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Crystal Ball Gazing: Are Real Estate Market Predictions Worth Their Weight?
September 14th, 2007 Categories: Buying real estate, Durham Region, Oshawa, Pickering, Real Estate News, Selling real estate
It’s been said that a weatherman is the only person that can be 
wrong, do his job badly and still keep it. Trendspotters in the real estate market could be in the same category. With all the gadgets and gizmos, I keep hoping that the weather predictions will get better, especially for my hurricane-season Florida trip. Throwing humans into the mix to predict what is going to happen next in the real estate market, might be a job for Nostrodamas.
What do the experts at CMHC say is going on in the real estate market:
- Things look good for Ontario. The Ontario housing market is running at a good pace with the number of existing home sales increasing along with the average price, when you look at the summer of 2006 compared to the summer of 2007.
- Toronto is holding its own. The greater Toronto area resale market is healthy with 17% more sales than last year and an average price increase of 5%.
- Oshawa, not so much. Oshawa has more sales than last year, but the average price has fallen 1 1/2%. The rest of Durham Region, as we walk farther from Toronto, through Pickering, Ajax, and Whitby, we would expect to see things somewhere in between. Pickering showed a 2% increase in price over last year. One reason for the difference in the market status is, as the region moves away from the healthier diversified job market of the GTA to the stumbling manufacturing-laden job market of Oshawa, prices soften.
How did CMHC do last year at predicting this year’s market?
I’m not sure if any of the trendspotters are looking to be weathermen, they could look into it.
In their Fall 2006 report CMHC expected Toronto to have an 11% increase in sales and only a 3.8% increase in price. In Oshawa, they were hoping for a smaller increase in sales and 1 1/2% increase in price.
Knowing their past history, we can ask CMHC to pull out their crystal ball and tell us what they think 2008 will look like.
They are expecting to see similar growth in the real estate market with the average price continuing to increase at a pace that is greater than inflation–good for your investment. Oshawa is expected to have a slower increase (2.3%) than Toronto (4.2%).
If CMHC are true to the breed of a conservative Canadian, we will expect the real estate market around the GTA to perform well in a balanced market.
Want a hot tip? Look at Sudbury.
It’s had an almost 20% price increase over last year and is expected to continue to record a double digit price increase next year.
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[…] ‘Tis the season for trend watching. As we march through the last quarter of 2007, whether to sell now or in spring 2008 is on a lot of people’s mind. The forecasters oblige by offering up what they think the market will be like in 2008. Earlier, I had discussed the value of looking to forecasts. CMHC put their fortune teller caps on earlier to present their thoughts on the matter. Each of the major players in the real estate market usually weigh in at this time of year to tell you their thoughts. […]
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