The real estate industry is asking for your help. No, seriously. Put down your weapon and listen to me.
For a longer time than most mammals live, this pathetic blog has yammered on about how organized real estate has failed consumers. Frankenumbers to mask market trends, for example. Encouraging (or merely allowing) engineered bidding wars which consumers must enter blind. Fuzzy stats which local boards revise in secret. Preventing the publication of sales histories or even days-on-market for individual properties. Counting multiple listings of the same house. Forcing homeshoppers to sign a punitive buyer’s agreement. Deliberately mispricing properties to start a riot. And threatening to vivisect poor bloggers who say ‘realtor’ instead of REALTOR®.
In days such as these, when real estate has become the asset of choice for seven out of ten Canadians, with debt bloated as a result, and the economy now hooked on housing, we have a looming train wreck.
People buy million-dollar homes in less time than they can find a pair of jeans. They take on massive risk through historic leverage. They eschew other investments, retirement savings or kids’ education funds, because they can’t afford them. Houses suck off everything. And yet the facilitators – the realtors – are thinly regulated, sparsely trained and too-often ethically-challenged. It’s an eat-what-you-kill industry sadly in need of reform.
And – until this moment – they didn’t care.
On Tuesday the president of the BC Real Estate Association, Jake Moldowan, sent me a note. After I had the GreaterFool Bomb Disposal Unit open it, an unexpected surprise…
“I am part of the team leading a significant research project on behalf of BC organized real estate called the Journey of Discovery. As part of our research, we are reaching out to five experts who track significant changes in the real estate industry. We have selected you as one of the five, and would like to invite you to contribute to our Disruptive Change Report and we are willing to pay you for your time.”
Turns out the provincial body actually wants to clean up the industry, or at least hear from those who believe change is necessary. It even issued a fat discussion paper asking big questions like, what in the future will customers expect of realtors? How is the business of house-flogging going to change, because of the economy, or technology or a tidal wave of wrinklies?
Hell, it even started with a quote from the Globe and Mail which quoted this site:
In a recent Globe and Mail post, Rob Carrick cites Garth Turner, “…nobody actually knows what’s going on with real estate. Not the eggheads. Not the Fster (Federal Finance Minister Jim Flaherty). 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.”
Anyway, here’s the rub. Jake and his crew have asked me to do something quite specific. “We are looking for your opinions on the significant forces that have shaped the real estate industry over the past five years, and the significant forces that are likely to shape it over the next five years. We encourage you to think broadly about the types of disruptors: regulatory, new entrants, business model innovation, agent practice changes, consumer behaviour changes, market forces, etc. The ideal disruptor list will include those that have both scale of impact, and show a diversity of forces changing the industry.”
Disruptors? Like Brad Lamb or Bob Rennie? Or like unregulated marketing and insane commission rates? Pandora, meet box.
The task is to create two lists of the top 5 things that have created the kind of housing market that we have today, and what will change it in the years to come. What led to the nutso situation in which two Canadian cities have average SFH prices of over $1 million? With rapid technological change, will buyers and sellers even need realtors in the future? If so, what role should they play? Is the business under-policed by government? How can we stop the virgins from being crushed in bidding wars? What can realtors do to mitigate a crash?
“We need two “top 5 lists” from you – past, future,” they’re telling me. “So we can achieve consistency between the lists, please provide each example with one headline (sentence or fragment) and 2-3 explanatory sentences.”
Are we up to the challenge, blog dogs? What five things do you wish me to tell the realtors about how we got into this sorry state, and the changes that will be needed to get out?
Second, the real estate association says it’ll pay me a grand for the answers. I plan on asking for 5%.