Don't Be Mislead!
If you consider our market compared to where it was at this time in 2012, yes the statistics will look impressive and individuals could be lead to believe that we’re doing better than ever and now is a great time to sell their home. However, the important factor that many of the articles seem to forget is that 2012 was a very slow year based on our 10-year average, and that comparing any statistic to what happened last year will almost certainly shed a positive light on our situation.
However, the fact is that 2013 is just about on pay with our 10-year average, and that the price increases and increased activity that we’re seeing are simply an adjustment from a down year. Prices have increased, sales have picked up, and yet compared to the long-term analysis we’re no better off than most years.
2012 was a year that met with tightened lending restrictions as the Bank of Canada reduced the amortization period from 30 to 25 years. The Toronto Dominion Bank, the leading lender in Canada, received further restrictions to its equity lending putting further pressure on clients to demonstrate income. Additionally, interest rates have increased and it may be some time before we see 2.79% 5-year locked rates again.
The impressive notion of what happened in the Vancouver Real Estate market is that prices in 2012 and 2013 did not plummet to the bottom of the barrel despite these changes. The fact that we have maintained a healthy level of activity and prices have held steady should be at the forefront of articles. Instead, writers and columnists continue to sensationalize the news looking for page views by using dramatic headlines.
It is unfair that articles, which receive advertising from Real Estate companies and Developers, favor conditions that would be beneficial someone in the industry. If we mislead the public, we lose the public’s trust. If we skew the statistics, we run the risk of interfering with market conditions and causing a more dramatic impact than might otherwise be seen.
If an article is going to speak to the conditions of the market, then they owe it to their readership to report all of the information or to provide context of the bigger picture. Yes, market conditions are much greater than December 2012, but if you compare the results to early 2012 they are fairly comparable. However, that wouldn’t make for a very exciting headline, would it?