Here is our weekly update on the Edmonton real estate market. We missed week last week due to the holidays but we’re back on schedule now.
For the past 7 days:
# New listings: 324
# Sales: 136
Ratio: 42%
# Price changes: 222
# Expired Listings: 889
# Canceled, withdrawn and terminated listings: 88
Net loss/gain in listings this week: -789
Active listings for single family homes: 2491
Active listings for condos: 1717
The pace of new listings coming on the market has picked up again, but it’s only half as high as we saw in October. The biggest number is the expired listings – as expected, many listings expired on the last day of the year. This has significantly lowered the inventory of homes for sale, but we expect to see a lot more new listings next week as things get back into gear after the holidays. Top that off with few expired listings in the first week of the new year and we should see a bump in inventory next week.
This is an interesting take on value differences even in local markets.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/05/BUB0U8SUU.DTL
That’s a good article. I think that it resembles what is going to happen in Vancouver eventually.
Condos and homes out in Surrey, White Rock, Abbotsford will lose value. But there are still more than enough individuals making six or seven figures a year that want to live near the beach and not have to drive more than 5 or 10 minutes to work.
I don’t think that cities like Calgary and Edmonton have the same luxury appeal. People definitely aren’t fighting to buy homes within walking distance of their work (no sidewalks!). But at the same time, I don’t see us getting 3 years worth of inventory and having 10% of homes in foreclosure.
I am blown away after picking up the most recent Comfree Magazine, which is 190 pages in length and stuffed full of Real Estate listings from Edmonton and Northern Alberta!! Now if this doesn’t send a message to Realtor’s that sellers are tired of dishing out 15-20K in commissions, then I don’t know what will. The other side to having this much volume on Comfree is that the monthly stats from the EREB are becoming less significant because they don’t account for the increasing number of private sales. In perusing the Comfree magazine, I’m amazed that in some areas of the city, they in fact appear to have a better selection of homes and bigger market share than MLS.ca. Also the prices that Seller’s on Comfree are asking seem to now be more realistic than they were months ago. Comfree appears to be picking up steam, even though I would have expected the opposite in a more balanced market, where homes are taking longer to sell. I find this really interesting and I’m sure a topic of discussion at the EREB board room table.
Ken,
Do you enjoy your job with comfree. Number of listings has nothing to do with number of sales. Even in the peak of the market a huge percentage of sales that were private involved a REALTOR on the buyers end. Personally the most desperate emails I get are from people who started on their own and then realize that MOST serious buyers work with a REALTOR.
As for the rest of your comments I can’t address all your b.s. but as for the board room discussions at EREB. Comfree doesn’t factor right now. The way real estate has been done is about to change in this province as the regulator moves change who real estate has been transacted. Currently licensed industry members are grapling with this change to Designated agency and Transactional Brokerage.
btw…why did your company remove their stats. I know they were looking dismal but come on maybe you guys could have some integrity and post the real deal (audited).
I was browsing Comfree and MLS this week and personally, I find that the prices on MLS are dropping faster than Comfree. Most sellers on Comfree seem to just be testing the market. Both sites do have a LOT of empty houses or homes that are just being completed. I’m looking forward to those sellers getting desperate this spring as they try to carry multiple mortgages.
Ken,
Great comments. Sheldon gets sooooo touchy about Comfree. He and I have duked it out over Comfree several times. He always so fast to reply to any positive Comfree remark.
No one could convince me (I am not alone) that realtors are not totally frightened by Comfree. It only makes sense to be intimidated with anyone who has taken away 1/3 of your business. Yet they have not adjusted their fees. Consider they had the absolute largest pay hike of any industry through the boom. They have to justify paying the huge cost associated with having their photo published with each ad.
You are correct regarding EREB’s #’s being less and less relative. There is no way to have an accurate picture without using ALL the #’s. This would be like an election total without all polls counted.
Realtors WILL NOT admit their fees must come down. They are holding out just like the sellers who refuse to lower their prices. They continue to insist theirs is a highly complicated industry that requires at least 6 degrees.
The Comfree website has a section discussing realtor myths. Before one insults their business, one should have a look at their entire website. They offer a service/choice to the FSBO market. FSBO is not a new concept, Comfree is.
Realtors have a monopoly on the market and are fighting so hard to keep it. Days are numbered.
Laura,
Every time you speak it just multiplies the reasons why people who don’t understand a complicated industry require assistance. Ignorance is no excuse and if people want to take your advice they are free to. You don’t get the frantic calls and emails to bail them out though.
As I have said before that alternative is not for everybody.
See what I mean Ken.
Rather than presenting his argument with facts or stats, Sheldon ALWAYS responds with rude, cover your ^&*%$ comments.
It’s like arguing with a teenager or husband that can’t win. LOL
Sheldon, I highly doubt you get frantic phone / emails from people that listed with ComFree.
I went to your website, and you hardly have any listings, and the ones you do have havent moved in ages.
This blog has so much ‘spin’ its generating air currents as powerful as a Level 5 Hurricane.
However, you are free to generate said spin beacuse this is your blog.
Knocking competitors makes you lose legitimacy, especially in times like this where people are ‘waking up’ to the lunacy of these real estate prices and realtor commissions.
Alternatively, I think if one was to sell on ComFree, they better have alot of spare time to conduct showings themselves. It all depends on how one values their time. But I think saving 15 grand in commission fees is a good enough incentive.
If you visit comfree website the listings are not moving there for long time. I think comfree is experiencing their worst time. In thses circumstances (Higher inventory lessor buyers) the value of realotrs is actually being realized buy the sellers. Comfree was good when houses were sold within 2 to 3 days without much conditions and even without inspections. Now to sell your house you need a proper marketing plan, strategy of pricing your house, timing and market research, which I believe is not easy for a person trying to sell by himself or trying to sell first time.
I am not a realtor but it is my perception.
I do agree if realtor have no marketing plans, advise for pricing your house and other important factors except for posting a ad on MLS website, they do not deserve high commissions.
If you’re flipping houses and just want to get the most bang for your buck, Comfree makes sense.
But if you’re relocating a family due to work and don’t have time to worry about every loonie that wants to see your home, a realtor saves you a lot of hassle.
I can rent a u-haul and move myself wherever I want to go. Or I can higher movers to do it and take a week off to relax. For some people, the money isn’t worth the hassle.
In my observation, I have not seen one Comfree property sold shortly after it has been listed, but I have seen many properties listed by agents sold the next day or in a very short time and I’m talking about today’s market and not back in March 2007.
Also, I have seen properties listed unsuccesfully, as Comfree and after about a month or two given over to Real Estate agent and been sold in a week.
And I have seen Comfree signs out on the lawn for well over 8 month and the house still not sold.
What I have never seen is a propety beeing listed by a Realtor, has not been sold and then listed by Comfree and has been sold.
Karl:
Comfree listing down the street sold last spring while the Comfree dude was standing on the road taking pictures of the house. This, of course, was during different market conditions. It does work. And I’ve seen the same with Realtors. Some are very good sellers, and to them they deserve credit. Like any industry, though, some just care about $$.
If my 2 cents are worth anything, here goes:
What I’ve seen over the years is that nothing takes 100% of the market and no new industry or business steals 100% of the business, UNLESS the technology involved gets obsolete. Even then, vinyl records are still around in an age of MP3′s and CD’s, AM radio still exists in the face of satellite radio, chinese imported cars will not totally replace the big 3, the internet and blogs like this did not replace newspapers.
My point is that there will always be a percentage of people that need Realtors and a percentage that will do it on their own. One won’t replace the other. They will both adapt and find their strengths.
Fighting about which is better, which SHOULD be dominant, which is more popular, is pointless. They both exist because we live in a free market society.
And it is that very free market that allows us to prosper and buy these nice homes that are probably better built than those existing in 85% of the world today.
I personally would love to have a Realtor sell my home. I think the protection they offer and the system in place for quick networking amongst other agents, as well as having potential buyers in the background, is great. However, I have had some bad experiences in the past. So while it is Sheldon’s perogative to defend the Realtor, it is also my right to choose another means to selling my home when, in my personal experience, I’ve been treated with disrespect. The sale became more important than MY living requirements, and to me that was just plain selfishness.
The Comfree vs. Realtors comparison is just like an online media vs. newspaper comparison.
They have different target audience and there is a trend that one is replacing the other. Still the transition is slow and can be ignored by most people.
Karl, there was a house very close to my parents’ house that got sold in 2 weeks via Comfree. The listing price was $615k and that was late October of 2007.
There is nothing wrong with Comfree. It’s about how greedy (or how reasonable) the listing price is.
I have tried to sell my property twice in the past all by myself
( sort of like comfree ) and have had
a very bad experience and needless to say that I was unsuccesful in the process (it was 10 years ago)
but anyway, the kind of people go to your house is discouraging,
for example, I had about 10 or 12 visitors on the the first day, half of them neighbours wanted to see, what’s inside the house…. another few just wanted to compare, as they were going to sell theirs soon, then I had those, who pointed out quickly, what they don’t like about my house, yet others commented, what’s outdated etc. none made an offer, but some said, even if they had, it would be much lower, than the asking price, stating that after all, no agents fee to pay, so they want a good deal and save that 7%.
Sort of a bunch of tire kickers, but no real buyers.
And I advertised, like crazy in the newspapers and noone came for the next month although I got an occasional phone call and they drove by, but did not even bother to come in.
It is probably not impossible to sell on your own, but it’s a long, agonizing process and noone will believe you, your property worth that much.
And be prepared to go down several ten thousand dollars in prices as they all want to save the comission.
It’s really about economics and incentives. On a typical commission fee on an average priced house, on the last (say) $20,000, the agent gets 3%, which is $600. If he slits this with the buyers’ agent, it goes down to $300. So which do you think is more likely, the agent working to get the $20,000 more you want for your house for a fee of $300 or him trying to convince you that the -$20,000 is fair and excellent. Would he keep the listing for another month or two or would he rather sell it quickly and move on? Would he sell HIS house under the same assumptions and advice that he gives you?
The answer to the last question is actually simple and documented. In Freakonomics, Steven Levitt describes a study which shows how, on average, real estate agents sell their own houses at a higher price (this is not the place for more details, pick up the book).
In the day and age of the internet , with the wide availability of information, only the fool, indolently rich or inescapably busy would work with a realtor at the current cost.
Unfortunately, their fee structure are outrageous and stuck in the past. I am not saying that they are not providing valuable information, but the cost of that information is exorbitant given that any mildly intelligent person with a bit of time on their hands could do a similar job. They’re not medical doctors, engineers or university professors, don’t be fooled in thinking that their profession requires the same education and study as the above mentioned ones. Don’t be fooled in thinking that you CANNOT possibly do it, unless you join their club.
The fact that their fee is tied to the price of the property and not to the amount of work they are doing is slap in the face of market economy. One question to the makers of this website, would they agree to the following fee structure? A flat fee for listing the property, not tied to the price of the property, and then a per hour charge for the actual work they are doing (showings, etc….). This way the work is directly tied with the reward and the customer has a direct access and breakdown of his costs. Not to mention it would really open the profession to competition. I guess the answer is no.
Well, if the fees were reasonable then the service that realtors offer are excellent. For example:
http://twopercentrealty.ca/
How come these guys can list on MLS for 2% commission when everyone else is doing the 7/3 rate? This 2% is very appealing cuz you can save about 50%. Not a fixed price service but very reasonable!
Aside from the ComFree v Realtor debate, the question remains – what do the inventory numbers look like in total? I think an increase in listings on ComFree, along with the return of most of fall’s expired listings to MLS, may tell the tale of the next few months.
The reason I won’t list with Comfree is lack of exposure. Less people looking can equal less opportunity to get your desired ammount.(not always) I have heard stats that indicate that Listing with MLS Realtors verses Comfree, that a higher price is usually obtained through MLS. I have heard some stats by word of mouth, and I can’t verify any of what I have heard. What I have heard indicates that if one pays the high commission, they stand to make more money. I think Comfree only lists their stats that are advantageous to their business. I think if one could obtain their stats people might think twice about listing with them. I heard a story about a flipper who buys a number of houses via comfree, and basically resells them through a realtor immediately for more cash. He was making 30-40 a flip during the boom. He bought from too many people who had no clue that the market was increasing in the fashion that it was.
I would love to know if Comfree average and median prices can be obtained. If they hide them, you got to think, WHY? Can these stats be obtained?
Yogi,
If a realtor can always get more for your house as a seller, then as a buyer you wouldn’t want to use a realtor as you would be paying more. Think about it.
As for exposure, think about that as well. Comfrees web site offers the same kind of exposure as MLS. As a matter of fact it is more user friendly. Also the magazine published every 3 weeks is great as all listings are in one spot. MLS listings are scattered all over, journal, sun and other places.
Check out FAQ on Comfrees web site. It will make you think twice about your misconceptions.
Laura, you may be right, but do you honestly think that selling with Comfree, you will get the same price. The truth is you don’t know. Do you want to take the chance that you may lose money, I rather not gamble. Why do they not publish their stats, answer that. If the price on average was similar to what MLS gets then why the heck don’t they point that out. I will point out the stat that was given to by a realtor I know, and the reason I never wrote it before was that I cannot conclusively prove it. I don’t think Comfree publishes their stats. At the height of the market MLS average was 426,000 on a home, Comfree at the same time was 369,000. Maybe my realtor friend was full of crap, but what happens if she is right. The only way to prove myself right or wrong is to get Comfree stats on hand. You may save commission, but you may also not get the sale price you want. I bet a lot of people lost thousands during the boom through Comfree, because how could you possibly know know how fast the market went up. What happened for 18 months was pure phenomenon.
P.S. I am not realtor, and honestly I wish I knew whether I was right or wrong.
Laura, you may be right, but do you honestly think that selling with Comfree, you will get the same price. The truth is you don’t know. Do you want to take the chance that you may lose money, I rather not gamble. Why do they not publish their stats, answer that. If the price on average was similar to what MLS gets then why the heck don’t they point that out. I will point out the stat that was given to by a realtor I know, and the reason I never wrote it before was that I cannot conclusively prove it. I don’t think Comfree publishes their stats. At the height of the market MLS average was 426,000 on a home, Comfree at the same time was 369,000. Maybe my realtor friend was full of crap, but what happens if she is right. The only way to prove myself right or wrong is to get Comfree stats on hand. You may save commission, but you may also not get the sale price you want. I bet a lot of people lost thousands during the boom through Comfree, because how could you possibly know know how fast the market went up. What happened for 18 months was pure phenomenon.
P.S. I am not realtor, and honestly I wish I knew whether I was right or wrong.
Yogi,
Did you go to Comfree site? I can tell you didn’t.
Laura, I looked at, I was wrong that they don’t have them, however you will find prices are significantly lower then the MLS average. Thanks
Laura, I looked at, I was wrong that they don’t have them, however you will find prices are significantly lower then the MLS average. Thanks