IS SALES VOLUME DOWN 1.3% OR 19.3%? OR BOTH!!
Every day I hear someone spouting off Real Estate Market statistics to me. They're usually dire and full of scary projections. When I ask more specific questions about either the source of those numbers, or exactly what those numbers pertain to, I usually get an "I don't know". All they know was that it was "bad" and "scary".
Let's take an example from a current bulletin from the BC Real Estate Association. NOTE: numbers from the BCREA are for ALL of BC, not just the Lower Mainland or Greater Vancouver. So you're getting numbers that include all the small cities, towns and municipalities throughout Northern, East, West, South and the Interior of BC. This includes towns with just a few thousand people living there and who may be heavy resource based towns that get easily affected by slight changes in the economy.
OK, back to the example. Here is the bulletin and then I'll point out how in the SAME bulletin they are saying 2 statistics that would give entirely different perspectives on the SAME market:
Summer Housing Market Continues to Sizzle
Vancouver, BC – August 14, 2017. The British Columbia Real Estate Association (BCREA) reports that a total of 9,275 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in July, down 6.3 per cent from the same period last year. Total sales dollar volume was $6.48 billion, down 1.3 per cent from July 2016. The average MLS® residential price in the province was $698,761, a 5.3 per cent increase from the same period last year.
“Strong economic growth, an expanding population base and a lack of supply continue to drive BC home sales and prices this summer," said Cameron Muir, BCREA Chief Economist. "However, home sales have edged back 4 per cent since May, with active listings beginning to bounce back from a 20-year low," added Muir. "If these trends continue, it may signal that more balanced market conditions could emerge before the end of the year."
Year-to-date, BC residential sales dollar volume was down 19.3 per cent to $45.6 billion, when compared with the same period in 2016. Residential unit sales declined 17.0 per cent to 64,107 units, while the average MLS® residential price was down 2.8 per cent to $710,921.
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OK. So where is the example here that shows two differing trends in the same market?
"Total sales dollar volume was $6.48 billion, down 1.3%..."
"BC residential sales dollar volume was down 19.3% to $45.6 billion..."
What is KEY here is the timeframe over which these numbers occurred. You can choose ANY timeframe to create a more or less dramatic effect. Here, in the SAME article, they mention the sales dollar volume. In the first instance they reference July 2016 to July 2017, so a 1 year period. Then at the end of the article they mention the exact same thing, sales dollar volume, BUT it's "year-to-date", so January 2017 to July 2017. The difference goes from the market being down 1.3% to a staggering 19.3%! So which is it? BOTH are correct but are measures over a different time period.
So, make sure you understand what is being said, and what measurement is relevant TO YOU! Markets are seasonal and if you dig in there are reasons even month to month why numbers fluctuate. So don't be fooled again!