February 2023 Market Update
A common question that I receive from clients is whether or not our local real estate market is continuing its decreasing trend after the initial pandemic years. To try answering this question and to provide some perspective, let’s review some of our market trends based on local charts.
The first chart from the local MLS Real Estate Board illustrates the behaviour of real estate prices since the beginning of the pandemic, including the median sales prices. The Municipality of Cobourg is shown in red, that of Brighton is in grey, Belleville is in yellow, and Quinte West is in blue:
The chart shows the rising prices of single family homes from February 2020 to March 2022, when all the municipalities reached their highest peak. It also shows the decreasing trend in property prices in the last year, which coincided with the increase in interest rates by the Bank of Canada, designed in part to help to cool down real estate prices;
Despite the significant drop in 2022, prices have substantially increased over the last three years. From February 2020 to February 2023, property prices increased from a median of $485,000 to $687,500 in Cobourg, from $407,250 to $677,500 in Brighton, from $318,000 to $520,000 in Quinte West and from $370,000 to $500,000 in Belleville. As with many municipalities in Ontario, we have seen a significant increase in equity appreciation, which is good for homeowners who already own a house, yet not for those who are looking into getting into the market;
The February 2023 property values for the municipalities of Quinte West and Belleville are lower than those of Cobourg and Brighton (explained by their more rural tendency), which may make these municipalities very attractive and more affordable for buyers from out of town, as well as first-time buyers.
The second chart zooms in the behaviour of prices specifically for the last year, when prices started their decrease:
Although less significant, the decrease in property prices has continued in the last quarter, in part explained by the commonly-quiet winter months;
From January to February of this year, property prices have dropped close to 20% in all municipalities indicated, with the exception of Brighton, where prices decreased 2%;
Though the chart confirms the decrease in prices, it does not confirm whether or not prices have levelled off yet. The spring market will be a major test to property prices, considering that we will have more buyers but those buyers will also have more inventory to choose from.
The last two months have been slow in sales in a number of price ranges, typically in houses over $750,000, while houses under $600,000 are very much in demand, at times resulting in more than one offer. Similarly, local buyers are becoming more motivated to get into the market, after two or more years of being unable to purchase a home. Those buyers are also more prudent however, presenting offers with conditions including the sale of their house.