In today’s news… the bleeding starts. The Globe reports that Canadian Housing Cools. Vancouver sales are down 45% percent. There’s even a heart wrenching story about a speculator who failed to pass her hot potato along fast enough. “It’s not fair” she claims “I got ripped off instead of the guy I wanted to sell it to at a profit”.
Let me explain something about housing corrections… everyone gets burned.
The problem is how far we’ve gotten from what the intrinsic value of a house actually is. Your primary residence is supposed to keep you and your family warm and dry. When you start seeing your primary residence as a status symbol or an investment it’s problematic. Because who doesn’t want more status or a bigger investment? The extra 50% of house that comprises the status/investment portion results in more expenses for taxes, utilities and purchase price. Buyers pay a ridiculous premium for a “cool” location.
An investment is something that pays you to own it. Your primary residence does not ever do such a thing. If you calculate all your payments, you’re lucky to break even when you sell.
As far as I’m concerned the less you spend on a primary residence the better off you are as long as it’s adequate for your needs. It’s no secret people are horrible at math. Look at the number of people buying rent to own furniture at low low weekly prices, less than the cost of a coffee per day for the next 5 years. Ridiculous, I’d park my butt on something put out at the curb long before I’d pay $2000 for a $600 couch.
July TREB Report
Finally the July report from the Toronto Real Estate Board is out. They are putting a positive spin on a 34% drop in sales for July The Globe is saying That Buyers Are Leaving The Toronto Market. TREB keeps trying to make us feel good by stating that house prices are up 6% over last year but prices dropped from June by 3.3%. I’m thinking there’s more dropping to come as I stated before by 10% through now until December. So there’s 6.7 percent to go down. I may be wrong because I’m underestimating that decline. It will of course also depend on what the Bank of Canada does with their interest rates come September.
That’s the problem with predicting the future, you never know what will happen. You spend a bunch of time worrying and nothing happens or you’re cruising merrily along and boom the well head springs a leak and 11 people die and there’s a continuous feed of crude oil video making you look like a bunch of idiots.
CREA Crushing Competition This Time While They’re Being Sued For… Crushing Competition
In other real estate news, I did a post about CREA vs The Competition Commissioner a while ago at Million Dollar Journey. It seems like these guys really aren’t getting any smarter. There’s a story in today’s news about Rules shut door on 1 cent listings
Basically Dawson Pereira opened a brokerage that offered one cent listings. It’s a bit of a scam because after 10 days they charge you $600. Best Value Real Estate does MLS listings for $109. In any case the way CREA has it now, the phone number of the seller is on the private section of the MLS so you have to talk to a real estate agent to get the number of the seller. Why would they waste their real estate agents time this way unless they have the agenda of interfering with the sale in some way.
I read later, after I wrote the article, that Realtysellers (who originally filed the complaint with the Competition Bureau) had their access to the MLS terminated because they were posting all the active listings online. Currently real estate agents only post their own listing on their own website.
My wish was for the Competition Commissioner to crack the MLS wide open and allow sites like Zillow in the US to exist here in Canada. This business of real estate agents having the stranglehold on information is just wrong. Their new Realtor.ca site is worse than ever with expired listings staying and new listings taking forever to get up. The lack of information is just appalling.
I’m not sure what’s going on with CREA, either they’re incredibly stupid or incredibly arrogant. Even a two bit criminal knows to keep their head down when the cops are about. You’d think they would have taken it easy on Dawson Pereira and others like him until their current lawsuit is over. Then when the matter was finished they could crush him like a bug and no one would care. Instead of chilling out they’re all over the front page of the Toronto Star for anti-competitive acts, AGAIN.
More TREB Propaganda
Then I unfortunately read this bit of drivel from Toronto Real Estate Board about how Realtor’s Access To Databases can Help Us. Buyer’s agency Agreements are supposed to be good for us. They aren’t. In a perfect world where agents were responsive and good at working for their customers, sure. In the real world world, forget it. If CREA and TREB hadn’t created the database situation that exists now, it wouldn’t be such a big deal. Everyone should have access to public information. If there’s anything I find hateful, it’s someone who restricts your information then claims they are indispensable because they are the only ones with the information.
For more on the case itself here’s the link to the Competition Bureau.
I think I sound cranky this afternoon. It’s the thought of the cabal of real estate agents skimming 5% off 85% of all house sales in the country. They also have a legal stranglehold on commercial rentals. Do you know how much money that is? A LOT!!!