Hamilton Housing Outlook for 2011

Hello Real Estate Investors in Hamilton Ontario,

Please click here: CMHC_PPT_Slides to download an excellent CMHC presentation re: Ontario as a whole and the Hamilton region.

Highlights and my analysis from the presentation:

Ontario:

• Worst of the economic cycle is behind us
• The public’s uncertainty caused by the recession delayed people’s home purchasing decision

• US stock market index is an accurate leading indicator 70% of the time.  Vs. the  US corporate profits, profits are increasing faster than the market index yet companies are missing their revenue targets > profit increases are from cost cutting.  This is an indication that US stocks may be on the rise.
• US savings rates on the rise, NO expected double dip in the North American economy.
• The expansion phase of the economic cycle will favour energy and commodities as well as transportation and warehousing.  Northern Ontario where all the mines are will benefit from the rise in commodities

• Actual vs Fundamental Real Price Ratio.  I found this graph of particular interest, fundamental real price ratio indicates what the economy can support and notice that the actual is currently very much in line with the fundamental.  How’s that bubble bursting, doom sayers?
• Canada’s economic story in 2010 was the recovery in manufacturing (Ontario), 2011 will be energy (Alberta)
• Expect a little more downside on the five year mortgage rate
• Housing markets have stabalized

Hamilton:

• Resale market moving towards more balance

• The upswing that started in late 2008 was caused by pent up demand, those trying to stay ahead of rising mortgage rates
• Drop in Q3 of 2010 caused by rising mortgage rates, new mortgage rules > people wanted to close prior to the Apr 19 deadline, perceived impact of the HST

• Note the trending downwards of the single family home and the upward trend of townhouses.  The trend is what economists call the “substitution effect” as singles became too expensive, buyers substituted singles with less expensive townhouses.

• Hamilton will fare well vs Ontario’s economy > higher employment rates and net migration of 3,000 to Hamilton.

• Seniors are a growing demographic.  These folks will be looking to downsize to smaller homes like bungalows, condominium townhouses, rental apartments

• This was my favourite slide from the seminar, we’re still the Steel City but there’s more to Hamilton’s economy than just that.
• Summary: resale markets trending higher, positive signs of employement growth and migration, seniors market is a key market

Bonus side story about my attending the seminar: As many of you know, I wear a Hamilton Tiger Cats jersey when attending real estate related functions for marketing purposes and to start conversations with those interested in Hamilton.  To maintain some form of professionalism, I do however wear a dress shirt under the jersey, dress pants and dress shoes.

Anyways, I ran into another Realtor who I had done previous business with who commented on my jersey “What’s up with the jersey?”

“Oh, my brokerage makes me where it” I replied with tongue firmly planted in cheek.

“Why? So you would stand out from the crowd?” From the look on his face, apparently standing out from the crowd is a bad thing.

To which I reply, “that’s sort of the point.”

In the end, a staff member at CMHC noticed my jersey and asked if I was from the media.  I replied “no, but I am a blogger on investment real estate in Hamilton.”  From that conversation I was quickly introduced to the Senior Market Analyst from CMHC who is responsible for analyzing and forecasting the Hamilton region and the rest of the CMHC economist team.  She and I are also making plans for an educational tour of the top neighbourhoods in Hamilton to invest where I will act as the tour guide.

Indeed it is unfortunate that in my effort to act as a sophisticated investor do I stand out from the crowd 🙂

If you too don’t mind standing out from the crowd and would like to work together in acquiring investment properties in Hamilton please feel free to contact me.

Till next time – It’s your life, may as well live it on your terms.

Erwin Szeto
MrHamilton.ca

Real Estate Investment Adviser
e: erwin@mrhamilton.ca
p: 416-848-6293 x 211
f: 905.481.2341