Watch the trend line, not the headline

By Ben Myers
October 27, 2014

housing market shows positive trend lineI stole the title for this article from a recent interview of former President Bill Clinton, and I think it is very fitting when applied to the housing market. It seems like 75 per cent of articles about the GTA housing market have a negative headline, yet Toronto's market trend line has been relatively strong for the past 17 years.

I believe you should ignore the headline and concentrate on the trend line. I presented some long-term data in my bi-annual Market Manuscript, a robust 40-page document on the conditions and trends of several housing markets in Canada. This report is available for free in the news section of our website at fortressrealdevelopments.com. The media picked up the report and several news outlets ran articles on the key findings, many of which I pulled from various reports by BMO Capital Markets, TD Economics, Anderson Economic Group and Will Dunning Inc. Based on the statistics and conclusions from these experts and decades worth of data from Canada Mortgage and Housing Corp., The Altus Group and others, I concluded that the Ottawa market is relatively flat, the Winnipeg market is softening (coming off a 26-year high for starts) and the Calgary, Edmonton and Toronto markets were performing very well.

This conclusion didn’t sit well with many anonymous folks online, and I was accused of being biased, being in the real estate business. Don’t listen to these ignorant people. The population growth, employment growth, price inflation and starts data in the Toronto area are all relatively strong, and the supply of completed and unsold units is right at the 10-year average. All these factors pointed toward my positive forecast. However, by the logic presented by these folks on the net, I can’t talk about my optimistic forecast publicly because my company may benefit by that conclusion being made. Absurd!

I guess a stockbroker can never say he thinks it’s a good time to buy stocks, or the guy at the corner pizza place can’t say he thinks his pies taste good, or the retail clerk can’t say those jeans look good on you, because they might benefit financially by saying those things (even if they are true).

It’s sad that so many people think that anyone that works in the real estate business in this country will lie just to make a buck. When I want to know what’s happening in the market, I go to the people who work in the market and study the trend line closely – and you should to.

Don’t argue that someone’s opinions are not valid based on where they work. Argue that someone’s opinions are not valid based on data and facts. The Toronto condo market is doing very well, and I have 17 years of data to back up that claim.

Keep that in mind when you’re looking for your new home.

About Ben Myers

Ben Myers is President of Bullpen Research & Consulting, a boutique real estate advisory firm, that works with landowners, developers, and lenders to better inform them of the current and future macroeconomic and site-specific housing market conditions that can impact their active or proposed development projects. Follow Bullpen on Twitter at @BullpenConsult or find Ben at bullpenconsulting.ca

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