HAVE VANCOUVER REAL ESTATE VALUES REALLY FALLEN?
An article in the Vancouver Sun last Wednesday May 16th by Sunny Freeman stated that Vancouver selling prices were down by 9.8 %. Statistically correct but actually and in reality TOTALLY WRONG.
How can that be wrong, when the Canadian Real Estate Association, Sunny’s source of information says so? Information from Vancouver Real Estate Board and Dexter Associates Realty in Vancouver suggest otherwise. The question is which is the most reliable.
There are primarily 3 methods of reviewing trends and value changes:
- Averages
- Median values
- Benchmark prices
Averages
An average is found by taking all the sales prices and dividing them by the number of sales. However, if in one month the majority of sales are over $500,000 and in the next month the majority is under $500,000, the % change will be distorted as this is not truly a competitive set. Hence if in Vancouver there is a slowing down of sales of high priced houses, the average is bound to fall. The anomaly can also be seen by looking at all the months in 2011. The averages vary from $831,000 (May) to $689,000 (Dec) on a monthly basis and then in February 2012 it is back to $803,000 and down again to $735,000 in April 2012. Generally value does not change that fast.
Median values
The median is the middle number in a sorted list of numbers. The highest and lowest are eliminated until there is one remaining. MLS calculates these values on a 1/4ly basis by type of property and area. There is no composite number. With few exceptions, values throughout Greater Vancouver have increased when comparing 1st ¼ 2011 to 1st ¼ 2012
Some examples:
Municipality Price Group 1st ¼ 2011 1st ¼ 2012
North Vancouver C $995,000 $1,090,000
Vancouver East A $633,000 $ 705,000
Maple Ridge A $374,900 $ 375,000
Burnaby South B $780,000 $ 897,000
Port Coquitlam D $650,000 $ 675,900
Benchmark.
This is the price paid for a typical property in each market. The Vancouver Real Estate Board keeps track of the prices paid for a particular type of property on a monthly basis, for example an 1800 square foot single storey house on a 50 foot lot.
Municipality Apr 2011 Apr 2012
North Vancouver $979,949 $977,300
Vancouver East $808,008 $847,200
Maple Ridge $464,818 $469,100
Coquitlam $697,022 $712,000
Port Coquitlam $562,495 $555,200
GVRD composite $638,400 $683,800
Conclusion
Averages are misleading. The other two methods appear to produce a more reliable pattern to illustrate the trends and certainly do not suggest a 9.8% fall.
MLS STATISTICS - REAL ESTATE BOARD OF GREATER VANCOUVER |
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PREPARED BY Dexter Associates Realty |
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Units Sold |
Units Listed |
Active Listings |
Sales to Listings Ratio |
Month's Supply |
Average Price |
Benchmark Price |
||
Year |
Month |
|||||||
|
|
|||||||
2011 |
January |
1,855 |
4,916 |
11,256 |
38% |
6 |
$762,562 |
$598,400 |
February |
3,140 |
5,916 |
12,866 |
53% |
4 |
$791,604 |
$605,600 |
|
March |
4,137 |
6,995 |
14,100 |
59% |
3 |
$786,310 |
$617,200 |
|
April |
3,270 |
6,011 |
15,239 |
54% |
5 |
$815,251 |
$638,400 |
|
May |
3,431 |
6,101 |
15,736 |
56% |
5 |
$831,554 |
$650,300 |
|
June |
3,317 |
5,961 |
16,194 |
56% |
5 |
$808,867 |
$659,300 |
|
July |
2,614 |
5,227 |
16,280 |
50% |
6 |
$761,672 |
$663,500 |
|
August |
2,419 |
4,864 |
16,395 |
50% |
7 |
$778,545 |
$667,600 |
|
September |
2,299 |
5,799 |
17,206 |
40% |
7 |
$751,042 |
$668,200 |
|
October |
2,359 |
4,462 |
16,418 |
53% |
7 |
$767,225 |
$667,500 |
|
November |
2,395 |
3,342 |
14,777 |
72% |
6 |
$728,117 |
$666,300 |
|
December |
1,700 |
1,713 |
12,082 |
99% |
7 |
$689,056 |
$658,800 |
|
32,936 |
61,307 |
54% |
||||||
2012 |
January |
1,607 |
5,906 |
13,456 |
27% |
8 |
$752,379 |
$660,600 |
February |
2,572 |
5,698 |
14,753 |
45% |
6 |
$806,093 |
$670,900 |
|
March |
2,919 |
5,996 |
16,226 |
49% |
6 |
$761,741 |
$679,000 |
|
April |
2,837 |
6,200 |
17,559 |
46% |
6 |
$735,314 |
$683,800 |
|
May |
1,237 |
3,219 |
18,195 |
38% |
|
$762,300 |
As of May12 |
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Prepared by Peter Austin, BSc. AACI. CArb. a Real Estate appraiser and consultant specializing in property tax appeals and condominium and rental arbitrations
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