July’s numbers provided by the Quinte & District Association of REALTORS® (“the Quinte Board”) for the Prince Edward County (“the County”) real estate market are consistent with, and reflect the recovery and robustness experienced by most property markets across Southern Ontario. Despite government initiatives to cool the overheated real estate market which peaked in the spring of 2017, and efforts to stem ever expanding household debt, the market seems to have adjusted and recovered to the extent that for the first time this year, monthly sales reported for properties in the County surpassed those of the year previous.

 

 

Specifically, according to the Quinte Board, 63 properties changed hands in the County this July compared to 57 last year at this time. That marks an almost 11% increase year over year. Given the lag in the market experienced throughout the first half of the year, July’s numbers shrink the year to date negative differential to only 7%, with a total of 256 sales being racked up so far this year compared to 276 by this point in 2018.

Despite the recovery in sales, the number of new listings coming onto the market was down almost 2% with 152 properties being listed in the month compared to 155 last year. Year to date, new listings trail last year’s numbers by 6% with a total of 655 properties compared with almost 700 last year (698). Consistent with both of these cumulative trends, while consistently higher inventory has been reported for 2019 year over year, any comparative surplus is gradually being absorbed as sales recover and market conditions improve. At month’s end, the Quinte Board reported 599 properties available for sale compared with 570 last year reducing the differential to only 5%, marking a significant decline from June when there was 15% more property on the market than in June 2018.

It is not surprising that with a tightening market, prices continue their upward march in the County. The average sale price for properties that sold in July was $476, 500 which amounts to a 5% increase year over year. Last year’s average sale price was reported as $453,275. While properties at the higher end still appear to linger on the market longer than more reasonably priced ones, it is worth noting that the median sale price, or midpoint of properties sold, is going up at a more impressive pace than the average sale price. This is significant because it reflects price trends by tracking the midpoint of all properties sold along the price scale, without being distorted by the impact of one or two particularly high priced sales. According to the statistics released by the Quinte Board, the median sale price climbed from $340,000 last July to $431,000 this month, a jump of almost 27%.

Some of the lag in sales that the County has experienced could reflect an absence of a meeting of minds between buyers and sellers. Many sellers continue to hold out hope of achieving some of the lofty prices witnessed during the sizzling market conditions experienced prior to the market correction. Buyers on the other hand are facing affordability challenges, balancing debt loads with higher prices, prompting them to be more cautious and tougher negotiate. As a result, it is not surprizing that properties continue to take longer to sell than they did last year with the average days on market for properties sold recorded at 80 compared to only 66 one year earlier. It is worth noting, however that with the recent uptick in the market that lag is shrinking.

In summary, the County real estate market appears to be playing out much in the same way as many of the comparable markets across Southern Ontario with a definite restoration of stability and sense of robustness. Long term interest rates appear to be coming down somewhat, as did the bench mark rate used to qualify buyers under the stress test. In addition, broader economic conditions have been relatively favourable, though storm clouds continue to loom on the trade front, prompting recent jitters in the bond and equity markets. Taking all factors into account, however, the outlook for the County real estate market remains positive, but still tempered and contained. This is good for sustainability. With buyers grappling with affordability and balancing debt loads, sellers will have to be realistic in their pricing so that buyers can see value in their property. Under current conditions, buyers have shown an increasing reluctance to pay just any price to obtain their property of choice.

 

PREPARED BY:

Richard Stewart, Vice President & Legal Counsel

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