While the winter so far has been relatively mild and snow free, it remains a quieter time in Prince Edward County (“the County”). After a remarkably busy and robust real estate market across the County in 2015 in which Chestnut Park Real Estate Limited (“Chestnut Park”) established itself as the #1 real estate brokerage in total dollar volume of real estate sold in 2015*, January proved to be a time of pause in the property market across the County. This is traditionally the case, but may in fact have been compounded by the economic uncertainty playing out both globally and closer to home due to the upheaval caused by falling oil prices, and volatility in the equity and currency markets (including the Canadian dollar).   Many potential buyers may be trying to assess how current market conditions may play out and the impact they may have upon their investment choices and whether to proceed with property purchases, particularly in the discretionary or vacation property markets. All of this may be having a bit of a dampening effect upon real estate activity in the County straight out of the gate in 2016, however initial volatility appears to have calmed somewhat, and the nearby Toronto and area real estate market actually improved upon the sales performance for the same period one year ago.    

 

A total of 19 properties were sold in the County in January, 28% fewer than the 24 properties sold last year at this time. Listings are down even more however, with 32% fewer new properties coming onto the market than last year, with 104 properties listed compared to 152 in January 2015. The market remains tight and that is reflected in the fact that active listings at the end of January were down 28% with only 326 properties on the market compared to 451 last year. With inventory down, fewer properties are available for buyers, which should have the effect of pushing prices higher. This proved to be the case for most of last year which consistently experienced a shortage of real estate product. In fact however, prices for January actually fell somewhat compared to the beginning of last year with the Quinte & District Association of REALTORS® (“the Quinte Board”) recording the average sale price as $237,942, down 11% from a year earlier when it came in at $267,835.  

As indicated in earlier reports, the smaller statistical survey available in the County due to the smaller number of properties bought and sold as compared to larger and more populous trading areas inevitably results in greater statistical swings depending upon the constitution of the particular cross-section of properties that changed hands at any particular time. In January therefore, the fewer properties that did sell were apparently more heavily weighted at the lower price range and therefore dragged the average sale price down from a year earlier. The properties that did sell however, sold in less time than those which sold in January 2015, taking an average of 71 days, 17% faster than the 86 days recorded a year earlier.   Activity across the broader Quinte Board which includes Belleville, Trenton, etc. was actually relatively on par with last year’s performance with only 1 more sale recorded then a year earlier (160 vs. 159), but the market was much tighter with 23% fewer new listings coming onto the market, reflective of the shortage of inventory being experienced across many of the areas served by Chestnut Park, meaning that purchasers have to hunt longer, and compete for those properties that reflect value. With that in mind, and given the comparative affordability and competitive price edge of the County compared to other comparable vacation property regions, the outlook is favourable for those thinking of putting their properties on the market for sale. Financing conditions remain attractive to buyers with interest rates hovering at historically low levels for the remainder of the year, and forecasts calling for increased economic strength and recovery in the central regions. The main qualifier remains ongoing volatility in the equity markets and uncertainty as to the reach of the negative effects of the collapse in oil prices, and any consequent impact for the future.  

* according to the the Quinte Board – Sales Report by Agency – Sale Date Jan1/15 to Dec 31/15  

Prepared by: Richard Stewart Vice President & Legal Counsel Feature image via Unsplash by Natasha Vasiljeva  

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