Is it Spring yet? The calendar tells us that we are almost two weeks into the season, but the remaining snow drifts, occasional squalls and enduringly cool temperatures suggest otherwise. While we might be seeing the first hints of a warming trend, it is fair to say that March remained resolutely wintry and was essentially an extension of what by any measure was an uncharacteristically difficult, cold and icy winter season. It is hard to imagine that these conditions have not had a dampening impact on real estate activity in Prince Edward County (“the County”), and the statistics released by the Quinte & District Association of REALTORS® (“the Quinte Board) for the wards that make up the County for the month of March are consistent with this proposition. Having said that, despite a general calming in the market and return to more moderate and sustainable conditions, the demand for property in the County remains strong, and indeed continues to outstrip the supply of desirable well priced properties.

 

 

 

Specifically, and consistent with seasonal norms, sales did increase significantly over the month previous with 35 properties changing hands compared to 24 in February, but activity was down moderately year over year with 39 sales recorded in March 2018. Year to date there have been a total of 93 sales in the County compared to 95 at this time last year, amounting to a nominal 4% decline. In contrast, the number of new listings has declined in greater measure, with only 116 properties coming onto the market compared to 132 last March. This marks a drop of over 12%. Year to date 256 new listings have been recorded compared to 293 last year, which translates to a 13% decrease.

 

Consequently, with market conditions remaining relatively tight, it is not surprising that prices have not gone down. Rather the median price of all of the properties sold in the County has actually gone up almost 18% year over year, with the midpoint price of properties sold coming in at $400,000 compared to $340,000 in March of 2018. The average sale price, which is more affected by the price of the particular cross-section of properties sold at any one time, came in at $418,808, marking a 4% decline from last year, when the average sale price in March was reported as $436,321.

 

Statistics provided by the Quinte Board also indicate that those properties which are selling are taking longer to do so. As mentioned in earlier reports, this may be a product of a number of factors. First off, with so few new listings, those properties that are selling, at least in part, are comprised of those that have been sitting on the market from previous months, or for some time. The reason for that may be either that they were priced too aggressively in the first place which dissuaded buyers from stepping up to the plate, or that buyers are having to bargain harder and are taking longer to meet both sellers’ expectations, and cope with the challenges of increased debt servicing costs as well as the stricter qualification hurdles of the stress test. Either way, it is increasingly difficult in this market for more cautious buyers, and more stubborn sellers to reach a meeting of the minds, therefore properties are taking longer to sell.

 

Another facet of this is that inventory at the end of March was up by almost 35%. This means that while there may be property available, it is of a nature that it is not finding as ready a market. This may be a hangover of sellers’ inflated expectations following on the tail of what was an overheated market, with buyers, at least in part not being in a position to give sellers what is in their wish list. Where, however, properties are well priced to reflect value, market forces find their equilibrium in steady and reliable buyer demand.

 

Despite a slowdown in the economy towards the end of last year, early signs of resurgent strength and resiliency in the first quarter of this year are encouraging for the real estate market. It is also an indication, however, that interest rates are not likely to come down much any time soon to provide relief to overstretched buyers. But, as the snow begins to melt after a long and stubborn deep freeze, and green returns to the landscape, conditions remain good for a healthy Spring market as the County comes into its own.

 

 

PREPARED BY:

Richard Stewart, Vice President & Legal Counsel

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