Chart 1: Median Sold Price
Chart 2: Median For Sale vs. Median Sold
Chart 3: Sold Properties
Chart 4: Under Contract Properties
Chart 5: New Properties Listed
Chart 6: For Sale Properties
Chart 7: Expired Properties
Chart 8: Supply and Demand
Chart 9 : Average Days on Market
Chart 10: Months Supply of Inventory
How to Calculate and Interpret a Rate of Change Caution
Glossary
Chart 1: Median Sold Price
Objective: To know the median price of sold properties and its evolution over the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the median price of sold properties for each month. The median price of the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the median price of sold properties for each month. The median price of the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the median price of sold properties for each quarter. The median price of the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in $ and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the number of properties sold and the average number of days on the market for sold properties, for each month or quarter.
Use: Allows us to know whether property prices have decreased, remained stable or increased compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase of x% in the median price means that, in general, this property type in this geographic area is selling for x% more than one, two or three years earlier, depending on the chosen time frame. It is important to remember that this calculation is based only on sales that took place during the selected time frame, and therefore represents only a sample of properties. It would be incorrect to conclude that the increase in value applies to all properties of this type and in this area during this period.
Chart 2: Median For Sale vs. Median Sold
Objective: To measure the difference between the median price of for-sale properties and that of sold properties, as well as its evolution over a period of one year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the difference between the median price of for-sale properties and that of sold properties for each month. The difference between the median price of for-sale properties and that of sold properties in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months).
If the chosen time frame is two years, the chart shows, for the last 25 months, the difference between the median price of for-sale properties and that of sold properties for each month. The difference between the median price of for-sale properties and that of sold properties in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the difference between the median price of for-sale properties and that of sold properties for each of these quarters. The difference between the median price of for-sale properties and that of sold properties in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in $ and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”): right-hand side for sold properties and left-hand side for for-sale properties. A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the number of properties for sale and the number of properties sold in each month or quarter.
Use: Allows us to know whether the price of for-sale properties has increased faster, slower or at the same pace as that of sold properties over one, two or three years, depending on the chosen time frame.
Interpretation: If the price of for-sale properties increases faster than that of sold properties, this can mean two things. It can mean that properties that are on the market tend to be in a higher price range than those that were sold. Or, it can mean that sellers’ asking price is increasingly high compared to the actual sale price, meaning sellers may be setting their expectations too high.
Chart 3: Sold Properties
Objective: To know the evolution of the number of properties sold in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the number of properties sold each month. The number of sales in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the number of properties sold each month. The number of sales in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the number of properties sold each quarter. The number of sales in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in units and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down. At the top of this chart, you have three options for choosing the basis of calculation: all properties, only properties that were repossessed by a financial institution, or all properties except those that were repossessed by a financial institution.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the median price and the average number of days on the market for each month or quarter.
Use: Allows us to know whether the number of sales increased, decreased or remained stable compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase in sales can be interpreted as an increase in the demand for this property type in this geographic area. Conversely, a decrease in sales may be interpreted as a decrease in the demand for this property type in this geographic area.
Chart 4: Under Contract Properties
See Chart 3: Sold Properties
In our MLS® system, there is no distinction between a sale and an under contract property.
Chart 5: New Properties Listed
Objective: To know the evolution of the number of new listings in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the number of new listings each month. The number of new listings in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the number of new listings each month. The number of new listings in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the number of new listings each quarter. The number of new listings in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in units and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down. At the top of this chart, you have three options for choosing the basis of calculation: all properties, only properties that were repossessed by a financial institution, or all properties except those that were repossessed by a financial institution.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides an additional piece of information compared to the chart: the median price of newly listed properties for each month or quarter.
Use: Allows us to know whether the number of new listings increased, decreased or remained stable compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase in the number of new listings normally means that more people have decided to put their home up for sale. In the short term, this gives buyers more choice. However, in the medium term, a rapid increase in the number of new listings may unbalance the market. To properly assess market conditions, we must take into account all properties for sale, as well as the pace of sales. Refer to the Interpretation in the Number of Months of Inventory for more information.
Chart 6: For Sale Properties
Objective: To know the evolution of the number of active listings in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the number of active listings each month. The number of active listings in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the number of active listings each month. The number of active listings in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the number of active listings each quarter. The number of active listings in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters).
In all three cases, the change in units and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down. At the top of this chart, you have three options for choosing the basis of calculation: all properties, only properties that were repossessed by a financial institution, or all properties except those that were repossessed by a financial institution.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the median price of for sale properties and the average number of days in which these properties were for sale, for each month or quarter.
Use: Allows us to know whether the number of active listings increased, decreased or remained stable compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase in active listings can be interpreted as an increase in the supply of this property type in this geographic area. To properly assess market conditions, we must not only consider active listings, but also the pace of sales. Refer to the Interpretation in the Number of Months of Inventory for more information.
Chart 7: Expired Properties
Objective: To know the evolution of the number of expired listings in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the number of expired listings each month. The number of expired listings in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the number of expired listings each month. The number of expired listings in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the number of expired listings each quarter. The number of expired listings in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters).
In all three cases, the change in units and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down. At the top of this chart, you have three options for choosing the basis of calculation: all properties, only properties that were repossessed by a financial institution, or all properties except those that were repossessed by a financial institution.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the median price of expired listings and the average number of days in which they remained active, for each month or quarter.
Use: Allows us to know whether the number of expired listings increased, decreased or remained stable compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase in the number of expired listings means that more properties were not sold within the terms established in the brokerage contract. It may be due, for example, to a downturn in the market, to a supply of properties that corresponds less to what buyers are looking for, or to sellers’ price expectations that are too high.
Chart 8: Supply and Demand
Objective: To know the evolution of the number of active listings (supply) and sales (demand) in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the number of active listings (red bars) and sales (green bars). The number of active listings and the number of sales in the most recent month are compared to those of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows, for the last 25 months, the number of active listings (red bars) and sales (green bars). The number of active listings and the number of sales in the most recent month are compared to those of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows, for the last 13 quarters, the number of active listings (red bars) and sales (green bars). The number of active listings and the number of sales in the most recent quarter are compared to those of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in units and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides two additional pieces of information compared to the chart: the average number of days in which the listings are active and the average number of days on the market for sold properties, for each month or quarter.
Use: Allows us to know whether supply (number of active listings) increased faster than demand (number of sales) in the last year, two years or three years, depending on the chosen time frame.
Interpretation: If the supply grew faster than the demand (the gap between the two bars increases), this means that market conditions favoured buyers. In theory, this also means that there is less pressure on prices. Conversely, if demand increased faster than the supply (the gap between the two bars narrows), this means that market conditions favoured sellers. In theory, this also means that pressure on prices is stronger.
Chart 9: Average Days on Market
Objective: To know the evolution of the average number of days on market in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows, for the last 13 months, the average number of days on the market for each month. The average number of days on the market in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months).
If the chosen time frame is two years, the chart shows, for the last 25 months, the average number of days on the market for each months. The average number of days on the market in the most recent month is compared to that of the same month two years ago (hence the range of 25 months).
If the chosen time frame is three years, the chart shows, for the last 13 quarters, the average number of days on the market for each quarter. The average number of days on the market in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters).
In all three cases, the change in number of days and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides an additional piece of information compared to the chart: the number of sales for each month or quarter.
Use: Allows us to know whether the average number of days on the market increased, decreased or remained stable compared to the same period one year earlier, two years earlier or three years earlier, depending on the chosen time frame.
Interpretation: An increase in the average number of days on the market means that properties are sold, on average, less quickly (meaning they remained on the market longer before finding a buyer). This can be seen as a sign of a market slowdown.
Chart 10: Months Supply of Inventory
Objective: To know the evolution of the number of months of inventory in the past year, two years or three years, depending on the chosen time frame.
Description: If the chosen time frame is one year, the chart shows the number of months of inventory for the last 13 months. The number of months of inventory in the most recent month is compared to that of the same month in the previous year (hence the range of 13 months). If the chosen time frame is two years, the chart shows the number of months of inventory for the last 25 months. The number of months of inventory in the most recent month is compared to that of the same month two years ago (hence the range of 25 months). If the chosen time frame is three years, the chart shows the number of months of inventory in each quarter for the last 13 quarters. The number of months of inventory in the most recent quarter is compared to that of the same quarter three years ago (hence the range of 13 quarters). In all three cases, the change in number of months and the rate of change in % are displayed below the chart (if needed, see “How to Calculate and Interpret a Rate of Change”). A positive rate of change (an increase) is indicated with a green arrow pointing up, and a negative rate of change (a decrease) is indicated with a red arrow pointing down.
Data table: You can also view the data in table format by clicking on “Data” (in the upper right-hand corner of the chart). The table provides three additional pieces of information compared to the chart: the number of active listings, the number of sales and the average number of days on the market for properties sold in each month or quarter.
Use: Allows us to know whether market conditions have tightened or relaxed since one year, two years or three years, depending on the chosen time frame.
Interpretation: The number of months of inventory provides information about market conditions. If the number of months of inventory is low, the market is more favourable for sellers and, theoretically, there is more pressure on prices. Conversely, if the number of months of inventory is high, the market is more favourable for buyers and, theoretically, there is less pressure on prices (prices may even decrease).
How to Calculate and Interpret a Rate of Change
Change
Calculation: In general, the change in data between two periods of time is calculated as follows:
The final value is the selected time period and the initial value is the period we are comparing it to. In MarketMetrics, changes are always calculated based on the value of the most recent period, which is compared to the value of the same period one, two or three years earlier. Calculations must be performed this way because of the seasonality that affects most housing market indicators.
Example: The change in sales between two months is calculated as follows:
If the number of sales went from 196 in March 2010 to 174 in March 2011, the change for March 2011 is:
Interpretation: This means that sales increased (+) or decreased (-) by X units in the selected period of time. In our example, the number of sales decreased by 22 between March 2011 and March 2010. Or, we can simply say that there were 22 fewer sales in March 2011 than March 2010.
Percentage Change
Calculation: In general, the percentage change in data between two periods of time is calculated as follows:
The final value is the selected time period and the initial value is the period we are comparing it to. In MarketMetrics, percentage changes are always calculated based on the value of the most recent period, which is compared to the value of the same period one, two or three years earlier. Calculations must be performed this way because of the seasonality that affects most housing market indicators.
Example: The percentage change in median price over one year is calculated as follows:
If the median price went from $215,000 in March 2010 to $225,000 in March 2011, the percentage change for March 2011 is:
Interpretation: This means that the median price increased (+) or decreased (-) by X per cent in the selected period of time. In our example, the median price increased by 4.65 per cent between March 2010 and March 2011. Or, we can simply say that the median price increased by 4.65 per cent in the past year or over the last year.
Caution:
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Price statistics are subject to seasonality and it is important not to compare consecutive months (or quarters), but only the most recent month (or quarter) with the same month (or quarter) of a previous year. For example, prices for March 2011 must be compared with prices for March 2010, and not those of February 2011.
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For all statistics, the lower the number of results there are, the less reliable the statistic becomes. In general, if there are fewer than 30 results, the reliability is too low to use the statistic. In this case, it may be wise to modify the search criteria to include a larger number of results.
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The median price is not particularly applicable to commercial or industrial properties or large apartment buildings. Often, the features of these buildings are too different to be grouped together and, furthermore, their market value is generally determined by the income they generate. It is therefore more appropriate to analyze each property individually. 18
Glossary
Number of Sales: Number of sales in the targeted time frame. The sale date is the date on which all of the conditions in the promise to purchase are met.
Days on Market: Number of days between the sale date and the date the brokerage contract is signed, for a given listing (for a single MLS® number).
Median Price: The median price is the price that divides all transactions into two equal parts: half of all transactions were at a lower price than the median price and the other half were at a higher price.
E.g.: 7 sales sorted in ascending order
Sale price 1 = $142,000
Sale price 2 = $156,000
Sale price 3 = $175,000
Sale price 4 = $193,000
Sale price 5 = $201,500
Sale price 6 = $239,000
Sale price 7 = $287,000
The median price is that of sale 4, or $193,000, because half of the transactions were at a higher price and half were at a lower price.
Seasonality: Some data sets show a seasonal pattern, meaning their value fluctuates according to the time of year. This is particularly true for sales, listings and prices of residential properties. For example, in general, there are more sales in the spring months than at the end of the summer. Similarly, prices generally tend to be lower in the spring, as there are more first-time buyers on the market, and they buy properties that have a lower value than more experienced buyers.
New Listings: New listings refer to the number of new brokerage contracts in the targeted time frame. A new listing necessarily means a new MLS® number. A new listing is normally associated with a property that has just become active, but it can also be a property that has an expired brokerage contract and a new brokerage contract becomes active.
Active listings: Total number of listings that currently have an “Active” status. For data in previous months, it refers to the total number of listings that had an “Active” status during the month, regardless of the number of days. For example, if a listing was active for only one day during the month, it is included in the “Active” listings for that month. 19
Expired Listings: Total number of listings whose status became “Expired” during the targeted time frame. Listings whose status become “Off-Market”, “Active” or “Sold” do not meet this condition.
Number of Months of Inventory: The number of months of inventory is a theoretical measure that seeks to express the number of months it would take to sell the entire inventory of properties for sale. It is calculated by dividing the number of active listings by the number of sales in a given period. It essentially represents the relationship between supply and demand.
Supply: The supply of residential properties is measured by the number of active listings, meaning the number of properties for sale.
Demand: The demand for residential properties is measured by the number of sales transactions. However, if the supply of properties for sale is very low, it is possible that part of the demand did not materialize, due to a lack of properties for sale. This is what is referred to as a “latent” demand. This refers to demand from potential buyers who are actively searching for a property but did not find one that meets their needs. This demand cannot be measured.