Cease & desist

In the recent past I received a letter from CREA, the mothership of realtors, informing me I could not use the word ‘realtor’ on this site. Expect legal action (leg irons, the rack, car battery on genitals), it intoned, unless I always said REALTOR®. Yup. Capital letters, little ® thingy. No snickering.

The document went on. This pathetic blog was also prohibited, upon pain of indefinite incarceration in a Brad Lamb concrete-walled condo with high strata fees, from saying ‘multiple listing service.’ Nope, it must be MLS®.

Naturally, I ignored it.

All this flooded back to mind when I heard about Shafquat Arefeen, a cool moister financial analyst with a must-read web site who committed the cardinal sin against realtors, and has also been threatened with castration by angry kittens. His crime was to create a gripping visualization of trends in the insane Toronto housing market, showing at a glance how unsustainable and fraught with risk housing has become. He published it. Over thirteen thousand people came to read it. The lawyers moved in.

So here is the cease-and-desist-or-face-vivisection letter Shafquat received, prompting him to fold.

The site displayed listing and selling prices, sales volumes and sold prices for individual properties. It’s just the kind of information freely available in real time to everyone in Nova Scotia, for example, at Viewpoint.ca. But in Ontario, you hang for it.

This begs a question: what are the realtors afraid of? The answer, it seems: educated consumers.

This purposeful opacity to data is exactly what got the Toronto Real Estate Board (the largest in North America) in hot trouble with the federal competition cops. Last year TREB lost a battle to keep its data secret when the courts ruled it was ‘anti-competitive.’ The 45,000-member cartel appealed, and the legal wrangling goes on. In the meantime the board continues to threaten any citizen, agent or broker who dares to publish information (it can be shared privately between an agent and her clients) arguing it’s proprietary and contravenes federal privacy laws.

Of course, keeping buyers intentionally dumb as to the sales history of a property, recent re-listing details, price increases or reductions, days on market and other relevant data was a key part of ensuring a housing boom would turn into a delusional bubble. Uneducated consumers were goaded into bidding wars, bully offers and blind auctions without any historic context to guide them. And while relevant information could have been demanded from their agents, most people didn’t know enough to ask, and many agents didn’t care to share. That’s when listing prices turned irrelevant and real estate became destined to implode.

So what does a rapid 20% price decline in the last few months tell us, with a detached home now worth less than it was a year ago?

It says too many paid too much, too hastily, too impetuously. The main sources of housing information were media reports, based almost solely on data released by real estate organizations. Realtors have routinely fudged the numbers, permitted multiple listings of the same property, ignored deals that eventually defaulted, withdrew data without notice (mid-month numbers disappeared in Toronto) and created Frankenumbers (as in Vancouver) that averaged out trends, effectively masking critical current market conditions. Meanwhile house pimps like Royal LePage and Re/Max pump out ‘reports’ based on sketchy data, internal surveys, regional managers’ comments and faerie dust, with the words reposted verbatim – as news – by our esteemed reporters. No wonder we went over the cliff.

So listen, Shaf. Man up. Spread the data. Embrace transparency. You’re on the right side of the issue. A decade from now, when the sun shines on all market info, this will seem so archaic.

Oh, I almost forgot: ‘realtor, realtor, realtor.’ Lock me up.