In Prince Edward County (“the County”), April brought more than spring showers, it also brought a larger sprinkling of new listings than has been forthcoming for quite some time. Whether this is simply the result of a seasonal surge; or is prompted by sellers seeking to take advantage of the recent spike in sale prices; or whether it is a knock-on effect of a broader sentiment regarding a potential change in the market prompted by the media chatter regarding overheated markets, affordability concerns, and provincial intervention to address some of these issues, it is di cult to judge and too early to tell. The performance of the real estate market across the County over the next few months and as the season plays out will shed further light on this, and hopefully provide some indication of where the market will land.
Property sales across the County, however, continued to be very strong in April with 76 transactions recorded by the Quinte & District Association of REALTORS® (“the Quinte Board”). The Enhanced Statistics Statistical Query Report published by the Quinte Board shows a 26% increase over last year’s numbers when 62 properties sold. April’s numbers bring year to date figures to a total of 214 thus far which is 39% more than was recorded by this time last year. The properties that did sell continued to do so at a brisk pace selling on average 29% faster than last year, specifically in 54 days compared to 76 in April 2016.
As mentioned, more new listings did in fact hit the market this April with 142 being recorded for the month which is 3% more than the 138 properties that came onto the market one year previous. Year to date, however, the supply of properties is still down, coming in at 446 compared to 470 last year at this time, marking a 5% drop. It is no surprise then that the market remains very tight, as strong demand has continued to outstrip the supply of new listings, even taking into account the slight bump in new product this month. According to the Enhanced Statistics Statistical Query Report, the County had only 354 active listings at month’s end which is 19% fewer than the 438 recorded as available one year ago. In many ways therefore, it is remarkable that the pace of sales has sustained the levels that it has, but one inevitable result of so many potential buyers chasing so few listings is that competitive pressure is pushing the prices upwards. In April the average sale price of properties sold in the County came in at $434,455 which amounts to a whopping 68% increase over last April’s average sale price of $258,385. As indicated in earlier reports, the smaller size of the County real estate market does make it particularly sensitive to statistical swings based on the particular composition of properties sold in any one month, but a surge in price of this magnitude cannot be ignored, and is clearly indicative of a broader trend, particularly when it is building upon the steady upward spike in prices recorded in the County over these preceding months.
Generally speaking, conditions for the County real estate market continue to look bullish and strong. Many signals from the broader economy are positive including encouraging labour and trade reports, optimistic Gross Domestic Product forecasts, and every indication pointing to a continuation of favourable lending rates. Moreover, even with significant escalation in prices, the County continues to enjoy an affordability advantage over comparable and neighbouring markets. Whether recent provincial initiatives to calm overheated urban markets, or some of the recent upheaval in secondary mortgage markets, or potential impediments to trade initiated south of the border have any destabilizing effect on the real estate market remain to be seen. But all in all, the fundamentals remain in place for a healthy market in the coming real estate season.
Prepared by:Richard Stewart Vice President & Legal Counsel