So with all do respect to all the agents on this board, please keep your biased opinons PM's only. If someone wants real adivce on real estate, do some research and talk to actual economists with actual degrees/phd's etc who specialize in real estate.
That's like saying people shouldn't post in the FOI forum because they're biased towards the Flames and none of them are experts who work with the team.
OK - admittedly, that was maybe a little harsh the way it came across but that wasn't the intent. I'm just simply implying that I've seen it on way too many occasions where a realtor has told someone I know to "BUY NOW OR MISS OUT" and they do. Then whoa, wait a second, a few months later the market suddenly drops 40K on these people.
I guess my point was, and this certainly didn't come across right, is that realtors specialize in buying/selling homes for people. They act as brokers to complete a sale. They don't specialize in economics, which is what predicting real estate is all about.
Are economists any better than realtors? Yes, I think so. They have much more tools and information available to them which allows them to make informed predications as to what the markets going to do. Obviously this isn't a crystal ball and it's not perfect but I bet they are right more often than they are wrong.
Basically, realtors are brokers that aid in the buying and selling of homes with a bias to make people believe the markets going up. Economists used information and tools to make predictions on the micro and macro economy - including real estate and have no underlying bias.
I know whose opinion I would rather hear from........
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I think the sooner we all admit a few things the better off we'll be...
1) We all have some sort of bias in our opinions.
2) Everyone's predictions/opinions are equally valid, whether it's a realtor, a Nobel prize winning economist, or an anonymous ranting blogger, because...
3) Markets cannot be predicted accurately, by anyone, period. It's a fallacy to look back and attribute skill to these predictions.
I believe it was in Malkiel's 'A Random Walk Down Wall Street' which gave a great example of how we often attribute skill to something we shouldn't have.
Imagine a room full of 1,000 people and ask them to flip a coin. If it's heads, they can stay, if it's tails, they have to leave.
After the first toss, approximately 500 will need to leave. 500 will remain. After the next toss, there will be 250 left. Then 125. Then 62. Then 31. Then 15. Then 7. Then 3.
Then finally, after about 8 or 9 coin tosses (or however many it takes), you will eventually just have one person left. This person managed to flip a coin and have it land on heads 9 times in a row, are they skilled? Statistically, one of those thousand in the room were bound to have this happen to them.
But before the coin tosses began, could you have predicted which one of these 1,000 people were going to come up heads 9 times in a row?
When someone comes along and makes a bold prediction that turns out to be correct, it's easy to look at that person after the fact and attribute it to skill, when in fact it's not.
Do a Google search for articles from 2005 before the U.S. housing market crash. You'll find well respected economists/analysts making predictions that range from soft landing to housing crash to stagnation.
cM
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I can see where you are coming from. And at the end of the day, we all have our estimates and if needed can hopefully agree to disagree (and not make it a personal thing.) I like the discussion to see different information and numbers/interpretations of it.
Soooo . . . not the derail the misunderstanding discussion but the more I read this blog particular, the more I am impressed by this realtor:
His website is a great source of numbers and his comments on his own blog are pretty good. He even points out the weather "excuse" and some misleading/incorrect numbers from our local real estate board.
Do a Google search for articles from 2005 before the U.S. housing market crash. You'll find well respected economists/analysts making predictions that range from soft landing to housing crash to stagnation.
cM
I have to admit that I thought this was great though - Ben Stein apologized a year later. Hindsight . . .
I love it when a realtor claims they will give you "honest" advice. What realtor is going to tell anyone to wait a couple of years to buy or sell? None. They have too much to personally gain by giving advice that favours them not you the buyer or seller.
95% of realtors have maybe a few months of education, none of it related to the economics of the real estate market. So with all do respect to all the agents on this board, please keep your biased opinons PM's only. If someone wants real adivce on real estate, do some research and talk to actual economists with actual degrees/phd's etc who specialize in real estate.
It's not nice to generalize.
I have a Commerce Degree and Political Science Degree.
Those specializations required me to take many Finance and Economics courses as well as Statistics.
In fact, I know 2 other very talented people that graduated with me that are Realtors as well.
Are there Realtors out there that aren't honest sometimes? You bet. Just like every other profession out there, be it accountants, lawyers, mortgage brokers, stock brokers etc.
Google is a powerful tool. If you want to find an educated, qualified Realtor, I invite you to do a google search and contact a bunch. I am sure they will take you out for a cup of coffee and you can ask them real estate related questions.
Until then, let the discussion on this thread continue in an amicable manner, and leave the sladering of Realtors out of it.
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Basically, realtors are brokers that aid in the buying and selling of homes with a bias to make people believe the markets going up. Economists used information and tools to make predictions on the micro and macro economy - including real estate and have no underlying bias.
I know whose opinion I would rather hear from........
To add on I think it all depends on who you are talking to and under what context you're using their advice. You were a bit harsh in your previous post. I think the anger towards realtors in predicting the market is not fair because ultimately they are not paid nor should they be expected to give sound financial advice on buying / selling past the short term.
Realtors are not financial advisors or economists - Where real estate fits in your asset portfolio is not something anyone should be relying on the advice of a Realtor. This simply isn't their job. The reason why you hire a Realtor is to achieve best execution of your deal. The underlying reason why you're buying or selling should be something that you have arrived at before you approach one.
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There is not going to be a big real estate crash. Sure there will be small corrections here and there and prices will increase, decrease and increase again, it's all cyclical. The big correction happened when prices increased rapidly 4 years ago. Calgary was an undervalued market at that point. Now after such a sharp rise in prices we are seeing waves of increases and decreases as the market tries to stabilize.
It's hard for anyone to predict where the market will go. Regardless if you are and Econiomist with a PHD or a Realtor. How many of these so called economist's predicted what happened in the US? (A few but not many)
I don't think all real estate agents are slime balls. Despite what their education is, they rely on sales for income. It is in the agents best interests to believe that it's always a good time to buy. You see it spun in the media constantly. If prices are high, it's a great time to buy because you'll be priced out forever. If prices are low it's a great time to buy because it's the bottom, if prices are neutral it's a great time to buy because prices are stagnant. But, one key that is always happening according to most real estate agents, that prices are always going up, or are about to go back up.
Does it make them a slime ball? Absolutely not. Of course not all real estate agents are like this, there are some great ones out there, you just need to do your research.
I have a couple degrees (one in economics), and am working towards a professional designation in an industry related to real estate (think more towards appraisal).
I look at the listings everyday as part of my job. I don't have a real bias one way or the other, I can buy right now, but have chosen to hold off the past couple years, I pulled out of an offer we made on a property in early 2008. Saved a lot of money so far.
If you think for one second that the correction was when prices doubled during the peak in 2007 you're crazy. The general rule, is that your mortgage should be no more than 3 times your gross salary. The median household income in Calgary in 2006 was approximately $85,000/yr (this is according to the 2006 census). This is NOT the average household salary (I prefer the median as it's not influenced by the higher and lower salaries).
If the 85,000 median salary is correct that would mean that the median house price should be approximately $250,000. As you all know housing prices are nowhere near this. Salaries may have increased since the 2006 census but not in a large enough increment to warrant a median house price of $400,000, which was the median price in July of 2010.
I find it surprising that there are this many people who are adamant that prices cannot decrease by a significant amount. It happened in the 80's, it's been happening for the past 5 years in the U.S., and it has happened in Japan. All these situations had people saying that prices would always go up..
It CAN happen. Is a big crash likely? No. Is a 10-20% correction over the next couple years possible? Absolutely.
Just keep your eye on the market, when you find a place you like, and can afford, even with rising interest rates, then purchase. It's time people stopped looking at houses strictly as investments, and looking at them as homes first, and investments second.
I love it when a realtor claims they will give you "honest" advice. What realtor is going to tell anyone to wait a couple of years to buy or sell? None. They have too much to personally gain by giving advice that favours them not you the buyer or seller.
95% of realtors have maybe a few months of education, none of it related to the economics of the real estate market. So with all do respect to all the agents on this board, please keep your biased opinons PM's only. If someone wants real adivce on real estate, do some research and talk to actual economists with actual degrees/phd's etc who specialize in real estate.
Not harsh at all. Commissioned realtors who only need a high school education and a few weeks/months of training shouldn't be giving clients market predictions.
Their job is to be an agent between the buyer and seller, not real estate economist.On top of that their pay structure can cause serious interests of conflicts.
If they want to state their views on CP, that's fine. But in a professional setting it's out of their job description.
Didn't think I would be thanking any of your posts in this thread, but you are right on the mark this time.
Absolutely nothing wrong with a difference of opinion/analysis in discussion of views - in fact, I appreciate it. Otherwise, why not just talk to ones self? Always good to be able to agree to disagree without taking/going on a personal level - and I see we have a separate thread for that discussion.
To add on I think it all depends on who you are talking to and under what context you're using their advice. You were a bit harsh in your previous post. I think the anger towards realtors in predicting the market is not fair because ultimately they are not paid nor should they be expected to give sound financial advice on buying / selling past the short term.
Realtors are not financial advisors or economists - Where real estate fits in your asset portfolio is not something anyone should be relying on the advice of a Realtor. This simply isn't their job. The reason why you hire a Realtor is to achieve best execution of your deal. The underlying reason why you're buying or selling should be something that you have arrived at before you approach one.
Great post!
The ironic thing about people not trusting Realtors, is that they always ask us which way we think the market it going.
I'm glad to share my opinion with anyone, but am always careful to clearly state it's just my opinion and should be taken as so. There was no crystal ball supplied with my real estate license.
I love it when a realtor claims they will give you "honest" advice. What realtor is going to tell anyone to wait a couple of years to buy or sell? None. They have too much to personally gain by giving advice that favours them not you the buyer or seller.
95% of realtors have maybe a few months of education, none of it related to the economics of the real estate market. So with all do respect to all the agents on this board, please keep your biased opinons PM's only. If someone wants real adivce on real estate, do some research and talk to actual economists with actual degrees/phd's etc who specialize in real estate.
Where are you pulling up the 95% from? can you back up your claims?
I would estimated 70-80% of Realtors I know have at least a College education and most University degrees.
Can you identify your educational and work background in relation to Real Estate? only fair, since you're policing who is qualified to post in this thread, that you should have to qualify first.
Where are you pulling up the 95% from? can you back up your claims?
I would estimated 70-80% of Realtors I know have at least a College education and most University degrees.
Can you identify your educational and work background in relation to Real Estate? only fair, since you're policing who is qualified to post in this thread, that you should have to qualify first.
I don't want to go into details on a message board but I will let you know that I do have both an undergraduate degree and an MBA from the U of C. Do I consider myself qualified to be giving advice on where real estate is going? No but my reasoning for what I think is a lot more sound than some of the opinions on here, especially most biased opinions (realtors). Sorry if that bothers you, but it's my personal opinion - which really shouldn't bother you.
I don't want to go into details on a message board but I will let you know that I do have both an undergraduate degree and an MBA from the U of C. Do I consider myself qualified to be giving advice on where real estate is going? No but my reasoning for what I think is a lot more sound than some of the opinions on here, especially most biased opinions (realtors). Sorry if that bothers you, but it's my personal opinion - which really shouldn't bother you.
Your opinion doesn't bother me, it's the assertion that others shouldn't give theirs. And you presenting incorrect statements (95% aren't educated) as if they are facts without any backup.
Lets hear your sound reasoning than? If you've got something of substance to add to the thread, please share?
That's the point of the thread; no one here is claiming to have all of the answers to billion dollar questions.
I don't want to go into details on a message board but I will let you know that I do have both an undergraduate degree and an MBA from the U of C. Do I consider myself qualified to be giving advice on where real estate is going? No but my reasoning for what I think is a lot more sound than some of the opinions on here, especially most biased opinions (realtors). Sorry if that bothers you, but it's my personal opinion - which really shouldn't bother you.
I'm not trying to be contentious but an MBA doesn't really add to one's credibility in predicting markets, in my opinion. It's a very generalist degree. I think that an undergrad degree in finance probably garners a person more business acumen than a watered down MBA.
With all this talk of Economists being the ones to listen to, here's an interesting article on Vancouver housing prices and why an economist from UBC thinks they are high. 2 Million Reasons for high prices in Vancouver
I'm not trying to be contentious but an MBA doesn't really add to one's credibility in predicting markets, in my opinion. It's a very generalist degree. I think that an undergrad degree in finance probably garners a person more business acumen than a watered down MBA.
I 100% agree with you - in fact I think the MBA I got was a complete waste of time. It's more a degree for net working than it is an actual learning experience.
With all this talk of Economists being the ones to listen to, here's an interesting article on Vancouver housing prices and why an economist from UBC thinks they are high. 2 Million Reasons for high prices in Vancouver
Here's a good response to that Sun article. The comments below it will do a much better job than I can outlining why/how this economist is mostly full of bologna.
I 100% agree with you - in fact I think the MBA I got was a complete waste of time. It's more a degree for net working than it is an actual learning experience.
That's a lot of work, time and money.
Back to the numbers, August is mostly done and Mike Fotiou has a good summary as always (and an amusing clip he put up.)
SFH sales numbers continue to drop versus historicals, we'll probably end down about 33% from August 2009. Median pricing edging down 1-2% further from the 4.3% from last month.
Inventory is still pretty high but there will be a few hundred listings that will expire to knock it back to an even 6 months again. Historically, sales tend to slow down September into the winter - I have a hard time seeing inventory dropping back to a balanced market (1.5-3 months) for a while. Though I guess a a few thousand people could just give up trying to sell.
However, many of the analysts figure the rate hikes will slow down a bit:
But with sales slowing down so fast consistently all across Canada I can't figure out if it is due to:
1.) Rate hikes - I sort doubt this as fixed rate discounts have mitigated most of the 0.5%. And really, it's just 0.5% unless of course people are maxed out that badly.
2.) The threat of further rate hikes scaring people off maybe?
3.) Canadians finally hitting a wall with the massive loads of debt we've built up.
4.) People getting fearful of this potential "double-dip" economically
5.) ?? not sure what else I can think of.
Oh, and Mike F's video if you are familiar with the Bestbuy dude who lost his job:
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I like the discussion to see different information and numbers/interpretations of it.
but the more I read this blog particular, the more I am impressed by this realtor:
That's a lot of work, time and money.
