Letter To The Editor
July 7, 2008 – 6:51 pmCALGARY REAL ESTATE BUBBLE BLOG
Recently, CREB released it’s June summary package for the city of Calgary. In conjunction, Mario Toneguzzi released his June housing report.
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RE: “Calgary home sales continue decline, prices hold steady,” July 2, 2008
Dear Editor,
I am disappointed at Mario’s inability to gather facts with prudent responsibility concerning accuracy of information. Provided that he writes articles where information is disseminated to the masses, journalistic integrity should be of utmost priority. This should be done to circumvent further financial entrapment of unprepared, unqualified and uneducated home buyers. The article does not challenge the facts presented by an association that’s main goal is to market the real estate market in an eternal positive light for only one reason, profit. It would have been deemed more efficient and similar in purpose if Ed Jensen had wrote the article himself.
CALGARY - Calgary’s residential real estate market in the first half of this year has been marked by declining sales, increasing listings and stabilizing average sale prices compared with a year ago.…
And the average sale price in both markets is close to a year ago - up by 0.20 per cent for single-family homes ($472,163) and down by 0.76 per cent for condos ($312,460), according to statistics released by the Calgary Real Estate Board on Wednesday.
These proclamations on pricing are misleading to the public. Firstly, average prices are not stabilizing. They are declining. A simple comaparison of June 2008 and June 2007 numbers would show a declining trend. SFH average and median prices are way lower this year compared to last June. For June 2007, the average sales price for the metro area was $496,890. The median metro home price was $439,000. In contrast, June 2008 average price is $473,774 and the median price is $408,000.
That is a decline of $23,116 (-4.7%) YOY in the SFH average price and a $31,000 (-7.1%) YOY decline in median prices.
For the condo market, the June 2007 average price was $323,269 and the median price was $304,900. The June 2008 average price is $315,042 and the median price is $282,000.
That is a decline of $8,227 (-2.5%) YOY in the condo average price and a $22,900 (-7.5%) YOY decline in median prices.
The numbers offered by CREB in their report are year-to-date numbers. By quoting these numbers psychologically mitigates the tremendous drop in prices year-over-year. The reality is June prices are substantially down compared to a year ago. The element of “statistical camouflage” should have been more challeneged in the article.
In a news release, CREB president Ed Jensen said the sales numbers “reflect that more buyers are finding a home that fits their family’s needs. As we move into the summer months, it’s an excellent time for buyers to capitalize on the wide selection of homes, rather than waiting for the fall when things start to pick up again.”
From a historical trend, sales peak in the months of May and June. Sales never pick up in the fall season extending on to winter. Now quoting Ed Jensen (who I would assume has experience in the market and understands the past trends), that sales will pick up this fall is not conducive to objective journalism. Yet again, there is an omission of critical analysis.
Spring was supposed to be the best time to buy. Spring came and went. At that point in time, houses supposedly “went on sale” and summer was the best time to buy. Now that sales are still down YOY, the best season to buy will be fall. By fall, I can predict that winter is actually the best time to buy. Nothing like a new house as a Christmas present. Hopefully we don’t get any snow fall in Calgary because that would chase buyers away as it did in Ontario earlier did year.
Perhaps it’s time to find other sources for information where the cheerleading of the real estate market is dampened and not relied on for livelihood. This would promote a more pure and objective market perspective.
Afterall, journalistic mantra is such where one usually strives for the truth and challenges conventional facts and preconceived notions.
Regurgitating information from a single biased source is not the best form of journalism by any stretch of the imagination.
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