The media coverage of price trends in Toronto’s residential housing market has been confusing. Most people look at recent reports and conclude that past trends have stopped or, at least, paused. Some people point to examples where old patterns of behaviour (i.e. paying more than list price or selling in a couple of days) reappear and reach a different conclusion. These conflicting stories illustrate how difficult it can be to analyse market conditions when there is no simple trend.
Turning points are challenging because a different logic of analysis is needed. I teach classes on the simple analytics of trends. Since there is general agreement on the direction, that analysis focuses on measurement and estimating precisely.
At a turning point, the general agreement falls apart. Illiquidity in real estate markets means Continue reading