Thursday 27 November 2014

Hamilton: A Life Line for Real Estate Refugees?


Because I focus largely on emerging Toronto neighbourhoods in my real estate career, I am often looking for the signs of a neighbourhood that will be ready to appreciate at a quicker rate than most, and transform into a pleasant neighbourhood where my clients would like to live.

Lately, it seems that Hamilton has garnered quite a bit of buzz. It is not exactly an emerging neighbourhood in Toronto, but I am often asked about my thoughts about Hamilton. Many buyers, whether they are first time buyers or buyers moving up, will know a friend or a colleague who has grown depressed with Toronto real estate prices and has bought a large Victorian house in Hamilton for the cost of a bachelor condo unit in Toronto. That gets many thinking:  Is it worth it to move to Hamilton? Could you acutally live in Hamilton? Would it be a wise investment?

I'm happy that Hamilton is finally having its moment. It's well deserved! Especially since I have been hearing that Hamilton will bounce back for years now, but there has been little sign of it until recently. Still,  there is a lot of optimism about the city right now, despite its rust belt past and decade after decade of decline since the de-industrialization of the Western world. These days, it has the fastest growing economy in Ontario. It is ranked as one of the best cities to invest in in Canada. The Real Estate Investment Network ranked it third after resource lucky Calgary and Edmonton.  It's been dubbed the "comback kid" of Canadian cities. And it has one of the best markers of any emerging neighbourhood or city: It is attracting artists. So much so that the James Street art crawl, or "supercrawl" as the locals call it,  brings in 1000 to 1500 folks to the event each time. It's no Nuit Blanche, but it's homegrown and it's growing.

Of course, we can't let our optimism get in the way of the reality here. Hamilton has a familiar rust belt tale, similar to many American cities like Detroit, Buffalo or Pittsburg. In the past fifty years the middle class and wealthy have traditionally left downtown for the hill or the suburbs or another place to live, and what's left behind is a lot of homelessness, drug addiction and mental health issues.  We cannot deny that Hamilton, once the booming steel town of the first half of the 20th century, fell on very tough times in the second half. You can still drive down sections of some streets like Barton and see boarded up street-front windows or mostly dismal, sad businesses that are on their last leg .

During this long period of decline from the 1950s until recently, Hamilton largely avoided what happened to prosperous, growing cities during that time. They did not tear down their historic architecture and build a large number of ugly, modern buildings and sprawling highways through downtown. The grim and poorly planned architecture of the 60s, 70s and 80s mostly bypassed this city, and what's left is a city full of incredible historic architecture from its downtown to the Victorian and Edwardian homes around the city. So, unlike suburban cities like Mississauga or Oshawa that has small historic areas, lots of highways and mostly sprawling, low density suburban housing, Hamilton has a dense, urban downtown core and blocks and blocks of red-bricked, historic homes.  It is ideal for the kind of neighbourhoods most buyers are looking for these days in Toronto. It is the Riverdale and High Park of 30 years ago.

Strangely, because Hamilton did not grow during an ugly era of architecture, by today's standards, it has become more appealing now. The old neighbourhoods are still in tact.  People want walkable neighbourhoods, local businesses, and community events. Most suburban areas don't offer this.  Hamilton has this, and more of it on the way as the downtown comes back from the brink.

Even though some credit can be given to the city of Hamilton for making the city appealing to artists and new businesses away from steel, Hamilton's success has a lot to do with the region it resides in. More and more, we will see the area stretching from Oshawa to Hamilton function as a more integrated region. In the future, it should have better and more integrated transit service between all areas. That means if you work in Toronto, Hamilton will function as a kind of urban suburb with the feel of a city but a GO train voyage away from Toronto. 

Within that context, I can safely say that Hamilton is one of Greater Toronto's most affordable emerging neighbourhood on it's western borders. I have taken a keen interest in this city and have worked on real estate transactions here from clients who want more space, historic architecture and lower prices.  More and more, I am asked about this city.  More and more, I am learning what neighbourhoods in Hamilton are worth considering, and which ones you may want to take a pass.

Hamilton does come at a price. If you do work in the city, it's a long commute. It will take up a chunk of your day. If you live in Toronto already, most of your friends and family live here too. But on real estate prices alone, you will be amazed at the kind of home you are able to afford, even in a more challenging price range. And that's what the draw is. There are many Toronto emerging neighbourhoods I would recommend as great areas to get in and as a wise place to invest, but Hamilton is in a category of its own.

As a city, it has a long way to go, but I believe it is heading in the right direction fast. Like Detroit and Pittsburg, Hamilton is finally shedding it's rusty past, but most importantly, Hamilton is not just a place where other Hamiltonians go to buy homes, but a place where Torontonians will increasingly go to find affordable homes. Unlike Mississauga, Brampton or the Durham region, Hamilton has not been a victim of suburban sprawl. It has a growing art scene, and some of the most affordable historic homes in an urban centre in the Golden Horseshoe. If this is something you can appreciate, you may want to consider an exploratory visit.


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