Who can you trust?

CAT CHOW

Through incompetence or by design, real estate boards are inflating sales numbers and giving Canadians false data. “If this were the stock market,” says veteran real estate pro Ross Kay, “these guys would be going to jail.”

How is this possible? Isn’t this the data upon which governments and central banks base policy decisions, which has a massive impact on public perceptions and market momentum? Is there actually evidence sales numbers are being pumped up, then used as proof of a housing boom despite higher mortgage rates, tighter lending and record debt?

Well, look at this (click to enlarge):

LISTINGS 1

Go to realtor.ca. Zoom in on Burlington, Ontario, for example. Go to ‘Gallery view.’ See for yourself. Above is a screen shot of listings that pop up – in duplicate or triplicate. The town house unit at 2301 Cavendish Drive is listed three times – with separate MLS numbers. The one with no letter before it is with a local board, while the ‘W’ is a listing on the Toronto board and the ‘H’ lists it with the Hamilton board.

Three listings, one house. And when it goes – one sale, but three transactions, pumping up the numbers of three real estate boards. In fact, days ago the Toronto Real Estate Board reported a juicy August, saying: “Greater Toronto Area REALTORS® reported 7,569 residential transactions through the TorontoMLS system in August 2013.  This represented a 21 per cent increase compared to 6,249 sales in August 2012.”

But should a town house changing hands in Burlington, 60 km and an hour’s drive away, really be counted as part of the “TorontoMLS” system?  “In the GTA the double-listing of properties is now epidemic,” says Kay, “and of all boards across the country, TREB is the biggest culprit.”

But there’s more deception. Let’s slide west to the hottest real estate market in the country – at least as reported by the local realtor cartel – in Calgary.

This baby’s smokin’, according to what the Calgary Real Estate Board is telling buyers who are increasingly desperate to find a home in a tight market. “Residential sales within city limits totaled 2,196 units, a 27.5 per cent increase over 2012 and 8.7 per cent on a year-to-date basis,” says CREB. “Housing demand has been supported by another year of strong migration levels, improving employment and wage growth,” says board economist Ann-Marie Lurie (she did not return my call today). “Same ol’, same ol’.  Price & sales continue to make significant year-over-year gains,” says realtor Mike Fotiou, on his Calgary real estate blog.

But did sales really surge 27.5% year/year last month?

“No way,” says Kay, who has just finished a board-by-board audit of published stats. “This is false reporting, because the very nature of what’s being counted has changed.”

At the heart of it is a federal Competition Bureau  ruling that private sales can appear co-mingled with broker sales in MLS numbers, since companies like ComFree now list on the realtor system, while PropertyGuys runs mirror listings through registered brokers. The result – a growing number of sales in Canada are classified as private transactions, but appear in real estate board numbers. That’s cool. A sale is a sale. But what’s misleading is that this year’s numbers (including private sales) are being compared with last year’s deals (that don’t).

Says Kay: “If CREB removes the 317 private sales in August not similarly counted last August, total sales are really up 14.24%, not 27.5%. And removing private sales from listing means there are only 6,447 active listing snow – a 28.17% decrease.

“Now add flooding into the  equation, plus the government buy-out of flood plain homes, plus a further bump in interest rates necessitating  quicker purchases by the pre-approved mortgage folks, and you have it… the perfect storm, a trap for homebuyers, during the months of July, August and September.”

Property guys

Above is an example.  The house at 231 9th Ave. NW is being sold privately by Lisa Evers for $1,850,000. The listing is here. But it’s also listed by Re/Max Real Estate (Central) on MLS, for $1,795,000. That listing is here. When it sells (good luck, Lisa!) it will be added into CREB’s list of MLS transactions completed, and contrasted with the same number last year, when private sales were not counted.

By the way, removing private sales, comparing apples-to-apples, Calgary sales for the year to date are 18,589, not the 21,733 reported. That’s a year/year decrease of 5.92% – a far cry from the 10.17% increase claimed by CREB. “The only reason prices have increased in Calgary,” says Kay, “as is true in every other city where they’ve climbed, is historically-low listing inventory, even as demand for homes falls.”

Well, judge for yourself. Multiple listings and multiple reportings of a single sale. Inclusion of transactions in distant communities as local deals. Year/year comparisons based on different data. Inflated numbers, and no disclosure. How can we believe what we’re being told?

“This time the real estate correction will be far worse than it was in the early 1990s,” says ex-realtor Kay. “When you look at the dynamics involved, how people think we are different from the rest of the world, I have no idea.”

161 comments ↓

#1 Derek R on 09.10.13 at 7:24 pm

I used to have a cat like that.

#2 pinstripe on 09.10.13 at 7:29 pm

“How can we believe what we’re being told?”

What’s new.

#3 Smartalox on 09.10.13 at 7:29 pm

Why the multiple listings? Is this just gaming the search engine on MLS.ca so that an agent searching for properties from the Toronto board sees the same house in their results as an agent searching properties from the Hamilton board?

I have to admit though that the comparison of FSBO + MLS sales in 2013, compared to MLS only in 2012 is dirty pool. For shame.

#4 CrowdedElevatorfartz on 09.10.13 at 7:32 pm

Time for the Feds to start regulating these shysters?

#5 Donald Trump on 09.10.13 at 7:33 pm

Honor of saying..well….. you know….

#6 chester on 09.10.13 at 7:35 pm

Never believe stats unless you count them yourself. Cheating is easy and very few check.

#7 Bob on 09.10.13 at 7:39 pm

THIRST – 1st & 3rd covered

#8 Condom King on 09.10.13 at 7:39 pm

Housing starts fall for third straight month in August: CMHC

http://www.ctvnews.ca/business/housing-starts-fall-for-third-straight-month-in-august-cmhc-1.1448360

#9 Observer on 09.10.13 at 7:41 pm

Thats right, as long as they can keep fabricating these numbers. They are upping the ante each time.

Until the day they can’t then not only do they have to face reality. But also the trust of the numbers coming out. because when the story breaks they will write an article on how the numbers has been fudge up all this time or realize they have

#10 dave b on 09.10.13 at 7:42 pm

Unreal and unfair and unethical.

#11 Rainclouds on 09.10.13 at 7:42 pm

Sharing a few beers yesterday after a round of golf at UBC yesterday.

The “financial advisor ” whom I didnt know prior to our round asked my friend (ret real estate guy) “what he thought the market was going to do”? Natch RE Guy waxed on about Vancouver being special, foreign investment, great weather……..all good steady as she goes……up, up, up.

I was gobsmacked……common sense ain’t that common

#12 Kevin on 09.10.13 at 7:43 pm

Furst!

#13 Chickenlittle on 09.10.13 at 7:45 pm

This picture is my new background….This is the best one yet!

#14 Ralph Cramdown on 09.10.13 at 7:45 pm

I hope against hope that when CREA compiles national stats, they use addresses and postal codes to eliminate duplicates.

Evidence, anyone?

#15 Toronto_CA on 09.10.13 at 7:45 pm

Great stuff tonight Garth. Why isn’t the media picking up this sort of story? Oh right, advertising revenue + bankrupt newspapers.

Still you’d think the CBC or Huff post or some outfit that didn’t have their balls in ReMax’s vice would want to talk about this sort of thing. Of course that implies they have good reporters.

#16 View on 09.10.13 at 7:46 pm

It gets more amazing every month, the distorted VIEW!

#17 omg on 09.10.13 at 7:46 pm

Could just be incompetence in how the RE Board numbers are put together. I doubt the people doing the numbers have phd’s in data manipulation.

Pumping up the sales number would seem to be pretty stupid given the efforts the federal government has made to cool the market.

It would just seem that they are inviting more measures from the government to slow the market.

#18 Cory on 09.10.13 at 7:47 pm

Is it a shocker to anybody that real estate is a scummy business? easy money for those that have a hard time reading, writing, and doing arithmetic.

#19 Week 37 2013 | Canadian Real Estate News | A Listly List on 09.10.13 at 7:48 pm

[…] MLScapades | Greater Fool Garth Turner […]

#20 dienekes on 09.10.13 at 8:04 pm

Brutal.
Everyone will be crying “why was there no regulation”.

#21 eddy on 09.10.13 at 8:07 pm

Yep, you can’t trust stats. You could ask a friendly realtor to email you all the solds on your street for Aug 2012 and 2013 to get reliable numbers.

But why the outrage about lies? It’s 24/7 from media and government but realtors are somehow held to a higher standard?

#22 Angryman127 on 09.10.13 at 8:08 pm

Like many readers of your well written blog I would like to believe that everything you write is true and basically the market will rationalise leaving irresponsible sellers buyers and speculators to pay the price of the obviously excessive values. But we are just not seeing it Garth.

Where’s the supply? Who is buying these houses? Why aren’t restrictions having a significant impact?

Unless a sensisble moderate has the courage to really call out what’s happening and help us to regain control of our country’s future, someone will harness the resentment and it will come out in ways none of us wants to see.

#23 Careful on 09.10.13 at 8:08 pm

Great posting…and not to be picky…but is it not “Whom do you trust”?

#24 Chris in Guelph on 09.10.13 at 8:11 pm

Thank you for all the work you do Garth. You da man!

#25 Dean on 09.10.13 at 8:23 pm

do not like Mexico? have a look at this one in sunshine state, 10 minutes drive from beach, only 120k

http://www.zillow.com/homedetails/2600-SE-5th-Cir-72A-Boynton-Beach-FL-33435/2111104559_zpid/

#26 Scalgary on 09.10.13 at 8:25 pm

Not sure why CBC Marketplace doesn’t want to look at this…

Great work Garth..!!!

#27 Notta Sheeple on 09.10.13 at 8:25 pm

“…….For more than forty years, through a variety of updates, the CREA Code of Ethics is unchanged in demanding high standards of professional conduct to protect the interests of clients and customers and safeguard the rights of consumers of real estate services…..” – REALTOR® Code Of Ethics
=========================

In a perfect world, every cartel brings upon itself the federal regulatory oversight it so richly deserves.

Hopefully, when the government is finished slamming the Bell/Telus/Rogers cartel, it will reload and set its sights on the REALTURD® cartel with guns blazing.

#28 wallflower on 09.10.13 at 8:25 pm

The misreporting is rampant. No doubt we could compile a list of 20 ways… here is another one:
Check out original listing prices versus follow on listing prices and the “percentage sold for” number – it always reports the list price closest to the sale price, NOT the original listing price. That in itself is a scam.

#29 Freedom First on 09.10.13 at 8:25 pm

Thank you Garth, and thank you too veteran RE pro Ross Kay. 2 men with ethics and steel gonads. Unfortunately, we live in a world where the consumer protection in everything is up to each individual. To be ignorant is absolutely certain to make you a victim to the system and destroy your life. Fortunately, men like Garth and Ross have the courage to tell the truth, and I use the word courage as we live in a world that whether in public, in the workplace, or, and even most unfortunately, with family and peers/associates, to tell the truth is to be victimized, meaning: “Shoot the messengers of the truth”. Corruption is everywhere, as is the ignorance of the masses. This has been proven to be true in the last several years in the financial devastation of the masses world wide in their own RE markets. And other countries used the same tricks from the top down, as is and has happened in Canada now. Money rules. I am very careful who I talk to for years now about anything, as the insane financially brainwashed masses minds are out of their own control. Also most unfortunate, is that so many millions of citizens in so many countries who have been financially ruined, were not trying to hurt anyone, or to be greedy, but are just average working people trying to do the best for their families. It really is terrible to see throughout history, that so many people have to learn their lessons the hard way. Remember the adage: “A smart man learns from his mistakes but a wise man learns from the mistakes of others”.

Listen to Garth and Ross, they are even taking not only the time to tell us the truth, they are also spoon feeding us on the exact methods that many perpetrators are using on us to deceive us. I, for one, appreciate the personal risks they are taking on to do so.

#30 Screwed on 09.10.13 at 8:27 pm

A better indicator than the industry’s own stats would be the amount of property transfer tax payments which the BC government collects for example. That tax is collected whenever the title changes through the sale of real estate. I don’t know if AB and ON have similar money grab programs.

The BC property transfer tax collection could set the record straight. Will the current BC government (“Christy”) publish those numbers? I’m not holding my breath.

#31 Devore on 09.10.13 at 8:30 pm

There have been plenty of cases of erroneous data released by real estate boards across Canada and US. There was a rather famous case recently in the US where the national board was double counting some sales.

Now, surely, an honest, ethical organization known for its integrity, like the TREB, would do some basic filtering and checking to remove duplicates before reporting aggregate numbers. Surely. I mean, these guys have actual, bona fide statisticians working for them.

Surely.

Or maybe not. Who knows? Who will ever know whether we’re comparing apples to apples, or whether stupid realtor tricks are foiling the smart folks at the real estate boards.

And this is what proponents of monopoly access to MLS data keep missing. It’s not about saving a couple of bucks on a listing. It’s about trust. Trust, but verify.

A 3rd party organization, whose bread and butter is reporting real data that people, businesses and policy-makers rely on, would perform simple data cleansing, like relisting and address de-duplication. Yes, there are properties with multiple street addresses, but they can be easily enumerated and accounted for. Yes, a property can be listed with different realtors, agencies and listing services at different times, or even at the same time.

All this is really trivial stuff to clean up. Businesses whose business it is to handle data do this dozens of times a day. Running a “SELECT COUNT(*)” and calling it a day is the height of laziness. I hope TREB aims a little higher than that. But we shouldn’t have to hope. There should be multiple parties able to verify this data and do their own analysis. Think of all the cool things we could have on the market based on slicing and dicing listing and sales data. You don’t even have to think, just punch in zillow.com into your browser for a glimpse.

Hey, things change. 15 years ago pre-construction sales were not a major factor in the market. Today they clearly are. It makes sense to count them somehow. Should they be included in aggregate sales data? Maybe, maybe not. I would say no, a pre-construction “sale” is a contract, which may or may not be completed by either party. Going back 3 years to revise sales data when contracts fall through is a stupid solution. A house sale is when title changes hands. A pre-construction house or condo unit has no title. It is not real estate.

I am sure there are many uses for detailed pre-construction data. None of it relevant to house hunters looking to buy a house today. Or to sellers for that matter. Apples and oranges.

#32 Screwed on 09.10.13 at 8:31 pm

#26 Not sure why CBC Marketplace doesn’t want to look at this…

Because nobody in Canada is interested in a real and truthful accounting of real estate transactions or prices.

Let’s call it a collective effort to protect our most cherished national assets.

Bubble? What bubble? Don’t ask, don’t tell.

#33 Mr. Reality on 09.10.13 at 8:34 pm

The summer of 2013 will remembered as the dead cat bounce of the Canadian housing market. With 2014 being the year that sales never returned.

I had a frank conversation with a couple of boomers sitting on a million dollar property. When we calculated the money from the house sale with an annual return of 6.5% in a dividend fund after tax, their jaws dropped.

Instant retirement and all debts paid.

People will catch on, then the stampede will begin.

Mr. R.

#34 john m on 09.10.13 at 8:35 pm

http://tosolds.ca/?p=2842
Check out this website for all houses sold in TO area

#35 Ex Victoria on 09.10.13 at 8:39 pm

Arrived in Calgary in late May, found a job in 5 days then got a taste of Calgary road rage (this was before the great flood)

Anyhow, Calgary reminds me of Victoria 2004-2008 when Len Barrie was building Bare Mountain and nothing could go wrong, until it all went wrong.

I take no pleasure in my spidey senses telling me it’s going to go wrong and I fear for my family who live there, but it just didn’t feel right, and then the floods hit!

#36 Inglorious Investor on 09.10.13 at 8:41 pm

Great post, Garth. Thanks for shedding light on this.

I have enough direct experience with realtors to know that the RE business is as dirty as Hugh Hefner after a week of parties at the Mansion and no shower, but when the corruption becomes systemic and institutionalized, it portends the end.

#37 Today on 09.10.13 at 8:42 pm

My favorite realtor thing is how they blame the house owner for changing things like offer dates etc trying to create bidding wars. Honestly feel like this will never end! Real estate is the least regulated business I have ever seen.

#38 Silver on 09.10.13 at 8:44 pm

Every actual completed sale is registered at Land Titles.
Period.
They would have the true totals of real completed sales.
The government could easily confirm the total by the hour…
if the truth was part of their actual interest…
So to… I would think could the assessment authorities…
you would think…
your tax rate is based on this being true………….

#39 Today on 09.10.13 at 8:44 pm

At least my diversified investments have continually gone up :) and my living expenses are low in this paid for home.

#40 AndrewAB on 09.10.13 at 8:47 pm

Noticing a few 50% interest listings popping up recently

Example: http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13616754

Can someone explain the rationale behind this? What’s the benefit to the buyer or the seller?

#41 Screwed on 09.10.13 at 8:47 pm

#33 boomers catching on, the stampede begins ..

That’s been going on for years already. Boomers have downsized and get this …DRUM ROLL … spent their kids inheritance. I hear it all the time. Nice vacations, nice sports cars, the Harley, the boat, the RV …

… AND IT’S GONE!

Besides, the sudden rush of liquidity into interest bearing accounts would collapse the system or drive the prices of such products into the stratosphere.

There’s no free lunch. The early birds caught all the worms and they spent most of it into the economy. Few boomers are truly independently wealthy and can live off the savings, let alone the return on their savings.

#42 Bill Gable on 09.10.13 at 8:49 pm

What happened to E T H I C S?

This was eyeopening, Mr. Turner. I was just gobsmacked.

#43 Ann on 09.10.13 at 9:03 pm

18 Cory on 09.10.13 at 7:47 pm
Is it a shocker to anybody that real estate is a scummy business? easy money for those that have a hard time reading, writing, and doing arithmetic.
.

#44 The real Kip on 09.10.13 at 9:08 pm

This happened north of Toronto at a precast fabrication plant and will cause delays on any building under construction with precast concrete. I hate it when this happens.

http://s265.photobucket.com/user/kipgardiner/media/CityPlace/Accident%20In%20Barrie/image_zpsffc40101.jpeg.html

#45 Pr on 09.10.13 at 9:18 pm

…how people think we are different from the rest of the world, I have no idea.

Because your elected leaders told you so. No words of bubbles, from Carney, Poloz, Flaherthy and Harper. So no bubbles and no problem here.

#46 Jimmy on 09.10.13 at 9:19 pm

Calgary bumper sticker:

“Dear God, let there be another oil boom and I promise not to piss it away this time.”

Maybe it could be modernized into one of those ribbon magnets – if any colors are left.

#47 Karie on 09.10.13 at 9:20 pm

Homes in the Hillhurst area of Calgary were selling in the $250,000 range in 2000!

#48 Paully on 09.10.13 at 9:21 pm

Quoting statistics is one of my favourite things. Over the years I have found that if you just pull a number out of the air, at least 74.5% of people will believe it without question. It helps if the number that you choose is not even or round. That makes it sound more believable.

#49 guelphstudent on 09.10.13 at 9:22 pm

if you look at the emails that tosolds.ca send you, very often you can find multiple copies of homes and condos sold.

#50 Serge on 09.10.13 at 9:25 pm

Multiple listings ,same house
http://www.realtor.ca/propertyDetails.aspx?propertyId=13579676&PidKey=-1541195083

http://www.realtor.ca/propertyDetails.aspx?propertyId=13585845&PidKey=-391551994

#51 JuliaS on 09.10.13 at 9:29 pm

Now we know the true definition of “Multiple Listing Service”.

#52 TakingResponsibility on 09.10.13 at 9:31 pm

Wow. Such blatant fraudulent behavior.

This calculating dishonesty (with intent to induce) is criminal. Organized Corporate Fraud.

And, if GT can provide evidence of materiality and falsity – where is the RCMP?

Eventually; however, there will be litigation …

…haha…wondering how long those links to the multiple listings will be accessible…

#53 Yuus bin Haad on 09.10.13 at 9:35 pm

Sorry, Garth didn’t even read the post.

Anything goes, nothing matters, and nobody cares.

#54 james on 09.10.13 at 9:44 pm

How someone will pay 1.8 for that house???????? we lost our minds and souls!!!! ;)

#55 CrowdedElevatorfartz on 09.10.13 at 9:45 pm

@#21 eddy
“But why the outrage about lies? It’s 24/7 from media and government but realtors are somehow held to a higher standard?”
+++++++++++++++++++++++++++++++++++

True, true, very true. :)

#56 Rabbit One on 09.10.13 at 9:46 pm

Funny in B.C if you are not licensed & be involved in (speculative) Real Estate transaction, you will be regulated by BCSC. Not if you are licensed R/E broker.

If you are deceiving, gave loss to the person who is older than 65+, if the loss amount is larger than $50,000.

> if you are securities licensed, (or non-R/E licensed – LOL-) you will be in jail so easily.

#57 Obvious Truth on 09.10.13 at 9:48 pm

From banks to governments to boc to agents. All had a hand and now it has to stop.

The question is always when and when. Too many factors to guess so why bother. Just watch the show.

Didn’t scotia CEO dare poloz to raise rates. It won’t happen soon.

World needs inflation and CBs are going for it. Right now bets are still on deflation or even worse. Stagflation.

The leverage in real estate is truly astounding. Only inflation can cushion the fall.

#58 jSan on 09.10.13 at 9:49 pm

My sister a nd her husband (who currently live in Edmonton)have been looking to buy a new place in Calgary for an upcoming move. I keep telling her that the market is overheated according to the media. She says that’s strange because almost every single house they have looked at has been reduced by 30K or more? That does not sound to me like a red hot real estate market?

#59 2CentsCdn on 09.10.13 at 9:49 pm

Sneaky little buggers this RE industry. It’s obvious what they’re up to …. but who is going to take on the task (and expense) of dragging each one of the thousands of scummy sales people and boards off to court? Noooo – body! that’s who. Too hard to prove intent ….. too many of them … too many details to dig up. Too many job’s and tax dollars being generated by their scummy success. It will all collapse on it’s own …. then the blame and finger pointing … then a recession ….. then an election …. then wait 5-10 years and repeat. Am I the only one who remembers Feb 1989 to 1992?

#60 gladiator on 09.10.13 at 9:56 pm

Epic post, Garth.
I’m sure, in the not-so-distant future, others will quote parts of it when reporting on the collapse that will become evident in the Canadian RE. Mixing private sales into the “index” is a sign of desperation – it’s grasping at the last straws left out there to help making sales look good and soon they will be gone too.
I am getting scared. The future ain’t looking rosy at all. This is more like going to be a collapse when Joe Sixpack gets wind of what’s cooking and starts panicking. Then, everyone’ll be running for the exits and suddenly there’ll be (financial) blood on the streets. Even though I am renting, debt free and invested my hard-earned dough in real businesses (not shares/bonds/reits/etc), I am sure I will feel this pain as well – via maybe losing my job, losing my friends due to divorce, feeling for my friends who got themselves into trouble (although I warned many of them of this danger), maybe having to pay more taxes, etc. etc.
I may be panicking too early, but all I see is a certain disaster – sooner or later.
Peace.

#61 recharts on 09.10.13 at 10:04 pm

I have been counting sales and calculating stats for GTA for more than 6 months. I can tell you that my numbers (sales) have been regularly off compared with the MLS numbers although the sales are reported by their own system

The trick with H and MLS prefixes explains me why a couple of listings blocked my algorithms a couple of time. I could not understand why a listing with address out of Toronto was listed in a Toronto MLS district

I think that a site like http://www.mlslies.ca will be extremely successfull. :-)

#62 T.C. on 09.10.13 at 10:07 pm

Interesting read here:

http://www.ltsa.ca/docs/LTSA_2012-2013_Financial_Report.pdf

#63 TurnerNation on 09.10.13 at 10:09 pm

Re. yesterday’s ‘RETURN OF THE BLENDER’.

35% down-payment? Cruel and unusual punishment! Prohibited by Barter of Blights and Screed-Hommes.

#64 wendi1 on 09.10.13 at 10:11 pm

How can you count on realtors to get the stats correct when they can’t even count the number of bathrooms and bedrooms correctly?

Those listings have different numbers of baths and bedrooms.

Baby steps, baby steps.

#65 X on 09.10.13 at 10:16 pm

The RE boards really should be fined for releasing such misleading information intentionally. You would think a finance minister would disapprove of the propaganda from the RE boards, and would do something about it.

#66 Canadian Watchdog on 09.10.13 at 10:17 pm

The best part is.. they add non-member sales to boost sales figures, then they remove non-member listings to lower inventory! Ha ha… oh ya.. it's a sellers market alright!

#67 Frogblender on 09.10.13 at 10:28 pm

Garth, how do we combat this fraud?

#68 Ted54 on 09.10.13 at 10:31 pm

” Isn’t this the data upon which governments and central banks base policy decisions”
Actually no Garth. The Gov. gets it’s info from more reliable sources. Stats Canada, banks etc.

All sales through MLS. Are MLS. Sales. If the system has no value to the private company’s they would not be using it. If exposure on MLS generated the sale it’s an MLS sale not a private sale if a commission is involved. Almost 90% of these sellers are offering compensation to agents. Conversely many private sales not listed on MLS. sold through agents go unreported. Whom do you blame for that shortfall the sellers, the private company or the agent.

Double and triple reporting is not intended and is a result of agents exposing a listing in one area on the board of another. Many small community agents promote their sellers listings in TREB with greater exposure and results. It’s not a trick or intended to mislead just a result of agent activities have become common practise over the past several years. I agree Boards should do a better job of filtering out but so should you when discussing misleading reporting and the lack of accountability by the so called private companies who are now full MLS brokerages, kinda!

Stats Canada does not independently verify residential sales nor do banks. As for non-brokerage sales, you completely miss the point. They were not in last year’s data, hence misleading stats. — Garth

#69 Smoking Man on 09.10.13 at 10:51 pm

I hate coming home from the desert, I fit perfectly in that other world.

On the radio, Obama is backing out gracefully and firm. Smartest thing he’s ever done. A fan emailed me 1 day ago and asked what would you do if your Obama.

My response was very close to his speech.

NSA only free bee your getting from me going forward, send me a PO

#70 Uh Oh Canada on 09.10.13 at 10:52 pm

Sad to say, but Garth’s blog is the only source I trust on financial matters. I finally put some of his advice in practice and took the money out of the Orange guy’s shorts and invested it. I’ve already seen profits in a few months (though only on paper now) more than the last few years. I also rent by choice- if you find a good landlord, keep the place clean, and pay your rent on time- you get extra perks, such as a new dishwasher, which saved me $600- more to invest. But mostly, I rent for the frededom from property maintenance and taxes. This freedom is truly priceless.

#71 45north on 09.10.13 at 10:54 pm

Careful: Great posting…and not to be picky…but is it not “Whom do you trust”?

it is not

in the sentence “who can you trust?” who is the subject and is correct.

Examples:

As verb subject: Who is waiting over there? He is someone who works hard.
As verb object: Whom do you support? She is someone whom many people admire.
As preposition complement: On whom do you plan to rely? These are the players of whom I am most proud.

http://en.wikipedia.org/wiki/Who_(pronoun)#Usage_of_whom

#72 Dogman01 on 09.10.13 at 11:09 pm

#29 Freedom First on 09.10.13 at 8:25 pm

It has become a zero sum game; hence the wealth concentration trends.

But this is fun:
http://www.globalrichlist.com/wealth

#48 Paully on 09.10.13 at 9:21 pm
Statistics are like bikinis, what they reveal is interesting but what they conceal is critical.
33.26% of people believe that all statistics are simply made up.

#73 Canadian Watchdog on 09.10.13 at 11:18 pm

#69 Ted54

All sales through MLS. Are MLS. Sales. If the system has no value to the private company’s they would not be using it.

 CMHC doesn't use MLS data. 

"CMHC acquires data from a wide-variety of sources. CMHC does not acquire nor does emili use MLS® listing data. We acquire data related to either [fraudulently inflated] property valuations conducted by [fraudulently inflated] property tax assessment firms or from actual transactions that have occurred in the marketplace."

But…

When purchasing a home, the price is determined between the buyer and the seller. Industry and CMHC studies show that the majority of Canadian homebuyers do their homework prior to making an offer to purchase a home and obtain financing.

Wait a minute… You mean homebuyers do their homework with data that CMHC doesn't use and refer to as actual transactions? If CMHC doesn't use MLS data to value properties, why should you?

#74 not 1st on 09.10.13 at 11:24 pm

Nobody from the “stock market” has gone to jail in a long time Mr. Kay.

Ever heard of Conrad Black? — Garth

#75 OwlEyes on 09.10.13 at 11:27 pm

It says “hotel” but I bet it’s a new “condo hotel”

ca.news.yahoo.com/man-hurt-falling-glass-downtown-toronto-162636305.html

#76 The Truth on 09.10.13 at 11:31 pm

Everyone on this blog should email, call or petition the CBC and ask to do an thorough, independent investigation of the numbers released by the RE boards – this would really start the correction if it hasn’t started already!

#77 45north on 09.10.13 at 11:37 pm

gladiator: in the not-so-distant future, others will quote parts of it when reporting on the collapse that will become evident in the Canadian RE.

which is what I think

#78 Westcdn on 09.10.13 at 11:48 pm

I was a little put off by some of the comments from Canadian living abroad. Too many sounded smug. My only experience of Mexico was 10 days in a 5 star my former wife insisted on – I found it surreal but each to their own. I did several tours of volunteer work installing small wood burning stoves in Mayan villager homes – a nonreligious initiative. The villagers were happy we came and it was safe at night near the villagers because there was no night life. I learned the value of silk lining. However, near or in most cities, you did not go out after sundown. Even the cops disappeared. I also sensed more gringo envy and I only saw expats living in gated communities. That was 10 years ago so maybe things have changed.
My feeling was the expats were living off the backs of the poor and few dared live outside of group communities. It reminds of Vancouver where the foreign money was appreciated at first and then the resentment grew.
Anyway, I think that if you give up Canadian residency, you also give up Canadian citizenship and social benefits. I still am offended by all those Canadians that demanded protection in the last Lebanese civil war. If you want back in Canada, line up with rest of the immigrant wannabes. Being Canadian means learning to live with winter and being called a popsicle by Aussies and Kiwis. It is just my humble opinion, besides, I burn easily.

#79 jim on 09.11.13 at 12:12 am

I’m a little gobsmacked by how obvious this scam is. It is a clear sign that there is desperation in realtor land, which means the party is at an end.

#80 Peter on 09.11.13 at 12:18 am

Hi Garth ,

People looking to buy a house or a condo to live in or for investment purposes should not be looking at month to month figures to determine what, where and when they will buy. Realtor stats are flawed by design , relying on averages when real estate is LOCAL, and anyone interested in purchasing a home should do their own homework in the area they are buying. Do not rely on brochures from real estate professionals to make your purchase. The stats are more like a poll than facts , relying on too many people to report information to be accurate and hard to audit , there fore not factual at all , just a guide (and a bad one at that).

I have purchased and sold properties without an agent , and not listed on MLS, so there are sales that are not counted also.

Lastly, if those houses are listed more than once on MLS, does that mean INVENTORY numbers would be too high?, and that (high inventory) is used by many on here as a sign of future price reductions . Prices in Canada have been pretty stable , thank you

#81 bob on 09.11.13 at 12:42 am

Thank you Garth. Love these educational posts, though the revelations gives me sick-to-the-stomach feelings. Oh well, such is life.

#82 The American on 09.11.13 at 1:38 am

I have trouble understanding why so many are upset or confused by this news. I’ve been saying for year the Canadian RE Boards have been cooking the books, the government knew about it and permitted it to continue, because the government-owned Canadian banking system needed and still needs protection. Yeah, this story is going to be the story of the decade, and you WILL be seeing high-profile documentaries about it. As protected as many believe the banking system in Canada may be, the truth of the matter is it’s more exposed than any U.S. Bank ever was. Why, just look at the U.S. taxpayer-paid Canadian Bank bailout at the same time the U.S. banks were collapsing. But, nope, not a word to the masses really about what was going in and had already happened in Canada. Don’t believe me? look it up, and not on some whack job site. Legit sites. The Canadian banking bail out exceeded, on a per-capita basis, the U.S. bail out by nearly 20%!!!!!!!!! That’s insanity. Your banks haven’t whispered a word, have they? Challenge me on it? I’ll gladly assist you in understanding better.

#83 Garth, the HAM denier on 09.11.13 at 1:47 am

Who can you trust?
The picture looks manipulated by Photoshop.

#84 Bobby on 09.11.13 at 2:12 am

Here in Victoria the weather is beautiful. If the sales are up here nobody told the guy who puts the SOLD stickers on the lawn signs. Many listings are languishing.
Maybe the government will have to raise interest rates significantly to stimulate the economy and get sales moving again.
Now, I know that sounds stupid, but the head of the real estate board here in Victoria once suggested that in their monthly summary. No, you can’t make this stuff up!

#85 betamax on 09.11.13 at 2:50 am

My realtor acquaintances (cannot call them friends) in Vancouver tell me that sales are up even though prices are not. Seems to be a one-time surge as fools rush to lock in their teaser rates.

The myopic masses, however, cheer the news as evidence that the Van market is once again proven unsinkable, much like that famous ship.

The recent few days of good weather here has erased all memory of the last three weeks of overcast drizzle, and once again the masses are bleating that our weather is amazing and (ergo) everyone else in the world wants to live here. Oddly, the rest of the world isn’t rushing to do so, but that factoid doesn’t mesh with the myth and so never even enters consideration.

Meanwhile, winter is coming, and icebergs ahead.

#86 P. Winterton on 09.11.13 at 4:33 am

What, to me, is totally inexplicable, is the following. You are smart enough to see through the lies and propaganda surrounding the real estate market. However, your analysis of economics is based on a slavish, naive belief in the propaganda pushed out by the very same media outlets which you expose in this article. What gives?

Media outlets do not create statistical data. — Garth

#87 World Traveller on 09.11.13 at 4:50 am

Looks like we can’t trust MPP’s either (since when was that a surprise), looks like everyone is trying to get out of paying people fairly.

http://www.thestar.com/news/queenspark/2013/09/10/problem_of_unpaid_internships_in_ontario_is_massive_says_student_group.html

#88 Pr on 09.11.13 at 7:20 am

Buyers BEWARE: CREA and in Quebec CIGM (Chambre immobiliere du grand Montreal) They work the numbers and if you call them, they believe what they do is ok.
Call the CIGM and ask them : if house prices had ever fall down. Do it, because i did, and their answer was: No, never!

They even call them *professionals*

Thanks for the internet some will get the truth…if they seek.

#89 Kent on 09.11.13 at 7:22 am

“If this were the stock market,” says veteran real estate pro Ross Kay, “these guys would be going to jail.”


If that were true, the jails would be full of Wall Street/Bay Street banksters.

I know of no manipulation of public share price data. Do you? — Garth

#90 Squad on 09.11.13 at 7:27 am

Also, in the above mentioned multiple listings in Burlington, you’ll notice that each of the listings has slightly different information about the number of beds and baths, as well as how the addresses are listed.

The one on Cavendish has 4 + 0 beds, 2 baths in the first listing and the second one has 4 beds, 3 baths… the third one is listed differently again at 4 beds, 2 baths.

The one on Brant has 4 beds, 3 baths in the first and 3 + 1 beds, 4 baths in the second (if you buy the second listing, you’ll get an extra bath included for the same price – yippee).

Which one is correct?! Oh, does it really matter, but I think the 4 + 0 beds makes good sense.

Oh, just heard on the radio that sales of luxury homes over $1 M have jumped 60% due to foreign investors. So, Lisa Evers may just get her price, or more if there is a bidding war!!

Quick, let’s raise our prices – maybe if we list over a million, we’ll get a buyer!!

#91 jaguar on 09.11.13 at 7:32 am

In Calgary there are two cartels. Big Oil, and Big Development. The builders have a lot of power and influence in the city. Too much. Nenshi has taken them on and he knows what they are like. It’s why Calgary is just one big sprawling suburb…cookie cutters homes as far as the eye can see. All filled with granite countertops and a shiny black Ford F150 pickup parked outside. Funny how people go to Calgary during their peak working/earning years, but hardly anyone stays when retirement comes around. They all bail to Vancouver Island, the BC interior or other places.

#92 Randy on 09.11.13 at 7:54 am

Why don’t the realtors publish the source of these buyers ? Either they come from off-shore or they are high-rollers in the MASSIVE Canadian Underground Economy….and should be investigated…

Please tell me that was sarcasm. — Garth

#93 Bob on 09.11.13 at 8:11 am

Mortgage apps plunge, refinancing hits 4 year low as rates soar in the US.

http://www.cnbc.com/id/101025316

No surprise that fewer people apply to refinance existing loans after rates increase. This is not an absolute indication of a similar drop in home sales. — Garth

#94 Musty Basement Dweller on 09.11.13 at 8:14 am

I have a buddy who is a realtor on Vancouver Island. (for 20+ years) He is also trying to sell his house. He is 100 percent sure the market is going to hell in a hand basket. He is very worried that the public is going to see through the cartel spin and realize the trouble the market is in before he can dump his place.

#95 42% of Canadians Are Broke CTV on 09.11.13 at 8:35 am

Here you go house pumpers. More reason the market will tank soon….

So basically 42% of Canadians live on must have paycheques, yet 70% is the home ownership rate? So a pretty good chunk of the 70% have no business owning a home as they are living with no money and totally screwed if they lose their job or need emergency money for major repairs, etc. As they bought with 7% downpayment on average, they wont be able to refinance and get the money that way either. So they are totally screwed and so is this market.

http://toronto.ctvnews.ca/42-per-cent-of-canadians-living-paycheque-to-paycheque-survey-1.1449473

#96 BR E19 ELok on 09.11.13 at 8:39 am

Hey Garth –

Sotheby’s doesn’t share your pessimism about the Canadian housing market, at least not in the high end, anyway.

http://www.menafn.com/16f77a45-b595-4f11-8cba-bcec31ea25c0/Canadian-Luxury-Real-Estate-Forecast-Predicts-Strong-Fall-Market-for-Key-Metropolitan-Centres?src=main

http://www.citynews.ca/2013/09/10/foreign-buyers-fuelling-sales-in-luxury-real-estate-market-report/

These articles point to buyers from Russia, China, India and the US, inter alia, as the top buyers.

Y’know, when you think about it, perhaps it really is different here. Unlike the US, Canada’s budget deficit is peanuts, our federal government is very competent – unlike the gang of amateurs in Washington and the recent Syria debacle – we have a steady economy that consistently creates jobs at a rate far exceeding our trading partners, and we also have lots of oil to export. Plus a strong currency. And seeing as our federal government isn’t looking to expropriate wealth the way Mr. Obama and his lefty pals are, perhaps it’s no surprise wealthy foreigners are looking to buy property here. That should help the RE market as a whole.

As always, I await your pithy soundbite response.

These are media stories based on a real estate marketing company’s promotional release. It’s all aimed at folks like you. — Garth

#97 Green Belt Barry on 09.11.13 at 8:50 am

I feel sorry for all you bloggers who are waiting for the much anticipated real estate crash. Look up what a green belt that surrounds a city does to the value of real estate in that city. The last decade has seen nothing but astounding rises in real estate in the GTA. Even a flatline or mild correction will leave everyone invested in real estate before 2005, with lots of equity in their property with enormous gains that will not be wiped out by any correction. Folks, you missed the boat. BTW, the green belt was put around the GTA in 2005. It is the largest in the friggin world – 7500 sq kms.

There is no material shortage of land. Developers in the GTA have drastically reduced their purchases of it, since demand has slacked. — Garth

#98 maxx on 09.11.13 at 8:53 am

Brilliant piece of investigative reporting Garth.
It is one thing to multi-list the same property by virtue of “shopfront”, but quite another to report it as a double or triple sale.
Nothing surprises me anymore with respect to realtards as it appears that this cartel is the darling of all levels of government and that it is completely exempt from reporting TRUTHFULLY.
How silly of people to expect any semblance of honesty before committing to a lifetime of debt repayment. I think that part of this horrendous disrespect is the result of referring to PEOPLE as consumers, but that is another matter.
The tide is turning and realtards and their unofficial but huge support network will be powerless to do anything about it. Even the most stalwart believers in RE I speak to are beginning to question the MSM-portrayed status quo- even they cannot ignore economic fundamentals.
Misguided, brainwashed and stubborn fools who sit on RE and cling to the notion that “RE always goes up” will flip like pancakes. Some already have.
The chorus is an increasing swell of “I GOT OUT!!!!” amongst the lucky souls who sold earlier and crystallized the best gains rather than having waited too long.

#99 NRI13 on 09.11.13 at 8:56 am

@ #96 Bob

Candidly,mortgage Apps would plunge in light of rate increases. most mortgages in US are 30 year fixed rate mortgages unlike here where the most popular is the 5 year fixed rate mortgage. If an individual has a 30 year mortgage at a lower rate than existing rates, they would have no incentive to refinance at higher rate in US.

#100 T.O. Bubble Boy on 09.11.13 at 8:57 am

@ #96 Bob on 09.11.13 at 8:11 am
Mortgage apps plunge, refinancing hits 4 year low as rates soar in the US.

http://www.cnbc.com/id/101025316

No surprise that fewer people apply to refinance existing loans after rates increase. This is not an absolute indication of a similar drop in home sales. — Garth

———————–

This is an ENTIRELY different mortgage market. Most of these people actually have 30-year fixed rate mortgages that they’ve been frequently refinancing as mortgage rates dropped.

That 30-yr fixed loan (as opposed to Canada’s 5-year reset mortgages) makes all the difference.

#101 T.O. Bubble Boy on 09.11.13 at 9:01 am

@ #83 happy renter on 09.11.13 at 12:37 am
When theres high home ownership it means the country has a booming economy.
———————–
And, when 25% of that “booming economy” is tied to the construction of those same homes/condos/etc., you are in a ponzi scheme.

#102 Smoking Man on 09.11.13 at 9:19 am

#81 jim on 09.11.13 at 12:12 am

I’m a little gobsmacked by how obvious this scam is. It is a clear sign that there is desperation in realtor land, which means the party is at an end.
………..
Nothing when one compares in Ontario.
The price of electricity, scam
Auto insurance, scam
Higher education, scam.

So what, bit of flip floppy real estate, don’t buy.

The above stuff we have no choice.

Prioritys people.

#103 Ret on 09.11.13 at 9:20 am

When I look at MLS listings in the GTA using the new beta system, and then click on a property, many times two pictures pop up for the same property.

I thought it was just a programming clitch. On reading today’s column, I checked two properties along North Shore Blvd. E, along Lake Ontario in west Burlington ON.

Both were playing the, “bed and bath game.” RE agents can’t count? Each listing had two identical pictures but with different MLS numbers.

What can it all mean?

#104 Editor on 09.11.13 at 9:26 am

This is posted way too late to come to anyone’s attention but it’s well-thought-out personal view on renting vs owning in the GTA:

http://www.wmtc.ca/2013/09/personal-update-our-new-rental-house.html

Funny how landlords who buy properties expecting tenants to flock to them are simultaneously wondering why anyone would rent. Cognitive dissonance?

#105 Keith on 09.11.13 at 9:27 am

It’s always been bad but it’s getting worse the way real estate boards and associations manipulate the data. But really, who cares? Who believes any of it anymore? Who even reads it?

#106 Paul on 09.11.13 at 9:27 am

Great info Garth… the little tricks they play.

How about giving us some insight into the smaller communities like the KW region. Interesting article.

http://www.therecord.com/news-story/4069014-house-sales-up-in-waterloo-region/

#107 jess on 09.11.13 at 9:42 am

90 World Traveller on 09.11.13 at 4:50 am
regarding unpaid interns maybe they could hire a virtual intern from overseas ;O

or senators as virtual interns then they could work in their pj’s.

http://online.wsj.com/article/SB10001424052748704471504574441132945681314.html

http://en.wikipedia.org/wiki/Virtual_internship

#108 nogoodifitsnottrue on 09.11.13 at 9:48 am

I complained about how averages skew peceptions and should not be used to equate values or incomes. Heres an example why the median would be a better fit in most cases.

http://news.nationalpost.com/2013/09/11/canadas-one-percenters-earn-at-least-191000-a-year-most-likely-are-male-live-in-toronto/

It indicates that most people don’t make an ‘average’ of $83,000 in Vancouver …..rather $26/7 is probably more realistic.

#109 Calgary Rip Off on 09.11.13 at 9:58 am

The correction may be worse in Calgary or it may not. The reality is that rentals arent easy to come by, in general are the same as mortgages, for now, in Calgary. That is the reality, statistics aside. If a person is able to get a rental and wont be retiring soon, then of course it makes sense to rent. If you can acquire a mortgage now and when the interest rates increase, still requalify for the mortgage, then a person should buy, IF they plan on working for the next 30 years in a government type job or something not likely to go away as a source of income.

Calgary is scary when it comes to getting a place. Rental or buying, be prepared for endless bs and a crazy sense of pacing that makes no sense. If you can get a place, be prepared to enjoy the 5 feet of space on both sides from your neighbour. You should be able to pass the Grey Poupon between windows during dinner assuming you and the neighbour are home and not working to pay the place off. And likely your neighbours mortgage payment is 75% less than yours as they bought when houses were $200K in Calgary, not $500K.

#110 bill on 09.11.13 at 10:04 am

Thanks Garth. How do these people look at them selves in a mirror?
venal ? is that the word to describe realtors?
works for me….

#111 e on 09.11.13 at 10:07 am

This is a win win solution. I could cash in my million dollar house and the broker could make a few coins out of the realtor’s fee. Good luck to the people who is going to buy my million dollar house. /s

#112 45north on 09.11.13 at 10:44 am

World Traveller: from your link: Samantha Bokma, who worked part-time as a constituency assistant for Barrie MPP Rod Jackson, claims she is being replaced by an unpaid person.

you know if I were Rod Jackson and I was in some kind of trouble with a beautiful young intern then this is exactly the kind of trouble I would choose

World Traveller: does this mean you have travelled to Barrie?

#113 Canadian Watchdog on 09.11.13 at 10:44 am

National Household Survey: Statistics Canada says errors won’t harm its reputation

Whatever you read today on historical incomes and homeownership rates should be taken with a grain of salt, especially historical comparisons. This was the biggest screw up in StatsCan's history and nothing more then numbers plucked out of thin air.

#114 benchwarmers on 09.11.13 at 10:45 am

Don’t tell me that when realtors say, there are (all of a sudden) multiple offers on a property (that has been on the market for a year) they are lying about that too!

#115 Holy Crap Wheres The Tylenol on 09.11.13 at 10:50 am

The double pumping of these numbers is criminal. It certainly smacks of outright fraud on behalf of those whom will directly profit from false indicators. Where are the newspapers and media who should reporting on this activity. Even here in Oakville we can not be mixed with downtown Oakville and Bronte or Oakville North. There are divisions here that are strictly adhered to.
Oops I forgot they are the advertisers of this shell game and get paid by the profiteers. Sorry my mistake!

#116 Randis on 09.11.13 at 10:55 am

Garth, honest question … Why isn’t the Government regulating the RE industry already like they do with the securities industry?

#117 Daisy Mae on 09.11.13 at 10:57 am

#38 Silver: “Every actual completed sale is registered at Land Titles. Period. They would have the true totals of real completed sales. The government could easily confirm the total by the hour…if the truth was part of their actual interest… So to… I would think could the assessment authorities…”

**************************

But, no one is asking them.

#118 Big Brother on 09.11.13 at 11:05 am

#70 Smoking Man on 09.10.13 at 10:51 pm
I hate coming home from the desert, I fit perfectly in that other world.
On the radio, Obama is backing out gracefully and firm. Smartest thing he’s ever done. A fan emailed me 1 day ago and asked what would you do if your Obama.
My response was very close to his speech.
NSA only free bee your getting from me going forward, send me a PO

MKULTRA and NSA do not need a PO.
Spy agencies may have previously unknown capabilities.The bad news is that there’s no magic bullet. There isn’t a single comprehensive tool that will completely protect you.
MKULTRA says go sell your program to NSA.

http://www.theglobeandmail.com/news/world/how-the-us-surveillance-machine-grew-too-big-for-even-the-nsa-to-understand/article14241474/

http://news.nationalpost.com/2013/09/06/nsa-secret-supercomputers-broke-encryption-codes-partnered-with-tech-companies-for-software-back-doors-reports/

#119 Daisy Mae on 09.11.13 at 11:05 am

45 Pr: “…how people think we are different from the rest of the world, I have no idea.

Because your elected leaders told you so. No words of bubbles from Carney, Poloz, Flaherthy and Harper. So no bubbles and no problem here.”

*****************

As a matter of fact, I heard it once (only once) on the radio that Harper was recommending to other countries that they follow our lead with regard to our handling of government finances. I thought: “Whaaat?!”

#120 me on 09.11.13 at 11:53 am

has anyone seen this?

http://www.peelregion.ca/housing/home-in-peel/

#121 Paul w on 09.11.13 at 11:54 am

Another great post Garth, keep up the good work…

#122 Blacksheep on 09.11.13 at 12:21 pm

Smoking Man # 70,

“Obama is backing out gracefully and firm”

“Smartest thing he’s ever done.”
—————————————————–
Your universal collider thingy is on the fritz.

Front man B-rock’s told, “make this happen”. Media blitz ensues. Uses sick kids on youtube. But Kerry screws up. POTUS scrambles, but eventually relents. Global opinions against him. Not this time boys. The ‘System’ wants Syria /
Iran and will have them, one way or another. Cue the next….

The Oil train left alone to roll down a hill, explode and kill dozens in Lac Megantic, was mislabeled. Much more volatile. Turns out it should have been labeled in the same category as gasoline and shipped in smaller containers.

Just another unfortunate series of events.

http://www.ctvnews.ca/canada/crude-oil-aboard-train-that-derailed-in-lac-megantic-was-mislabelled-tsb-1.1449749

Who can you trust?

#123 Victor V on 09.11.13 at 12:43 pm

XRE is yielding 5.24% — Garth you have been repeating recently that preferreds and REITs were looking “juicy”, but this is getting too good to pass up!

#124 Shawn on 09.11.13 at 12:54 pm

ALL YIELD IS NOT CREATED EQUAL

Victor V just above says:

XRE is yielding 5.24% — Garth you have been repeating recently that preferreds and REITs were looking “juicy”, but this is getting too good to pass up!

*************************************

Some of that is return of your own money… What if you get 5.24% for many years but in the end the building is worthless (Elliot lake Mall). The yield would ultimately go to zero in that case?

How is depreciation not a real expense at some point?

Beware of REITs bearing “gifts” of your own money

#125 gainsaywhodare on 09.11.13 at 12:59 pm

That house (231 9 Ave NW) was listed since last year. The owner(s) was trying to do it themselves via PropertyGuys but it didn’t sell. It is actually in a really nice community of Crescent Heights, a few blocks off Crescent Road, very walkable to downtown, near parks, playground, curling rink, schools, etc. etc. Typically for a house like this in Crescent Heights, some buyer with more money than sense would have bought it eventually. So then why is it still on the market you ask? Gee I wonder who would want to drop almost $2M on a house that faces a dingy and dimly lit high school parking lot? For the same kind of money, you could have bought a nice big house in a much nicer location in Crescent Heights or Rosedale (and possibly a brand new one too). The true lesson here folks, is when it comes to real estates… it’s all about location location location. Even though a house may be in a good area, if it’s next to a side/back alley, on a busy street, faces commercial area, etc. etc., it will impact the appeal of your house because people do take that into consideration.

Million dollar houses in Calgary are nice and all. People buy into it and I guess that’s to each their own. I just can’t picture myself paying 5-digit property taxes like some of these houses every year. Sure I am not in the same league as these home owners but I can think of many better ways to spend my after-tax money elsewhere.

#126 DM in C on 09.11.13 at 1:13 pm

Calgary Rip Off: ” If you can get a place, be prepared to enjoy the 5 feet of space on both sides from your neighbour. ………And likely your neighbours mortgage payment is 75% less than yours as they bought when houses were $200K in Calgary, not $500K.”

Those are two different scenarios — the new subdivisions are exactly like that, yes — but most didn’t exist when houses were $200k. Unless you are in an infill where the lot was subdivided — if you are in a new subdivision, most people pay near the same.

The only difference would be if they sold a house they owned prior to 2005 and used the huge gains to pay down the new mortgage.

I agree with practically all of your assertions about the Calgary market (we bought cause there were no rentals in our community, and now rentals there equal our mortage), but you’re mixing the message a bit.

#127 jess on 09.11.13 at 1:23 pm

Help Kickstart World War III! .
TheSecondCityNetwork
http://www.youtube.com/watch?v=z-sdO6pwVHQ&feature=player_embedded

=====
and then the serious side
http://www.youtube.com/watch?v=TqYGLHiPD0A&feature=player_embedded

#128 Donald Trump on 09.11.13 at 1:27 pm

#46 Jimmy on 09.10.13 at 9:19 pm

Calgary bumper sticker:

“Dear God, let there be another oil boom and I promise not to piss it away this time.”

=====================================

Yeah…but it’s probably pasted over 4+ more bumper stickers that say the same thing.

#129 Donald Trump on 09.11.13 at 1:31 pm

#86 Garth, the HAM denier on 09.11.13 at 1:47 am

Who can you trust?
The picture looks manipulated by Photoshop.

====================================

I agree.

What happened to the Kid’s other ear ?

#130 Donald Trump on 09.11.13 at 1:35 pm

I never trust RE “stats”….

All I look at is frequency of SOLD stickers as one indicator and what my annual assessment is based on.

New Multi Family/ Condo sales….claiming “x” % sold….ahahahahah.

#131 ozy - nahhhhh, not the reporting is the issue on 09.11.13 at 1:39 pm

ozy – nahhhhh, not the reporting is the issue

the lack of product and high gov development taxes\levies

how many of the house-less are willing to make a career in the construction industry and at the same time picketing the gov to cut jobs so waste is reduced and new houses levies are brought DOWN?

give me an answer Garthello

#132 CITRAN on 09.11.13 at 1:44 pm

How much money do people in your neighbourhood make?

http://www.cbc.ca/news/interactives/cp-census/index-september-2013-income-map.html

#133 eddy on 09.11.13 at 1:46 pm

@ Blacksheep

Who can you trust? Your own eyes when you are at the scene. Type ‘Lac Megantic hoax ‘ into a search engine

#134 Old Man on 09.11.13 at 2:17 pm

I have just had this amazing time in my life getting two free dinners assisting a grad student with her assignment concerning Plato’s allegory of the cave. She is so young and am so old, but we had a meeting of the minds that she finds an older man cool, so do not count me out, as she wants to explore so much more with me. Perhaps a trip in the future might come about with a cruise somewhere, as am a dirty Old Man who loves a younger woman who appreciates the finer things in life. There is hope in old age for us all.

#135 bill on 09.11.13 at 2:18 pm

#129 Shawn on 09.11.13 at 12:54 pm
Shawn would you happen to have a list of such reits that are doing this?
Thanks

#136 DM in C on 09.11.13 at 2:21 pm

Shawn:

Top 4% here, married to a double-median-er. But in Calgary, that’s the norm. How many of those 1% live in AB?

#137 Putzly Doneright on 09.11.13 at 2:28 pm

This can’t be. These people are high trained, licensed professionals. They’d never try to hoodwink anybody. Everybody knows that they have the best interests of their customers at heart.

Just ask ’em.

#138 Old Man on 09.11.13 at 2:52 pm

#128 Victor V – the one thing about XRE is that is a well managed basket; never go for one, as XRE can be part of a portfolio to ride the storm, and yes buy it as a part of the entire portfolio with a balanced vision. I said just a part with say 15% of the total.

#139 Alex N Calgary on 09.11.13 at 3:08 pm

Great post Garth! I think there is going to be hell to pay for these guys when people start demanding answers when the whole thing collapses. This will be one of the things people will find out and be shocked. So shocked that an organization making TONS, not reasonable, not a lot, TONS of cash lied to them to keep the money rolling. It doesn’t take a rocket scientest to find out how much realtors make, then deduce that they could be lying about anything and everything to keep the mega cash rolling.

Are people just lazy or really that blindly house horny? the Calgary situation of difficult rental houses is half the story, its not just difficult to find a rental house (this city is FULL of immigrant laborers here to work the flood recovery or construction, they are all the filthiest blue collar barley-20 year olds from all over Canada, I see them every day in droves) When you do get a rental house, maybe they put it up for sale before you’ve been there a year, or they demolish it to put up a $$$profit duplex, we’re on our third house in 4 years, just getting booted again, or they have to deal with disgusting landlords, barley 30 years old, morons, who just bought an “investment” house. Its insulting and degrading, I don’t blame anyone who rented in this market and gave up to get a house.

I can see why people buy to reduce the cycle. Seriously, we need some damn crash already, I’m getting Super sick of moving and dealing with these landlord monkies (not all bad, but lots)

Combine several factors of Calgary: Massive influx of migrant workers from the rest of Canada who will bail the second the work comes to an end (from their own mouths) : Huge number of investment properties rented to said laborers owned by people barley making AB median family income, where does that money come when the rentals dissapear? Hugely overpriced market, dillusionsal about housing demand from the flood.

Vancouver ain’t ground Zero, its here in Cowtown

#140 No Longer Innocent on 09.11.13 at 3:09 pm

#106 and #93

Not all of the multi-district listings are actually deliberate deceptions on anyone’s part. I have no idea if the boards actually double report these sales but obviously they shouldn’t be.

If you are a TREB member but are going to list a house in Milton the only way to get it on the Milton MLS is list through TREB first and then ask TREB by fax to send lovely little forms off to Milton for you. Ideally, Treb would take down the Toronto listing and only have it on Milton but that’s not how the system currently works.

As for the bed and bath game, this too is an annoying system issue that should be fixed. Each board uses different forms, short hands, definitions and pulls data digitally from one listing to another. Sometimes the info entered for a TREB listing is not properly pulled to the other board.

Sometimes the pretty blond completing the second listing is stupid and forgets that the “bedroom” in the basement listed on the Milton listing was actually described as a den for TREB.

Price changes are the same. If you update TREB but forget to tell them you are also listed on Milton then Milton does know and you’ll have two prices advertised for the property.

All of these issues can and should be addressed by the boards and these logistical mistakes should not be used to wash away any of the blatant manipulation of stats that does occur but we cannot assume that every inconsistency is actually deliberate manipulation.

#141 Old Man on 09.11.13 at 3:12 pm

This is a huge day in D.C., but there appears to be a mass media blackout, and am wondering why. So just maybe the medium is the message, as millions are there, so what gives? I want to see what is going on, but CNN for example has better things to do showing BS about other nonsense. I will try to find another live streaming outlet, as something is very wrong about this all. :)

#142 Form Man on 09.11.13 at 3:41 pm

Data from the real estate industry is obviously not to be trusted. I am keeping an eye on housing starts, as they are an early indicator ( developers will slow down as inventory piles up). Starts are showing declines in most centres. You can access this data here:

https://www03.cmhc-schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=58&itm=1&fr=1378928339863

#143 TorontoBull on 09.11.13 at 3:50 pm

City of Toronto home ownership-54.6%

#144 LTL_FTC on 09.11.13 at 4:06 pm

# 65 wendi1 & # 106 Ret
Oh realtors can count all right. Looks like they’re using a trick that car dealers use on craigslist. If you have a 2008 Toyota Corolla for sale, you also embed search terms for 2006, 2007, 2009 and Nissan, Acura, Mazda, etc to maximize the number of hits. People are looking for a 3 bedroom and so limit their MLS search on that criterion, so the realtor for the 4 bedroom listing posts once as a 4 bdr and again as a 3 bdr + guest bdr or some such thing. Sneaky, yes – sloppy counters, not likely.

#145 Tony on 09.11.13 at 4:16 pm

There are nothing but listings in Calgary. Even the people on welfare think they’re of noble decent and snub their noses at anything royalty wouldn’t live in. Go on Comfree and you’ll see about one out of about one thousand houses actually sells over a one year listing period of time. All you see is price reductions and listings that expire. In Edmonton you couldn’t give a house, townhouse or condo away for free at the low end of the market now that mortgage rates are higher. Most of Alberta is the same desperate sellers and no buyers at any price.

#146 Coho on 09.11.13 at 4:52 pm

Thanks for those clips.

People need to start paying attention. Seems more are starting to.

It’s interesting that the notion of the ‘rebels’, many of whom are Al Queda commandeering the rebellion having being the culprits behind the chemical attacks, is dismissed by the warmongers and their enabling media. The say they don’t have access to these weapons. Yet, if we believe the official story of nine eleven, that a handful of these terrorists penetrated the multi-billion dollar air defense system of the most powerful country in the world, why is it they don’t have the ability to access these weapons?

People are starting to see through the lies, hypocrisy and the disingenuousness of the so-called bleeding heart warmongers.

It’s good that people are also noticing the fudged real estate numbers. It takes several lies to support the first lie and many fold more lies to support the second set of lies used to support the first and so on. It is an exponential function. Eventually the lies crumble under their own weight until even the sleepiest of people notice, but by then the damage has been done.

#147 Coho on 09.11.13 at 4:52 pm

My comment above was directed to Jeff #132.

#148 Stickler on 09.11.13 at 5:03 pm

hmmm…manipulated data. Just like US CPI calculations & unemployment statistics & on and on. Go figure ;)

Hidden inflation:
—————–
Take a look at inflation… which government “officials” will tell you doesn’t exist.

“But that’s only because the methodology for the Consumer Price Index (run by the U.S. Department of Labor) has been changed.

At one time, the CPI actually monitored inflation. If an item in the index, say a lobster tail, went up in price by a few cents per pound, the index would rise so that inflation would be clearly recognized.

But “they” don’t want us to recognize inflation. They want to keep us operating without worry.

So they changed how the Consumer Price Index is calculated: Today, if that lobster tail rises in price… a cheaper item will simply be substituted in its place. So one month it’s lobster tail… and the next month, it’s tilapia — all to hide the rising prices.

Unemployment rate:
———————
The official unemployment number reported by the government does NOT count those who have given up looking for a job because there aren’t any, nor does it count those who are underemployed.

There are still 1.698 million fewer jobs than when payroll employment peaked in 2007. The “official” unemployment rate is 7.6%. If you include those who have given up working in the past year, the unemployment rate doubles to 14.3%.

The only reason the unemployment rate has been “declining” is because the government moves people from “unemployed” to “discouraged worker.”

In the June 2013 report, 247,000 people were switched from “unemployed” to “discouraged worker.”
More people gave up looking that month than actual jobs were created.

If you add in workers who gave up looking more than a year ago (they call these “long-term discouraged workers”), the “official” unemployment rate triples to 23.4%.”

#149 Smartalox on 09.11.13 at 6:04 pm

Interesting stats out tonight about median incomes in the Nations largest cities. Vancouver Sun has posted an interactive map colour-coding median incomes and neighbourhoods in Metro Vancouver.

http://www.vancouversun.com/news/metro/Interactive+median+incomes+Metro+Vancouver/8898691/story.html

It’s interesting to see where the ‘money’ is, and not always where you might think, given housing prices.

I’d be interested to compare this map to a map of median house prices using the same neighbourhood divisions.

#150 bill on 09.11.13 at 6:07 pm

#151 Shawn on 09.11.13 at 4:51 pm
Thanks Shawn.

#151 Bill Gable on 09.11.13 at 6:13 pm

A new study by the Canadian Payroll Association suggests fewer Canadians are living paycheque to paycheque compared with last year.

Of those polled, 42 per cent said they would be in financial trouble if their pay was delayed by even one week, down from 47 last year.

However, the Canadian Payroll Association says the long-term financial outlook for many Canadians remains “troubling.”

LINK: http://tinyurl.com/pw442ps

#152 Bob Rice on 09.11.13 at 6:14 pm

I still don;t know why a real estate “agent” is needed today with the internet available to most of us…

I used one of the not-so-great services available (better than an agent) and paid $800 to have it listed on the MLS. It still hurt having to pay the buyer’s agent 2.5% but better than paying 4%+.

With the internet we should be able to do this transaction virtually free… only lawyers fees (and transfer taxes to buyers)

Lets put these bums out of business.

#153 Devore on 09.11.13 at 6:26 pm

#140 bill

Pick a Canadian REIT, almost certainly will have a large portion of return of capital. When I did some research into REITs, there was one, AX.UN I believe, that has been consistently paying out 100% of its distributions as return of capital. Tax-free money, eh! Like all things too good to be true, it probably is.

Taken to its logical conclusion, you will end up with units that are worthless, due to either depreciation or loss of equity. That’s what return of capital means. I would be extremely wary of any such scheme; you will be likely facing in the future both capital losses and reduced distributions.

Over the long term, you have to look at the total return, including capital loss/appreciation, dividends/distributions, and tax treatment, and compare to returns you might get elsewhere. But if all you need is the income, hey, party on! until all your money is returned to you.

#154 Valley Renter Chick on 09.11.13 at 6:37 pm

The misleading data doesn’t surprise me at all. Years ago I stopped paying much attention to “studies” or “data”. There are just so many variables, it is hard to know what to believe.

#155 HAWK on 09.11.13 at 6:51 pm

#129 Shawn on 09.11.13 at 12:54 pm

True the “depreciation” of buildings has to be accounted for at some point but over long periods surely the appreciation in the land value would itself offset that?

#156 T.O. Bubble Boy on 09.11.13 at 7:12 pm

@ #125 Shawn on 09.11.13 at 12:17 pm
ANY 1% ers here? 10% ers?

Stats Canada today said:

According to the 2011 NHS, 10% of Canadians had total income of more than $80,400 in 2010 — almost triple the national median income of $27,800. To be in the top 5%, Canadians needed to have a total income of $102,300 and to be in the top 1% required $191,100, nearly seven times the national median income.

This is INDIVIDUAL income, not family.
——————————–

Wow. I see these stats every year, but I’m so conditioned by the U.S. stats (WAY higher for the top 1% levels) that Canada’s incomes just seem low.

So if a Top 1%-er is “only” $191k (about $123k after-tax), who keeps buying the $1.5M-$2M McMansions around me? Offshore money and/or gift from rich parents you say?

The crazy part is, if you look at the link from #137 CITRAN (to the CBC article on income by postal code), my area shows $100k average income!

#157 Smoking Man on 09.11.13 at 7:26 pm

#152 Coho on 09.11.13 at 4:52 pm

Good post but your last line, the lies crumble.

So what, the lier is found out, no consequences.

The lier always wins.

Learn to lie, enjoy life…

#158 Donald Trump on 09.11.13 at 7:33 pm

#146 Old Man on 09.11.13 at 3:12 pm

=======

I read that some of the main media providers are in a pi$$ing match with cable companies.

The cable companies apparently didn’t pay the big media(aka Time Warner etc.), but now big media wants to charge the cable companies fees.

Some cable companies are saying NO and likely have all the cards…as if a big media outlet loses its spot in the cable menu…it is screwed.

#159 Derek R on 09.11.13 at 8:08 pm

#125 Shawn on 09.11.13 at 12:17 pm
ANY 1% ers here? 10% ers?

Stats Canada today said:

Income doesn’t tell you anything about who the 1% are. All it can show you is who the well-paid are. But being rich isn’t about your pay, it’s about your net worth.

Plenty of well-paid fools around who spend every penny they make. They’ll never be rich even if they earn $200K per annum.

#160 Daisy Mae on 09.11.13 at 8:57 pm

#130 Gains: “I just can’t picture myself paying 5-digit property taxes like some of these houses every year…”

******************

I shudder to think of the assessed values of these inflated homes across Canada — how do they pay the exorbitant taxes due? Probably by taking out a HELOC….

#161 Greed is God on 09.12.13 at 12:35 pm

According to this study, 37% of the demand for houses in the US is driven by low interest rates.

http://www.creditwritedowns.com/2013/09/this-chart-on-housing-is-a-big-deal.html

Garth, I would imagine that this rate is similar on this side of the border?