The month of May marks the third month in which we have been contending with the challenges posed by the COVID-19 virus in earnest. In confronting these unprecedented circumstances, in which an otherwise robust economy and vibrant real estate market fueled by strong and steady demand, was completely sideswiped by an unforeseen disruptor, unrelated to any economic causes, the landscape has changed and evolved rapidly in keeping with the many moving parts involved in coping with the pandemic. After a complete shutdown following the provincial state of emergency declaration, many parts of the economy came to a standstill, as activity in many sectors was suspended. Real estate, however, was designated an essential service and business was allowed to continue in recognition of the important role that it played in people’s lives. The fact is that, regardless of the circumstances, many people still had to sell their property for a variety of reasons, and others needed to find one to secure shelter for themselves and their families. In addition, the significant economic impact of the COVID-19 virus meant that certain transactions needed to take place. That said, however, with the emergency shutdown, and due in large part to government and public health directives to stay at home and self-isolate, the pace of real estate activity in the Province essentially fell off a cliff. But it did so in varying degrees depending upon region, and based upon the statistics compiled by the Quinte & District Association of REALTORS® (“the Quinte Board”) for Prince Edward County (“the County”) real estate market, the County has weathered the impact of the pandemic better than many neighbouring markets. Specifically, the negative year over year differential in the County real estate market does not appear to have been as great as other markets in Southern Ontario.
In April for instance, the recorded year over year decline in sales and new listings in the County was in the high 40% range, which while significant was approximately 20% less severe than that recorded in the Greater Toronto Area and some comparable markets. And with the onset of spring and warmer weather, as well as the gradual lifting of restrictions and phased in reopening of the Province, the County real estate market statistics provided by the Quinte Board for the month of May shed more positive light on what might appear to be a swifter recovery than otherwise feared. With the advent of May, and as people appeared to adjust to the realities of living with the Corona Virus, players seemingly re-entered the market to engage in real estate activity.
In fact, a total of 41 properties were reported sold by the Quinte Board in May compared to 50 the year previous. While that marks an 18% year over year decline, it represents a significant recovery from the month previous, and is testament to the strong fundamentals underpinning the market and the ongoing demand for property in the County, despite the unprecedented circumstances of the pandemic. Year to date therefore sales trail last year’s figures by only 10.5% with a total of 169 properties changing hands thus far this year compared to 189 by this time one year ago.
Similarly, 111 properties came onto the market in May which was 14% fewer than the year previous when 128 new listings were recorded, but still illustrating that many sellers were prepared to put their properties up for sale in this challenging climate. Year to date numbers were down only 7% with a total of 393 new listings compared to 424 the preceding year.
Inventory is also down almost 16% with 475 properties being available for sale at month’s end compared to 564 one year ago which suggests that rather than being a distressed market with sellers trying to unload their properties, lack of product may well once again be presenting itself as one of the greatest challenges facing buyers and limiting sales. And the average sales price appears to be reflecting this. Rather than falling, the average sales price in the County actually went up over 8%, coming in at almost $500,000 for the month of May. Specifically, the Quinte Board posted the average sale price for the County this May at $494,523 compared to $457,502 one year ago.
As indicated at the outset of this report, there are many moving parts in assessing any sort of market forecast moving forward, given the variables and exigencies surrounding the evolution and containment of COVID-19, to say nothing of the extent of any enduring collateral economic damage that the pandemic and ensuing shutdown may have caused. To date, many indicators look positive for a relatively swift recovery as restrictions are lifted and the broader economy gradually reopens. In the circumstances, market statistics for the County real estate market appear to support this positive trajectory. That said, however, the full extent of job losses and business shutdowns has yet to be fully assessed and accounted for, nor has the impact of increased household debt and deferral of mortgage and related financial obligations been determined in defining the likelihood of an elastic rebound. In short therefore, real estate decisions should depend more on personal priorities, conditions, and timelines rather than being contingent upon a clear prediction as to when “things are back to normal”.