{"id":15163,"date":"2022-10-20T16:44:15","date_gmt":"2022-10-20T20:44:15","guid":{"rendered":"https:\/\/steveroblin.com\/?p=15163"},"modified":"2022-10-24T09:14:50","modified_gmt":"2022-10-24T13:14:50","slug":"fall2022realestateupdate","status":"publish","type":"post","link":"https:\/\/steveroblin.com\/fall2022realestateupdate\/","title":{"rendered":"Hamilton\/Burlington Real Estate Fall Update – What Can We Expect?"},"content":{"rendered":"

Well, it sure has been an interesting few months for our local Real Estate market leading to big questions about prices, supply, demand and overall “where do we go from here<\/strong>”\u00a0followed by the equally important “how do we get there<\/strong>“?<\/p>\n

Are we approaching the bottom of this Real Estate market correction? What\u2019s next for Hamilton-Burlington?<\/i><\/b><\/p>\n

But first things first; It\u2019s important to realize that what we have been\u00a0experiencing is a much needed market correction NOT<\/strong> a full on \u201cbubble burst\u201d collapse.\u00a0 A healthy perspective is crucial, understanding that our local market is correcting itself back into a healthier balanced market – and that is a good thing, for everyone.<\/p>\n

So what\u2019s been going on?<\/span><\/p>\n

The market downturn comes as consumer confidence weakens and of course as interest rates continue to rise.\u00a0 In March of 2022 we started to see mortgage rates rise.\u00a0 The increases have continued through the Spring, the Summer, and now into Fall.\u00a0 As rates rise and with the threat of further increases looming, Buyers have become more cautious and more reserved. \u00a0Investors have become more savvy.\u00a0 And Sellers have started to reconsider whether or not it truly is the best time to sell.<\/p>\n

The Sellers who need<\/strong> to sell have remained optimistic and have contributed toward the steady amount of new listings still coming onto the market. \u00a0This increase in active listings coupled with a large decrease in sales volume has resulted in more buyer-friendly real estate market.<\/p>\n

While this change has been welcome news for Buyers, some Sellers may have been caught off guard and are struggling to cope with this new reality.<\/p>\n

As we approach Winter and a potential seasonal slowdown some Sellers are taking one more shot in hopes of finding their buyers in this Fall Market.<\/p>\n

Where is the bottom? When does this end?<\/p>\n

To understand this I want to take you back.\u00a0 Way back. A decade back to be exact. Sometimes to have a clearer understanding of the reality of where we are now we need to retrace our steps and look at the “bigger picture”.<\/span><\/p>\n

The following graph highlights Real Estate trends since 2012.\u00a0 A clear upward trend is evident not to mention this graph clearly shows what we all have all been feeling over the past 2 years.\u00a0\u00a0 We were living through one of the <\/span>strongest<\/b> Sellers’ markets of all time.<\/span><\/p>\n

\"\"<\/p>\n

Looking at the next graph you\u2019ll see a bolded red line.\u00a0 This is what I am calling a “historic support line”<\/b>. Even though there are naturally peaks and valleys above and below this “support line” statistics show that home prices have remained in a continual upward trend since 2012.<\/p>\n

\"\"<\/p>\n

The past 2 years however have skyrocketed far beyond this support line, with home prices reaching approximately $400K more than the support line in the beginning of 2022 and now tapering off to just above the support line as we near the end of the year. Yes, prices have retracted, but is it very important to remember that they are still ABOVE<\/strong> our historic support line.<\/p>\n

Have we reached the bottom of this correction?<\/p>\n

Real Estate is cyclical and as such I am optimistic that we are reaching the bottom of this correction. \u00a0Here are a few reasons why I am optimistic that our market will remain healthy post correction.<\/span><\/p>\n

Reason #1: Supply and Demand<\/span><\/p>\n

With a record number of new immigrants set to arrive in Canada in the next (over 447,000 in 2023) (<\/span>FN LINK<\/a>) and the ability to only produce 214,000 new homes (<\/span>FN LINK<\/a>) there will continue to be not just an affordable home shortage, but an overall housing supply shortage.<\/span><\/p>\n

As prices fall some Developers may decide to slow their production further decreasing the number of new builds.\u00a0\u00a0\u00a0According to CMHC Ontario needs to build an additional 1.85 million homes in the next 7 years to help close the affordability gap. (<\/span>FN LINK<\/a>)<\/span><\/p>\n

Reason #2: Life Goes On<\/span><\/p>\n

While the financial and housing markets continue to fluctuate life does go on. \u00a0 \u00a0People get together, they break up.\u00a0 Life begins, life ends.\u00a0 Jobs change, lifestyles change. \u00a0Families grow with new kids. \u00a0Families blend, multi-generational households combine.<\/span><\/p>\n

There IS and always WILL BE a need for resale real estate.<\/span><\/p>\n

Reason #3: Tremendous Investment in Our City<\/span><\/p>\n

After over 2 Billion Dollars of development in 2021 Hamilton is already over 1.5 Billion Dollars committed in 2022. \u00a0 The word is out – Hamilton is one of the most economically diverse economies in the country and its excellent geographic position is a sought-after place to invest.<\/span><\/p>\n

Balance is Good!<\/p>\n

Again, this market correction is simply correcting us back to a more balanced market.\u00a0\u00a0 Remembering from blogs of the past a balanced market is a 3 to 1 sales ratio.\u00a0 For every 3 homes that come on the market 1 will sell.\u00a0\u00a0 Listings take on average between 30-45 days to sell in a balanced market.<\/span><\/p>\n

Buyers are not only aloud to finish their coffee before they must sign an offer but they can have conditions on that offer, including the return of \u201ccondition on the sale of the Buyers property\u201d which was practically unheard of in 2021 and the majority of 2022. Buyers are now able to purchase with more confidence and a greater sense of security.\u00a0 With this increase in inventory Buyers are finding themselves with more options as listings are no longer selling overnight or in multiple offer “bidding wars”.<\/span><\/p>\n

Manage Your Expectations<\/p>\n

While we have seen a large retraction in average sale price please remember we did see a massive (48-50%) increase in 2020 and 2021.\u00a0\u00a0 So a 30% retraction in 2022 is still UP<\/strong> 20% over 2019 numbers.<\/span><\/p>\n

Now more than ever both Sellers and Buyers need to adjust their expectations and stay informed.<\/span><\/p>\n

Sellers:<\/p>\n