Statistics Can Be So Misleading

May 3rd, 2018 – Isn’t the purpose of statistics just to confuse people?  The Toronto Real Estate Board (TREB) consistently pumps out their monthly statistical report, which the media then tries to interpret and inform the population about what is happening in the Toronto real estate market.  Problem is, TREB always uses this year-over-year comparison in their pricing analysis.  They always look back a full 12-months to determine if the market is up or down.  We sure don’t do that with the stock market!

Today the Globe and Mail reported:

Toronto home prices tumble but market shows signs of stability

They describe in the article the 12% drop that has occurred in the Toronto real estate market.  What they fail to mention is the RISE in home prices that has occurred for each of the past four months.  Yes, April of 2017 was the peak in the Toronto real estate market and now we find ourselves at an average price point below that peak.  There is no need to report that prices are “tumbling” when in fact they are rising and have been doing so consistently for four months in a row.

Declines in the Toronto real estate market took place in the period from May through August of 2017.

I don’t know why the media buys into the real estate industry’s habit of talking about annual statistics.  It is simply unfair to the readers who want to get a sense of what is actually happening in real estate versus the statistics they might be getting on inflation, GDP, interest rates, stock prices and more. The best way to do this in real estate is to look at month-over-month changes rather than looking back a whole year.