Based on recent statistics released by the Quinte & District Association of REALTORS® (“the Quinte Board”), real estate trends that have been developing in Prince Edward County (“the County”) over the last few months appear to be playing out much as anticipated in our earlier reports. Market performance for the area remains strong but sustainable, with one notable qualification. A confluence of forces including consistent demand, relatively stable but limited supply, mixed with stubborn sellers unwilling to budge from their ambitious selling points, are all contributing to steady and relentless price inflation, making affordability the single greatest challenge to the County real estate market moving forward. That, combined with the successive increases in interest rates and the likelihood of more, compounded with the impact of the stress test in qualifying borrowers, means that buyers will have to show ever greater resourcefulness, fortitude and determination in the months to come to secure their property of choice.

October’s numbers simply reinforce this prognosis as most indicators point to more of the same. While new supply was relatively stable, falling year over year by only three listings, sales surged more than 36%. Specifically, 85 new listings came onto the market as compared to 88 in 2017 – a decline of a little more than 3%, bringing the year to date numbers to 1141. This amounts to approximately 5% more than last year’s 1082. On the sales side, 60 properties sold in October across the wards that make up the County compared to 44 one year ago. Year to date sales still lags behind last year’s frenzied market by approximately 16%, coming in thus far at 493 sales compared to 584 at this time last year.

 

 

But given these underpinnings and the influence of the factors set out above, the average sale price continued its impressive positive year over year surge for yet another month coming in at $458,766, a whopping 25% gain over October 2017 when the average sale price was reported as $365,619. This builds upon the double-digit price increases that the County has been racking up since the spring of this year. With prices reaching these levels, and financing becoming ever more challenging and expensive, and sellers continuing to insist on top dollar before relinquishing their properties, it comes as no surprise that the pace of sales is somewhat slower. In October the average property took 77 days to sell compared to 69 one year ago, an increase of approximately 12%. Buyers must seriously assess the suitability and value of the property in question, and once committed, engage in tougher negotiations to settle on a price that is acceptable to the seller, but still makes sense and is sustainable to the buyer in all of the circumstances.

 

That said, there appears to be no decline in the level of interest or appetite for properties in the County. The area continues to be situated in a sweet spot for an increasingly broad demographic, reflecting value despite its escalating price point, to say nothing of its natural attributes, attractive location and characteristics that garner so much attention in the zeitgeist of social media, culture, and the press.

 

To reiterate, while the market and demand for properties in the County looks positive for the foreseeable future, price and buyers’ ability to pay and manage the cost of servicing their debt load will inevitably be one of the greatest challenges to the ongoing robustness and health of the County real estate market. The broader economic outlook shows promise on a variety of fronts including job creation, output and greater trade stability. But these very factors will likely only further contribute to the likelihood that money will become even more expensive and pose increasing challenges to buyers’ ability to balance their finances and justify that next significant expenditure and foray into the real estate market. And while the County remains comparatively well placed on the affordability front, it is not immune from the potential pressures that a squeeze on borrowing and debt load may impose.

 

Prepared by:
Richard Stewart Vice President & Legal Counsel

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