Following a roller coaster ride over the previous year, steady, stable and more deliberate market conditions appear to have settled into most markets across Southern Ontario, and the real estate market in Prince Edward County (“the County”) is no exception. The more moderate but sustainably healthy trends that have been developing and playing out over the last few months appear to have taken root. Based on prevailing economic factors this is likely to continue through to the end of the year with price increases and affordability playing a sobering influence on the real estate market, keeping a cap on growth, and restraining any swift return to a more frenetic market.

 

 

Supply seems to be loosening up somewhat. According to data released by the Quinte and District Association of REALTORS® (“the Quinte Board”) on its Matrix data platform, much like last month and the month previous, the number of new listings continues to increase on a year over year basis as we move into the fall season. Specifically, 84 properties came onto the market compared to 73 this month last year, marking a 15% increase. Year to date, with the earlier shortage of new listings, the increase is only 6% compared to last year at this time with 1056 new properties being logged so far compared to 994 last year. The effect of this, however, is that it does give potential buyers more choice, and contributes to steady sales which are coming in remarkably close to last year’s performance, with only one more sale being recorded in September compared to last year when 53 properties changed hands. Year to date sales continue to lag last year’s more frenetic pace with 433 sales so far compared to 540 last year at this point.

 

With a more measured sales pace and an increase in new product, it is not surprising that overall inventory is up. In fact, at month’s end, the Quinte Board recorded 531 active listings which are over 46% more than one year ago, when 363 active listings were reported.

 

Demanding sellers, however, and steady demand continue to push prices ever higher as noted above. Once again, the average sale price in the County shot up on a year over year basis, coming in at $491,076, 34% more than last year at this time when the average sale price in September was recorded as $366,436. This is a chronic story for properties in the County, putting increased pressure on buyers hoping to get into the market.

 

With that in mind, it took somewhat longer for the average property to sell, with days on market increasing to 72 days on average compared to 69 last year at this time. This could be a product in part of buyers having to be a little more careful in their decision making, and being forced to negotiate a little harder and assess the compromises required to make that extra financial stretch to secure the property of their choice. Prices have increased so significantly, compounded by tighter lending conditions that affordability is playing an ever increasingly important role in people’s decision making as to whether they can take the plunge into the County real estate market. That factor alone is likely to be one of the most influential forces in market performance in the County as we move into the new year, despite it retaining a relative price advantage when compared with many competitive markets.

 

Broader economic indicators continue to be remarkably positive with robust output and job creation both domestically and south of the border where the economy is performing at close to full capacity. With the impending settlement of the trade dispute, prospects look even more positive for economic stability and growth. The downside, however, is that these conditions contribute further to inflationary pressures, likely prompting further interest rate increases which will simply compound existing challenges to affordability already at play due to recent interest rate increases, the imposition and effects of the stress test, and ever increasing property prices.

 

Prepared by:
Richard Stewart Vice President & Legal Counsel

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