Opinion: I always thought I’d own a home in Hamilton but now I’m not so sure
Published May 18, 2021 at 2:46 pm
Hamilton was regularly portrayed to me as an area where people moved when they wanted to live near or in Toronto but couldn’t afford it.
Being born and raised in Hamilton, I always thought when I entered the housing market it would make sense to stay in the city – my family is here, my friends, job, etc. There have been no external factors pushing me out, until recently.
Growing up, although I may have been a little naïve, I always thought housing was fairly affordable in Hamilton. But then again, what did I know about affordability in 2008 at the ripe age of 12?
According to listing.ca, the average price for a detached home in Hamilton (as of June 30, 2008) was $291, 386. This number slowly increases over five-year increments.
June 26, 2013 – $373, 251
June 22, 2018 – $585, 676
And, in even earlier years, according to Carlos Cruz, Zoocasa Agent, the average price for a detached home in Hamilton in 1990 was $233,159 while in 1999 this price dropped to $230,592.
“This accounts for a decline in home prices throughout the decade,” Cruz told InTheHammer in an email. “The silver lining was that real estate in the city was affordable. Home prices were only about four times the average middle-class family income in 1999.”
It’s safe to say that real estate numbers have significantly changed over the years.
More recently, as noted in a Realtors Association of Hamilton-Burlington press release, the average price for a detached home (as of January 2021) was $798,431 – a $565,272 increase from 1990.
Despite this, Cruz notes that the Hamilton real estate market is currently doing well.
“The Hamilton real estate market is a healthy, fairly stable real estate market, which has experienced a rapid increase in appreciation in the last five years, culminating in record-breaking growth in values this past year,” Cruz said.
“The underlying factor behind this growth stems from a migratory influx of GTA residents to the city, coupled with higher value jobs added to the workforce, population growth and, this last year, the added circumstance of a forced work-from-home workforce which created demand for affordable larger homes with office space and backyards.”
However, Cruz explained that he does not see an end to this trend.
“Due to the continued migratory pattern of GTA residents moving to our region, Hamilton home prices and overall demand for real estate in the city will continue to grow,” he said.
As a result, affordability is gradually becoming an issue in the city.
“The average freehold detached home price in Hamilton in March was $887,770,” Cruz said. “That accounts for just over 8.5 times the average middle-class family income.”
On a similar note, Chad Connelly, Salesperson for Pottruff and Oliver Realty, said that bidding wars are also an issue nowadays.
“Twenty-five, 20 years ago we were dealing with a more balanced market,” Connelly said.
“There was an adequate supply of listings to meet the demand of buyers. You weren’t seeing bidding wars – it was extremely rare that people would fight over a house.”
Now, according to Connelly, it’s extremely rare if there isn’t a bidding war.
So, what does this mean for people who are wanting to move to Hamilton and/or first-time homebuyers?
“The face of real estate in the new Hamilton is more affordable housing in the shape of condominiums,” Cruz said. “Hamilton is growing fast, but growing smaller, as the average size of construction is decreasing to create affordability.”
Although, according to Cruz, affordability still may be an obstacle for first-time buyers.
“My advice for first-time homebuyers is simple: based on historical home values, especially when accounting for the last five years, it is highly unlikely that a first-time home buyer can save enough yearly to match current appreciation rates,” Cruz said.
“This means every year that goes by that you don’t own a home, it becomes significantly more difficult to buy that same home the following year.”
But despite affordability issues, bidding wars, etc., those looking to break into the housing market can navigate these obstacles. The key is to have a plan.
“Talk to a good mortgage broker and a Realtor you can trust,” Cruz advised. “These professionals will help you formulate a plan and answer any questions you have in order for you to be comfortable with the process. Then you need to act!”
So, although I’m not at a stage where I’m even starting to look at places (and won’t be for a few more years), what does this mean for me and my hopes of staying in Hamilton?
It means I’m going back to the drawing board.