In Kelowna and Vernon, this year’s real estate sales may be less rosy than we have been led to believe, according to the Okanagan Mainline Real Estate Board’s (OMREB) published statistics.

The OMREB statistics can be found on their website:
http://www.omreb.com/page.php?sectionID=2

In my review of the OMREB statistics, I came across several numbers that quite literally do not add up. These incorrect numbers were also repeated in their media releases.

I noticed that the YTD dollar sales figures in many categories do not match the sum of the monthly figures. In almost every case, I found a rather large discrepancy (as much as 11.23% in the case of Central Okanagan Townhouse sales). The YTD sales numbers give the impression that the sales this year (in dollars) are much better than the monthly sales numbers indicate. I noticed that almost every month this year had this problem, but that it did not occur in the 2009 statistics.

I’m sure that this discrepancy is just an error and that they’ll correct it immediately, so as to give an accurate picture of the market to those considering buying or selling a property. Because we’re nearing the end of the year, I would not be surprised if the incorrect November YTD sales figures are not exceeded by the real December YTD dollar sales figures.

I’m not sure how OMREB will be able to correct the numbers, short of re-calculating the YTD numbers for the entire year. As an alternative they could show December dollar sales as zero (or negative), to allow the numbers to match, but that might make the December month-over-month and year-over-year numbers look really bad, in addition to making the slump in sales compared to 2009 more obvious.

Providing the correct YTD dollars sales numbers is especially important in this declining market, because this year’s incorrect (inflated) YTD figures will make next years comparative sales look worse than they should.

The numbers that I am using can be found within the OMREB statistics. For example, on page 8 of the November 2010 Central Okanagan statistics report, the Residential Total Current YTD sales are shown as $1,315,905,989, yet the sum of all the monthly totals from their 2010 reports add up to $1,244,919,850.00, which is a difference of $70,986,139.00, or 5.70%.

In the Central Okanagan, the discrepancies are:
Grand Total Current YTD Sales
– Published number is 5.48% above the calculated number
Residential Total Current YTD Sales
– Published number is 5.70% above the calculated number
Residential Current YTD Sales
– Published number is 5.61% above the calculated number
Apartment Current YTD Sales
– Published number is 4.01% above the calculated number
Townhouse Current YTD Sales
– Published number is 11.23% above the calculated number

In the North Okanagan the discrepancies are:
Residential Total Current YTD Sales
– Published number is 7.82% above the calculated number
Residential Current YTD Sales
– Published number is 8.33% above the calculated number
Apartment Current YTD Sales
– Published number is 5.50% above the calculated number
Townhouse Current YTD Sales
– Published number is 5.94% above the calculated number

I considered that there may be some collapsed sales, waterfront property, late reported sales, changes in sale price, etc, which may have influenced the monthly numbers, so I compared the 2010 figures with the 2009 figures, using the same methodology, and found that there is not the same consistent level of error that I find within the 2010 YTD numbers. In fact, I did not find any error in the 2009 YTD numbers, other than a few small math errors, which did not affect the YTD numbers vs. the sum of the monthly numbers.

In many cases, I noticed a consistent upward bias to the published YTD numbers throughout the year. For example, in the North Okanagan, published Residential Sales numbers YTD compared to the sum of the monthly numbers are:

Perhaps the published monthly numbers are lower than they should be. (I cannot see why they would be in a declining market; I suspect that the OMREB would want the numbers to be as rosy as possible). Another possibility is that there has been a change in the YTD calculations since 2009. Yet another possibility is that there is some recent systematic bias that makes the YTD numbers appear larger than they should be.

I’m curious as to how the OMREB intends to resolve this. At the moment I’m not sure which of their published numbers I should trust.