De-Mystifying Toronto Real Estate Numbers For Consumers

The Toronto Real Estate Board (TREB) reported its June 2018 monthly numbers today.
According to TREB:
"The average selling price edged up by two per cent on a year-over-year basis to $807,871 in June 2018. After preliminary seasonal adjustment, the average selling price was also up by 3.3 per cent month-over-month between May 2018 and June 2018. The MLS® Home Price Index (HPI) was down by 4.8 per cent on a year-over-year basis, but remained basically flat month-over-month."
Confused?  We don't blame you, there was a lot of information packed in there.
Here are three points to help you understand the information:

1. Know the meaning of "month-over-month." Prices rose "month-over-month" between May 2018 and June 2018.  That means the average selling price trend between May and June was an increase of 3.3 percent (subject to seasonal adjustment which we'll get to later).
2. Know the meaning of "year-over-year." This looks at the change of price after a year. So it is comparing the average June 2018 price to the average June 2017 price.  The average price increased 2 percent in a year.
3. Know the relevance of seasonal adjustment.  People like to buy houses in the spring and summer. The weather is nice for visiting open houses and for moving furniture.  Families can relocate to new areas in time for the school year.  So comparing winter sales to spring sales is never apples to oranges.  So a seasonal adjustment is intended to compensate for the actual season, to give you a better idea of the strength of the market.

As for that "MLS Home Price Index" - we'll get to that in a future post.  Have any topics you'd like to see - let us know in the comments section below!