2010, A Year of Real Estate In Review

Here’s a look at some of the events that made headlines this past year:

Source: propertywire.ca Written by:WRITTEN BY DAVID HATTON, EDITORIAL TEAM

2010 has been a year that resembled an amusement park roller coaster ride, complete with twists & turns . But the year will also go down in the record books as the year that realtors took a good look at the value added services clients are paying for. Or choosing not to.

Here’s a look at some of the events that made headlines this past year:

The year in Toronto got off to a good start with reports that 87,308 transactions were processed during 2009 – a 17% increase over 2008. That included 5,541 properties bought and sold during the month of December 2009 alone. The average home price climbed 4 % in 2009 to $395,460, according to the Toronto Real Estate Board (TREB).January

A survey of 1,225 Royal LePage agents and brokers across Canada revealed buyers were still nervous about the stability of the economy. When asked to comment on the most common fears they heard from home buyers during the last three months, 38% of Royal LePage agents and brokers cited economic stability and related factors such as job security. 23% said home buyers fear they may not be able to sell their existing homes at the price they are hoping for, while 12% said buyers are hesitant because they believe prices have not yet hit the bottom of the cycle.

Meanwhile, realtors in the Halifax area were encouraged by news that sales from November 2009 to January 2010 were up 27.5% compared to the same months last year. Nova Scotia Association of Realtors president Linda Smardon explained it was no surprise. “This time last year we were experiencing large decreases so we fully expect our numbers to be up provincially. With listings down and sales up, the real estate market is more balanced,” she said in a news release, adding the average price in the province was up 8.5 %.

February

February was the month of Valentines Day, and TREB released statistics showing clients loved buying and selling properties, reporting that there were 4,986 transactions in January, a “huge” increase over the 2,670 sales during the same period in recession battered 2009.

Century21.ca announced they would be adding Chinese language support for sales representatives and brokers in the Century 21 System. “Cantonese and Mandarin are commonly spoken languages in Canada’s metropolitan centres such as Toronto, Vancouver, Calgary and Montreal,” says Century 21 Canada President Don Lawby. “We now offer a unique advantage to franchises and sales representatives whose clients predominantly speak these Chinese languages.” Century21.ca already serves Canadians in the country’s two official languages – English and French – and the addition of Chinese makes it the first trilingual, nationally branded real estate website in Canada.

March

Greater Toronto realtors reported 10,430 sales through the MLS in March, pushing total first quarter 2010 sales to 22,418 – the best result on record under the current TREB boundaries.

March was also when CREA filed its response to the Competition Bureau’s challenge of its MLS rules, calling comments by commissioner Melanie Aitken “preposterous”. “There is simply no legal, economic or factual basis upon which to order the remedy sought by the commissioner,” a statement from CREA said.

CREA’s response, filed with the Competition Tribunal March 26, stated the challenge was “fundamentally misconceived. Contrary to the commissioner’s allegations, is it simply untrue that consumers have only one option if they want to sell a house using a MLS system operated by a local real estate board or association?”

CREA even went after Aitken for statements to the media. “The commissioner of competition has stated in multiple media statements that (CREA’s MLS rule amendments) amount to a ‘blank cheque’ because new anti-competitive rules could be introduced by CREA or its member boards. In CREA’s view, this allegation is preposterous. CREA has and always has had the ability to make rules, as do its member boards. CREA and member boards...comply with competition law,” says the response.

CREA officials also addressed the Competition Bureau’s statements that “MLS restrictions have caused at least one broker to exit the relevant market.” It’s a reference to the Toronto firm Realtysellers, which has pending legal action against TREB and CREA. In its response, CREA added, “Realtysellers suspended operations because of impending disciplinary proceedings. The Real Estate Council of Ontario commenced proceedings to strip Realtysellers of its broker registration because the conduct of its principal Stephen Moranis afforded ‘reasonable grounds for belief that he will not carry on business in accordance with the law and with integrity and honesty.’” It said the RECO investigation and proceedings against Realtysellers were commenced prior to CREA’s March 2007 introduction of the interpretations to the MLS rules.
Finally, the last word went to Michael Polzler. The Re/Max Ontario-Atlantic executive vice-president took out an advertisement in one industry publication, taking aim at part-time realtors who do one deal per quarter. He questioned their professionalism and value and launched a website for realtors to voice their thoughts.

CREA and RECO declined to comment specifically on Polzler’s letter, although RECO’s communications manager Sherri Haigh suggested Polzler take his concerns to Ontario’s Ministry of Consumer Services.

April

In April, real estate boards and associations across Canada were trying to get rid of land transfer taxes. The Winnipeg Real Estate Board released a study showing Manitoba had seen its land transfer tax revenues increase from $31 million in 2006 to $44.8 million in 2008, representing a 44 % increase. The board cited a November 2007 land transfer tax study by Will Dunning, the chief economist of the Canadian Association of Accredited Mortgage Professionals (CAAMP), showing “the taxes levied on land transfers are far in excess of any social or governmental ‘costs’ that result from the activity of home buying and therefore these discriminatory taxes are not justifiable.”

Dunning compared 1997 to the first nine months of 2007 and showed over a slightly less than ten year period, the tax payable had gone up more rapidly than house prices.

TREB officials released a poll showing that 70 % of Torontonians believe the Toronto land transfer tax was not a fair way for the city to address its budgetary needs. That was up from 62 % of Torontonians who felt the same way according to an earlier Environics poll conducted for TREB in 2007, prior to the implementation of the tax. That still didn’t stop TREB from also reporting 10,898 sales through MLS in April, representing a 34 % increase compared to April 2009. There were also 20,683 new listings in April –a 59 % annual increase. Both the sales and new listings results amounted to new records for the month of April under the current TREB boundaries

May

Greater Toronto realtors reported 9,470 sales though the MLS system in May, representing a one % dip from May. 2009. In comparison to previous years, this was the third highest May sales result on record.

Century 21 Canada unveiled a new branding direction during May as part of a multi-year online marketing strategy that it says has seen the number of visits to Century21.ca rise by nearly ten-fold since late 2007. “The goal behind our new tagline, Connected to More, is to communicate to home buyers how Century 21 has evolved as a brand,” company president Don Lawby said in a news release. “It also represents our vision for how we want consumers, potential sales representatives and franchisees to relate to the Century 21 brand in the future.”

May was also when realtors got suspicious and angry with Real Trends. The US-based research firm had been producing a list of Top 500 brokers for 22 years, ranking everyone by number of transactions and closed sales dollar volume. When it attempted to release a Canadian Top 200 list, however, there were initial problems with accuracy. Real Trends said it was due to not all brokers returning their surveys, and still wanted to do the lists on an annual basis.

June

The battle between CREA and the Competition Bureau heated up in June with the tribunal chair turning down Lawrence Dale’s request for intervenor status in the case. The co-founder of the former Realtysellers discount brokerage was expected to be a witness in the case while another applicant, Stephen Skelly, vice-president of operations for the National FSBO Network, was granted intervenor status. Skelley was asked to submit an affidavit for cross-examination by counsel for both parties in the case.

In other news, Greater Toronto realtors reported 8,442 sales through MLS in June. This represented a 23% decrease compared with the 10, 995 originally sold during June of the previous year.

That was still substantially less unit volume than in the Vancouver area, where the Real Estate Board of Greater Vancouver reported 2,972 properties were sold, a decline of 30.2% compared to the 4,259 properties that changed hands in June 2009, the highest selling June on record for the board.

But Edmonton realtors were still satisfied with the pace in their market with sales of 1,539 properties in June, said Larry Westergard, president of the Realtors Association of Edmonton. “There was less external pressure on the market from incentives or rate changes last month and as a result the market seems to be operating in a normal controlled manner...It has been...very busy in REALTORS® offices as they list client’s properties for sale, book showings for buyers and attend open houses. This has not resulted in immediate sales, however, and, in anticipation that this slowdown will continue through the year, we have reduced our 2010 sales forecast by 2,000 units from 21,000 to just 19,000.” There were 9,406 residential properties in inventory at the end of June as a result of 3,473 new residential listings and sales of the 1,539 properties. The sales-to-listing ratio was 44%. The average days-on-market was up at 47 days. The record inventory levels were set in September 2007 at 9,913 residential properties available through the Edmonton MLS system, according to Edmonton board officials.


July

On July 1st, Ontario and British Columbia joined  the Atlantic provinces of New Brunswick, Newfoundland and Nova Scotia when they introduced the controversial Harmonized Sales Tax (HST).  The new tax is 13%  in Ontario and 12%  in B.C.

Meanwhile, over a dozen Kitchener Waterloo area realtors met with Ontario PC leader Tim Hudak to discuss the controversial land transfer tax. Hudak had advocated for a one year land transfer tax holiday to give buyers a break for that first year.

August

CREA launched a new national television commercial month called Faces, that was intended to highlight the value realtors bring to home buying and selling. In the 30-second ad, viewers see and hear testimonials from several individuals about their experience with their realtor. Men and women representing people from all walks of life talk about their unique needs when buying and selling a home. While they talk, their faces continually change, eventually becoming another person with another positive story.

September

Keller Williams Realty announced plans to launch a Keller Williams Realty Commercial Division this fall. “Our goal is to expand our platform and make Keller Williams Realty the real estate company of choice in both the residential and commercial worlds by providing our associates the technology, marketing tools, and resources to succeed in the commercial business,” Mark Willis, CEO of Keller Williams Realty, said in a press release.

Re/Max launched a new entrepreneurial series for its top sales representatives, led by real estate coach Ken Goodfellow. The entrepreneurial program, exclusive to Re/Max, provides sales associates who have achieved Platinum Status (more than $250,000 in annual commission) with “the skills necessary to create a ‘systems driven’ business, including strategies to achieve long-term growth, financial planning and leadership skills for better results,” the company said.

October

October will be remembered as the month when The Big Vote took place.

Representatives of the country’s 101 real estate boards crowded into the ballroom of a Newfoundland hotel to vote 97% in favour of a deal that some warned could mean the end of the Canadian Real Estate Association. Visitors rushed to the PropertyWire.ca website almost immediately, making it the most-read story of the year.

There were also reports that the federal Competition Bureau may not be finished with organized real estate and set its sights on investigating how MLS data is stored.

The Ontario Real Estate Association (OREA) was also upset this  month, but over another issue. The group commissioned an Ipsos Reid survey that showed 56% of Ontario residents mistakenly believed the new Harmonized Sales Tax (HST) applied to the full purchase price of a resale home, when it is only levied on the various transaction fees associated with the purchase. “We’re doing our part to inform our clients, but we shouldn’t have to do it alone. We’re calling on the Ontario government to launch an immediate public awareness campaign to educate taxpayers and end the HST confusion,” said Dorothy Mason, President of OREA.“For average homebuyers, learning that the HST does not apply to the full purchase price means a $40,000 saving they weren’t expecting.”

TREB reported 6,681 sales through the MLS system in October 2010, while the REBGV showed home sales were steady the past four months, lending a sense of stability to the market. According to the MLS Link Housing Price Index (HPI), the benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 4.6% to $579,349 in October 2010 from $553,702 in October 2009. Since June, however, residential home prices in Greater Vancouver have remained relatively unchanged, declining 0.2%. “We’ve seen a lot more consistency and less volatility in recent months when it comes to both number of sales and pricing, although it’s important to remember that conditions often vary between communities and neighbourhoods,” Jake Moldowan, REBGV president said.

November

CREA announced that, after a six month review of potential candidates, Gary Simonsen would become its next CEO when Pierre Beauchamp retires next spring.  Well-known within organized real estate in Canada, Simonsen has been CREA’s chief operating officer since 2008, having previously served for a decade as associate executive officer.

Toronto area realtors reported 6,510 existing home sales in November – down 13 % from 7,446 sales in November 2009. New listings were also down 13 % annually to 8,642, according to a news release. Meanwhile in Greater Vancouver, residential home sales improved in November compared to the previous four months, with the number of sales posted on the MLS coming in slightly higher than the 10-year average for that month. REBGV reports that the number of residential property sales in Greater Vancouver totaled 2,509 in November 2010. This represents a 7.4% increase compared to October 2010 and an 18.6 % decline from November 2009.

December

According to the sixth Annual State of the Residential Mortgage Market report from the Canadian Association of Accredited Mortgage Professionals (CAAMP), Canadian homeowners are comfortable with their mortgage debt, have significant home equity and could withstand an increase in their mortgage interest rate.

With a month to go in the year, Winnipeg realtors were preparing to celebrate a new record for dollar volume sales. MLS sales totaled $2.58 billion as of the end of November, surpassing the previous record of $2.47 billion set in 2009. “In many respects,” said WinnipegREALTORS president Claude Davis, “the first 11 months bore a striking resemblance to last year with the exception that prices are continuing to climb, as they have been doing year-over year since 2003. “Looking ahead to the end of the year, WinnipegREALTORS has already set a new annual MLS dollar volume record and will see MLS sales finish over the 12,000 unit mark — a level only surpassed five times previously,” he added. With 11,583 units sold by the end of November, year-to-date MLS® sales were virtually deadlocked with last year’s total of 11,563. November MLS unit sales were down less than one % to 829 transactions. On the other hand dollar volume sales during last month rose by 10 % to $182.2 million when compared to the same month in 2009, which is a new record for the month.

We could not include everything in our yearly review but we'd like to hear from you; what was your highlight of 2010 so far? Tell us about your highs, and lows, this past year in the comment section below.