Housing Market favour buyers: Times Colonist

http://www.timescolonist.com/business/Housing+market+favours+buyers/6881507/story.html

From the Times Colonist July 4, 2012

Headlines are meant to draw attention.  For some reason, this particular article generated far more calls from clients and past customers than any other in recent past.  "Is the market taking a nosedive?" asked a friend.  "Sounds like prices are tanking" said a client.

In particular, this article pointed out the drop in average sale price of single family homes from $622,387 in May 2012 to $591,464 in June 2012.  It was $629,292 in June 2011.  Sure does sound like a major drop!

Facts and figures can be interpreted in many ways but it is important to understand the basis of the numbers.  Average prices are skewed any given month by the number of low priced or high priced sales.  In March of 2006, two $10 Million dollar sales caused an increase which showed a spike of $40,000 in the average price.  Also, it is important to review numbers based on a time frame i.e. over 3 or 6 months, since one single month is not an accurate indicator of activity.

A good indicator comes from the man/woman "on the street":  what is going on with Real Estate Agents?  Have they seen multiple offers, are their listings getting traffic and activity, are they needing to adjust prices, what is their average days on market to sell, etc.  What is Buyer motivation?

Even when such headlines are released, people still buy.  Why?  Because something in their lives requires a change in address.  I've said many times before people don't buy homes because the news tells them its a good time.  Changes in finances, family, job and other factors cause people to move- regardless of the market.

Are we scared?  I think I would be if we saw an overnight drop in prices over 10%.  Since 1988, there have only been 5 periods of downward price movement, with a range between -0.51% and -5.37%.  This includes the nasty economy of 2009!  I think we're doing just fine, thank you.

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