Prince Edward County Real Estate: Disconnected From Reality

Over the last several months, prices for PEC homes have become disconnected from reality. 

My report on the County real estate market this month centres on one simple point: County real estate prices have become disconnected from reality.

PEC Real Estate 2021-02 Summary

For the last several months I have warned that we were seeing a price bubble in the County…and now the market is actually heating up further.

The average existing house price in the County during February was $736,400, up 38% from the average price in February 2020.

Two recent examples from my own practice illustrate the irrational exuberance were seeing in today’s market.

This month I showed a modest, 3-season waterfront cottage which two years ago I valued at $375,000. It was listed last month and sold in days for $700,000 with no conditions.

In another example, a client bought a small 2-bedroom bungalow in Picton last September for just over $400,000. This week she received an unsolicited offer of $600,000, an increase of nearly 50% over six months.

Reality check: if the increases we’ve seen over the last year were to continue uninterrupted into the future, the median house price in the County would increase by more than 300% over the next five years. By comparison, the Ontario government expects economic output will grow 15-20% over the same time period.

This is clearly unsustainable. Will it end in a soft landing or a deep crater? No one knows, but the frenzy cannot go on forever.

Image Credit: Getty/iStock

Treat Hull spent three decades as a management consultant and marketing executive before moving to the County and taking up real estate. He is broker/owner of Treat Hull & Associates Ltd., a Prince Edward County brokerage which takes no listings and represents only buyers.

Email Treat

Cottage     |     Prince Edward County     |    

Toronto’s most authoritative real estate insights, delivered right to your inbox.