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A million-dollar penthouse and a century cottage: 2 sides of a hot housing market

03/09/2015 10:51 EDT | Updated 05/09/2015 05:59 EDT
A small century cottage selling for $20,000 above its asking price and plans for a million dollar downtown penthouse reveal two of the latest twists in central Hamilton's continued hot housing market.

While Hamilton’s real estate market has been improving for several years, it's now reaching the point where realtors are knocking on doors in search of properties to sell and multiple condo projects are racing toward completion. 

Here's a look at two downtown properties that might be a sign of the times.

Little house, big price

In north Hamilton, a 900-square foot century cottage sold a few weeks ago for $309,000 — $20,000 more than the sellers were asking for it. Even tear-downs can spark bidding wars.

Diane Brown, a real estate agent with Coldwell-Banker, has sold houses in the area for years, but lately it’s been getting a “little crazy.”

CBC Hamilton spoke with Brown while she was listing the small semi-detached house at 74 Burlington St. W. that was listed at $289,000. At the time, Brown was holding off bids on the house, with the goal of sparking multiple competing offers from the 30-some people who had been to see the place.

"Pretty much anything down here right now, if you’re not holding off offers people wonder what’s wrong with it," Brown said.

She said sales in the area are driven primarily by access to the waterfront and its trail system, but the GO Station and James Street North are both becoming major selling points.

"It seems like it’s even more now with the GO station because it’s coming up very quickly," Brown said.

Last year, the average selling price in the North End — the area between John and Locke Streets, and Cannon St. down to the water — was $259,735 according to statistics prepared by Coldwell Banker.

That’s up nearly 14 per cent from $228,043 in 2013.

The jump is even more striking on a square footage level, climbing from around $181 per square foot to $237.8.

In both years, most sellers netted more than the listing price when they sold their homes, the statistics said.

Who’s behind the sales? Brown says there’s a mix of both people looking for the home they’ll live in to investors looking to snap up properties.

Brown said the days of getting a house in the area for under $200,000 is already gone.

"Anything under $200,000 in this neighbourhood, doesn’t matter what it is — could be a vacant lot — will get multiple offers," she said.

Areas east of James are still a bit more affordable, she said, but even those prices are going up.

Still, Brown said, there are people that won’t buy in Hamilton, particularly in the lower city due to concerns about pollution and the "stigma" of the city's industrial history.

"In my lifetime I think I’ll see that gone," she said.

"The change here just in the last few years is incredible. I’ve never seen anything change so quickly."

The seven-figure penthouse

The Royal Connaught launched its penthouse sales last month with a swish evening reception in the 99-year-old building’s luxurious lobby. When the first phase of construction is finished, likely in mid-2016, the condo project will have multiple penthouse units, ranging from $446,990 to an eye-popping $1.2 million.

"Hamilton’s been waiting for a project of this sort for a long time," said developer Rudi Spallacci, president of one of the two companies restoring the building.

Spallacci makes no apologies for condo prices, though he admits they surprise some people in Hamilton.

"Our pricing is going to be penthouse pricing," he said, noting it's still a good deal compared to Toronto.

Spallacci thinks his clients will be empty nesters and well-to-do young professionals, both of whom were represented at the event.

The selling points are the same as condos elsewhere in downtown Hamilton: limited maintenance, ability to walk to most destinations in the core and a chance to buy before city improvements like the Gore Park revitalization.

And, like in north Hamilton, the short walk to a GO station is a selling point for the project.

Back by the water, Brown is also selling condos that rival the Connaught’s sticker price. She’s already accepted deposits securing two $913,000 penthouses at the Tiffany Square, a building set to go up at Bay St. N. and Stuart St. in 2017.

While the pricey penthouses are a highlight of the hot market, the rush to build hundreds of smaller condo units — often with more compact floor plans — priced in the $200,000-$400,000 range are likely more indicative of the hot condo market that actually outperformed the detached home sales last fall.

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