Comments on: Myth of falling house prices (II)

By: Canadian Business Blog » Blog Archive » Where house prices really stand

Wed, 31 Dec 2008 20:24:11 +0000

[...] We got a better picture today on how well Canadian house prices are holding up. According to the Teranet-National Bank House Price Index (TNHPI), as reported in a Dec. 31 communiqué, Canadian home prices rose 2.1% over the twelve months to October, 2008. This reading contrasts sharply with the year-over-year drop of 10% reported by the Canadian Real Estate Association (CREA) just before Christmas (with its questionable methodology). [...]

By: James

James — Tue, 23 Dec 2008 15:44:11 +0000

But Garth Turner is touting his book and another gloom and doom book to come soon. He can’t taking advantage of the bad headlines can he?

Keep up the good work Larry, I’ve been reading you work for ages. A very merry Christmas to you and your family!

By: Chris

Chris — Sat, 20 Dec 2008 15:41:39 +0000

Unless you are selling this is a non-issue . If you are then you get less for your house and the one you buy will be less ( moot point ) . But I agree with Larry BIGTIME on the media negativity . To sell papers they find the most negative facts and figures to post in an article . We have been through this before and things will get better . This is a time of hope and change . Get with the program media !!!!

By: Larry MacDonald

Larry MacDonald — Sat, 20 Dec 2008 10:12:59 +0000

Potato
There is no suggestion the bias is always to the downside, just that the widely used method is inaccurate per se. If we go back into the boom years and compare it with the benchmark, i.e. RSPI, we may find there was an upward bias.
LM

By: Larry MacDonald

Larry MacDonald — Fri, 19 Dec 2008 19:51:20 +0000

Michael J
You can contact them through their website (seel link in my previous posts) and who knows, with your math background, they might be interested in having you do some tests.
Colin, Steve
Prices are indeed coming down according to the RSPI, compared to previous months or quarters. But so far not on a year-over-year basis — except for Calgary. Given the momentuum, it could show year-over-year declines in 2-4 months. But the pace is nowhere near as rapid or deep as suggested by widely quoted meaures.
LM

By: Potato

Potato — Fri, 19 Dec 2008 19:39:26 +0000

I find it very strange to see someone suggesting that CREA is biased to the downside.

By: Steve

Steve — Fri, 19 Dec 2008 18:05:43 +0000

It’s difficult to believe that housing sales and prices are not declining.

I purchased my house in January of this year in the (905) area. There are a very large number of houses for sale in my area in the Oct-Nov timeframe, and most were sitting, and sitting and sitting. The house down the street from me is identical and in the same condition as mine, but has been listed at 6% less than I paid for mine and has been unsold since September.

Despite headlines, I SEE more listings, less sales, and lower prices in my area.

By: Colin

Colin — Thu, 18 Dec 2008 18:22:26 +0000

Fascinating.

I’m reading as much real estate news as I can these days. When 800k Vancouver houses are so totally out of range of decent incomes (80k/year), house prices must be overvalued…

BUT if the statistics the media are quoting aren’t accurate…that sure does paint a different picture of the current market. That doesn’t fix the imbalance, but it sure would temper people’s negativity.

By: jesse

jesse — Thu, 18 Dec 2008 17:11:26 +0000

” It may scare house hunters away from the market and lead house sellers to list at a lower price, creating a self-fulfilling prophecy. Lies, damned lies, and statistics, goes the saying.”

Perhaps the media blindly quoting price rises when economic times were better caused as much or more damage than reporting larger price drops now.

Prices are too high and are coming down. Don’t blame the media for what the market will take care of all on its own.

By: Michael James

Michael James — Thu, 18 Dec 2008 13:02:56 +0000

An interesting test of the RSPI would be to see if five-year figures matched the compounded one-year figures. By this I mean calculate the RSPI for five years by using houses sold both now an five years ago. Then do five separate one-year versions and compound the results. If the two calculations don’t match, then the RSPI is suspect. Presumably old data exists to try this. I’d do it if I had access to the data.