It’s pretty well known that real estate agents are somewhat prone to hyperbole.  We’ve written in the past about the secret codewords that agents use to try to convince buyers a home is appealing.

While people are pretty good at seeing past the flowery phrases dressing up the listing, it can be much harder to decipher the differences between two seemingly similar properties.  After all, numbers don’t lie, right?

So, numbers can lie.

Real estate is full of numbers and while the price is arguably the most important one, lots of the other numbers aren’t always what they seem.  Consider the following examples:

• Two 4-bedroom homes, where one has three good-sized bedrooms on the 2^nd floor and a spare bedroom (or den) on the ground floor. Suitable for a family with young kids, closets in all the rooms and able to fit beds, dressers and so forth.  The other property has one huge bedroom on the 2^nd floor, with massive walk in closets and a spa bathroom retreat and three smallish “bedrooms” in the basement, one of which has no windows.  Great for a couple with no kids who want hobby rooms in the basement.
• Two 785 sf condo units, each with two bedrooms and two washrooms. The first is a rectangular shaped split wing layout with two 10×12 bedrooms at either end of the condo, with ensuite washrooms off both, one of which opens to the hallway so guests can access it without going through a bedroom.  The other is a small L shape, with a full bathroom right beside the entrance door, a hallway leading down to a small bedroom with an angled wall, and a primary suite beside it with the washroom took into the other side of the angled wall.

Two properties can appear nearly identical on paper if you look at just the numbers, but there are often considerable differences between them when you look closer.

According to Webster’s Dictionary…

Numbers aren’t the only area where seemingly identical properties can differ significantly.  We have some standards that apply to how real estate agents can describe different attributes, but they aren’t always followed to the letter.  Some agents consider a kitchen “newly” renovated if it happened in the last five years, whereas others follow the more stringent approach of it literally just got renovated before we listed the home for sale.

While flat out misrepresentation is relatively rare, people can hold very different definitions of what certain descriptions mean.  Where do you fall on the below scales?

• Is a walk-in closet a large room with a dressing bench in the middle and custom shelving on all sides, or is a walk in closet any closet that has enough space for you to walk inside and cuddle your clothes?
• Is a family size kitchen a big room with tons of cabinetry, an extended island with spots for stools, as well as a separate eating area with a kitchen table? Or is it a narrow galley style that has a bistro table and two small chairs at the end beside the dishwasher?
• Are high-end appliances delivered from Europe and installed by a team of four who wear white booties when they enter your home, or are they a mismatched group of premium versions of different appliance brands that you see in most homes?
• Is the only hardwood that can be called hardwood flooring actual hardwood such as oak, hickory or maple, or is engineered hardwood with a thin layer of hardwood veneer also hardwood flooring?

We could go on and on, but when no specific details are provided on any claimed “feature” of a home, it is likely there are big differences between two listings who both claim they have it.

Where did I put my glasses?

Finally, there are homes that seem to have identical features as per the listing, but it turns out that not all things are created equal.  Which would you prefer?

• If you’re invited to enjoy your private backyard oasis with a pool and hot tub, do you envision an inground pool, with a hot tub section you can swim into from the pool? What if it is an aboveground pool with a hot tub in a different section of the backyard?
• Is it a media room if there are couches (that don’t come with the house) and a first generation low resolution digital projector (that is generously being included), or is a media room a custom built space with built-in furniture, sound baffling and a state of the art video and audio system?
• If both properties have a balcony, does it make a difference if one faces the Gardiner and is loud and dusty all year round, whereas the other faces the lake and views of the setting sun?

The above examples may seem pretty far fetched but trust us, they have all happened.  The quality, age and inclusions in a given attribute can make a huge difference in the value – or lack thereof – to potential buyers.

We’ve looked at a lot of properties for our clients and with our clients.  If we had to estimate the numbers, it would be somewhere between “too many” and a bazillion.  As a result, we’re very good at spotting differences that the numbers and images may not make clear to the general public.

This is surprisingly relevant on the sale side work we do, as a big part of setting your list price is comparing your home against other properties.  We often encounter situations where we see significant differences between our seller’s home and the recently sold and currently on the market competition.  This allows us to make sure we don’t leave money on the table, or mistakenly over price and not get the result our clients need.

If you’re looking to make a move and want to work with agents who know what to look for when comparing properties, get in touch with us!

There is a quote we often reference on the team, and it goes like this.

“There are three kinds of lies: Lies, Damned Lies, and Statistics”.

It has been attributed to Mark Twain, who himself attributed it to British Prime Minister Benjamin Disraeli, who might never have said it in the first place.

Regardless of the source, we periodically quote it, particularly around the start of the month, when the latest round of real estate statistics is published by our friends at TRREB, the Toronto Regional Real Estate Board.  We absolutely believe that the data that is published is accurate, so we’re not questioning that aspect.

The reason we reference that quote is more to do with the headlines that start appearing around this time.  TRREB provides tons of data each month in the form of a Market Watch Report, which is disseminated to media outlets, who then decide what data points make an interesting story.

These headlines often take the complicated market stats and come up with a simple statement that, when you dig into it, is either inaccurate or flat wrong.  Sometimes this is because the media wants a more interesting story to push, and other times it is because the stats themselves can be misunderstood or wrongly interpreted.

It’s early January, 2025, so we now have the stats for the December, 2024 market, which means we also have the full stats for last year.  Let’s go over the three biggest lies – uh, we mean, flawed interpretations of the data – and what it actually means.

It’s just a bit off, by that we mean, the exact opposite.

Let’s talk about prices for a bit.

The default standard for talking about real estate prices is the average price, which is simply the number of sales divided by the total dollar value of sales.  If you had 10 sales that equal ten million dollars, the average sale price is $1M.  If you had 10 sales that totals twenty million dollars, the average sale price is $2M, and so forth.

If you look at any headlines out there in January, 2025, they will be saying that the average price in the GTA went down 1.6% in the past year.  It was approximately $1,084,000 in December, 2023 and it was about $1,067,000 in December, 2024.  That means, on average, prices went down in the GTA by about $17,000.  Got it.

Now, the average is a good measure of the total scope of data. It’s the most commonly used measure but it can be misleading when data is skewed or has outliers. For example, if a few multi-millionaires are included in a set of household incomes, the average income will be higher than reality.

So, is our housing data skewed?  Well, if we look at what sales took place in different price bands in the data, it definitely isn’t equally distributed.  In both December of 2023 and December of 2024, about 54% of sales were under $1 million, about 39% were between $1 million and $2 million and about 7% were over $2 million.  That means, our real estate data is skewed to a moderate extent, and about 70% of the total sales take place in a price range between $600K to $1.5M.

In instances where data is skewed, the median, or the middle number of the data set, is a better measure to use.  Going back to our example of 10 sales that equal $10M, for a $1M average, what if we looked and found that nine of the sales were for $800K and one was for $2.8M.  That averages to $1M, but the data is skewed with a high outlier at the top end for that $2.8M sale.  The median, or medium number would be $800K, which is more representative of the actual typical price.

If the average sale price in the GTA has gone down 1.6% in the last year, losing about $17,500 in value, what about the median sale price?  It turns out, that is a very different story, in fact, pretty much the opposite.

The median sale price in December, 2024 was $930,000, which is about 13% lower than the average price.  If we look back in December, 2023, the median sale price was $908,750, which means that prices went up by about 2.3% in the last year.

This shows how it absolutely matters how statistics are interpreted and which measures are used.  In this case, prices have gone down on average by $17,500 in the past year, but our dataset is skewed, which means the median is a better measure to use, which shows prices have gone up by over $21,000 in the past year.  Damn statistics.

It just takes two weeks longer than we say it does.  What’s the big deal?

Our next example of how statistics can be misleading comes to us in the form of the days on market.  Don’t worry, we’re not going to talk about average or median in this case.

Instead, we’re going to point out one of our favourite gripes about our market data, which is that the length of time it takes for properties to sell uses what is called Listing Days on Market, or LDOM.  If a house goes up for sale on January 1^st and sells January 10^th, that means the listing was on the market for 10 days and it took 10 days to sell.  Pretty clear, right?  Take all of the properties that have sold in a month or year and you get the average days on market, or how long it takes real estate to get sold.

In the GTA, it took, on average, 25 days for a property to sell last year.  That’s the average for all housing types, all price points, across all parts of the GTA, but it does give us an idea of how quickly (or slowly) the market is moving.  We can compare the 25 days it took on average to sell in 2024 with the 19 days it took on average in 2023 and say pretty firmly that it was a slower year.

The problem with the Listing Days on Market has to do with the fact that the Toronto Regional Real Estate Board allows properties to be listed, terminated, and then relisted.  This can be done as many times as a seller and their agent want to, so it radically skews the accuracy of our days on market stats.

In our previous example of a home that took 10 days to sell based on the listing going up January 1^st and selling January 10^th, what if that wasn’t their first listing of the home?  What if it was listed October 15^th for a higher price and it didn’t sell?  What if it was relisted November 24^th for a lower price and still didn’t sell?  If that home sold January 10^th after two previous listings, the 10 days on market isn’t actually accurate.  In fact, if we look at the property days on market (or PDOM), it was actually on the market for 87 days.  This PDOM stat takes all of the recent listings and combines them to get a days on market that is reflective of how long it actually took the property to sell.

A large number of listings in the GTA have more than one listing attempt, which means that the listing days on market, which is the stat that is used in the media to describe how quick or slow a market is these days, is often wildly inaccurate.

To prove that, the average listing days on market in the GTA was 25 days in 2024, but the average property days on market was 38 days.  That’s 13 days longer, or almost two weeks longer.  Back in 2023, the average listing days on market in the GTA was 19 days and that went up to 28 days for the PDOM.  While it took longer in 2024 to sell than it did in 2023 by both metrics, if we compare the LDOM, it was 6 days slower, versus the PDOM, where it was 10 days slower.  When we’re talking days, an additional four days is a significant slow down, so the media stories about the slow real estate market last year are actually understating how much slower it was to transact in 2024.  Say it with us, damn statistics.

Tale of Two Townhouse Territories

The final example we’ll give about how statistics can be misleading has to do with the danger of taking an overall stat and applying it to any given subset of the data.

While we previously challenged the accuracy of the average sale price that is used in headlines, let’s look at how even if it was accurate in general, how egregiously wrong it can become when you apply it to specific housing types and market areas.

Here’s the chart from the Market Watch report with the sales and average price by major home type, including the year over year change.

You’ll note we’ve circled the Townhouse statistics, as it gives us a great example of how using the average statistics can be plain wrong when it comes to a specific subset of the data.

The average price (not the median) went down in the GTA by 1.6% in 2024 when you compare December 2024 to December 2023.  If you owned a townhouse, however, the average price dropped by just 0.3% in the past year.  Go deeper into the stats though, and you’ll see that in Toronto (the 416), the average price for a townhouse went down 18.2% in the past year, whereas the average price outside of Toronto (the 905) went up by 4.7%!

The moral of the story is that before you celebrate or shake your head in disgust at the average increase or decrease in real estate prices according to the latest headlines, think about whether that average is at all accurate when it comes to your home.  Odds are pretty good that it will be a very different story for your home compared to what is happening on average!

We love data, but we’re also very aware that statistics can be misleading.  Whenever we work with buyer or seller clients, we make sure to understand what is going on in the specific subset of the market they are transacting in – and we use that data to get our clients the best results.  If you like the sound of that, get in touch to discuss how we can help move you forward.