Real Estate Statistics Can Be Manipulated

“Hamilton housing market continues its downward trend in April”. This is the headline I read about current real estate statistics by the CBC news. Could it be true? Yes, but only when compared to last year! Remember, 2017 was an outlier in terms of price appreciation in sales volume. At our Mortgage Architects Office located on the East Hamilton Mountain, we try to write as if we were the ones wanting to learn and try to pass on our professional opinions. Real Estate statistics can easily be manipulated if not clearly understood. The media needs to sell news, so they put their spin on almost anything including sports, politics, or current events. I take a very jaded perspective.

In reading the headline, they only compared the real estate statistics for 2017. A good Statistician would throw out the highest and lowest price points and look at a long-term average. For example, if we had no record levels for rain in a particular year, it is only natural that when average rain returns it could be written that rain is drowning us compared to the last year. In other words, you can skew how something looks with only a two year sample.

This is what is really happening this year in terms of real estate statistics:

1. Mortgage rates have gone up.
2. Mortgage stress tests have impacted the market.
3. There are more active listings than last year.

As of May 2018, this has been the effect:

1. Canadians can afford less total mortgage than previous.
2. The Hamilton market in the $300,000-$450,000 range is red hot with multiple offers.
3. Prices have steadied.

These are the facts. There is more balance between the buyer and seller and this means homes are taking longer to sell. This is normal and not doom and gloom. Be careful what you read.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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