Looking At The Latest Nanaimo Stats…
So I was perusing local websites a few moments ago and I came across a local blog post here and I thought I would offer some insights on average sale price statistics and how they relate to Nanaimo real estate. As I said to someone recently, I’ve pretty much written everything on this blog already that the non career professional real estate buyer/seller would ever need to know, but here goes anyway. A new way of presenting the same important info.
First off, I couldn’t agree with the poster’s comments at the end more. I so often see people drawing conclusions about the price of their home from information like this without taking time to understand the deeper working of it. I see the same sorts of conclusions being drawn from property assessments, what the neighbour’s house sold for (which of course isn’t as nice as their own) and a price based on how much they paid for the place plus how much the average sale price has gone up plus how much it cost them to do their renos.
There’s only one thing that counts when pricing your home and that’s what people are willing to pay for it. When Realtors give you an estimate on the value of your home, we give you this price based on what has sold recently that is most similar to your home combined with the experience and knowledge gained from spending pretty much every day thinking about the value of every property we see. And we see a lot.
If we’re really stuck for comparables, (rare) we might include average sale price changes as a factor. I for one, only do this if I really have no better option.
Why? Well, they only measure an average of what people are spending at a certain time. Take on year ago for example, a time when hardly anyone was buying any real estate. A lot of people were scared off by the nonsense the mainstream media was spewing, those who were buying were being more modest with their purchases than usual and we had a higher number of first time buyers than usual. Those first time buyers were smart. The only deals I was doing at the time was with people like that and I was excited for them because I believed that it was the best time to be a first time buyer in quite a few years due to the low interest rates and the slight slump in the market. All in all, the although these stats do mirror the changes in actual value of real estate, they are only a general guideline. Unfortunately, I can’t think of a better way to measure the overall changes of vlaue in a given real estate market. The Vancouver Real Estate Board is trying a new way of doing these things, but I’ve yet to be convinced of its value. Pun intended.
To sum it up, what I’m trying to say is that I think most people make too much of the average sale prices. For real estate investors and real estate professionals they’re something to keep a finger on the pulse of. For most homeowners, they can be a source of making conclusions that appear more informed than they really are. So, don’t get too detailed in your calculations.
By the way, what you should be paying at least as much attention to in my opinion is mortgage rates. Those can affect what you pay quite a bit more than market value.