Realtors - tell us the truth!
I'd like to give some credit to a realtor in North Vancouver, Paul Boenisch, who recently reported that the market is cooling, requiring sharp pricing to get a quick sale. In fact, while prices are not going down yet, inventory is growing fast and if this continues prices will go down. The exact quote was:
"We are getting mixed signals. We see steady price gains month after month. On the other hand, sales are down 6.4% and listings are up 26% . If this trend continues the only direction is down for prices."
It seems a certain minority of realtors understand the economic situation and don't bother to act as cheerleaders, but rather acknowledge the situation and work within it. In a way, realtors who are relatively successful should have a good gut instinct about when things are going well due to the numbers of sales versus the numbers of looky-loos and no hope listings that make up a portion of their work. When a Realtor keeps rah-rah sales BS in check, and speaks frankly about the market, they provide a valuable service in any housing market. Some examples of this I have found in my internet rambles since starting this web-site include Scott Simmons, Mike Morgan, Paul Boenisch and to some extent Rob Chipman. They are writing, publishing or hosting messages that other realtors might not be so happy to see distributed, if they believe their continued livelihoods depend on a sunny economic view, no matter what.
Do the readers know any other realtors who are not ladling on the candy coating or handing out the rose coloured glasses, who are encouraging buyers to "price sharply" or even possibly to "bid sharply"? If so, feel free to provide links here in the comments and to relate any interesting quotes.
On the other hand, maybe you are meeting realtors who take the other point of view, who drank so much real estate kool-aid, they bought a bunch of presales themselves and have been busy flipping houses. They can't acknowledge the tides have turned, or they confuse paper profits with money in the bank, they are not going to be able to play the next round under new rules, and don't understand that the property market is cyclical.
Is rah-rah enthusiasm with markets at levels many real estate bears consider madness, is that highly suspect, or merely misplaced optimism?
In other words, if the only way a person/couple/family can buy a selected property is with no down payment, variable rate, 40 year amortization, in a time of global economic disruptions, is it appropriate for realtors to avoid mentioning any potential for a downturn?
It's okay to stay positive when you are positive that everything is positive. Otherwise, you could be jeered and maligned like that other former media mouthpiece of the NAR, David Lereah.
I should clarify - David is an economist. Even economists can't get it right all the time.
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I can not speak for any Realtors but only myself. The best book written on BC real estate is called "Paving Paradise" by Micheal Kluckner. In his book he explains the main business in Vancouver is Real Estate. It all started with the rail road and the rail companies getting the land in Vancouver. They figured that they could make more money selling building lots to Easterners or Europeans that hauling wheat or coal. This has been and will be the main business in Vancouver.
In real term your local municipal government with their zoning laws can affect real estate prices more than anything else. If affordable housing was something that the local governments had the political will and really wanted to solve they could solve it in one council meeting in each municipality. The tax base concerns, votes and nimbyism stop this from happening .
After working as a Realtor I can assure you that Realtors do not make a market go up or down. It is based on everyone wants their piece of the pie. I have seen sweet older ladies scream out the prices that the neighbors received for there home and hear 20 reasons why their home is better. Realtors are the ones who make the deals happen between willing parties. So don't shoot the messenger not just yet. I would say the vast majority work long hours and make little money. Yes some make lots but most do not. I make the same amount now as I would working as a plumber. I guess in stead of unplugging the ___ I'm shoveling it. lol. (Realtors can even tell jokes or maybe they are one)
To the people who are left out of the real estate market or think they are rent. It is the best time to rent. I have a friend on Salt Spring (yes even a Realtor can have a friend) he rents a 2 million dollar waterfront home for $1200 a month. Who is the crazy one on this deal.
Cheers Scott Simmons One Percent Realty Vancouver Island
After working as a Realtor I can assure you that Realtors do not make a market go up or down. It is based on everyone wants their piece of the pie.
That statement's bull. I've seen Realtors pumping up the market. There's only one reason they'll say "You can probably get $90,000 more"......Greed...They get more commission.
Yes, I do agree on renting. Personally, I don't feel too inclined to pay for someone's retirement. :)
I'll be honest Scott, I had never hear of Michael Kluckner until now, or maybe didn't pay any attention if I did. Anyway, after a google and a visit to his website, it seems he is a pretty interesting character, now living in Australia. Here is a link, if anyone wants to check out his paintings, comments on Vancouver ,or his blog.
I agree with what you say about realtors not all making big money, or influencing the market.
I'll make a confession, back in the 90s I took the pre-licensing course and tried to get started as a sub-mortgage broker. At the time I was under-capitalized to say the least, and couldn't hang on long enough to make a go of it. Or maybe I was just bad at the job. So anyway, I understand what you are saying about the economic reality and the hours required to make a living for a lot of realtors. I also don't agree with bizznitch that realtors determine the market by pumping.
However, there is another type of realtor, one who maybe gives a bad name to the profession. This is the one who as soon as you walk in an open house, tells you to be quick with your offer, as multiple offers will be coming in, or says he has an offer, but feel free to look at the place and raise it. Or for that matter, if talk turns to the general market quickly pipes up with, "Prices won't be going down in my opinion, they never do."
From what I can tell you're not presenting the situation like that. I hope being a bit more straightforward pays off. That's what I prefer if I'm dealing with a realtor. Trust is a funny thing, for the realtors who buy into and regurgitate the hype of ever-rising house prices, trust from sellers who can't sell and buyers who feel ripped off will of course be gone at some point.
I remember talking with a Vancouver Island Real Estate Board (VIREB) member company GM back in 1996 about the situation in the VIREB - around that time the board lost over a third of its members in just over a year - there was no money to be made and realtors quit left right and center.
Hard to believe it could ever be like that again, but in fact the signs are all around us. Good luck with your work Scott and hopefully you can stay busy even if things are not so hot for the whole market in the near future.
As a likely buyer, my own sympathies are a little more cold-hearted; I'd like to see he market get hammered down 30-40%.
Oh well, just have to wait and see about that.
Greg,
Listings have been piling on the last few weeks and I have not seen a lot of sales in Fairfield, Oak Bay, Downtown Victoria or James Bay. Will you be updating the stat charts at the end of the month??
Hey Roger, I have fallen into the "don't do a post for two weeks and get 150 comments mode." Unfortunately, I don't do a post and I still don't get 150 comments. Front page gets a bit stale without something new, so I will follow your advice.
Also, I noticed apartments haven't jumped much since the last update, that's why I waited another couple days to see if that would change....
In some ways I think posters on the real estate blogs are being too hard on real estate agents. While a Financial Advisor has a fiduciary duty to their client, they are really just as dumb and informed/uninformed/misinformed as the rest of us, albeit with (perhaps) some more education.
A real estate agent, on the other hand is a salesperson with no such duty to you, and if you choose to believe what any salesperson tells without question (even though you are paying them huge sums of money for their services), then you are "asking for it".