales across the REALTORS® Association of Hamilton-Burlington (RAHB) market area, 37 per cent less than the same time the previous year. Much of the decline was felt in the higher end of the market as homes priced below $800,000 represented the majority of sales.

“Demand at the lower end of the market is increasing as higher interest rates impact affordability and attainability. Buyers have more options than they did a year ago and are less likely to compete in unfavourable market conditions,” said Lou Piriano, RAHB President. “Sellers at the high end of the market appear reluctant to sell, presumably because to move and take on a new mortgage rate could equal a higher monthly payment.”

An increased hesitancy to list impacted the detached sector hardest. New listings fell to 1,203 in February, 27 per cent below the same time last year, and new listings relative to sales prevented significant inventory gains. While inventory levels are much higher than reported last year, they are still below levels reported for this time of year before the pandemic.

For the second month in a row, unadjusted benchmark prices trended up over the previous month. This may indicate that prices are starting to stabilize. Prices in February 2022 were perhaps the most competitive of all time. This February, sales were over 22 per cent below last year. However, all gains are not lost as prices are still well above the under $600,000 price reported prior to the pandemic.   

2022 marked a year of adjustment in housing demand across the REALTORS® Association of Hamilton-Burlington (RAHB) market area as sales activity eased by 30% over the near-record highs achieved in 2021. Rising lending rates, previous price gains and limited supply options weighed on potential purchasers. At the same time, new listings continued to grow in the region, but only for homes priced above $800,000. The pullback in sales was enough to support inventory gains across all price ranges by December. While inventories have nearly doubled, levels reported in 2022 are still nearly 20% below long-term averages for the region. Moreover, supply levels remained well below typical levels for homes priced below $600,000.  

"The pandemic, combined with historically low interest rates, created an exponential surge in housing demand. Supply could not keep pace, resulting in price growth that far exceeded expectations over a two-year period," said Lou Piriano, RAHB President. "2022 saw conditions start to shift back to a more balanced market. Improved supply is an important component to stabilizing both sales and home prices." 

Across the RAHB market area, easing sales and rising supply have shifted the market from the extreme sellers' market conditions at the beginning of the year to one considered relatively balanced. The shift took some pressure off home prices, which hit a record high in February but declined 25% by December. While the price adjustment within the year was significant, it is important to note that as of December, prices remain over 16% higher than pre-pandemic levels. 

On an annual basis, prices are still nearly 10% higher than in 2021.  

"If higher lending rates continue, they will weigh on home sales in 2023, however; the dip in prices coupled with better supply choice could start to support a more stable market for the foreseeable future," continued Piriano.