One question that Realtors get asked most when out and about is, “How’s the market”? It’s surprisingly hard question to answer and some Realtors say things like “unbelievable” or “fantastic” or even “terrible”, but those answers are meaningless in answering the question as the question is almost impossible to answer.
Real estate is local. Real estate is about one house in one neighborhood, one seller and one buyer. What happens on a larger scale than that is “outside influences”. Some outside influences are more important than others and statistics are mostly meaningless in my opinion.
For example, there was a story in the newspaper the other day that claimed that the average Ontario home price has risen by 17% over the past four years. This suggests a very strong real estate market. However the very same newspaper story also said that the national average house price in June was 369,339, down .08% from the same month last year. So, are prices up or are prices down? What’s the current trend?
I’ve noticed when the media is reporting real estate statistics, they are not very consistent in which statistics they are reporting. Sometimes the stories will compare this month and last month. Sometimes the stories will compare this month to this month last year. Sometimes the stories will have year-to-date statistics and sometimes, like the story the other day, they will take a four or five-year period and report that.
What I’m saying is, it’s really hard to make sense of real estate prices and trends by reading the newspaper. Furthermore real estate is very local. If, like the newspaper story reports prices in northern Ontario have risen by 29% in the last four years – it doesn’t mean much to our KW real estate market at all.
Of course if you read the American newspapers, that’s a completely different world again and has virtually nothing, absolutely nothing to do with what’s happening in Kitchener Waterloo.
But back to the story in the Financial Post. Northern Ontario saw 29% increase in home prices over the last four years. In Timmins there was a 25% increase. In Sault Ste. Marie there is a 19% increase. What these statistics don’t reveal is that Northern Ontario is coming off a very low base relative to the rest of Ontario. For example, in Northern Ontario an 1100 square-foot bungalow sold for an average of $152,616 in 2011. In Kitchener Waterloo the same bungalow likely couldn’t be found for less than $260,000.
So, how’s the real estate market in KW? My answer today is “If a house is in good shape and priced right it will sell fast”.
