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

PREPARED BY Dexter Associates Realty

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

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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