When Kevin was cruising condo porn on Zoocasa yesterday, he came across something which looked oddly familiar. A two-bed, three-bath, one-parking job in the hipster Element building in DT Toronto. The site indicated the $489,000 listing had been added 29 days earlier, but Kevin knew otherwise.
In fact, he’d viewed the same condo for sale on the same site back in June, when it has been posted ‘about one month ago.’ But then it had a different MLS number and a different price – $500,000.
“I’m sure you already have a ton of these examples but just wanted to highlight some screen shots where properties are listed (and then re-listed again) – to avoid them becoming stale,” he tells me. “As a potential buyer, I think this is pretty critical information as it shows that the current owner is probably under some stress given his days on market is already well north of 90 (at least). At any rate, I’m just annoyed at how MLS/zoocasa never provides full disclosure on any of the properties – as when the property eventually sells… it will have a DOM of something much, much lower.”
Welcome to the murky, scary world of real estate stats, where realtors and their cartels work hard at misinforming and deceiving consumers. As you may have noticed this week, housing data-pooping is big news. The MSM has finally discovered that organized real estate routinely massages numbers to create the impression of eternally rising markets. Tools include allowing double of tripling listings of the same house on multiple boards, counting private sales in with ones realtors handle, quietly revising year-old stats so the new ones look better and deliberately masking price trends with the ingenious HPI Frankenumber.
But perhaps there’s no deceit more irritating to people like Kevin than taking tired old dog listings and pretending they’re pups. In places like Toronto and (to a lesser degree) Vancouver, it’s common practice. Some realtors rebrand their listings every thirty days, just so they’ll show up in a ‘recent’ search on the MLS site. Others create a fresh listing with every price reduction, getting a shiny new MLS number and bringing it out as a recycled virgin.
Why does this matter?
First, buyers are prevented from knowing the number of days a property’s been sitting around. This is worthy information if you’re searching for motivated sellers, or like the look of a place but don’t know about the toxic, killer mold that was recently covered with swimming pool paint in the furnace room. Listings with long DOMs always have a story behind him – priced too high, or flaws that repelled other potential buyers. But when every listing is New! it’s a blatant attempt to withhold relevant information.
Second, the stats that local real estate cartels collect never take into consideration previous listings. Take suite 303 in the building below (Merton Street, in mid-town Toronto), for example:
The two-bedroom, 1,200-foot condo was originally listed for $649,000, where it languished for four long months. Then the agents, Sue Lee and Ron Chicora, relisted it at a more reasonable price – $575,000 – and the market responded. It sold two weeks later for $572,000.
How was the sale reported? Not as fetching only 88% of the asking price after 141 tortuous days on the market, but as a hot commodity that went for 99.5% of the asking price in a scant 17 days.
Now, imagine if all the relistings, moldy oldies and fleabag properties which eventually found buyers were reported accurately. Suddenly we’d have a far more accurate snapshot of the direction and velocity of the market, with trendings that could help sellers find the right asking price and guide buyers frame their offers. We might also finally get meaningful data reports from real estate boards, instead of the fictionalized junk many now publish.
This week that elfin deity we know as F had a session on the housing market with a slew of economists. One conclusion that leaked out: nobody actually knows what’s going on with real estate. Not the eggheads. Not the Fster. And certainly not the consumer. There’s simply no good, credible, dependable, non-biased data available, because all current stats must first be laundered by the industry itself.
This also opens up the issue of foreign ownership and the influence on prices of all those horny Mainland Chinese with their suitcases of money from Guangdong. Are they really forcing good little beavers out of their ponds, or is this a yellow peril thing used by realtors to scare us into buying? If the cartels can spend unlimited amounts of money creating elaborate, obfuscating indices, surely they can tabulate simple citizenship. Or the number of speculators. Or cough up accurate data on sales trends.
Days ago Goldman Sachs in New York looked north in dismay. Canada, it said, is careening towards a sharp fall in housing prices.
I expect the last place you’ll ever hear about it, is here.
(Speaking of phantom listings… Alex in Sudbury sends this along. Same house, two listings, two prices.)