Real estate boards ignoring month-to-month losses to promote year-over-year gains


Rather than compare July figures to the previous month, real estate boards are instead touting the gains in sales and prices compared to 12 months ago. But this time last year, the market experienced a significant downturn.

The Ottawa Real Estate Board ran this headline on its latest press release, for example: “Ottawa housing market warms up in July.” In fact, sales were down 22.5% in July compared to June, and average prices were down 3.6%.

The board instead promoted the fact sales were up 18.8% compared to a year earlier, and prices were up 6.2% over that period. Similar trends were also found in Vancouver, Calgary and Toronto, as local boards there also promoted the yearly gains rather than monthly drops.

One reason is that yearly trends are considered more accurate by some, as sales can largely be influenced by the weather and time of year, for example. Thus, comparing July with a previous July can be more useful than comparing it with June.

Others see it as spin by the boards to promote a constant positive picture in each of the press releases, which often get repeated in news media with the same angle that’s fed to them.

In his blog, Garth Turner labeled the practice of using yearly stats by the Toronto Real Estate Board as “deception” and “illusion.”

“Big drop in sales and prices from last month. Valuations trending lower since the spring. Total 2011 sales lower than those recorded last year. So are words like ‘strong home sales,’ second best on record’ and substantial rebound’ responsible? Of course not,” noted Turner on Toronto’s market. “These are realtor-salesguys.”

Turner was referring to the August press release, which quoted Toronto Real Estate Board President Richard Silver. “If the current pace of sales hold up, we could see the second best year on record under the current TREB market area,” Silver said in the release.

Sales in Toronto were up 23% in July 2011 compared to July 2010, but were down 22% from June 2011.

Some boards, such as the Edmonton Real Estate Board, just left the bad news out of the release. While promoting that sales were up 3.6% in July compared to 12 months earlier, there was no mention by the board that sales were also down 9.3% compared to the previous month.

Take a look below at how the picture of these markets greatly changes depending if you’re comparing monthly or yearly stats.

 

A down month, but a good year overall

July 2011 residential home sales stats

Sales compared to previous month

Sales compared to previous July

Average prices compared to previous month

Average prices compared to previous July

Vancouver

-21.2%

+14%

-0.1%*

+9.2%*

Toronto

-22%

+23%

-3.2%

+9.7%

Calgary

-26.2%

+8%

-1.86%

+0.6%

Ottawa

-22.5%

+18.8%

-3.6%

+6.2%

Victoria

-15.4%

-0.1%

-7.7%

-13.3%

Edmonton

-9.3%

3.6%

+1.1%

+1.3%

*The Real Estate Board of Greater Vancouver does not report average prices, but rather a benchmark price for what a typical home would cost.

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