If I wasn’t such a rube, I’d swear there was a conspiracy. Break out the tin foil. What a coincidence.
The realtors announce numbers only they can verify saying house sales in April slipped a meagre 3%. CREA’s chief economist, Gregory Klump, quickly pronounces the market, “remarkably steady.”
Almost immediately F makes an announcement, from France, no less, where TLP is giving away tax money. “I’m pleased in particular that the condo market in big cities has fallen back,” he says. “I’m also pleased with some other moderation in new house construction and in demand for mortgages. I think these are healthy developments because I think we were beginning to see some indications of the beginning of a bubble.” (This would be the bubble he previously said did not exist.) And then, a few days after he secretly decided to ban 30-year mortgages, he adds: “I’m not going to intervene in the mortgage market, I don’t need to.”
If he could suck and blow any more effectively, he’d be a dirigible.
Meanwhile on Bay Street the monster bank economists are in spin mode. BMO egg Doug Porter cheers for a real estate soft landing, saying the market is “calm, cool and collected.” And: “While some are highlighting the fact that prices are now rising at their slowest pace since the 2009 recession, the plain facts are that they are still rising faster than inflation, and prices are at all-time highs, suggesting concerns of a meltdown were unfounded.”
Not to be outdone, CIBC’s Benny Tal grabs reporters to suggest certain bearded, hysterical bloggers have poop for brains when it comes to demographics. Nobody needs to worry about the wrinklies dumping houses, he says. “It turns out that those fears are highly exaggerated and very premature. In fact, demographic forces will be as supportive to real estate markets in the coming decade as they were in the past decade.”
Benny figures all those people in the 25-34 age group will be flocking to buy houses in the next few years, once they find their way out of their parents’ basements and get a career. “Demand for housing in the coming decade should be more than four times stronger than it was during the dreary market of the 1990s.”
Remember the Nineties? Of course, that’s when a house in Toronto cost $203,000. Now it’s $526,335. Sure, Benny. Have another toke.
And as all this happens, the economy slows, commodity prices erode and we can peer West to get a nice sampling of what a Canadian-style housing correction looks like. As our wet coast correspondent points out, in the last 60 days sales of SFHs in all of Vancouver and the Lower Mainland are running 35% below year-ago levels, 47% under 2011 and a third less than the meltdown annus of 2009. And yet the official real estate board Frankenumber shows sales off a non-threatening 6%.
Time for those tin foil hats?
Ross Kay says, yup, you bet. The career GTA realtor has chosen this pathetic blog to come out of the closet. As all of the aforementioned cheerleading and group-stroking was going on, he was sending me this:
Just a short note in support of your continued frustration on the use/misuse of MLS data and the media’s willingness to drink the Kool-Aid. I can assure you 1000’s if not 10,000’s of real estate professionals across Canada have shared your frustration for a very very long time. I think many have reached a point of action.
Currently all Organized Real Estate (ORE) from national groups like CREA to the local RE/MAX brokerage, are all governed by rules and regulations that make it virtually impossible for them to interpret MLS data in any manner that could negatively fuel declining real estate prices.
CREA, Regional MLS systems, Franchise Brands and any brokerage who lists homes for sale in any corner of Canada, all have a fiduciary duty to represent their Sellers. Sellers and Sellers alone enter into marketing services contracts with ORE to promote their properties. These contracts all state that the goal is to garner the highest price possible or at least that the listing price is the price set out to be obtained. These contracts all are written and signed on contracts printed on and have Headings owned by the various MLS systems across Canada thus tying all ORE to sellers.
As read on the pages of Greater Fool, over and over again, ORE chooses to cherry pick data, that best endorses stable home prices or higher home prices because they have a legal obligation to do so. While we all can respect this fiduciary duty, shouldn’t ORE, at least, make a disclaimer on who’s interest they are legally obligated to support, that being Sellers?
The time has come for an unbiased interpretation of all available house price trend data, including MLS. Canadians deserve it!
Smart realtors know there’s no such thing as a soft landing. Booms always bust. Bubbles pop. It may not be US-style swift or cataclysmic. After all, Vancouver’s not Phoenix and Toronto ain’t Miami. But the result’s the same – a lot of people losing tons of money.
I’m sure Ross has a hard time telling greedy vendors to price realistically, or persuading house-horny kids to stay renting for the next two years. The real estate cartel has but one goal. Higher prices and more commission. And it obviously spins the media.
Yes, the system is built to serve the sellers. And that’s why a soft landing will never happen.