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.
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.