The pace and activity of the Prince Edward County (“the County”) real estate market was set, right out of the gate, at the new year – robust demand, tight supply and rising prices. This trajectory was rooted in the fundamentals of the year previous, and continues to build on that, gaining further momentum as we move further into 2020.

 

With month end statistics released by the Quinte & District Association of REALTORS® (“the Board”), market trends appear to confirm that the County market is maturing into a steady, less seasonally contingent proposition, with an ever broader buyer demographic contributing to a bullish outlook for the foreseeable future. This forecast is qualified by those unforeseeable and unpredictable disruptive forces that can affect any market, and are difficult to factor into any predictive model or economic calculation. One such curve ball is Covid 19 or the Corona Virus affecting different regions of the world with varying degrees of intensity, but which has impacted world markets and prompted federal banks to pre-emptively slash interest rates to soften any blows that these unpredictable forces may have. South of the border, the Federal Bank cut interest rates by half a percentage point, and the Bank of Canada promptly followed suit. Many commentators predict that this will fuel what is already becoming an overheated real estate market, but the impact of these events together is difficult to predict. It should be said, however, that the forces at play which contributed to the strong performance of both the County real estate market as well as those across Southern Ontario, remain very much in place.

 

Demand continues to outstrip supply, and in urban markets in particular, this imbalance is becoming alarming in cases, pushing prices back up to near record levels, and in the process pushing buyers further and further afield, and in some cases onto the sidelines as the prospect for getting into the real estate market become out of reach for some. As discussed in earlier reports, this trend is having a very real impact upon satellite or regional markets such as the County with many buyers flocking to the area in search of an opportunity to get a toe hold in the market, get better value for money, and take advantage of the improved quality of life benefits synonymous with the area. To date there is little indication that these factors are being substantively affected by potentially disruptive global forces, and any impact if any, will likely be temporary.

 

In February, the Board reported 32 property sales in the County. That is seven more, and marks a 28% increase over last year, when only 25 properties changed hands that month. That builds on January’s numbers, bringing year to date sales to 70 which is 19% more than one year ago when 59 properties were reported as sold by this time. This has been facilitated somewhat by more properties coming onto the market as new listings surged over 94% year over year with 99 reported in February of this year compared to only 51 last year. Year to date new listings are ahead by 38% year over year with a total of 195 thus far compared to 141 a year ago. The robust pace of sales, however, has precluded inventory from growing appreciably as the number of properties available for sale is remarkably similar to last year with 428 properties on the market at month’s end compared to 401. Furthermore, those properties that are selling, continue to do so at a faster pace with the average days on market coming in at 75 compared to 92 at this time last year, a reduction of over 18%.

 

One interesting, but anomalous statistic is average sale price. Contrary to what might be expected under such market conditions, both average and median sales prices went down this month rather than up. The reason for this, however, is rather simple, and due in large part to the smaller pool of transactions that make up the County real estate market. A smaller sample means that statistical outcomes are susceptible to more violent swings depending on the cross-section of sales at any particular time, particularly when there is a cluster of activity at one extreme of the market or the other. In this case, in February, despite residential and single family categories reporting respectable average price increases, and a condominium sale being reported when the year previous there was none, six land parcels sold with an average sale price of just over $51,000 marking a decline in average sale price from last year of over 90% when two land properties sold for an average sale price of almost $540,00. This anomalous development therefore has a skewing or disproportionate downward impact on average sale price, and does not give a clear picture of market behaviour, namely otherwise, one more month of solid price gains. The net result is that the average sale price in the County for all property categories came in at $440,670 which was almost 14% less than last February when it was recorded at $511,035.

 

All in all, and as stated, February stands as further proof of the solid ground upon which the County real estate market is based. Notwithstanding some of the unforeseen and disruptive global forces at play, the fundamentals of investing in the County remain strong, and by most accounts the outlook for the rest of the year continues to look very positive. Cheaper borrowing costs may contribute further to robust conditions, adding further fuel to the fire, and making an already robust market even hotter.

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