"I just don't see the point for it other than the real estate industry trying to skew the numbers upwards deliberately in order to create the impression in a headline that markets are robust. And I think its disingenuous marketing and very suspect in terms of public information," Garth Turner, the author of Money Road: Tools for the Wild Road Ahead, told CRE Online
The national average price is in no way representative of the average real estate market, Turner said, because the stat is so heavily skewed by robust real estate activity in Vancouver, yet it is "trotted out" as a benchmark for all other markets.
"But right now the price of an average single-family home in Vancouver is 70% above the average single-family home. That is bizarre. That is unsustainable economically and it will change. So I just don't see the point or purpose of a national average price."
Turner said homebuyers and professionals should instead refer to local real estate statistics because he believes they are a more reliable way to gauge the market.
CREA Senior Economist Gregory Klump responded to Turner's comments, saying his argument is misguided.
Of course, all real estate is local, Klump said, but homebuyers and professionals still want the national average so that they can gauge how their market compares overall.
"It's from a comparative market analysis standpoint that the national average price is useful," he told CRE Online
As for Turner's contention with Vancouver skewing the national average, Klump said CREA has been very forthright in explaining that Vancouver is pushing the national average price up.
"When you take a look at price, it's pretty self-evident that Vancouver is on fire. If you strip Vancouver out the national average price is trimmed considerably. So, yeah, the national average is useful but you've got to keep it in context," he said. "When there are factors that skew the national average price, it's a mistake not to understand what goes into that calculation."
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