The Quinte & District Association of REALTORS® (“the Quinte Board”) has recently switched to a new Matrix data platform for its MLS System, therefore all statistics provided in these monthly market reports moving forward shall be based on the numbers gathered and compiled accordingly. Without careful analysis, context and perspective however, statistics can be misleading, and can paint a picture that is in stark contrast to what is actually happening on the ground.
First off, and as indicated in our last report, the market is still adjusting to the psychological jolt prompted by the provincial government’s imposition of the Ontario Fair Housing Plan as part of its attempts to pour cold water over the overheated real estate market of one year ago. That mixed with the Office of the Superintendent of Financial Institution (“OFSI”)’s implementation of the new stress test requirements for mortgage approvals, as well as three consecutive rate hikes and the prospect of more given broader strong economic conditions, have all contributed to a significant moderation of the real estate market since the exuberant demand and irrational buyer hysteria of last spring. These same conditions were experienced across most of Southern Ontario, and Prince Edward County (“the County”) is no exception.
But just as the irrepressible influences of the market are making themselves felt in the Greater Toronto Area which has experienced a recent and steady resurgence in pricing and demand due to ongoing strong economic fundamentals, employment, migration and demographic patterns, so too are the basic market forces of supply and demand playing out predictably in the County. Despite the fact that sales are indeed down from this time last year with only 37 sales being recorded in the wards that make up the County compared to 68 last year (marking a 46% negative differential), so too is new inventory which was already at very tight levels one year ago. New listings are down 2% year over year with 130 properties coming onto the market compared to 133 in March 2017. Year to date figures are consistent with this trend with sales down 37% thus far (87 in 2018 vs. 139 in 2017 at this time) and listings are down 2% overall (299 in 2017 vs. 305 in 2018 so far).
But demand remains strong, and when desirable properties that re ect good value come onto the market there is a steady and focused stream of keen buyers vying to purchase them. This is particularly the case for more reasonably priced properties with some still attracting multiple offers and selling for significant premiums over the asking price.
One contributing factor is the growing affordability challenge confronting many buyers across Southern Ontario, and in particular the Greater Golden Horseshoe. Given many of the factors cited above, many buyers are turning to different property investment opportunities to get into the market, with Cottage Country and rural areas and satellite communities being the recipients of increased demand and attention. The influence of technology and advent of flexible lifestyles and workplaces as well as the growth of the sharing economy have opened up a wider variety of property investment choices to both first time buyers as well as down sizers seeking to maximize and diversify their property investments, and consider alternative markets for their primary choices. It is noteworthy that this trend has not gone unnoticed and has been observed and commented on in a number of articles in the press and media recently. Needless to say, the County often finds itself highlighted front and centre in such discussions, and pricing and affordability has not remained immune. The average sale price for all properties sold across the County in March came in at $440, 713 which is 10% higher than one year ago when it barely tipped the scales above the $400,000 mark. Significantly, and as an added point of perspective, the comparator for this increase is the spring of 2017 which was by any measure a sizzling market during the height of the real estate frenzy.
Many potential buyers are becoming increasingly frustrated with the scarcity of properties and the fact that, in the words of many, there simply isn’t anything to buy. With little likelihood of demographic, migration, or affordability trends changing any time soon, tight market conditions are likely to persist into spring and summer, with the greatest challenge being the persistent shortage of new listings coming onto the market for eager buyers to view and choose from.
Prepared by: Richard Stewart Vice President & Legal Counsel
Source: Chestnut Park Blog