Let’s just say the last few months of Toronto real estate news has been anything short of entertaining. Real estate has been dominating morning news channels while also taking some serious heat from the public.
Every non-real estate expert has been spouting B.S. about the market tanking and the imminent ‘bubble burst’. No one knows for sure, but the people who immerse themselves in real estate, who live, breathe and of course, sell real estate have been painting a different picture. Well, at least I have! I’ve been skeptical of the new housing initiatives and [not so] patiently waiting each month for the CREA Toronto Real Estate Board stats to come out and prove me right.
In this article I’m setting the record straight and making sense of the numbers that have been thrown around by the media over the last few months. Oh, and *spoiler alert*, THE MARKET ISN’T CRASHING!
MAKING SENSE OF THE NUMBERS
Let’s start with a question. As a home owner what stats matter to you the most? If you don’t own a home, for a moment let’s pretend you do. You get to pick one stat from the below list, which matters to you the most?
- Number of monthly new listings
- Number of sales that month
- Monthly national average price increase/decrease
- Monthly local average price increase/decrease
I hope you picked the monthly local average home price! It is just like when you get those little postcards in the mail from realtors and the first thing you do is check the price that sold. That’s because you know the best comparative for your home is a home that sold recently in your local neighbourhood. You don’t care that two homes sold this month, and five sold the month before. You only care that your home is holding or increasing in value and that if you needed to, you could still sell it.
Choosing local market stats and paying attention to the ones that really matter to you is important because you can easily come to very different conclusions from the data you have been given. For example: You could say there was a 37.3% sales decline while also saying there has been a 5% increase in prices. If you only paid attention to the sales decline (like the headlines have been doing) you might gather that your home isn’t holding its value, or that perhaps it’s a buyers market but if you look at the sales stats it clearly is doing better than simply holding value, it has increased in value and with no indication of sellers lowering prices, it certainly isn’t a buyers market!
So, let’s talk about the stats that are being thrown around by the media for a moment. When articles throw out “national” and “local” stats we need to be cognizant of what this means and what we garner from this information. National stats are no indication of your current local market — they are more an indication of the nation’s economy as a whole and have no place in the valuation of your current property. Local stats however, can still be misleading. When we talk about them we need to ask, what is being considered local here? For example, the GTA although local when compared to national statistics is still much different than Toronto or the individual neighbourhoods within Toronto.
So, I’ll reiterate just to be safe, Toronto is NOT in a buyer’s market. In Toronto, sellers aren’t dropping their prices and we’re still seeing multiple offers on our listings.
Don’t let stories in the media intimidate you. Educate yourself and when in doubt, head back to our blog for the #HonestBroker truth.
When I started writing this post I wanted to also discuss how the media has been manipulating the statistics over the last few months and I wanted to shed some light on what has really been happening with Toronto real estate. The post started to get too long so later this week I’ll have another that makes sense of the numbers and what’s really been going on over the last few months. Stay tuned. – Pierre