In the news recently I have heard that the Toronto Stock Exchange is down 39% from this time last year and New York Exchanges are down 45.6% for the same period, unemployment in Canada increased .6% in January and now stands at 7.2%. Do we really know what these numbers mean for the economy and most importantly for our own lifestyle?
As I have been selling real estate for the past 30 years I am even more sensitive to the statistics that are quoted with regard to property values. You cannot fault people for quoting statistics that they have seen in print but it can be frustrating for the real estate agent when they know this information is not accurate. Here are two recent errors that I have seen in print. In a well respected magazine, an analysis was being done of property values in various areas of Toronto. One area that they chose to feature was Lawrence Park. I have no argument with researching the increase or decrease in property values over a period of time if they are accurate. What amazed me was that the writer of the piece didn’t do his research properly. While they were talking about homes in Lawrence Park they were quoting statistics for the C04 area of the Toronto Real Estate Board – Lawrence Park is not in the c04 area. It is actually in the c10 area. The statistics were completely inaccurate but I will wager that many people believed them.
Some time ago there was a map in a national newspaper that showed the areas in Toronto which received the greatest increases or decreases in value year over year. I would expect that people probably believed these stats too as they were quoted from what would be considered a reliable source. However, although they might have been accurate they were extremely misleading. Why? Averages are only useful if there are enough sales to be informative. In the first year that they quoted there were a normal number of sales based on the activity level of the previous few years and as usual there was a broad spectrum of price ranges. In the time frame measured for the second year there were very few sales. If there were only 2 sales in the second year and they both happened to be higher priced sales and you averaged them you would of course come up with a much higher sale price for that year. In analyzing the two time frames, the second year would look like it had increased in value considerably while in actual fact what had happened was that the number of sales had fallen greatly and therefore the information published was very misleading.
What does the Ca
nadian Real Estate Association tell us?
According to the Canadian Real estate Association prices have declined 17 per cent in Canada this year. In February they further stated that prices are expected to decline a further 17 per cent in 2009. Many people believe that those numbers therefore apply to us in Toronto. Do they? CREA is providing an average for the sale prices for the entire country. For us to apply these figures to our area would be like someone coming up with the average snow fall in the entire world per year. If that number came to 3 centimeters should we then expect to see 3 cms of snowfall in the Serengetti this year and 3cms in Toronto? I don’t think so.
What can I tell you about statistics? Consider the source and the premise on which they were calculated. If you really want to know what is happening to your property value ask for proof in writing of what has happened in the past few months to values of similar properties specifically in your own or similar areas. These are the numbers that give you a true estimate of the value of your home.
Nan Campion is an Award Winning Sales Representative with Royal LePage R.E.S./Johnston & Daniel Division. Nan is a regular contributor to the Muddy York Blog. Nan can be reached at ncampion@trebnet.com or visit her website at www.nancampion.com.
Have You Had Enough Fear-Mongering?
By Rosalin Smith-Carr
It would have to happen sooner or later. Someone has already coined a term for all of this pessimistic news that we are being bombarded with daily; “pessimism porn”. Psychologists have long held the belief that it is human nature to feel a sort of magnetic attraction towards gloom and doom.
The way I see it is, the more we allow ourselves to focus on the bad news, the more we blur our perspective with negative input. In Canada we now have an unemployment rate of seven per cent, not a good number. But what we fail to focus on is that 93 percent of us have jobs. Our glass is 93 percent full!
How is this changing our buying habits? Having been involved in residential real estate for more than two decades, I naturally focus a lot of my attention on the state of the real estate market. Sales in Toronto have dropped by close to 50 percent. However, neither of the most critical components necessary to sustain a healthy housing market – employment figures or mortgage rates – justify such a dramatic decline in home sales.
I do not know how long this recession will last, nor do I know how much more home prices will decrease – if at all. However, I do know that there are individuals and families buying homes under these market conditions.
I have written about this before. We are still seeing buyers paying the full asking price and in some cases more than the asking price, even under these market conditions!
So what’s going on? Are some of those buyers aware of something which the rest of us are not? I do not believe that this is the case. Perhaps instead, most of those who are still getting into homeownership are simply taking it all in good stride and refusing to join “the negative masses”. They are simply carrying on with their lives.
The sky has not yet fallen and I humbly believe it will not fall any time soon. Yes, it is going to be a bumpy ride. We should remember that by staying out of the market and watching from the sidelines while waiting for things to get better, we are all potentially contributing to our own demise.
If we all decided to simultaneously put all of our major buying decisions on hold, we might just create our own apocalypse and then truly have the sky fall on all of us.
Would love to hear your comments. Do you agree, disagree or have no opinion? Let us know.
Rosalin Smith-Carr is a Sales Representative with Royal LePage R.E.S. Ltd., Johnston & Daniel Division. Rosalin can be reached at rsmithcarr@sympatico.ca or visit www.primetorontoneighbourhoods.com
→ 2 Comments
Posted in Commentary
Tagged Central Toronto Real Estate, Real Estate, Toronto Real Estate Market