Calm down and check the numbers
Everyone keeps talking about how the numbers at the end of this year are so much higher than last year. But everyone seems to forget to put them in context. Last year was in the toilet, numbers were abnormally low, so this year seems abnormally high.
It happened last year as well, when people would say how low the numbers were, without qualifying that they were comparing to 2007, a record year. Thus a low year seemed even worse when compared to an abnormally high year.
It has been said time and again that stats can be made to say anything, and the past 15 months is a fantastic example of that. But the “experts” should know better, they should know to qualify the numbers and give valid comparisons. The press is in the same boat, they should be giving numbers in context. But that does not sell papers, does it?
Experts and pundits get their name in the paper by screaming out extremes and dire warnings, while the press sells papers by printing it. It isn’t very exciting to say that sales are up 123% over last year, but that it is only 4% when compared to the year before. Massive increases - terribles drops this is the stuff the news is made of.
So here is a nice and easy table of prices and sales volumes for the past few years. Not you can see for yourself what has been happening and make comparisons for yourself.
November 2006 Sales: 6,281
November 2007 Sales: 7,313
November 2008 Sales: 3,640
November 2009 Sales: 7,446
December 2006 Sales: 4,447
December 2007 Sales: 4,646
December 2008 Sales: 2,577
December 2009 Sales: 5,336 (est)
November 2006 Prices: $355,727
November 2007 Prices: $393,747
November 2008 Prices: $368,582
November 2009 Prices: $418,460
December 2006 Prices: $336,217
December 2007 Prices: $394,931
December 2008 Prices: $361,415
Mid-December 2009 Prices: $423,103
Mid-December 2006 Year-To-Date Sales: 82,861
Mid-December 2007 Year-To-Date Sales: 90,870
Mid-December 2008 Year-To-Date Sales: 73,264
Mid-December 2009 Year-To-Date Sales: 84,888
Mid-December 2006 Year-To-Date Prices: $351,941
Mid-December 2007 Year-To-Date Prices: $376,236
Mid-December 2008 Year-To-Date Prices: $379,347
Mid-December 2009 Year-To-Date Prices: $395,411
So you can see that last year was more of an abberation than this year. Sales this November were almost the same as in 2007. December sales were higher than 2007 or 2006, but only by 14.9% and 19.9% respectively - a far cry from the 107.1% difference over 2008.
Prics have shown a steady rise except for the drop we saw at the end of 2008. Think about it this way, prices rose 12.4% from 2006 to 2009, an average of 4.1% each year – does that sound like a bubble to you? Never mind short-term strangeness, from record year to terrible year to rebound year. Look at the whole picture.
By the end of 2009, we won’t even hit the sales numbers of 2007, and barely beat the volume of 2006. Sure, there were more sales than in 2008, but everything has been higher than that dismal year.
So take your stats with a bit of thought, look at the numbers for yourself. I pulled all of this from the Toronto Real Estate Board site, from the Market Watch section. You can all go there and find all the same data I did. Nothing fancy here, no tricks. Just a simple list of all the sales and prices for the end of the past few years.
Do not let talking heads, paid scribes and doomsayers tell you what to think.
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