Everyone in the GTA relies so heavily on the stats reported by TREB. So those stats should be perfectly accurate, right?
Ah, summer. A time to enjoy the short blast of warm weather we get in Toronto, while desperately trying not to complain about the humidity and sudden downpours of rain. Summer is also when the real estate market typically slows to a grind. Agents, buyers, and sellers are usually taking time away from the city or just relieved with the fact that every news outlet isn't talking about real estate all the time. It's also just a time for everyone to take a breath after what was effectively a 6-month sprint of real estate activity from January to June. But don't worry, give it a couple weeks and we'll be right back in the thick of it, when the Fall market kicks off right after Labour Day. I, for one, can't wait!
Summer is also a time for real estate nerds (like myself) to analyze stats from earlier in the year to see how the year is turning out. Year-over-year sales figures, average sale price increases (although you all know how much I hate looking at averages - see why in one of my previous blog posts here), average days on market, sales-to-listings ratios, etc are all examples of numbers everyone looks at to get a sense of how the market is performing.
And where do all these stats come from?
Well, in Toronto (and the GTA), they come from the Toronto Real Estate Board. And more specifically, from Stratus, which is the MLS database used by every agent in the GTA. This is the holy grail of sales information and it records every MLS transaction for as far back as you could imagine.
So you'd assume that this information would be quality controlled, checked, re-checked, and standardized to ensure integrity, right? Well, that's not always the case.
A very closely watched statistic folks like to report on is "Days on Market". This is a number that is constantly analyzed to determine how long properties are staying on the market and help show how active the current market is and where prices could be headed based on demand.
Days on Market: This should be simple enough - it's the number of days a property was actively on the market before it sold.
Here's the catch: When is a property considered to be sold? Is it the day an offer is accepted? What if the offer is conditional? Is it then the day the conditions are removed? Is it the day the deposit is delivered? You would think that with the tens of thousands of transactions that recorded in Stratus each year, there would be mandatory consistency required for the date that is recorded. I think you see where I'm going with this...
Consider this example:
- A house is listed on June 1st
- The seller receives on offer on June 10th, conditional on financing for 5 business days
- The offer goes back and forth until an agreement is reached and the conditional offer is accepted on June 12th
- The deposit is delivered on June 13th
- The financing condition is waived on June 17th
So, what is the actual "sold date" of this house? And how long has this house been on the market?
I'll tell you folks, I've seen everything.
The correct answer is June 12th. That's the date that should be entered in Stratus as the date the house was sold. (To get technical, it's the date shown on the Confirmation of Acceptance, which is when the buyer and seller come to agreement on all terms of the offer). The "Days on Market" field is auto-populated in Stratus and calculated from the sold date, so in this case it would be 11. This house was sold on June 12th and it was on the market for 11 days, regardless of when the deposit was received or when the conditions were removed.
What actually gets reported in Stratus? I've seen every incorrect variation:
- Sold date of June 10th (when the offer was received. 9 days on market)
- Sold date of June 13th (when the deposit was delivered. 12 days on market)
- Sold date of June 17th (when the deal goes firm. 16 days on market)
- Sold date of June 19th (because I guess this is when the agent or admin finally decided up update Stratus, which would make it 18 days on market).
- And so on...
In an industry that relies so heavily on numbers and stats and uses those numbers to convince the general public whether we're in a buyer's or seller's market (and why), this type of inconsistency in a simple yet vital statistic drives me crazy.
And let's not forget about properties that are re-listed. If this same house sat on the market for 30 days without selling, and was then re-listed on July 1st and subsequently sold the next day, Stratus (and TREB) would consider this property to be sold in 1 day. Not 31 days, but 1 day. Because the new listing would be considered, well, a new listing and that original listing would have been terminated and there's no actual linkage that occurs in Stratus for the database to report that this is actually the same house that was already on the market. This has been a constant complaint about TREB's reporting for a while so I won't dwell on this.
I spent over a decade in my previous career analyzing data for a living, so I take numbers seriously. The common theme I was always reminded of when I couldn't get numbers to reconcile was "garbage in, garbage out". If you feed a system with garbage data, your reporting will look like garbage.
I feel like this is a pretty easy fix - force agents/brokerages/admins to consistently report sold dates accurately as mandated by TREB. Maybe then we'll get a cleaner, more accurate database that everyone can feel confident about. Or maybe I'm just being a stickler for details - but that's just how I roll.
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Your Toronto condo lover,
iPro Realty Ltd, Brokerage
Direct: 647-223-1679 (call/text)