We publish a lot of market stats on our blog, and our regular readers are quite familiar with our methodology. But if you’re new to our blog there are common questions that are not addressed in the weekly or monthly stats that we’ve answered below.
Edmonton Real Estate Market Weekly Update:
The weekly stats are a snapshot of the real estate market in Edmonton only. I go into the database at approximately the same time each week and report the number of new listings, sales and more for the past 7 days. These numbers are for Edmonton only and do not include the surrounding areas such as Sherwood Park and St. Albert. If you take the numbers for the past four weeks and add them together they will not equal the monthly numbers because the dates (Saturday-Friday each week) do not line up with the days of the month.
New Listings: This is simply a sum of the number of new listings in the past week. If a listing expires or is terminated and entered in the database as a new listing it will be included in the number of new listings (it will also be included in the “off market” total for a net gain of “0”).
Sales: The number of listings marked sold in the past week. A number of “sold” listings will not get counted each week because REALTORS® have two days to report a sale. For example, if a listing is sold on Thursday, but not reported until Saturday it will not appear in any weekly report since my snapshot occurs on a Friday and includes only sales that occurred and were reported in the past seven days. The assumption is that the percentage of unreported sales is fairly steady (I have tracked this number on a monthly basis for a few years and it is quite consistent).
Ratio: The sales to new listings ratio is simply the number of sales divided by the number of new listings, and is an indicator of whether we are in a buyer’s market or a seller’s market. There is no standard ratio for any market, but some analysts agree a ratio less than 40% is a buyer’s market, 40%-60% is a balanced market and over 60% is a seller’s market.
Price changes: The number of price changes we report are generally price reductions, but there is the odd price increase; our database does not distinguish between the two so we report “price changes” with the understanding that 99% of these are reductions.
Expired/Off Market listings: I add up the number of listings that were previously active and were either cancelled, withdrawn, expired or terminated in the past 7 days. This is not an exact science and is just an indicator of the approximate number of people who’ve decided not to sell for one reason or another. I do not include pending sales, as they will either show up as sold in the near future or will come back on the market – either way the seller has not taken their home off the market. A listing that was previously withdrawn, terminated or cancelled that becomes expired is also not included as I do not want to count the same listing coming off the market twice.
Net Loss/Gain: I take the number of new listings, subtract the number of sales and the number of listings that came off the market. It is intended to show if the inventory is shrinking or growing. Again, this is not an exact science as it does not including pending sales. There tends to be a large number of expired listings in the last week of each month, and a large number of new listings in the first week of each month.
Active listings: I simply take a snapshot of the number of single family homes and condos currently showing as active in the database.
Running averages: I show the average sale prices of single family homes and condos for the past four weeks. This is intended to show the overall trend of the market (whether prices are generally rising or falling) and shows large fluctuations on a weekly basis.
In addition to the weekly snapshot I will frequently add information reported by the REALTORS® Association of Edmonton. This is intended to give an idea of where the greater Edmonton real estate market will be when the reports come out at the end of the month. The Association includes stats from all members in their reports, and therefore they includes the surrounding areas such as Sherwood Park, St. Albert, Spruce Grove, Stony Plain, Leduc, Beaumont and more. These are the numbers that are generally reported in the media, so I like to give our readers a preview of what is to come.
Monthly Stats – Preliminary report
Published on the first day of each month, the preliminary monthly report is a snapshot of the Edmonton real estate market only (this does not include stats from surrounding areas like Sherwood Park or St. Albert). The report only includes information on sales that took place in the previous month that have been reported by REALTORS® by the time I publish the results. Since REALTORS® have two days to report sales, some will not be included in the preliminary report; I do not go back to previous months and update the stats to include sales reported after my updates. The purpose of the preliminary report is to uncover trends in the marketplace, and to compare current trends to previous months and years. I include charts in the monthly report to visually represent these comparisons. Just because the overall average has increased or decreased does not mean the value of individual homes has followed suit.
Monthly Stats – Final report
Our final monthly report is based on the numbers reported by the REALTORS® Association of Edmonton for the Greater Edmonton Area. These numbers are often reported in the media, so we take a more in depth look at what is going on and include charts and analysis of the market place. As with the preliminary report our goal is to understand any trends happening in the market, and compare the current trends to previous months and years.
The Association used to report their stats based on a “snapshot” of the market, as we do in our weekly and monthly reports, however, in 2010 they started adjusting past reported numbers each month. This is because REALTORS® have a number of days to report a sale, so when the numbers are released by the board, many of the sales are not yet reported and therefore not counted in the monthly report. So, now when the next month’s numbers are tallied, they re-tally the previous months and adjust them to reflect the correct numbers. This does not take into account that the same thing is going to happen in the current month, and therefore the sales for the current month are always lower when they are first reported than they will be the following month, and this makes it impossible to compare this month to previous ones.
I continuously track the difference between the number of sales reported in the current month and those reported when they re-tally the sales in subsequent months. I have determined that on average only 94% of the current month’s sales are reported by the REALTORS® Association of Edmonton in their monthly report. In order to compare apples to apples, I adjust the current month’s total sales up by 6%. My adjusted numbers tend to be off by about 10 sales, while the current number reported by the Association tends to be short by about 100 sales.
To summarize: I adjust the total number of sales for the current month up by 6%, so i can fairly compare the current month to previous months that have been adjusted by the Association. I only adjust the total number of sales, nothing to do with prices or any other stats. I re-tally the numbers for previous month’s in each report just as the Association does.