Interesting to See that Toronto House Prices are Down in January 2016
Listen, headlines are headlines and that’s all there is to it.
If you want more information, you really have to drill down into the facts and statistics and weed through everything carefully.
I appreciate that the real estate and mortgage industries would always like you to believe that things are going up and up and up. Is that actually true?
However, let’s have a careful look at the average house prices of a single family home in the GTA, as reported by the Toronto Real Estate Board over the last 13 months.
2015
January $552,925
February $596,320
March $613,875
April $636,089
May $649,650
June $639,300
July $609,124
August $603,512
September $627,752
October $630,311
November $633,048
December $609,278
2016
January $631,092
REVIEW
I have “bolded” a couple of months, in 2015, namely May and November.
You will notice that the peak of the Toronto real estate market was May of 2015. That was the height and it has been dropping down since and has not fully recovered.
Have a look at November! You will see that November was the Fall peak. It dropped in December, recovered in January, but it is not quite back up to the November number.
If you were to look at the market, you might be tempted to draw some negative conclusions. But, that might be a little too hasty!
If you wanted to say something very positive, you could take the January 2016 number and compare it to something that would show a positive gain. Obviously that means:
1) Avoid comparing it to the height of the market in 2015, (May)
2) Avoid comparing it to the height of the Spring market in 2015, (May)
3) Avoid comparing it to the height of the Fall market in 2015, (November).
That doesn’t leave us with much! So, let’s go back. April is out, because that’s higher. The summer and fall might work, but there’s no natural relationship. So, we are left with March, 10 months, February, 11 months, and January, 12 months.
The obvious natural fit is January. That’s 12 months or one full year. Clearly, you could actually go back several years and that would work out well too. However, if we were talking about the stock market, this would be a silly comparison. Everyone wants full and complete current information. Apparently, that is not necessarily the case with real estate.
What do you think of my headline:
“Declining Toronto House Prices in January 2016”
It is correct if you compare January 2016 to November, June, May and April. But, it would be incorrect if you compared it to any of the other months.
If you would like to talk about the market, give me a call.
Brian Madigan LL.B., Broker
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