With markets in neighbouring urban centres, particularly the Greater Toronto Area (“the GTA”), showing early signs of stabilization, including the first year over year positive differentials in both number of sales as well as average sale price, the real estate market in Prince Edward County (“the County”) continues to reflect tenacious price strength as well as many of the hallmarks of a healthy market.
It is difficult to definitively pinpoint the basis for the improvement in numbers, namely whether for the first time in a year we are comparing apples to apples (as compared to measuring this year’s performance against the unsustainable frenzied conditions experienced across most of Southern Ontario in the first half of last year), or whether buyers really are moving back into the market with more confidence and conviction, or whether sellers are simply showing extreme resistance to lowering their price, or whether it is a combination of these and a variety of other influences.
One factor to consider is that the broader dampening effects and psychological impact of the Fair Housing Plan and tighter lending conditions were somewhat delayed in the County, so sales did not fall o as quickly as they did in parts of the GTA. So, it was not until the midyear point last year that a little more sanity returned to the market, therefore we are only now starting to see the year over year numbers reflect that, with declining negative differentials, and the start of positive ones.
Sales did go up marginally in the County in June from both last month and last year, with one more and two more sales respectively. Specifically, according to the Matrix data platform of the Quinte & District Association of REALTORS® Inc. (“the Quinte Board”), 65 properties were reported sold in June compared to 64 in May and 63 in June 2017. Year to date, however, sales still trail last year’s numbers by 28% coming in thus far at 263 compared to 366.
Notwithstanding last month’s momentary statistical bump, new listings in the County continue to be scarce. 129 properties came onto the market in June compared to 133 last year. Year to date, the number of new listings falls short of last year by 9 properties (702 versus 711 the year previous at this time) when listings were already in short supply. Because of the overall decline in the urgency of sales, and buyers becoming either pickier or price sensitive, inventory is up by almost 43% with 565 available listings at month’s end compared to 396 the same time last year.
Those properties which are selling, however, are doing so at relatively the same pace as last year, taking 44 days on average to sell compared to 42 last year, suggesting that the market remains on firm ground. When a good property reflecting value comes onto the market, it usually sells relatively swiftly.
Further evidence pointing to a healthy market is the ongoing increase in average sale price for County properties. In fact, the average sale price of properties went up almost 19% year over year, rising from $354,517 to $420,454. The median sales price also went up from $292,700 to $355,000, an increase of over 21%. This is a predictable effect of supply and demand. Competition for properties in limited supply has the effect of pushing prices up. Buyers recognize that they have to step up to the plate when a desirable property comes up for sale. One other factor alluded to above, however, may simply be sellers’ resistance to lowering their price. In other words, sellers’ expectations may have increased due to the bull market that the County has experienced over recent years, and accordingly, sellers may simply be unwilling to accept less when it comes to selling. That can have the effect of putting a damper on sales if buyers are not prepared to commit, but the latest numbers suggest that demand is indeed relatively robust.
Based on the foregoing, the market appears to have legs looking forward to the second half of the year. Barring disruption from broader economic trade uncertainty or challenges to affordability exacerbated by higher interest rates or tightening financing requirements, the outlook for the County real estate market continues to be a positive one.
Prepared by:Richard Stewart Vice President & Legal Counsel
Source: Chestnut Park Blog