April marks the second month in which the real estate market statistics upon which this report is based, are produced by the new Matrix data platform adopted by the Quinte & District Association of REALTORS® (“the Quinte Board”). As indicated, in previous reports, the relatively smaller pool of properties and transactions that take place in Prince Edward County (“the County”) from which these numbers are drawn, inevitably results in disproportionately greater statistical swings and volatility depending upon the nature and composition of the particular cross-section of properties sold at any one time. Therefore, a greater degree of care, as well as a critical eye, must be brought to bear in any market analysis in this regard.
First off and undeniably one of the most significant and persistent issues confronting the County real estate market this spring is lack of product. The pace of new listings is once again trailing that of last year at this time and confirms the pattern of a shortage of good listings that have been set over the last few months. In April, only 110 new listings were brought out across the County, a 23% drop from last year’s figure of 143. Year to date the County has had 38% fewer new listings come onto the market than last year, a year in which tight market conditions were already prevalent. As of the end of April, a total of 409 new listings had been recorded, compared to 448 last year at that time.
No doubt this chronic shortage of property to show buyers is contributing to the 39% decline in sales year over year, particularly at the more reasonable price points. Specifically, 47 properties sold in April compared to 77 in the same month last year. Year to date 72 fewer properties have sold, a drop of 38% from 216 in 2017 to 134 in 2018. But, when well-priced properties reflecting good value do become available, they are often attracting multiple offers and selling within very short time periods. This is supported by the statistics which con rm that the average days on market for properties that did sell in April was only 49, 4 days (almost 8%) faster than the pace at which they sold in April 2017 in the thick of the red-hot market when it took on average 53 days for a property to sell.
Higher priced properties, however, do not appear to be selling at the same pace, which potentially contributes to the decline in average sale price year over year from $434,164 to $400,697, a drop of almost 8%. The median sale price, however, rose from $352,000 to $395,000 which amounts to an increase of over 12% showing that the midpoint of sales has actually gone up in price. The median sale price dilutes or reduces the potentially distorting impact that a few higher end sales (or the lack thereof) can have on average sale prices, thereby providing greater insight and perspective to the statistics and a little more granularity on market trends in these sorts of situations.
When all of these factors are taken into account it is more difficult, and indeed unreasonable, to conclude that the decline in sales is in any way indicative of a weak or faltering real estate market. Rather it is simply not possible to sell what is not available. But the record shows that demand remains strong and the County should continue to benefit from its competitive advantage in affordability, as well as its natural attributes and comparative strengths.
Affordability, however, will continue to be an operative factor in the real estate market generally as buyers are forced to adapt to more stringent qualification requirements to obtain financing and cope with the cumulative impact of three consecutive interest rate hikes and the very real and likely prospect of more in the coming year. The economy continues to perform well as jobs are being created and other indicators point to a positive outlook as well, but this comes as a double-edged sword, fueling in stationary pressures translating to more interest rate hikes which in turn adds to the financial burden on buyers already struggling with high household debt. As mentioned, however, the County real estate market is better placed than many to weather this challenge, and may actually stand to benefit when buyers assess relative and comparative values in the context of other marketplaces.
Prepared by:Richard Stewart Vice President & Legal Counsel
Source: Chestnut Park Blog