Housing Market Update - The Data and the Drama

Separating the fact from the drama in the myriad of data being reported in the housing headlines can be a challenge. News captions highlighting the staggering bad news are unfortunately commonplace:

Yes, it is fact that some markets are experiencing a downturn, but compared to what, where, and when?

Although The Toronto Real Estate Board (“TREB”) has reported an 8.2% decline in the average price of a resale in the City of Toronto, down to $343,632 from $374,449 a year earlier, this in reality is not as dramatic when it’s realized that this decline is in relation to the record high price levels set in 2008. TREB itself is optimistic pointing out the market is now more balanced between buyers and sellers, with buyers now having more choice, average families can qualify for a mortgage on the average priced home at low interest rates, and the rebound of the housing market will likely be quick once economic recovery takes hold. These are the positive statistics that, unfortunately, do not make the headlines. It is the doom and gloom being reported that overshadows the fact that the average house price still shows an increase of over 9% from just 5 years earlier; an admirable return on investment.

In rapidly changing markets, such as in Calgary amongst others, the increasing volumes in new construction and resale listings have exceeded its demographic requirements since early 2006. Now, as the averages move away from the record setting prices and volumes towards a market in equilibrium, continued declines from the record levels are to be expected.

Data is available for most markets through a multitude of sources across the country and North America. From a relocation policy and home disposition program perspective, the key is to challenge the “facts” being presented, and their source. Do not be reactionary but instead make informed decisions. This opportunity should be taken to review legacy policies and reanalyze programs and processes to ensure they continue to meet the needs of the company and employee regardless of the market or economic condition.

Terri Oliver
Director, Consulting Services