A couple of weeks ago
one of the local news-
Papers reported that
apartment prices in:
West Vancouver had
jumped dramatically
over the izst year.

: The paper stated that
“The typical West Van condo —
costs $326,390, . up a stag- -

- gering 25% from May of last
se year.” io. .
=.1s this really happening —

’ are prices up by this much?

Weil the simple answer is no,
* “of course they’re ‘not. Price
increases of that magnitude
ae i very unusual “and only
occur. when there is a boom-
‘economy and near panic
of: homies 1/ don’t -
ne would suggest
wis that, we'bave had those kind
of conditions over the past.
year. ; PO ey -
~ Sa'what is going on here?
The. article said ‘that the .fig-
.,“uares:.came: from the Real;
» Estate. Board of Greater
"Vancouver. How can they be
‘wrong? ”
FSR Js Glen Clark : somehow
.. behind these numbers?"
“Well no he isn’t, and it is
“more.a.question of misinter-
" pretation of data than wrong
numbers, ees

oe The basic problem fies in -

basing onclusions:only:on. »
y.

numbers rather than |

longer term trends or on -

The. 25% price’increase
came from: the Real’ Estaze

S

rn : :
eaeeseeeoceos

150

Board’s May MLS. Housing
Price Index. ~

-This is a measure that was
designed to estimate changes
in housing: prices in much

_the - same. way as the

“Price increases
of that magnitude
-only occur when
there is a
booming
economy and

near panic buying.

of homes.”

{Consumer Price Index mea-

sures price changes. . .

The board gets an “A” for
effort in attempting solve the
thorny. problem of measuring,

May-06 Nov-96

Friday, July 2, 1899 - North Shore News -.43

SHEHSBAS9SSHHHOKSHSSSSSHSHSTHOSFSHHSSHSHARSHSHKSSHSSHTSOTAISSHSFSSOCHSSSSOHSSHFSTGAOSCSGAHEKES

ics for accuracy

Average Selling Price
West Vancouver Apartments

May-87. Nov-97
changes in the price of hous-
ing, but it doesn’t deserve
much more than an “EF” for
the statistic itseJf, or ar least
for tne way that it is released
to the media.

The problemi. is that the
monthly price index figures,

- which are made available to

the public, can be highly mis- ’

leading because they tend to
jump around erratically from
month to month. :

For example, while the
May index ‘showed that West
Van apartment prices were
up 25% over May of last year,
the same index for April
showed that prices were up
only 5% and for March they
were down 10% from the
year before.

This type of inconsistency ©

typically arises when analysis
is based: solely ‘on monthly
figures, whether it be for
sales, average prices or th
MLS price index.

~ ADDRESS: 4648 South Piccacilly

ewccrocesavece

Seaeveecvesessccenoesseues

LOT SiZé: 57 Acres

COM Rens em eres DOOR TOS E CEES ERE OSH EE OTEEEOS

INTERIGR SIZE: 5300 SQ. FT.

wreerecues

NURIGER OF SEDROOMS: 4/5

COP e meee e eee rece seer esnsecoereeeeTEDDerere

NUMBER OF FLOORS: 3

eres verrerriririirerririrrririririr iy

ASKING PRICE: $2,900,000

May-98 Nov-98 May-99°

Real estate. figures jump
around a lot from month to
month, particularly in “thin”
markets like West Vancouver
apartments where only about
15 units scll in a. typical
month, .

For an illustration of this,
have a- look at the above

graph of average™ selling -

prices for resale West
Vancouver. apartments frém
May 1996 to May 1999.

You can sce how erratic
this series is and you can also

see that the measurement of .

year over year change would
fluctuate. wildly,” depending
on which months were used.

For example, if we mea-
sured year over year. change
in average selling price based

on May 1999 over May 1998 .

we would get-an increase. of
well over 20%. - ‘
On the other hand if we

measured it on the basis of

April 1999 over April 1998,

LANCE ...

Weconceconocescer

~ OPEN HOUSE: By appointment .

. LISTING AGENT: Allan Mark Angell,

921-1188

CCe mer erranereseccceueceseseresusenconeesle

SPECIAL FEATURES: Pool and steps to

we would actually get a
decrease.

So what can we do about
estimating changes in hous-
ing prices? Do we just throw
up our haads or is there
some way we can get an idea
of what is going on?

Well there is some intelli-
gence we can use from the
Real Estate Board’s MLS
Price Index if we can just
smooth out some of the
month to month variation,
Earlie~ this year { reported
on a study I did which
showed that using a three
month average of the index
resulted in quite accurate

~ estimates of price changes in

North Shore housing.

The table below shows .

estimates of price changes in
five different categories of
North Shore housing based
on taking averages of. the
MLS Price Index for March,
Apa and May for 1998 and

These are not official fig- .
- ures nor are they perfect ¢sti-

mates. of price changes but

they. are - probably’ the | best:

you are. going to get...

It is. worth’ noting. that :.:
these price changes fit in well -
_with what we know -about
conditions in: these. markets. .

The market for North
Vancouver detached homes
was in a siump last year but
has pulled out of it very
strongly this year.

In view of this, and the
fact that the number of
homes for sale has not been
particularly high, it is not
surprising that this market
gained back the price
decreases of 1998. (Contact
me if you would like to see
graphs of any of these. mar-
kets.) 7
West Van apartments is
the only one of these markets
that did not have-a major
slump in sales in 1998 and
supply is currently. tight.. So
an increase in prices ever the
Jast. year .is quite plausible |
and 1 think we can expect to
see even more of an increase
over the next year. cn

The. other. three.-markets

-eries from.

that they. suffered in 1998, -
however they.all have.a lot of.

Trent: Appelbe..is: a
economist and. areal: estate

“ggent: with’ Sutton Group. -

West. Coast. Realy. He can be

Listing

th Picea

huge’

quarters,

he century -and

appropriately named. ‘Stone: Haven’
gracious old.tudor manor :
waterfront with a park on front. Re:
sandy beach with views.-to Pc
‘Imagine. 5300. sq.ft
decks,
cobblestone
nanny S
house,. totally ‘remodeled
and. a. superbly - private
swimming pool. .

., Spaciou
- outdoor.“ g
fireplace,
“guest