With shortage of listings and continued demand from Toronto migrants, the real estate market was firmly in bubble territory with a price increase of 41%.
The January supply of homes for sale in the County remained unchanged from December at an all-time low. Many of those who wanted to sell listed earlier in the year as prices rose and now the second wave of Covid-19 raised concerns about listing.
Home sales in January were ahead of January 2020, but not as far ahead as in the previous six months. This acute shortage of listings has undoubtedly limited sales which were also slowed by the province’s lockdown due to the resurgence of Covid-19.
Inventory -measured by the number of homes for sale divided by the number sold during the month- remained at an all-time low in January.
% Selling in 7 Days or Less
High demand combined with limited listings meant that homes continued to sell quickly by County standards in January. Almost 30% of homes sold in a week or less after listing, about three times the normal rate for the County at this time of year.
% Selling For List Price or More
The percentage of homes selling for listing price or more in January continued to run about four times normal for the County.
With continued high demand and limited supply, it’s no surprise that prices continued to increase rapidly in January. The year-on-year increase in median price from January 2020 to January 2021 was an astounding 63%, but this apparent rate of increase was exaggerated by a dip in the median price last January. The more reliable trailing 3-month median price (comparing the median for January 2021 and the two preceding months with January 2020 and the two preceding months) was still up an eye-popping 41%.
The Covid-19 lockdown imposed by the province did nothing to cool the seller’s market in the County and may have even caused it to accelerate further by limiting the supply of listings.
A median price increase of 41% per year cannot go on forever, especially when County prices are increasing much more rapidly than detached home prices in Toronto. According to statistics published by the Toronto Real Estate Board, median prices in the County are increasing at double the rate they are increasing in Toronto.
The million-dollar question: when house prices level off in Toronto, will the current price levels in the County be sustained or will there be a correction?
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.