If you ask a person how much their stuff is worth, they’ll almost always overestimate the value. The Canadian Census asks homeowners how much they believe their homes are worth. As you might have guessed, the self-estimates are a little higher than they were selling for at the time. This likely contributed to the meteoric climb many markets made. Interesting enough, these expectations have tapered from 2011.
Homeowners in Toronto reduced expectations for their home values, but still remained ambitious. The typical home across the Greater Toronto Area (GTA) sold for $635,600 at the time of Census 2016. The average GTA home owner estimated their home’s value at $734,924. Homeowners perceived their homes to be 15.63% higher than they were selling. That’s a slight decrease from the self-estimates that were 16.32% higher during the 2011 Census. Prices have since exceeded the expectation level, but have dropped for the past 4 months, and are inching to closer to expectations.
Source: CREA, Statistics Canada.
Vancouver homeowners tempered their expectations, which were surprisingly low for a market with such large climbs. The typical price of a home in the city during Census 2016 was $898,500. The average homeowner self assessed the value of their home to be worth $1,005,920. Homeowners overestimated the worth of their home by 11.96%, down from 13.5% during Census 2011. Interesting that the country’s most expensive market, had lower expectations than Toronto. Today, a little over a year later, the typical property is pricing around Census 2016 expectations.
Source: CREA, Statistics Canada.
Montreal homeowners were some of the most ambitious regarding self-assessed home values. The typical price of a home in the city, during Census 2016 was $310,400. The average homeowner self assessed the value of their home to be worth $366,974. Homeowners overestimated the worth of their home by 18.23%. That’s up from 12.45% during Census 2011. Over a year later, prices haven’t hit that self-assessed value.
Calgary owners are tapering expectations, but they’re still some of the highest in Canada. The typical home in Calgary sold for $432,600 at the time of Census 2016. The average Calgary homeowner estimated their own home at $527,216. Homeowners perceived their home 21.87% higher than the typical price they were selling. That’s a slight decrease from the self-estimates that were 24.32% higher during the 2011 Census. Over a year later, prices are pretty much flat.
Victoria homeowners had one of the biggest drops for expectations in the country. The typical price of a home in the city during Census 2016 was $507,900. The average homeowner self assessed the value of their home to be worth $566,156. Homeowners overestimated the worth of their home by 11.47%. That’s WAY down from 28.42% during Census 2011. Today a typical home in Victoria is $620,700, over 9% higher than owner self-assessment’s last year. I guess they low balled their ambitious estimates.
In a sellers market, the seller calls the shots. Buyers that feel the need to purchase at the time, will pay whatever the seller wants. As we can see during this snapshot in history, sellers had a very ambitious idea of what their homes were worth. While these expectations have tapered since 2011, they were still very high. There’s increasing evidence that buyers were not pricing on fundamentals. Now we have a little more insight into what they were paying – a homeowner’s estimated value.
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