More CREA spin and new numbers

So what does CREA now say:

"Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets," says Calvin Lindberg, the President of The Canadian Real Estate Association.

Hmmm, I guess sinking is the NEW stabilizing...

It gets better according to CREA per a recent Toronto Star article

"With the sales activity now beginning to slow from its breakneck pace last year, it's taking homes much longer to sell and since people are under no distress to sell, they'll take it off the market and put it on the market on a better day," Klump said in an interview.

"With fewer sales and fewer listings, it's a built-in stabilizer as far as the extent to which you can expect to see prices to decline."

1) So now they are pointing to the slight decrease in new listings in recent months as a sign that the market is stabilizing. This could be transient as sellers do what Klump describes above (take it off the market for a better day). What happens when they realize that the better day is not coming? New listings are going to pick up as the economy tanks and all those foreclosures kick in. And even if new listings don't pick up, I would expect sales to dry up as buyers become more selective and more patient and financing becomes much, much tougher.

2) A better day: When would that be? Houses have doubled or tripled already. It is possible that on an inflation adjusted basis, that houses may never get this high again?

What should they really say if they were forced to adopt a Jim Carrey Liar, Liar tone: "If you have a house to sell, sell it soon before prices plummet! If you want to buy, just wait as there will be bargains in the coming years, assuming that you can get financing. The end of 2008 and 2009 will be a disaster for home prices!".

CREA also trots out a new data series that shows that the weighted average price was -0.6% if you use existing private housing stock to weight the data. This is because activity in the hottest markets (Calgary, Edmonton and Vancouver) are bringing the reported number down to -6.2%. This new number has the same trend (down) and while it may lag for now, I'm sure it will catch up eventually as all markets are going to be going a lot lower. I would guess that Toronto, Montreal and Ottawa have a higher weighting in the new number and since they have held up relatively well vs the Western big cities, this leads to a lower number.

Expect CREA to emphasize the new numbers as it tries its spin. Hey CREA, what happened to the average price will be up 5% in 2009 that you put out a few months ago. Notice that they have not updated their number? Maybe they will try to use their new number to say that they met their forecast. I asked back then if they were just making this stuff up. They just made up a new way of reporting their number.