STAT CHAT
// BY BEN MYERS
ARE REALTORS BIASED?
Ben Myers is senior vice-president of Market Research and Analytics at Fortress Real Developments. Ben assists in evaluating the market and projects that Fortress engages in. Follow his blog posts and commentary on the Canadian Housing Market at fortressrealdevelopments.com/news or follow him on twitter at @BenMyers29
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henever a real estate agent, builder or developer references the state of the Toronto condominium market in a media article, a video, or on a website/blog and says anything other than the market is overbuilt, oversupplied, overvalued or on the brink of collapse, one of the first
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comments made online is that this person should not be trusted, that you shouldn’t take advice from someone who makes money in the real estate business. By this same logic, why does a dentist tell you to floss? Wouldn’t he make more money if you don’t? It must be difficult to trust anyone if you think everyone is out to swindle you; that everyone will lie, manipulate or bend the truth to separate you from your money. I choose to believe that people’s judgments are not solely based on their own financial gain. I too have been accused of being biased, my opinions on the market fluffed off as an attempt to persuade buyers into an uncertain condo marketplace. People who know me well, know that I’d much rather be right than rich! My commentary is my opinion. I don’t want people to have the satisfaction of waiving my incorrect predictions in my face. If you want to know what’s happening in the condo market, go to the experts – those who study the market every day. Go to the folks who pour over the Toronto Real Estate Board (TREB) data daily when looking for condo suites for their clients. Go to people in the business who are having the conversations with buyers, mortgage brokers, construction lenders, other sales agents, developers and insurers. It’s great to see people interested in real estate economics and the condo market data in specific locations, but better to go to someone with the experience, as opposed to that neighbour of yours who blogs about it on weekends, or that guy from Owen Sound who Tweets about the Toronto market. A person who shoots 200 free throws a day is going to be much better at it than the person who shoots 15 on the weekends. The thing people need to understand is that there are opportunities to buy real estate when the market is booming, and there are opportunities when the market is flat. A good realtor can help you find the perfect place to live, or help identify an undervalued property for investment purposes in both instances. The reason that realtors and I have been positive about the market, is that the data indicates that the GTA market is performing well. The Statistics Canada New Home Price Index in April 2014 is up 31 per cent in 10 years. The median price of a resale condominium as tracked by TREB as of May 2014 is up 59 per cent during that same time frame. Urbanation Inc. has indicated that the average price on a per-sq.-ft. basis for new condominiums in Q1-2014 is up 82 per cent over Q1-2005, and the average absorbed new single-detached home has increased by 89 per cent over the past decade, according to May 2014 data published by Canada Mortgage and Housing Corp. I hope that you don’t decide if the Toronto condo market is up or down by who said it. Attack the message, not the messenger. Educate yourself on what is happening in the market, and in the neighbourhood you want to live, in addition to leaning on the experts. With that combined knowledge, you’ll never be swindled or taken advantage of.