You’ve got to hand it to the fine folks at CREA. They truly are one of a kind when it comes to spinning statistics.
Today they released their official September sales report. Remember that I have long been saying that we should see the first year-over-year price decreases in the Fall. I think this will be an important psychological moment for many people when they start reading headlines about house prices falling.
Here’s the part of the report that I find most telling:
Let’s look at the year-over-year price change in the average home price going back to January of this year:
Care to guess what the next couple months will look like?
A drop of 0.2% is a statistical rounding error. It is insignificant. But it’s still enough that I’ll gladly take this moment to point out how dead wrong CREA and the big bank economists have been and how right your truly has been.
To reiterate: First year-over-year declines in the fall. -5 to -10% off by the New Year, another 10-20% off in 2011. Recession by Q3 2011. We’ll see how the rest of the predictions hold up.
Back to the press release:
“…national sales activity in September 2010 came in 19.8 per cent below last year’s record for the month…”
Not too surprising given that some of the big realtor boards are reporting abysmal sales.
The Whisperer highlighted the awful plight of the Vancouver real estate market:
“So we’re just about halfway through the month of October and we’re on track for a 5th consecutive month wherein real estate sales are down more than 40% from last year.
And it’s not just a case of comparing data to an outstanding sales year in 2009. Sales are on track to total 2,188 units for the entire month. Compare that to the totals over the past decade:
Oct-2009 – 3704
Oct-2008 – 1364
Oct-2007 – 3028
Oct-2006 – 2722
Oct-2005 – 3099
Oct-2004 – 2735
Oct-2003 – 3765
Oct-2002 – 2866
Oct-2001 – 2379
Once again, with the exception of 2008, we are on track for the worst sales month in the past decade.”
Meanwhile Victoria is facing carnage (395 sales among 4323 active listings….holy crap!), Edmonton sales melted almost 30%, Calgary sales were knocked lower by 24% with average and median prices down 20K from their peak, while Toronto sales wilted by 23% also. Mid month sales should be reported early next week. They should be revealing.
So how is this all reported in the media?
Home prices, sales up in September- Financial Post
“…average prices reversed the falling trend with a 1.9% increase from August, the Canadian Real Estate Association said Friday.”
That’s a pretty blatant attempt to mislead! I love how the media will use month-over-month data when it casts home prices in the best light and will reference year-over-year data when it shows most positively. Here’s what the Association said, straight from their release:
“The national price trend continues to stabilize. At $331,089, the national average price remained on par with where it stood one year ago. September marks the second consecutive month in which average price remained even with year-ago levels.”
Now by ‘remained even’ they actually mean ‘declined slightly’, but who am I to nitpick.
At least the Sun got the title right:
Meanwhile in the US, we’ve had a mixed bag of data lately. Consumer spending, which makes up the bulk of GDP growth in both Canada and the US has declined significantly in the US.
And today, consumer confidence readings again ‘surprised’ to the downside.
“U.S. consumer sentiment unexpectedly dipped in early October to its weakest level since July, with buying plans on the decline, a survey released Friday showed.”
That’s our future too, by the way. Consumer spending will stall once the reality of falling home prices becomes too obvious for even the magicians at CREA to spin. With it, jobs will be lost. Consumer confidence will fall. Big purchases will be put on hold. Recession.
The big difference right now between Canada and the US is confidence. We’ve (erroneously) still got it. They don’t. But give that a few months…