Who Cares About National House Prices?

First I will start off by saying I am not a Realtor who is defensive about house prices reducing.

That would be like being offended by the sun rising each day. History has shown that the sun comes up, the sun goes down. House prices go up, house prices go down. The difference is one is fairly predictable. To not accept the rise and fall of real estate prices would be unproductive if not irrational.

Am I the only one who finds articles discussing the Canadian housing market seeing price reductions somewhat useless to home buyers? Am I buying or selling houses in Canada? Well yes...well sort of...well no. I was thinking about narrowing it down to a province or even maybe a city. Heck I may even be so brazen as to narrow it down to a particular neighbourhood.

Now I realize that the media can’t or won’t report on market activity in each neighbourhood in Canada. However, what does a reader gain from knowing the prices are down such and such percent across Canada? Can they take that tidbit of information into negotiations with them?

Point being, real estate is local. Neighbouring towns can have polar opposite trends depending on job creation, in migration, supply, quality of schools, hospitals and transportation. Different parts of a city will experience the same effect.

Here is a real life example, a mill burns down in Prince George and house prices falter as there is job losses; the Hebron oil deal is approved in Newfoundland which includes partial manufacturing of the rig in province and house prices start rising. They are 7335 kilometres apart by car; both are used to calculate the average national housing price and subsequent increases or decreases.

There is nothing wrong with trying to be in tune with what the real estate market is doing, just make sure it is the market that is actually relevant to you.

By the way, these articles and this data do have a practical application for those observing the national economy for purposes other than the purchase or sale of real estate. Real estate tends to be an indicator of the overall health of our economy, however it is not a driving force of the economy.