The primary source of information about the real estate market comes from realtors. Based on that, people make the biggest financial decisions of their lives. This, of course, is terrifying.
Ex-realtor and now-indie housing consultant Ross Kay is a vociferous critic of the stats the industry spits out. “Canada is in a full contraction on sales with the volatility of pending price changes now being calculated,” he says, “The reason why the public needs to pay to obtain impartial and unbiased financial advice and not leave it to commissioned sales people was driven home this week better than I could ever imagine by the absurdity of the latest TREB press release.
GTA realtors scored big headlines claiming sales and prices spurted in January, mysteriously reversing a price wilt that saw detached homes slump 4% year/year in December. Kay says that data was likely inflated more than Kim Kardashian’s booty.
So, what are the actual facts? Can we trust what real estate boards tell us when ethical, progressive agents who try to reveal the true state of the market are squished like bugs by the industry?
Well, let’s compare two houses currently on the market, one in Toronto and one in a tourist town outside Halifax.
If you were shopping for a residence within walking distance of the harbour, restaurants and stores in Mahone Bay, you might come across this place, currently listed for $259,000.
But is that a fair price? How long as the place been on the market? Are the sellers highly motivated, or just fishing? Have there been price reductions in the recent past? Info like this could help you frame a winning offer, understand the dynamics of the listing better and know whether you needed to make an all-in or bully offer (if it had been listed for mere days) or vultch (if it had been languishing). And it would be great to know the valuations and recent selling prices of adjacent properties, the way you can view them on US sites like Zillow.
Well, in Nova Scotia, you can. The provincial real estate board makes its data available to private companies, and lets them publish it. So a couple of companies do, including Viewpoint and Tradewinds. Here’s some of the sales history of that Mahone Bay house – showing it’s been for sale forever and the ask is already down 12%, leading a buyer to conclude this may be ripe for an aggressive offer.
How does this compare with buying a house in Vancouver, or the GTA? Badly. In Toronto the local real estate gods are currently threatening to cut off any realtors who try to publish this kind of data on their sites and offer consumers a worthy glimpse into the circumstances surrounding a listing. Like this property, on a 25-foot lot currently listed for $1,719,000, in the wrong part (north) of desirable Leaside.
Google your little fingers off, and the only published information is that it’s been on the market for 40 days – which is a surprise – and the price has been reduced by almost $30,000 (an old listing on a marginal site has not been updated to match the data on Realtor.ca). Of course, all of the realtor’s marketing bumpf is intact:
Stunning Custom Build Home On A Quiet Upper Leaside.Just Steps From Eglinton Ave,Close To Mt Pleasant And Bayview, Shopping, Transit, Schools, Restaurants And More. This Absolutely Magnificent 4 Bdrm Custom Built Home W/Outstanding Quality & Workmanship. 10 Ceiling.Hardwood Flrs.Open Concept,Huge Fam Rm W/Fireplace W/Built In Bookcase,Built In Speakers, Luxury Kitchen, One Of A Kind! Walk Score 84. Tarion Warranty . 3000 Sq.Ft. Living Space.
Well, if you hired a realtor in Toronto, met the dude in person and asked for the sales history of this house, he’d give it to you. That would be legal. But if you read the sales history on a web site like Viewpoint (which does not exist in Ontario or BC), it would be illegal. The Toronto board has just finished threatening to cut off any agent who tries to provide this information to families researching the market, saying web visitors must register first, the sellers must permit data to be published (fat chance) and any sold listing must be taken down immediately.
This kind of draconian thuggery has put the board in the crosshairs of the federal competition cops, and resulted in a lengthy and expensive court battle, the outcome of which was inconclusive. That spat revives in May. Meanwhile, as this pathetic blog has pointed out, realtor organizations routinely revise past sales and price statistics to make current ones look more positive. They have included double and triple listings for the same property in sales data. And they’ve created a Frankenumber pricing matrix which obfuscates current trends, rendering it impossible for consumers to see if the market’s lurching or cavorting.
Logically, because of the stuttering economy, oil crush and swelling debt, the housing market everywhere should be soggy.
Maybe it is. But how would you know?
Update: On Sunday Toronto Homes Sold, apparently intimidated by the Toronto Real Estate Board, suspended its daily service of providing the selling prices of current listings.