Whenever major changes occur affecting the Toronto housing market, expect a wide range of opinions from the media on their significance to the market today.
To the public, news articles on Toronto real estate seem authoritative. For achieving this credibility journalists back up their articles extensively by quoting a wide array of real estate and financial industry professionals such as economists, CMHC, trade associations, academics, mortgage brokers, think tanks, and of course realtors.
But when you read several articles from different mass media sources on the current state of the Toronto housing market, it’s easy to come away feeling confused about what’s happening now and what will happen in future. The biggest problem with confusion is it breeds fear in most people. Fear can lead either to inaction, panic or worse. Ernest Hemingway once said “Critics are men who watch the battle from a high place, then come down and shoot the survivors.”. Journalists aren’t much different than critics.
With real estate market analysis there are so many factors influencing market conditions and so many analytical methods available. However, the key problem is there’s so little (if any) consensus among journalists on exactly what approaches and methods yield sound market analysis and which don’t.
For instance, a May 25th Globe and Mail article “Toronto area home sales sink after cooling measures” stated overall GTA home sales were down in May 2017 an average of 26% compared to May 2016 sales. Yet there are two key things to notice with this article. FIrst, in terms of % change by GTA city there were huge differences from city to city as seen in the graph provided. At one extreme Richmond Hill was down 62.1% and yet at the other extreme Pickering was up 14.5% – a 76.6% difference between the two cities. Evidently the GTA is not a homogenous market at all. That’s also true of the many individual neighborhoods within each GTA city. With such a heterogenous market, it’s misleading starting this article with the words “House sales fell 26 per cent in the Toronto region”.
Second, resale condos weren’t considered in this Globe article’s analysis, only attached and detached houses. Yet the GTA condo resale market for the same May 2016 vs. 2017 time period told a considerably different story with only a 6.4% drop in sales overall on average. Obviously resale condo sales are a huge factor in the overall housing market in any GTA city nowadays, so they should be included in any market analysis.
One of the biggest causes of confusion for the public is market analysis on a large, macro scale. Media articles typically analyze and comment on the GTA market or even the entire Canadian real estate market as a whole. But the larger the size of the market considered, the easier it is for journalists not trained in market analysis as realtors are to make sweeping generalizations. In doing so they thereby unwittingly misrepresent the conditions of many individual, much smaller markets defined by city or by neighborhood. People do not buy Canadian real estate at average market prices, they buy real estate in specific neighborhoods in specific cities at local market prices.
With all of the many market opinions influencing our clients, we as agents now more than ever need to to educate our listing prospects first and foremost on the market conditions that matter most to them – those of the neighborhoods they live in. When we have a listing presentation opportunity, a home seller wants to see the trained, professional market analysis only an expert realtor experienced in their local market can give them. This will give your listing clients the confidence that we are headed into a great market this fall and you will be the agent to get them top dollar for their home.