Touching a nerve: Was a Richmond real estate agent forced to remove a graph plotting a potential 70% decline in housing prices?

On Sunday we told you about Richmond real estate agent James Wong.

Wong has, over the past few months, regularly published the abysmal real estate sales statistics from the former HAM infused Vancouver suburb and given clients his frank and honest assessment of what it would take to sell your home in these conditions.

On August 9th, Wong wrote:

"In Richmond, there is a high probability of a price decline for detached homes in excess of 30%... Sellers who need to sell will have to cut their prices more deeply to attract buyers. This could be the beginning of a real estate down cycle... The cascading effect of declining home prices will snowball, causing more home sellers to sell before home prices drop further... The biggest problem faced by home buyers are getting their mortgages approved. Canadian banks are now required to underwrite their mortgages based on borrowers’ ability to debt service their loans. The cascading effect of declining home prices will snowball, causing more home sellers to sell before home prices drop further. Unlike 2009, even if home prices drop 20% or more, many home buyers and investors would be prevented from buying due to the difficulty in getting financing.

Wong's commentary is a refreshing change from the rah-rah boosterism we are used to hearing from the real estate industry.

With each passing month, as conditions continue to worsen, Wong has become even more straightforward with his analysis.

The ultimate from Wong was released this past Sunday.

Titled, Are We Headed For a Housing Market Downturn? Wong outlined a very bearish scenario for real estate over the coming months and years and predicted (with a graph) a 70% decline in real estate values.

However, if you go to his site today, you will not see the exact same article as you would have seen if you went there on Sunday.

Oh, don't get the wrong idea.  James Wong still makes the same case he did two days ago. But a significant element has been removed.

Here are 2 screen shots that capture Wong's original Sunday post. Click on these images to enlarge them and see if you can spot what has changed:

Contrast those screen shots with this screen shot of his current post:

Notice what's missing?

In the original post Wong took a stab at predicting where things might be going by plotitng a “reverse image” of the Greater Vancouver price chart (with home price topping around March 2011). He hypothesized how a down cycle for real estate might play out, including the potential duration and extend of the price decline over the next few years.

Wong's chart was a classic tracing of the formation of a bubble and how a bubble unwinds.

(For a great video on 'Bubbles and how they unwind' by Chris Martenson, see this post from June 5, 2009).

Regrettably it appears Wong's chart was censured because the chart has been removed and replaced by this passage (click on image to enlarge):

A disclaimer was also added at the bottom of the post which reads:

Clearly Wong's chart touched a nerve and so much negative feedback that he was forced to remove the industry graph he modified to make his case.

To Wong's credit, he maintains his belief in his original message.

But it gives you an indication of just how significantly his observations have touched a nerve.

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Is the Real Estate Industry starting to take legal action against local bloggers? - Updated

Last Thursday we told you how the Financial Post had started to question the methods being used to by the Real Estate Industry to calculate price decline figures for the real estate market.

Headlined 'As Canada's housing market slows, industry tries to paint positive picture', the Post took direct aim at those 'suspicious' numbers and concluded:

"Organized real estate is unable, it seems, to admit the glory days may be behind it."

The Post made this statement because the lengths that local real estate boards are going to these days to diminish the depth of declines in real estate values borders on the comical.

The latest outrageous twisting of statistics, the Post said, comes from the Toronto Real Estate Board.

This month’s gem comes from the Toronto Real Estate Board: It complained September didn’t have enough working days — too many weekends. 

I always thought people bought homes on weekends, but it seems the transactions are registered during the week. 

“The number of transactions was down 21% in comparison to September 2011,” said TREB in a release. “However, it is important to note that there were two fewer working days in September 2012.” 

This logic has produced a new measure from TREB: Sales were down only 12.5% — not the actual 21% — from a year ago on a “working-day basis.”

Presto-change-o and a 21% decline becomes only 12.5%.

The mere fact a real estate board would even attempt such nonsense shows you the level of panic permeating the Industry right now.

And the manipulation doesn't end there. As the Post notes:

Vancouver’s real estate board likes to tout what it calls the MLS HPI (home price index) composite benchmark price for all residential properties. It was down 0.8% to $606,100 in September from a year ago and off 2.3% over the past three months. 

Doesn’t sound too bad. 

But when you pull out actual sales data, you find year-over-year prices in August in Canada’s most expensive housing market were off 6.9%. For the first two-thirds of the year, prices fell 7.3%. 

The decline is happening; it’s the severity that seems to be under dispute.

It seems the Industry will do all it can to mask that decline for as long as possible.

But is that obsession now extending to silencing blogs in an attempt to keep price changes and declines under wraps?

The question is being asked in the wake of the disappearance of a Vancouver area blog that charted MLS price changes.

The website address of the blog in question is http://re.olvius.com

Up until last week this is the home page you would get when you went to that site (click on image to enlarge):

It was an incredible site that allowed users to chart daily MLS price changes.

This was significant because, if an MLS listing was withdrawn and then relisted, you had no idea if the property had seen significant price drops.  With this blog, you could see what had been going on with a property through it's various listings.

http://re.olvius.com went AWOL this week.

Now when you go to the site, all you see is this:

It has the blogging community wondering if the site was issued a cease and desist order by the Mulitiple Listings Service.

As Abraham Lincoln famously said, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."

Did the Industry move to shut this site down to keep the information from reaching the public?

As yet we are not sure.  

To coin another famous phrase: perhaps desperate times call for desperate measures?

UPDATE

As noted in our comments section (hat tip Steve), another real estate blog Canada Bubble (canada bubble dot com) appears to have gone off-line this week as well.

(Note: while this site has gone off-line, there have not been any updates to the site since August 2012).

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