Stories and commentary related to the real estate market appear to be dominating the press, social media and airwaves. Much of the attention appears to be focused on the Greater Toronto Area real estate market marked by chronic property shortages while matched with seemingly insatiable demand, having the effect of pushing prices ever higher and breaking new boundaries on a monthly basis. But what also is filtering into the mix is the knock on influence this trend is having on satellite real estate markets across Southern Ontario, with some of the most notable being in Hamilton, Oshawa, Barrie, the Niagara Peninsula, and beyond. Even communities, traditionally perceived as being beyond this reach have now come to the attention of both commentators and buyers and are being swept up in, and affected by the on-going hunt for affordable property across Southern Ontario. While the real estate market in Prince Edward County (“the County”) does not fall lockstep into this same analysis, there is no question that previous reports and the latest statistics confirm that the County is experiencing remarkably similar trends. Supply has not been able to keep up with demand and the pace of sales and pent up pressure from buyers is pushing prices steadily higher at an ever increasing pace.
Specifically, in the Enhanced Statistics Statistical Query Report released by the Quinte & District Association of REALTORS® (“ the Quinte Board”) the number of listings that were reported as being posted on the MLS® System were down again in March when compared to the same time last year. 133 properties came onto the market this past March, a 4% year over year drop from last year’s reported 138 new listings. This month’s numbers bring the year to date total to 304 thus far in 2017, compared to 332 last year at this time which works out to be an 8% drop.
While those numbers on their own may not be startling, when contrasted with the number of sales, the consequences for market conditions become more apparent. Despite fewer new listings, sales were up by a whopping 38%, calculated on the basis of the difference between the 66 properties that changed hands this year compared to the 48 in March 2016. These numbers bring year to date sales statistics to 138 compared to 92 last year at this time, amounting to a 50% jump year over year.
With these factors in place it can come as no surprise that the inventory of properties across the County is remarkably low with only 311 recorded as being available for sale on the MLS® System in all of the wards that make up the County, compared to 401 last year at this time, a 22% drop. Further to, and consistent with this, properties that are selling are doing so at a faster pace as eager buyers are snatching them up before they are given a chance to sit on the market for long. In fact, properties in the County sold on average 38% faster this year, taking on average 59 days to sell in March 2017 compared to 95 days in March of last year.
Finally, and as indicated, basic economic principles dictate that the combined effect of the forces at play in the County, are pushing prices up and at an increasingly robust rate. Last year in March, the average sale price for a property in the County came in at $289,979. In March 2017, the average sale price was $405,446. The sizeable gap in price over a twelve month period reflects a 40% increase. While these numbers are based on a relatively small sampling of property sales by virtue of the specific geographical area in question, and are thereby subject to greater swings based on the cross-section of properties that sell at any one time, the extent and relative consistency of these price increases over recent months cannot be ignored and are a clear indication that the County real estate market is very much caught up in the same sizzling market that is gripping the other markets in Ontario served by this brokerage.
With all the chatter of a hot and frothing real estate market preoccupying an increasingly broad cross-section of society, including everyone from bankers, to politicians, and even sectors of the real estate industry itself, there is a growing chorus of calls for government intervention to curb the galloping price increases, address what is increasingly perceived to be an affordability crisis, and remedy the supply shortage. Given that, it is highly likely that some measures will be introduced by the provincial government in its next budget expected some time in April. While they will likely be directed primarily at conditions in the Greater Toronto Area, it is unclear as to how this may roll out and affect other markets across Southern Ontario. And as is often the case, it is di cult to predict any unintended consequences that may occur until the announcements are made and the impact is felt. Having said that, the strong fundamentals underpinning the County real estate market such as its desirable and attractive characteristics remain unchanged as does its comparative affordability when compared to like markets, despite the recent uptick in prices. Moreover, lending rates remain at historical lows and all indications are pointing to a strengthening Canadian economy and job market.
Prepared by:Richard Stewart Vice President & Legal Counsel