This was my online post that inspired my "blogginess"
In is a response to a recent front page MacLeans Article, "The shocking truth about the value of your home." I posted this as a comment.
You can find the actual MacLeans article here:
(MacLeans photo which accompanied the article)
The Post...
I am appalled at the one-sided slanderous tone of this article.
Let me be clear- I am a professional Realtor, but I do expect that housing prices will likely fall modestly over the next few years.
Let me also be clear though- I am an intelligent and rational individual and I cannot stand to read this type of shock journalism. I am incensed by the borderline slanderous swipes at my industry and the twisted logic of the author.
Firstly, let's talk about the real estate industry's market outlook. Sure, CMHC revised their forecast, but it seems to me that doing so is quite aboveboard. They are after all a government agency, so one would assume that there is a certain expectation of honesty and integrity. That article infers that a revised forecast indicated some sort of dishonesty in the first place. Perhaps I should remind the author that it was only 4 months ago that the federal government was forecasting a surplus budget. Things changed rather quickly on the Canadian economic front.
In terms of private real estate forecasts, yes perhaps some of the real estate companies might paint a slightly rosier picture then reality I would concede. That said, as private firms, we cannot be outlandishly optimistic or it would clearly hurt our credibility with our ever-so-finicky consumers when they realize we are sailing them down the river. The vast majority of us in the business operate with integrity and high ethical standards with the fiduciary duty of protecting our clients' interest always in mind. I would like to point out that some major real estate companies (not reported in the article) did in fact forecast a significant downward trend for 2009.
Next, let's talk about the claim that the Canadian Real Estate Association (CREA) "scrubs the data". I find this to be libelous and preposterous. Let me take a moment to explain how CREA data is inputted. It is not through a bunch of Realtors sitting in a room entering the sales at some head office in Toronto. The sales data is collected through each individual agent submitting sales reports to the individual mls boards. These mls boards are integrated (through automated technological processes) to upload the data to a provincial and then national level. To say that Realtors are messing around in this process is totally ridiculous. I am ashamed that my association refused to comment, but that does not infer guilt! I would challenge anyone to take a random sample from CREA data and verify it via the land registry system. I am willing to bet on the accuracy being 99.99% or higher.
It also occurred to me that the whole basis of the "evidence" that the market will drop 20% over the next 10 years is this new futures index. Well firstly it is completely absurd and circular logic to use a speculative index as an indicator of the future and then present this as solid evidence that the market will shift. It made me wonder where the inspiration for such a detailed analysis of the Teranet futures index came from. Perhaps the author has some money invested and will benefit should the market be spooked by major publications presenting these sorts of articles. Hardly unbiased for those who "put their money where there mouth is" to want to see a negative on the market.
Finally, where is the neutrality? Like I mentioned at the beginning of this now lengthily rebuttal posting, I do expect the market to shift downwards. That said, we cannot simply assume that we will follow the same path as the U.S. in terms of housing markets. The author loosely makes this connection and to do so is blatantly wrong. There are so many key differences between the U.S problems and ours that I dare not even list them. Here are a few though: 1. Substantial legal differences in terms of bank repos mean that we don't see houses being liquidated drastically by banks which in turn drives down pricing; 2. Sub prime mortgages account for about 10X as many mortgages in the US as the do proportionally in Canada; 3. We never had the extensive and abusive so called NINJA loan programs that triggered the US slide; 4. We have a vastly different taxation system related to principal residences which means we have far more equity in our homes then our American cousins; 5. Our banks are the most stable in the world and are still operating as such.
Overall, I just hate to read an article like this and sit by idly. I hope that those that have read my posting here will agree that MacLeans should be ashamed of itself for publishing this 'report'. It is makes wild accusations and bases its predictions on circular logic. It is shock journalism and is founded on half-truths. It is ultimately quite biased and one-sided.
Ultimately, I am sad to say that I no longer trust MacLeans to report fairly and with the integrity that I thought I could expect. I guess from now on when I want to you’re your news, I will be reaching to the magazine rack in my bathroom, instead of to the top of my coffee table where I keep the scholarly publications.
Sincerely,
Scott (From St. Catharines)
Let me be clear- I am a professional Realtor, but I do expect that housing prices will likely fall modestly over the next few years.
Let me also be clear though- I am an intelligent and rational individual and I cannot stand to read this type of shock journalism. I am incensed by the borderline slanderous swipes at my industry and the twisted logic of the author.
Firstly, let's talk about the real estate industry's market outlook. Sure, CMHC revised their forecast, but it seems to me that doing so is quite aboveboard. They are after all a government agency, so one would assume that there is a certain expectation of honesty and integrity. That article infers that a revised forecast indicated some sort of dishonesty in the first place. Perhaps I should remind the author that it was only 4 months ago that the federal government was forecasting a surplus budget. Things changed rather quickly on the Canadian economic front.
In terms of private real estate forecasts, yes perhaps some of the real estate companies might paint a slightly rosier picture then reality I would concede. That said, as private firms, we cannot be outlandishly optimistic or it would clearly hurt our credibility with our ever-so-finicky consumers when they realize we are sailing them down the river. The vast majority of us in the business operate with integrity and high ethical standards with the fiduciary duty of protecting our clients' interest always in mind. I would like to point out that some major real estate companies (not reported in the article) did in fact forecast a significant downward trend for 2009.
Next, let's talk about the claim that the Canadian Real Estate Association (CREA) "scrubs the data". I find this to be libelous and preposterous. Let me take a moment to explain how CREA data is inputted. It is not through a bunch of Realtors sitting in a room entering the sales at some head office in Toronto. The sales data is collected through each individual agent submitting sales reports to the individual mls boards. These mls boards are integrated (through automated technological processes) to upload the data to a provincial and then national level. To say that Realtors are messing around in this process is totally ridiculous. I am ashamed that my association refused to comment, but that does not infer guilt! I would challenge anyone to take a random sample from CREA data and verify it via the land registry system. I am willing to bet on the accuracy being 99.99% or higher.
It also occurred to me that the whole basis of the "evidence" that the market will drop 20% over the next 10 years is this new futures index. Well firstly it is completely absurd and circular logic to use a speculative index as an indicator of the future and then present this as solid evidence that the market will shift. It made me wonder where the inspiration for such a detailed analysis of the Teranet futures index came from. Perhaps the author has some money invested and will benefit should the market be spooked by major publications presenting these sorts of articles. Hardly unbiased for those who "put their money where there mouth is" to want to see a negative on the market.
Finally, where is the neutrality? Like I mentioned at the beginning of this now lengthily rebuttal posting, I do expect the market to shift downwards. That said, we cannot simply assume that we will follow the same path as the U.S. in terms of housing markets. The author loosely makes this connection and to do so is blatantly wrong. There are so many key differences between the U.S problems and ours that I dare not even list them. Here are a few though: 1. Substantial legal differences in terms of bank repos mean that we don't see houses being liquidated drastically by banks which in turn drives down pricing; 2. Sub prime mortgages account for about 10X as many mortgages in the US as the do proportionally in Canada; 3. We never had the extensive and abusive so called NINJA loan programs that triggered the US slide; 4. We have a vastly different taxation system related to principal residences which means we have far more equity in our homes then our American cousins; 5. Our banks are the most stable in the world and are still operating as such.
Overall, I just hate to read an article like this and sit by idly. I hope that those that have read my posting here will agree that MacLeans should be ashamed of itself for publishing this 'report'. It is makes wild accusations and bases its predictions on circular logic. It is shock journalism and is founded on half-truths. It is ultimately quite biased and one-sided.
Ultimately, I am sad to say that I no longer trust MacLeans to report fairly and with the integrity that I thought I could expect. I guess from now on when I want to you’re your news, I will be reaching to the magazine rack in my bathroom, instead of to the top of my coffee table where I keep the scholarly publications.
Sincerely,
Scott (From St. Catharines)
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