Market Forecasting

  Without a doubt one the most frequently asked questions I get at “Open Houses,” social gatherings, in the grocery store and on the street etc. is: "how's the market?” This appears to be one of the most talked about subjects at dinner, cocktail parties and just in general no matter what the economic climate we may be in.

  As with almost anything, it’s easy to report on things in a “past” sense. As REALTORS®, we have at our disposal numerous reports on a monthly basis that indicate sales in units, dollars, by price range and much the same applies for listing activity as well. I have always paid close attention to market statistics because frankly I believe it’s a large part of what WE are paid for. Consumers can look at property all day long online without my help. They can even get a sense of what going on by just looking around their neighbourhood at the “For Sale” or “Sold” signs. Helping them better understand the market from behind the scenes is now a crucial component of what we need to do in order to demonstrate the value we as professional REALTORS® bring to every real estate transaction.
  Reporting on past market conditions is easy and I will cover year-to-date market activity in my next posting. What about the future? In this ever-changing globally driven world that appears to be an increasingly difficult subject for most to get a handle on. Companies typically did five year business plans. Five years in today’s world is an eternity so making five and even two or three year plans is almost worthless.  Look at stock market activity, few seem to be able to foresee the signifiant swings up and or down that regularly happen in this seemingly volatile environment.  The same applies for real estate. The old patterns of sales and listing activity for the most part have changed dramatically. Yes, new listings typically increase in the spring and taper of in the fall as do sales but in between those seasons it’s often a roller coaster ride of unprecedented proportions.
  As previously noted the Canadian Real Estate Association (CREA) has just “boosted” their forecast for national resale home activity in 2011. Last November, CREA predicted a sales decrease nationally of 4.9% with a total of 402,500 homes anticipated to sell in 2011. In the coming months we will see how accurate these numbers prove to be and if will further forecast revisions will be required. No doubt many of you are experiencing the same forecasting dilemma in your own businesses.  Budgeting for inventory, staffing and other requirements is often about as accurate as gazing into a crystal ball.  The ball is increasingly cloudy and one must make adjustments on-the-fly in order to capitalize on business opportunities when they arise. 
  In my next post I will re-cap market activity in our area for the first two months of the 2011. That’s the easy part, what lies ahead is anyone’s guess and I will comment on that as well.