Hello Hamilton Real Estate Investors!!
Oh where to beginâ€¦ this active market that is Hamilton never ceases to amaze.Â Last night, we were one of six offers with
a firm offer (NO conditions!), well over asking, and we still lost. The night before we were one of four offers, well over asking, NO conditions and won! Last week we were one of 21 offers and lost, on another property near McMaster, the only offer 😛 Unless we were the only offer on a property, every conditional offer we wrote in January LOST. Even just two days for inspection.Â Where possible, our clients hired a certified home inspector to inspect the house before offering. Our clients who are contractors or in construction, they had an inherent advantage.
Not to toot our own horns, but both James and I have owned a fair number of houses, renovated them, and attend our clients’ inspections an average of six houses per month.Â As professional real estate investors, weâ€™re more comfortable than the average investor and recommend all our friends to become more familiar with how to inspect a home should you find yourself in a competitive offer situation and you really want the house.
One friend of ours, Tony, heâ€™s a computer engineer but has no education in building, HVAC, etc. and in his experience of buying a house in Toronto, he noticed a trend where the couple sporting the largest baby bump would be the eventual new owner of the house, as they were most motivated. I remember when my wife was sixth months pregnant and we walked into the multiple offer presentation with a blank offer, no conditions, we werenâ€™t going to take no for an answerâ€¦Â Back to Tony, again being a smart guy, after losing on many offers, decided he would take responsibility to learn all he could on the subject of home inspections, budget for contingency, and started writing offers without an inspection condition.Â Shortly after, he was a happy new home owner and recently a new dad.Â Lesson is, if you want it badly enough, all skills can be learnt and competitive advantages win in competitive situations.
Side benefit of this rising market: I got a call from my clients Ben and Barbara who purchased their single family house on the Hamilton MountainÂ five years ago, and on Friday they’re refinancing that same house and pulling out $90,000 to purchase another investment property. You have got to love what time in the market does for you investments!!!
Is Hamilton’s housing market at risk of overheating?
Short answer is not really as the chart below from CMHC indicates… quotes, details and my thoughts below:
“Hamilton is the only housing market out of 15 measured by the Canada Mortgage and Housing Corporation (CMHC) that is at risk of overheating, according a new report.”
But it’s only showing moderate evidence, and employment in the city is still trending upward.
“While Hamilton is the only city listed where demand is outpacing supply, it has so far avoided problematic conditions related to price acceleration, overbuilding, overvaluation and overall assessment, the CMHC says.”
Unfortunately the same can’t be said for Toronto where we see price overvaluationÂ of properties on land and over supply of condos:
“Down the QEW in Toronto, that city is facing problems with price acceleration and overvaluation.”
“We are also monitoring for the potential emergence of overbuilding in Toronto due to the high number of condominium units under construction,” the CMHC report says. “Inventory management therefore continues to be necessary to make sure that these condominium units under construction do not remain unsold upon completion.”
“Hamilton has nowhere near Toronto’s condo penetration”
I used to think we would see an over supply of Hamilton’s condo market but apparently not. However, I still prefer land based, free hold housing.
Full text from CHMC 2016 Q1 Housing Market Assessment Report and link to report
“Hamilton: Weak evidenceÂ of problematic conditionsÂ The sales-to-new-listings ratioÂ remained elevated in the thirdÂ quarter of 2015 and continuesÂ to show moderate evidence ofÂ overheating. Meanwhile, Hamiltonâ€™sÂ employment continues its upwardÂ trajectory. The average weeklyÂ earnings has been showing strengthÂ and is in line with strong employmentÂ growth, which is supportive ofÂ housing demand. As a result,Â there is weak overall evidenceÂ of problematic housing conditionsÂ in Hamilton.”
Thanks for reading and happy Hamilton real estate investing everyone!
Erwin Szeto |Â MrHamilton.ca
Rock Star Real Estate Inc., Brokerage
PS:Â If you are just starting out investing, start byÂ spending more time with like minded people and take guided tour of Hamilton by joining us for the next Mr. Hamilton Inner Circle by clicking here!!!