Well Spring, if you can call it that, does not appear to be co-operating this year, and shows little sign of declaring itself any time soon. The tenaciously cool weather, relentless cloud and rain, and the resultant flood and high water warnings are doing little to wrench potential buyers out of their winter doldrums and put them into a buying mood. The resultant impact on the secondary and discretionary real estate market has not been positive, though to date, Prince Edward County (“the County”) has not suffered the devastating effects of the spring melt off as has cottage country further north in Muskoka and the Ottawa River area. As water levels rise in Lake Ontario, however, and the sun shows a continuing reluctance to show itself and definitively jump start the spring season, the County real estate market may continue to experience a bit of a delay this season.

 

 

Having said that, sales are occurring across the wards that make up the County, and according to the statistics released by the Quinte & District Association of REALTORS®, a total of 45 properties changed hands, which is only 5 fewer, or 10% less than last year when 50 properties were recorded as sold in April. Year to date, a total of 80 properties have been sold which is also about 10% behind last year’s pace when 89 properties had sold by this time. While the harsh and inclement weather cannot account for all things, it has undoubtedly contributed to a slightly quieter market, though other factors such as affordability, tougher borrowing requirements, and a scarcity of good properties reflecting value for buyers to choose from, have limited their ability to enter the County real estate market.

 

On the subject of inventory, new listings were up slightly in April with 127 properties coming onto the market which is 15 more than last year at this time, constituting a 13% increase. Year to date, however, new listings are flat compared to last year with one fewer in total with the numbers coming in at 243 thus far in 2019 compared to 244 in 2018. The number of available listings, however, has increased from 401 at the end of April last year to 525 one year later. While this amounts to almost 31% more properties available year over year, it would appear that it is due in part to a disconnect between sellers’ expectations on the one hand, still influenced by what they experienced in the super-heated boom market in the first half of 2017, and what buyers are able to, and can justify paying today.

 

Much like other markets in southern Ontario, particularly in urban centres, affordability is imposing increasing challenges for buyers hoping to get into the County real estate market. This is compounded by higher interest rates and the impact of the stress test on borrowers. While still comparatively affordable, property prices in the County have seen a steady upward surge over the last few years, and show little sign of letting up. Even with the discouraging and uninspiring weather conditions in April, the average sales price of properties sold across the County came in at $436,884, over 4% higher than last year at this time when they were calculated to be $419,570.

 

Despite ongoing and steady demand for County properties, these countervailing forces have created a bit of a western standoff with more protracted negotiations, and in some cases, buyers simply stepping back and waiting for a price adjustment in the hopes that a willingness to sell and an ability to pay can eventually fall into line. As a result of this tension, properties on average are taking longer to sell with the average days on market coming in at the end of April at 77 days compared to 55 one year ago.

 

Having said all that, the outlook for the County real estate market continues to be on balance a positive one. With spotty economic performance and ongoing trade uncertainty, the prospect of higher interest rates appears to have dissipated, though buyers continue to grapple with the challenges posed by higher debt burdens. As stated, the comparative affordability of County properties continues to give the area a competitive advantage, but even the County is not immune from the effects of its own popularity.

 

PREPARED BY:

Richard Stewart, Vice President & Legal Counsel

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