Friday 4 November 2016
But just how bad is it?
Unfortunately, we don't really know an exact answer to that.
Yesterday I shared the local real estate association's monthly press release, and we read that October was a record-breaking month for sales. Demand is definitely up. But then we also read that listing inventory at the end of October was only a third of what it was the same time last year.
The only problem is that the listing inventory statistic from the local real estate association only takes into consideration listings in the local MLS® database. Meaning agents who are members of this association. I confirmed this with them after the drop reported last month, so I am less in awe of this month's even more dramatic decline.
In the past, counting only local listings was sufficient because almost all listings were taken by local agents and companies. The impact of out-of-town agents was minimal. But just as professionals on the street can tell by experience that listing inventory is down, we also know that there has been an influx of agents from out of town taking listings in Hamilton - some of them from Toronto, and some of them from closer outlying areas. We've seen the yard signs.
This is due in part to Hamilton's hot market naturally attracting investors and agents from further afield. But there was another behind-the-scenes shift that has helped to facilitate this: over the last year and a bit, the local real estate association has been transitioning to a regional MLS® database shared with seven other real estate associations. The local association's official 'jurisdiction' covers a pretty wide area - all the way from Burlington to Dunnville - so there are really several sub-markets within our association's data, not just Hamilton. The shared database has made it easier for agents to cross the traditional jurisdictional lines into our area, and many have.
While I don't have a strong objection to this, it does wreak havoc on our statistics which are based on old models from before a shared database or wider interest in our market. We can look at our listing inventory at the end of October and we're rightly shocked that it is a third of what it was last year. But - and this is a big but - how many more listings are available in Hamilton but not counted in that number because they are not listed with a Hamilton agent or company? I'm sad to say I don't have an immediate answer for that. I could find out fairly easily about extra listings from the seven regional associations, but adding in listings from Toronto agents is more difficult.
So what does all of this mean for you? In a way, not much. If you're looking to sell a home, we know it's a strong sellers' market whether listing inventory is 33% of last year's or 66% or whatever. You'll be looking at recent sales in the open market to price your home, and that doesn't really change. And as a buyer, you'll want to stay cool and rational, making decisions based on your needs and actual market sales data. In the end you don't care how many houses or buyers are out there as long as you find the one you need.
Having said that, I'm hoping we'll be able to sort out this inaccuracy in statistical reporting as the regional system settles in. In the meantime, 'stay calm and carry on' as they say, and don't get too excited about stats.
And if you are thinking about buying or selling real estate in the Hamilton area, please give me a call or email. I'd be happy to answer any questions you have or discuss your plans and needs.
Thursday 3 November 2016
[CLICK HERE] to read the full report in PDF format