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Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being

Is it so far fetched to assume some realtors may be juicing the bidding to increase their own commission and to make their firm more uhh "prestigious" by being able to drive up the price for their own marketing purposes further down the line. Likewise if you dont know who you're bidding against, how do you even know the bidder is even real (foreign or not)? Transparency is good thing. While there may be some "scarcity" not having full transparency and realtors not in alignment with their own clients needs is a step in the right direction. (I use scare quotes here because while I know we're not building enough but the current market has a fair share of retail speculation, institutional investors inflating prices, and homes held as purely places to mark money(non-owner occupied). Scarcity is real and building does need to happen, but thats slow and expensive. Millions of homes are kept empty or as poor speculative investments and thats a problem)

CountSessine 4y ago
Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices. In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%. In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing. It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!" Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.
- LimaBearz 4y ago
  Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets. This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
  - CountSessine 4y ago
    ...but I'm not sure that just building more will do much of anything <sigh> As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it? Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity! Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity! Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-canada/ https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity! The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side. Don't talk to me about housing prices unless you deal with scarcity.
    - Majromax 4y ago
      > Do those foreign investors leave the house empty? Who cares if we can just build more? I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would. Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.
AzzieElbab 4y ago
Lets see. Assume I am a realtor, I earn outrageous commissions of 2.5%. Does it make sense for me to jack up price of 1M condo by say 15% above the market and spend a month trying to sell it or to lower the price by 10% below and possibly sell two similar properties in the same month?
- Valgrim 4y ago
  But every house that is on the market IS being sold, even at outrageous price, because buyers don't believe the price hike will slow down anytime soon (why would they? this segment of the market is guaranteed to be protected by any government who wishes to get re-elected) So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
  - AzzieElbab 4y ago
    that is classic cause and effect. realtors are just tagging along. I bet even if they make realtors accept second highest price instead of first(aka google adds) the impact would be minimal overall
    - cpwright 4y ago
      It isn't the Realtor accepting the price, it is the owner. At least in my state they are obligated to present every offer. Price is not the only dimension to factor in either. Just off the top of my head: (1) inspection contingency (2) mortgage contingency (or how much to make up for the appraisal) (3) timing for closing (4) lease back option Can all affect what you would select, not just the price.
- Alan_Dillman 4y ago
  Yes, it does. Because you don't know if it will take a month, and if you have any confidence (maybe too much) in your abilities, you will likely assume you will sell it quickly. And a second one too. Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.

CountSessine 4y ago

Is it so far fetched to assume some realtors may be juicing the bidding to... Of course not, and I didn't say that I'm completely against reforming the real estate industry and the bidding process. But it won't fix expensive housing. It's all bullsh*t if it doesn't address scarcity. In 2016 we had had 10 years of 2% population growth in Vancouver and 1.2% housing stock growth and we wanted to blame foreign investors, so we enacted the foreign-buyers tax. That was going to fix high housing prices. In 2017 we all got angry about dirty money and our casinos being used as money-laundromats so we commissioned the German report to detail what was going on and surely that would show that real estate was expensive because of money-laundering. It said prices might have gone up by 6% because of money-laundering. So that's 6% of 400%. In 2021 we started talking about investors driving up the cost of housing, ignoring the fact that investors typically become landlords and in cities with rental vacancy rates hovering around 1% (Vancouver's was 0.4% in 2017!!!), that sounds like a good thing. It's all bullsh*t and it's all a distraction that let's us ignore scarcity. I've decided that no matter how justified that housing reform is (ie open-bidding), I refuse to support it before we deal with scarcity because we'll deal with open-bidding and then say, "Ok ... let's see where we are in 3 years time now that we've fixed that!" Deal with scarcity or f*ck off with talk about housing prices. Don't expect me to validate your cognitive dissonance.

LimaBearz 4y ago
Well I share your feelings toward the whole situation for sure but I'm not sure that just building more will do much of anything. As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets. This outside competition detaches local prices from the local economy. Likewise the speculation sets an anchor(comp) for neighboring homes when they go to sell. One investor overpaying by say 100K.. well now next month if Average Joe wants to sell he can now ask the same or more. Rinse and repeat just a few times and you get to where we are today.
- CountSessine 4y ago
  ...but I'm not sure that just building more will do much of anything <sigh> As long as we have folks buying with the intention of parking money or using homes as an "investment" you're going to have competition with much deeper pockets Why do you think foreign investors want to overpay for a Vancouver Special? And what do they do with it once they buy it? Do they live in it? If so, what you're upset about is population growth. Sounds like scarcity! Do they rent it out? If so, that's a social good in a city with a 1% rental vacancy rate and sky-high rents are as bad as high housing prices. Sacrificing the rental market to save home-buyers sounds like scarcity! Do those foreign investors leave the house empty? Who cares if we can just build more? And we know (https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-canada/ https://doodles.mountainmath.ca/blog/2022/02/14/unoccupied-c...) that Vancouver doesn't seem to have more empty homes than most cities it's size. But of course we can't "just build more". Scarcity! The truth is that we've seen developers market condo pre-sales in China playing-up the region's dysfunctions - pointing out our 2% population growth rate and the difficulty in building new housing. Investors come to Vancouver because they know the game is rigged - they know that housing prices are mostly one-sided and hedged by political interference. Canada's real estate is "too-big-to-fail" and is mostly up-side. Don't talk to me about housing prices unless you deal with scarcity.
  - Majromax 4y ago
    > Do those foreign investors leave the house empty? Who cares if we can just build more? I'll note here that there is a legitimate complaint to vacant housing. Some expensive city infrastructure like transit is supported by people-density rather than house-density, so a community of empty homes doesn't justify a subway line in the way that a bustling, lived-in community would. Municipal funding that comes from the provincial level is also supported implicitly by income and sales (value-added) taxes rather than property taxes, so empty homes can easily create an imbalance of cost and revenue. The same also goes for cases of alleged tax evasion, where one globe-trotting patriarch supports their live-in family without declaring and paying Canadian taxes on income as a resident.

AzzieElbab 4y ago

Lets see. Assume I am a realtor, I earn outrageous commissions of 2.5%. Does it make sense for me to jack up price of 1M condo by say 15% above the market and spend a month trying to sell it or to lower the price by 10% below and possibly sell two similar properties in the same month?

Valgrim 4y ago
But every house that is on the market IS being sold, even at outrageous price, because buyers don't believe the price hike will slow down anytime soon (why would they? this segment of the market is guaranteed to be protected by any government who wishes to get re-elected) So you, the realtor, will sell every house you got anyway, so why not bump the price while you're at it?
- AzzieElbab 4y ago
  that is classic cause and effect. realtors are just tagging along. I bet even if they make realtors accept second highest price instead of first(aka google adds) the impact would be minimal overall
  - cpwright 4y ago
    It isn't the Realtor accepting the price, it is the owner. At least in my state they are obligated to present every offer. Price is not the only dimension to factor in either. Just off the top of my head: (1) inspection contingency (2) mortgage contingency (or how much to make up for the appraisal) (3) timing for closing (4) lease back option Can all affect what you would select, not just the price.
Alan_Dillman 4y ago
Yes, it does. Because you don't know if it will take a month, and if you have any confidence (maybe too much) in your abilities, you will likely assume you will sell it quickly. And a second one too. Its a poor sales person that thinks, "I might not sell one this month..." Not with that attitude.