Why is the media, and hence the public and eventually the real estate industry so focused on monthly sale numbers? We know that the media needs regular news and reports to sell advertising.
But real estate sales are not neatly packaged in one month intervals. Weather, holidays, and a variety of personal factors can move sales from one month to another. Real Estate sales are rarely time sensitive. We need to look at longer time horizons – say a year or two.
The second point to make is that 80% of residential sales take place for personal or family reasons, and not economic reasons. Experts sitting in some small office think that all decisions are based on income. When an Executor phones to tell me that Grandma’s dead; they never ask me about the market, should they hold off selling for a better price, or should they rent it out for a year. No they just want to sell it!
Sales for the first three months of 2013 on TREB are down 15% from 2012. We know that by August, at the latest, monthly sales will be running 10-15% higher in 2013 than in 2012. And by the end of the year sales will be equal to 2012. How do we know? In a previous Blog from March 15, we tracked sales per 100,000 people in the GTA from 2001. Sales in 2012 were the LOWEST since 2001. How much lower can we go with the population increasing every year!
Every year people need to move. We just don’t know when they will be moving – but they will! That is real estate.