experts: real estate column Thursday, March 23, 2006

Beware of 'Logical' Conclusions

Be very skeptical of 'one month trends' whether they be up or down...

By Alan  Skinner

The Vancouver Sun (Mar 3rd) ran a headline which concluded, based on the 28 days in Feb '06 vs '05, that sales volumes are dropping and Greater Vancouver condos have "taken the biggest hit". A reader in say, West Vancouver, could certainly be forgiven if they in turn concluded that sales of their neghbourhood's real estate were dropping off. Fact: Feb '06 vs '05 in W/Van detached – up 15% and attached up 50%. Apartments saw 14 units ('06) vs 23 units ('05) – sold. Somewhat at variance with the headline. Remember two things here i) we are dealing with a small snapshot in time (28 days - approx 7.5% of a calendar year) – not even a mention of what may have transpired in the prior month (even though that was almost 11% longer – don't you hate irrelevant statistics!) and ii) small sample sizes (time or number) can cause stats to be "logical" and erratic at the same time. Clearly an example of using "one swallow to predict summer" – or is it? In any event, be very skeptical of "one month trends" whether they be up or down. Sadly, headlines seldom carry impact if worded "Is this past month's drop in sales the start of a new market trend?"

Whether the market is expanding or contracting, one important fact remains, an experienced negotiator and marketer who understands the forces of Supply and Demand is a definite asset in obtaining the best Real Estate deal, buying or selling. Beware any party whose prime motivation seems to be to have the highest number of sales. The process is far more important than the volume of transactions or the speed thereof. If thinking about selling in the next while, take a look at my recently introduced OBEO™ system – specifically the “tours” and SpaceDesigner™ features - and click on either of the OBEO™ links (house or condo).

And now for the year to date “proudly inconclusive” figures - read Feb ’06 vs Feb ’05. Number of N/Van detached sales show no change from last year. Average prices +17% and inventory 9% lower than last year. On the attached (t/hse) front, sales numbers down 11% while apt sales were down 35%. Average prices up 27% (t/hse) and up by 9% for apartments. Once again the small sample size gets in the way of intelligent commentary – all prices, however, remain up. Inventory up by 4 units (t/hse) and down 29% (apt). Demand (buyers) seems to be remaining strong with inventory still generally below ’05.

W/Van detached once again up in number of sales (+26%); average price +41% Feb over Feb YTD and inventory stands at 21% lower than 2005. On the condo side – attached (t/hses) saw 6 vs 4 units sold; average price change again not meaningful. Active listings now down 28% compared with last year. Apartments reflected 19 sold vs. 31 in ‘05; with average prices up 17% and active listings now more than double this time 2005 - still largely the result of the new construction activity.

More prognosticating (all right – “crystal balling”). Again I do not pretend to analyze or give an opinion on any location other than our North Shore. I remain of the opinion that both components (North and West/V) will climb in average value in the 5 – 10% range. This may well start to level off, but again, not a flat line or a dip and, yes, we may see less properties changing hands.

Those with school going families – enjoy Spring Break!

Remember that is the place to visit for North Shore R/E information. This work in progress strives to be the “go to” site for North Shore Real Estate analysis. A jumping off point for FULL market listing information, it offers a “no obligation” estimate of value for your personal Real Estate. Please use it and continue your valuable feedback.

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Questions regarding the market, decisions, contemplations, opinions of my musings, are welcomed via e-mail (or phone) – hey, pop-in and say “Hi” to me at an open house – I’d love to see you.

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Recent Articles by this columnist:

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Resistance to change and compliance delay
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