January is traditionally one of the slower and quieter months for real estate in Prince Edward County (“the County”). Accordingly, activity is inevitably limited, and the number of transactions is relatively small, providing a comparatively restricted statistical sampling upon which to base a market report. Consequently, and as adverted to in earlier reports, the smaller the statistical base, the less reliable the numbers can be as determinative indicators of market conditions because they are disproportionately affected by the particular characteristics and cross section of the fewer number of properties listed and sold over the period in question. Any interpretation of, and conclusions from numbers for the County real estate market in this context therefore should be qualified with that in mind.
Having said that, based on the figures released by the Quinte and District Association of REALTORS® (“the Quinte Board”) for the month of January, certain trends observed at the end of the year appear to be playing out as we move into 2018. In particular, despite the cooling market conditions, and the fact that the comparator for any year over year analysis is the extremely robust and heated market experienced in the first half of last year, which will inevitably result in negative differentials across many market indicators for the next few months, prices of properties continue to rise at an impressive pace, reflective of the ongoing strength of demand for choice properties in the area.
When compared to last year’s extremely tight market with chronic inventory shortages, new listings are mercifully up from one year ago with 115 properties coming onto the market compared with 89 in January 2017. Not surprisingly with the pace of sales being slower, the number of properties available for sale has gone up as well with 272 active listings reported compared to 228 the year previous, constituting a 19% rise in inventory.
As suggested, sales were down across the County with only 17 properties reported sold as compared to 29 last January, resulting in a decline of 41% year over year. It also took on average 28% longer to sell the properties in question with an average 73 days on market being reported compared with 57 last year at this time. As stated, the small number of transactions does qualify the significance of these trends somewhat, but it still provides some perspective as to where the market is going, namely a return to more measured, rational and sustainable conditions.
Despite a calming market, affected by the cooling trends and correction experienced across much of Southern Ontario (and in the Greater Toronto Area in particular), brought on in part by the introduction of the Fair Housing Plan and ever tighter lending conditions, property prices in the County do, as stated, continue to surge coming in at an average sale price of $417,735 compared to $283,045 last year, marking a significant year over year increase of 48%.
Notwithstanding the foregoing, the County continues to benefit from its competitive advantage with respect to affordability when compared to many neighbouring markets which are being impacted by the reality that many property types are simply increasingly out of reach for a large number of buyers struggling under a combination of high prices, record debt loads, rising interest rates, and the imposition of tighter controls on lending qualifications. Given that, and increasingly flexible work and living arrangements made available through advances in technology, buyers are looking further afield and diversifying their property portfolio, with many preferring to invest first in less expensive markets outside of major urban centres. Given all of its natural attributes and characteristics including location, the County is well placed to take advantage of these trends. With that in mind conditions support a strong and stable forecast for the County real estate market moving forward.
Prepared by:?Richard Stewart Vice President & Legal Counsel
Source: Chestnut Park Blog