An update on the real estate outlook in Richmond

Richmond realtor James Wong is out with his June Report and at first blush it appears market conditions have improved a bit:

Total home sales in Richmond for May 2013 totaled 375 units were 7% higher than the 350 sales recorded a month ago. Higher home sales the past 2 months helped to improve the housing market in Richmond slightly. The slow down in new listings, and improved sales helped to improve the market outlook for townhomes and condos. The slow down in the supply of new listings the past 3 months helped to improve the housing market in Richmond significantly.

Total active listings in May at 2,230 units was at around the same level compared to the previous month’s total listings of of 2,225 homes. With an average past 3 months home sales of 335 units, the MOI for homes in Richmond at 6.66 months for May is a vast improvement compared to the previous 2 months.

Sounds promising.  But that's for the market in total.  What's happening with detached homes, presumably one of the big draws about moving to one of Vancouver's suburb communities:

The situation for detached homes in Richmond did not improve much. The MOI for Richmond detached homes for May at 9.35 months will continue to exert pressure on home sellers. The only way out for home sellers who must sell is to reduce their prices significantly.

Yikes!

Wong continues:

Richmond detached home prices are under pressure to decline further due to the high supply of homes and lower than expected demand from home buyers.

Currently, there are 642 detached homes over $1,000,000 for sale in Richmond. The average monthly sales the past 3 months for homes over $1.0 million was 49 homes. With 13 months of supply, detached home sellers are not seeing much demand for their homes. 

The situation for detached homes over $1.5 million is far worst. With 357 homes listed for sale and average monthly sales of 17 homes, these home sellers are confronted with 17 months of supply, with little hope of finding buyers. The demand for detached homes over $1.5 million is not expected to improve much. 

There are not signs of the market changing for the better for million dollar homes in Richmond.

Hmmm. What about townhouses?

The market for townhouses in Richmond appeared to have stabilized and home prices are holding at current level.

On the face of it, decent news.

How about condo owners?

On the other hand, resale condo sellers in Richmond are in a dire situation trying to sell their condos. The Richmond condo MOI for May at 6.6 months is not a true reflection of the market situation for condos in Richmond. When the unlisted inventories of new condos are added to the pool of resale condos for sale on the MLS® system, there are far more condos for sale than buyers. The competition for buyers by resale condo sellers and new condo developers will inevitably result in lower condo prices in the coming months.

James Wong, telling it like it is.

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New Blog: Vancouver Flippers in Trouble

It seems another new blog charting the perilous condition of our Vancouver Real Estate bubble has emerged.

Titled Vancouver Flippers in Trouble, the site purports to set out to document real estate losses during the bursting of the bubble.

It's appears to have surfaced about a week ago and offers us such treaties as 2603-8 Smithe Mews:

This 2 bedroom, 2 bath, 1577 sq ft sub penthouse in Coal Harbour was purchased for $2,000,000 in a 2007 pre-sale.

It's currently on the market.  Asking price: $1,670,000.

That's quite the drop from the original purchase price. Factor in the GST paid at the time of the purchase ($100,000), the Property Transfer Tax ($39,000), the Real Estate Commission ($61,950) and it means this seller is already looking at a loss of  loss of  - $530,950, assuming he/she gets the current asking price.

Ouch!

And if misery loves company, then solace can be found in the plight of the seller of 2106-8 Smithe Mews:

This 1 bedroom, 2 bath 1055 sq foot condo was purchased in a 2007 pre sale for $1,030,000.

Currently it's listed with an asking price of $799,900. Once GST on the original sale is factored in ($51,500),  Property Transfer Tax ($19,600) and Real Estate Commission ($51,500), this seller is looking at a loss of -$332,697.

Should be interesting to keep our eyes on this site and see if they can continue to provide such interesting examples in the coming months.

We've also added it to the reading list on the sidebar.

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RECBC issues suspension order for a realtor

On the heels of complaints about the lack punishment for realtors by the Real Estate Council of British Columbia (RECBC), the council has just issued a suspension order for John Salanga of Sutton Group-West Coast Realty and Royal Pacfic Realty.

SUSPENSION ORDER: Johnson Castaneto Salanga, Sutton Group-West Coast Realty and Royal Pacfic Realty (Kingsway) Ltd., Vancouver

Published 2013/06/13

Upon reading the Affidavit of Sonya Jakovickas, Compliance Officer of the Real Estate Council of British Columbia, sworn June 11, 2013,

I AM OF THE OPINION that:

There has been conduct on the part of Johnson Castaneto Salanga in respect of which a Disciplinary Committee could make an Order under section 43 of the Real Estate Services Act. 

The length of time required to complete an investigation or hold a disciplinary hearing, or both, would be detrimental to the public interest. 

I CONSIDER IT in the public interest to, and hereby make an Order under section 45(2) of the Real Estate Services Act suspending the licence of Johnson Castaneto Salanga effective immediately and Order that he not provide any real estate services to or on behalf of any member of the public.

I CONSIDER IT in the public interest to, and hereby make an Order under section 46(3) of the Real Estate Services Act requiring the Royal Bank of Canada, located at Fraser St. and 49th Avenue, Vancouver, British Columbia, branch 003, to hold any and all accounts, trust account, client funds, securities, term deposits, registered savings accounts, and/or general accounts on deposit for, or in the name of any of: “Johnson Castaneto Salanga”, “Johnson Salanga”, “John Salanga”, and “Sutton Group – Johnson Salanga”, held solely or jointly, until further order of the Real Estate Council, including but not limited to:

1. Account Number XXXXXXX

2. Account Number XXXXXXX

I CONSIDER IT in the public interest to, and hereby make an Order under section 46(3) of the Real Estate Services Act requiring the Vancouver City Savings Credit Union (“Vancity”), Branch 809, located at Fraser St. and 47th Avenue, Vancouver, British Columbia, to hold any and all accounts, trust account, client funds, securities, term deposits, registered savings accounts, and/or general accounts on deposit for Johnson Castaneto Salanga, or in the name of any of: “Johnson Castaneto Salanga”, “Johnson Salanga”, “John Salanga”, and “Sutton Group – Johnson Salanga”, held solely or jointly, until further order of the Real Estate Council.

From Salanga's 'about me' page on his (now suspended) website (click on image to enlarge): 

So it appears that you can do something that will trigger an immediate suspension from the RECBC as 'the length of time required to complete an investigation or hold a disciplinary hearing, or both, would be detrimental to the public interest. '

Perhaps there is hope we will see the RECBC take assertive action for the exposed liars in the MAC Marketing fiasco.  It's still difficult to fathom how an organization can go on TV, blatantly lie to the public, and the members who lied can still be allowed to work in a field where the public trust is paramount.

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Summarizing the known rigged markets. By process of elimination does that mean Gold and Silver are the only non-manipulated ones?

Following up on yesterday's third post of the day where it was revealled traders at a number of major banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments, we now have the link to the original Bloomberg News story.

Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice. 

Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.

It may be difficult to prosecute traders for market manipulation, as spot foreign exchange, the trading of one currency with another at the current price for delivery within two days, isn’t classified as a financial instrument by regulators, said Arun Srivastava.

The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives, the two traders said. The Financial Conduct Authority, Britain’s markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter.

As Zero Hedge notes, as FX trading becomes the latest addition to the "rigged" market column, we now have quite the list of known market manipulation scandals. They are:

• Libor - interest rates (link)
• ISDAfix - swaps (link)
• Platts - oil prices (link)
• WM/Reuters - FX
• High-Frequency Trading - equities (link)

We also know that the Fed and world central banks are engaged in a full blown (and unprecedented) Treasury curve modeling exercise courtesy of both ZIRP (short-end) and QE (long-end), and that courtesy of some $12 trillion in extra liquidity in the past 5 years, stocks are at an artificial "weath effect" sugar high.

Faithful readers will recall that over the past couple of years we spent a considerable number of posts outlining how gold, and particularly silver, are highly manipulated as well.  We received a considerable amount of criticism for that viewpoint.

But as ZH wryly observes:

We can therefore deduce that, following the process of elimination, gold and silver are the only markets that are unmanipulated and where transparent price discovery is allowed to take place without intervention from key players. Sarcasm off.

Exactly.

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Tues Post #3: Bloomberg News - Dealers rigged forex spot benchmarks

MarketWatch is out this evening quoting Bloomberg News that traders at a number of major banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments.

LOS ANGELES (MarketWatch) -- Traders at a number of major global banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments, Bloomberg News reported Tuesday, citing five unnamed dealers. The scheme involves the WM/Reuters Closing Spot Rates, which are used to provide daily benchmarks to value portfolios. However, market participants have been front-running client orders to rig the rates by pushing through trades before and during a 60-second window when the rates are set. British regulators are considering a probe into allegations of this practice, the report said.

You don't say?

Next they'll be discovering that the spot price of Gold and Silver is manipulated too.

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Tuesday Post #2: Port Moody Snapshot - houses priced above $900,000 have a 3.2% sold rate

We haven't really focused specifically on the Vancouver suburb of Port Moody before, but at first blush high end homes there are faring just as bad as Richmond.

The above info comes to us via realtor Bill Coughlin's blog and his report covers Belcarra, College Park PM, Barber Street, Anmore, Glenayre and all the sub-areas of Port Moody Real Estate Market.

Coughlin tells us Port Moody has a 12% sold rate... but take a look at the wild swing in home sale success.

• Homes priced below $600,000 have 41.7 %SOLD rate. Not bad.
• But homes priced above $900,000 have an abysmal 3.2 %SOLD rate. And given that Belcarra is almost exclusively houses assessed with multi-million dollar homes, that's a disaster.

Couglin tells us that the Pt Moody RMR Home Price Index (another franken number formula?) shows that prices decreased $25,245 in 2012. He says Pt Moody has a high Listing supply; 148 homes are for sale with 8 months of inventory. At this sell through rate approximately 111 of these listings will not sell. Currently 28% of the active listings have reduced their price by $47,449 on average.

Sounds pretty ugly, doesn't it?

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Tuesday Post #1: Real Estate Crossword Puzzles

Hilarity ensued over in the comments section of one of Vancouver's leading real estate chat sites yesterday.

The first post of the day to Vancouver Condo Info advised that the infamous MAC Marketing Solutions (you remember them... the condo marketing firm exposed for lying to and deceiving the public on various Vancouver TV news stations) has come out with a Vancouver real estate-themed crossword puzzle contest to celebrate their 50th contributing article to the publication New Condo Guide.

New Condo Guide readers are invited to overlook the fact this marketing firm has very publicly deceived potential customers by being offered a chance to win a $50 Home Depot gift card if they succumb to this direct marketing ploy.

The post generated a slew of responses on VCI, most making suggestions for MAC about potential crossword clues and answers:

(click on images to enlarge)

But perhaps the best was submitted by VMD who crafted VCI's own version of a crossword (click on top image to enlarge or fill it out and solve online here).

There's no gift card to be won, but you will get an unbiased insight into the Vancouver Real Estate  scene with the answers.

And that's worth more than $50 bucks any day of the week. 

Besides, answering VCI's crossword won't trigger a slew of marketing pitches by the very liars we saw on TV, one of whom is apparently still selling real estate to those gullible enough to trust them.

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Monday Post #2: Inside Story: Gold, Trust, And The Federal Reserve - The Video Documentary

A National Geographic documentary that is a fascinating look inside of the Federal Reserve's gold vault (where we are told one quarter of the world's bullion resides) to NYC's diamond district and the gold-dealers on the streets.

This documentary takes you on a walk through the reality of trust, money, and gold.

As the narrator notes, "the Fed's discretion is so trusted that few depositors have ever asked to see if their gold is still here," except of course Germany.

This  must-watch video then progresses to the reality of our financial world where the narrator explains the trillions in money that is transacted every day "used to be backed gold, but is now supported by the promise of our government... The fact that it all works based on trust alone is simply taken for granted." 

As Zero Hedge notes, this leaves the ominous question of "who is in charge" of that 'trust'? 

Cue Ben Bernanke - who answers the question of what the world would look like without a Fed... bank runs, stock market crashes, and financial chaos.

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Monday Post #1: The most important news story since Watergate.

If you follow our twitter feed, you know we have had a keen interest in the PRISM whistleblower story going on in the United States right now.

This may well be THE most important news story since Watergate in the early 1970s.

The very idea that a government organization has been collecting information for seven years on every phone call, domestic and international, that Americans make was long rumoured and dismissed as the ramblings of the tin foil hat crowd.

Warrants for wiretaps? Constitutional protection against unreasonable search and seizure by government agents? Silly formalities the conspiracy theorists alleged.

But it turns out these aren't the ramblings of wing nuts.

 It turns out it's all true.

The NSA has recorded and logged every phone call, every email, every internet post you have made and stored it. They have done this with the implicit support (and granted access by) organizations such as Facebook and Google.

It's all been saved, waiting for the day you come under 'suspicion' of having done 'something' in the future.  At which point all of this data will be brought up and analyzed.

As investigative journalists report on what whistleblowers are telling us, the growing awareness of the intrusions of America's National Security Agency (NSA) into the everyday lives of Americans is of profound significance.

If you haven't been following this story, go to this link for a video interview with NSA whistleblower Edward Snowden: 'I don't want to live in a society that does these sort of things'

From The Guardian newspaper, an editorial by the author of The Pentagon Paper titled "Edward Snowden: saving us from the United Stasi of America":

In my estimation, there has not been in American history a more important leak than Edward Snowden's release of NSA material – and that definitely includes the Pentagon Papers 40 years ago. Snowden's whistleblowing gives us the possibility to roll back a key part of what has amounted to an "executive coup" against the US constitution.

Since 9/11, there has been, at first secretly but increasingly openly, a revocation of the bill of rights for which this country fought over 200 years ago. In particular, the fourth and fifth amendments of the US constitution, which safeguard citizens from unwarranted intrusion by the government into their private lives, have been virtually suspended.

The government claims it has a court warrant under Fisa – but that unconstitutionally sweeping warrant is from a secret court, shielded from effective oversight, almost totally deferential to executive requests. As Russell Tice, a former National Security Agency analyst, put it: "It is a kangaroo court with a rubber stamp."

For the president then to say that there is judicial oversight is nonsense – as is the alleged oversight function of the intelligence committees in Congress. Not for the first time – as with issues of torture, kidnapping, detention, assassination by drones and death squads –they have shown themselves to be thoroughly co-opted by the agencies they supposedly monitor. They are also black holes for information that the public needs to know.

The fact that congressional leaders were "briefed" on this and went along with it, without any open debate, hearings, staff analysis, or any real chance for effective dissent, only shows how broken the system of checks and balances is in this country.

Obviously, the United States is not now a police state. But given the extent of this invasion of people's privacy, we do have the full electronic and legislative infrastructure of such a state. If, for instance, there was now a war that led to a large-scale anti-war movement – like the one we had against the war in Vietnam – or, more likely, if we suffered one more attack on the scale of 9/11, I fear for our democracy. These powers are extremely dangerous.

There are legitimate reasons for secrecy, and specifically for secrecy about communications intelligence. That's why Bradley Mannning and I – both of whom had access to such intelligence with clearances higher than top-secret – chose not to disclose any information with that classification. And it is why Edward Snowden has committed himself to withhold publication of most of what he might have revealed.

But what is not legitimate is to use a secrecy system to hide programs that are blatantly unconstitutional in their breadth and potential abuse. Neither the president nor Congress as a whole may by themselves revoke the fourth amendment – and that's why what Snowden has revealed so far was secret from the American people.

In 1975, Senator Frank Church spoke of the National Security Agency in these terms:

"I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return."

The dangerous prospect of which he warned was that America's intelligence gathering capability – which is today beyond any comparison with what existed in his pre-digital era – "at any time could be turned around on the American people and no American would have any privacy left."

That has now happened. That is what Snowden has exposed, with official, secret documents. The NSA, FBI and CIA have, with the new digital technology, surveillance powers over our own citizens that the Stasi – the secret police in the former "democratic republic" of East Germany – could scarcely have dreamed of. Snowden reveals that the so-called intelligence community has become the United Stasi of America.

So we have fallen into Senator Church's abyss. The questions now are whether he was right or wrong that there is no return from it, and whether that means that effective democracy will become impossible. A week ago, I would have found it hard to argue with pessimistic answers to those conclusions.

But with Edward Snowden having put his life on the line to get this information out, quite possibly inspiring others with similar knowledge, conscience and patriotism to show comparable civil courage – in the public, in Congress, in the executive branch itself – I see the unexpected possibility of a way up and out of the abyss.

Pressure by an informed public on Congress to form a select committee to investigate the revelations by Snowden and, I hope, others to come might lead us to bring NSA and the rest of the intelligence community under real supervision and restraint and restore the protections of the bill of rights.

Snowden did what he did because he recognised the NSA's surveillance programs for what they are: dangerous, unconstitutional activity. This wholesale invasion of Americans' and foreign citizens' privacy does not contribute to our security; it puts in danger the very liberties we're trying to protect.

And lest you think in Canada we are immune: NSA Spying On Canadians, CSEC Capable Of Similar Surveillance - Expert

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Sunday diversion: $190 million house?

I guess we will call this house porn.

Greenwich, Conn. has long been known for its pricey ZIP codes, enviable proximity to New York City, and of course, a diaspora of wealthy Wall Street residents that has earned it a nickname as the hedge fund capital of the country.

Now the tony town will be known for something else: America's most expensive home for sale.

With an astounding asking price of $190 million, Copper Beech Farm has come to market as one of Greenwich's last 'Great Estates,' a designation assigned by the Junior League of Greenwich in a 1986 coffee table book highlighting the town's 46 most architecturally significant historic abodes.

At that nine-figure price tag, Copper Beech Farm trumps every other U.S. residence publicly listed for sale, asking nearly 30% more than the country's second most expensive home, the $135 million Crespi-Hicks estate in Dallas, Texas.

Makes a $25 million condo condo seem like peanuts, doesn't it?

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Re-listing and hiding price reductions. Realtor examines data and "results yield completely different story."

For those who follow the real estate bear blogs, it is a well known practice.

In an attempt to hide seller desperation, property listings are pulled and re-listed with a new MLS number.  It helps hide the number of days a property has been on the market, not to mention some of the price drops a property has had. Because let's face it, when buyer's sell desperation, the lowballing intensifies.

Vancouver Observer noticed this practice over a year ago on his excellent site, Vancouver Price Drop. So prominent is the practice that Observer now tracks all old MLS listings for a property to give us a true insight into the selling history of a property.

In this weeks Vancouver West detached spotlight, the top property for price reductions is at 1010 West 57th:

1010 West 57th pulled it's listing on January 16th, 2013 and relisted with a new MLS number on January 25th, 2013.  This move helps hide 291 days of market availability as well as $1,000,000 in price reductions.

This property, however, is a very minor example of the relisting phenomenon.  Observer has made several interesting posts in the past charting relisting champions.

Interestingly realtor Arnold Shuchat also touched on this phenomenon in a post on his blog today charting this week's biggest price declines in Richmond.

Publishing these price reduction blogs on a regular basis is time consuming. But this week's Price Reduction report was even more so. I have observed that for almost every week that the price reductions are published, the average reduction is between 4-5% regardless of property type, give or take 1%. Under a hypothesis that those averages do not really tell the whole story, I conducted a search of every price reduction listing to review the price history from the time it was first listed. The results yield a completely different story as I suspected. I am not going to undertake this every week, but as an eye opener and to make a point of what's really going on I did it this week. The numbers speak for themselves and here is the summary:

The average price reduction since originally listed is 11% instead of the most recent 5%. But, if we take the top 10 price reductions since listed, the average is approximately 20%! And, the properties are not yet sold!

The real estate industry official line is that price reductions are minimal and that sellers are holding firm with their prices. The industry insists any price declines are only minimal.

But anyone conducting a proper, detailed analysis is uncovering quite a different story.

Surprised?

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Cameron calls a bottom

The Chief Pumper at the BC Real Estate Association is calling it the bottom over in Nanaimo today. Shilling in the Nanaimo Daily News, Cameron says:

"This is the second month, seasonally adjusted, we see a rising trend in consumer demand," said Cameron Muir, B.C. Real Estate Association chief economist. "I'm calling this a transition year. I think we're about to embark on another upswing."

Happy days are here again?

Never mind that every other market in the Island region, save Port Alberni, saw average selling prices decline.  In popular Parksville, they fell by as much as 6%.

We're in a transition to rising prices?... Woohoo!

Back on the mainland, rational realtors don't seem to share Muir's enthusiasm.

While west side realtor Sam Wyatt is also reporting an uptick in sales...

Months of Inventory (MOI) fell to 5 months for Vancouver detached homes. It remained at, and fell to under 5 months for attached homes and apartments respectively.

Vancouver real estate is now back to the MOI levels of last spring. I was pleasantly surprised that May was a such a good month for sales volumes for both my clients and the Vancouver market. Those sales volumes are what helped drive down the MOI in spite of high volumes of active listings.

... he doesn't view this as a springboard to a market surge:

Sales volumes generally peak in the Spring so it is likely that May will be the high point for the year (though I said that about March). May's real estate sales are comparable to May of last year but the trend to lower volumes of sales remains apparent. Unlike sales volumes, active listings don't typically peak until mid summer so It will be very interesting to see whether sales remain strong and listing volumes drop over the next few months. I will be surprised if either is the case.

Sounds like a rough transition, Cam.

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Red Pill or Blue Pill? Median Price data and spinning the numbers to boost buyer confidence.

In pop culture the blue pill and its opposite, the red pill, are symbols representing the choice between the blissful ignorance of illusion (blue) and embracing the sometimes painful truth of reality (red).

The terms derive from the 1999 film The Matrix. 

In the movie, the main character Neo is offered the choice between a red pill and a blue pill. The blue pill would allow him to remain in the fabricated reality of the Matrix. The red pill would lead to his escape from the Matrix and into the "real world".

Realtor Larry Yatkowsky plays off the pop culture pill reference in his latest post which gives us the median price data from May, a contrast from May's average price data a few days ago.

Removing the skewed data of high sales and low volume, the charts show most area prices dropping last month.

Of course data is meaningless without the right spin and the real estate spinmeisters are in overdrive this month as the battle for 'consumer confidence' is endlessly waged.

May is often considered the bellwether month for real estate sales. And while the number of home sales last month is still well below the 10 year average, the numbers are up from last month and there is an increase year-over-year in some categories.

Of course 2012 was a dreadful year so any increase, no matter how small, is cause for celebration right?

For example there were 1,212 detached property sales in Vancouver in May, up from April’s 1,064. 

But those sales are down 22.8% compared to May 2012.

Detached unit sales in May 2013 totalled 534, an increase of 3.3% compared to the 517 sales in May 2012.

That figure, however, is down 7.8% from the 579 attached properties sold in May 2011.

So it all comes down to how you want to look at it.

The real estate industry (naturally) see's great potential in this data. Toss in the fact that a condo listed for $28 million in downtown Vancouver - which has languished on the market for almost 2 years - has now sold for $3 million below it's asking price (yet still setting a record for the most expensive condo sold in Vancouver) and the fodder is there for the spinners to declare the correction over and real estate taking off towards a new housing boom!

It's all about confidence and massaging that theme is sure to take on prominence in the coming weeks.

Perhaps the coming glut of 'good news' will perk up these sellers? Observer's Vancouver Price Drop is back after a three week break. He has the monthly drop for May 2013 for us and and the top 20 properties this time around combine for a stunning $98 million in price cuts from their original asking prices. If there's a group that needs confidence and massaging it's this bunch.

Presumably they are still depressed from reports, like this one, which trumpet that Canadian homes remain the most overvalued in world wide rankings.

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Sellers "living off hope of a turnaround"

Richmond realtor Arnold Shuchat is out with with Richmond real estate market report for May and an interesting quote comes with the data:

I draw a few conclusions from this and other data that I have published recently in this blog:

1. There are less buyers for more expensive single family homes and relatively more for attached properties; 

2. Many of the frustrated listings are ones that have been purchased since 2010 and had high original purchase prices. Those sellers can't bring themselves to realize a loss. Hence the stagnant listings, expireds and terminateds. They live off hope of a turnaround.

Stagnant listings and sellers living off hope of a turnaround.

Poignant words that summarize the real estate market right now.

Vancouver Realtor Larry Yatkowsky described it this way:

Tumultuous changes to real estate occurred last year and in the first days of June Active listings hovered near 27,000. It was a temporary! Active listings rocketed to an unprecedented 28,000 units by the end of the month.

This year June’s early Active Totals reveal a barely perceptible difference as the total active listing count hovers around 26,500 units. Uncertain is what the crystal ball will deliver in the weeks ahead. We anticipate that Active listings will continue to... climb to equally bloated totals in the latter part of June 2013.

What will it take for the market to move? Shuchat thinks that:

Once sellers get it in their heads that their properties are only worth what buyers will pay regardless of what they paid for their properties, the ratio will start to descend further. I believe that time is coming although it will take time for the required volume of sales to diminish the outstanding inventory.

Is the market about to break downward?  Interesting how the stagnating market is now spawning news articles like this one in the Toronto Star: 7 reasons your house may not be selling.

Hmmm.

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May's Average Price and total listings graph

Realtor Larry Yatkowsky is out with the monthly stats and the average price rose slightly again.  Larry has also posted the top 25 west side sales for the month as well as giving us an updated listings chart for 2011/2012/2013:

As always we thank Larry for posting and sharing this data.

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Who's policing dishonest BC Realtors?

Lots of disscusion in our posts (see here and here) about CTV-BC's coverage of realtor Marco Vincenzi's forging of signatures and altering documents.  Apparently this was done in order to increase his commission on the sale of a yaletown condo.

In their third instalment of their coverage, CTV-BC asks 'Who's policing dishonest BC Realtors?' It's a poignant question, particularly in light of the MAC Marketing scandal we covered earlier this year.

After admitting to altering documents and other improper behavior, MacKenzie’s realtor (Marco Vincenzi) was ordered to pay a $1,250 fine, take a remedial course. He was also suspended for 120 days. The council took 16 months to make its decision. Said MacKenzie:

"To see this long drawn out secretive real estate council process that finally resulted in something that I think is just a slap on the wrist is insulting and angers me. It calls into question for me the actual ability of the real estate council to do their job and their mandate and uphold the public interest, rather than giving the perception that they're protecting the realtors."

Bingo!

What is particularly frustrating is the fact that MacKenzie also went to the Vancouver Police Department, who declined to proceed with a criminal investigation. Her case was ultimately reviewed by the Financial Crime Unit which felt the situation was better handled through a regulatory process rather than a criminal one.

And we've just seen how effective that was.

Even more galling was the fact that Vincenzi was allowed to continue selling real estate after the complaints were filed.  In virtually any other professional field, an individual accused of misconduct is placed on some form of administrative leave until individual is cleared of wrongdoing... and with good reason.

If the accused individual is, in fact, committing fraudulent acts... are you really going to let that person carry on committing the same (or worse) offences against innocent/unwitting members of the public?

It brings to mind the liars from the MAC Marketing scandal, who just so happened to dupe CTV-BC,  Despite having committed specific violations of the Realtor Code of Ethics, the infamous 'Chris Lee' is still selling real estate as the RECBC supposedly investigates (see here and here).

As MacKenzie says, it all "calls into question the actual ability of the real estate council to do their job and their mandate and uphold the public interest, rather than giving the perception that they're protecting the realtors."

It's gratifying to see CTV-BC finally begin to look at these issues.  But more needs to be done.

We asked Lynda Steele of CTV-BC about the status of the MAC Marketing investigations.  Here is our twitter exchange (click to enlarge):

She says she thinks it's worth taking another look at. If you agree, let her know on twitter @CTVLyndaSteele or via email at Steeleonyourside@ctv.ca

Make your voice heard.

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Dishonest realtor's punishment questioned by victim - CTV BC

Meet Janet MacKenzie.

She's the condo buyer we told you about yesterday who made an offer on a Yaletown property that was listed with a reduced realtor's commission.

Her realtor, Marco Vincenzi, tried to make a deal behind her back that would compensate him for the money he stood to lose on that reduced commission. To accomplish this, he forged documents on MacKenzie's behalf that resulted in direct financial gain for himself.

When MacKenzie was made aware of what he was doing, she went to Vincenzi's real estate office in Coquitlam and demanded a meeting with his boss, Jason Watson. Watson insisted in a recorded conversation that Vincenzi’s days as a realtor were done.

"Ultimately by the end of the day, I can't say it will be tomorrow, but probably by Monday he won't have a license," said Jason Watson, managing broker at Sutton Group – West Coast Realty."

But rather than see MacKenzie take her concerns about Vincenzi to police for formal charges, CTV-BC reports that Janet Watson, the managing broker at Sutton Group - West Coast Realty, told MacKenzie not to call police.

Instead MacKenzie was urged to allow the Real Estate Council of BC (RECBC) to handle the matter. CTV-BC reports Mackenzie was assured the RECBC would see that Vincenzi would lose his license permanently.

In a ruling that surprises no one who follows this blog though, the RECBC didn't revoke Vincenzi's real estate license.

Vincenzi was found to have committed professional misconduct. The RECBC ordered him to pay $1,250, take a remedial course and gave him a measly 120 day suspension.

Vincenzi's explanations for his actions?

Vincenzi told the Real Estate Council he was in the running for a platinum award given to realtors who secure $100,000 in commissions for the year. The council's ruling says, "at the time of the transaction he had earned approximately $90,000 and he states that there was a lot of pressure of him to put him over the $100,000 threshold."

Vincenzi also told the council he was facing "a great deal of financial pressure" because of his upcoming wedding.

So Vincenzi claims he forged his client's documents because he's publicity hungry for a realtor award. There's also the small matter that hes desperate for cash to pay for a upcoming wedding... and this is justification not to ban him from selling real estate forever?

Says MacKenzie:

"The idea of saying, ‘well, because I was under financial pressure, that's okay, somehow makes this okay,’ it doesn't. It's not acceptable. Knowing right from wrong is kind of a basic principle."

No kidding.

It's the same basic principle that doesn't excuse one from going on TV to lie to about Asian buyers  during Chinese New Year.

These are the actions of a few that tarnish and destroy the reputations of an entire industry.  Why is the RECBC even tolerating this behaviour?

What rankles even more is that Vincenzi's suspension doesn’t kick in until June and it appears the Metro Vancouver realtor is still in business, accepting calls on a current listing from a CTV intern posing as a potential customer. 

CTV-BC consumer reporter Lynda Steele went to Sutton Realty in Coquitlam to see what Vincenzi's boss, Jason Watson, had to say about his employee's professional misconduct, but she was told Watson was in a meeting and not available.

It reminds us of the liars from the MAC Marketing Solutions scandal who are still out selling real estate while under investigation for their transgressions. Does the RECBC not appreciate the optics of their inaction?

CTV-BC says they are airing a third part to this story tomorrow.

For the sake of the public at large, and the industry as a whole, let's hope they continue to pursue this issue.

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RECBC decisions come under media spotlight with latest realtor misconduct

Meet Marco Vincenzi.

He's the latest realtor to gain notoriety for wrongdoing as the market continues it's slump. 

A slumping market means less sales, and less sales mean less commissions. Do desperate times require desperate measures?

According to CTV's coverage of the story last night, realtor Marco Vincenzi has admitted to forging condo documents, drafting and presenting documents without his client's knowledge, changing offer amounts without permission and keeping his client out of the loop on negotiations... all part of a ploy to increase the size of his realtor sales commission.

According to CTV, Vincenzi's client was making an offer on a Yaletown condo that had languished on the market.  What sparked an offer on the property?  The fact the condo was now being offered with a reduced commission.

Vincenzi took his client's offer, but then tried to make a deal behind her back that would compensate him for the money he stood to lose on that reduced commission.

The client, Janet MacKenzie, was alerted to these shenanigans when the seller's realtor brought them to her attention.

"The way that I found out what had happened was actually when the sellers' realtor had contacted me because she had noticed some discrepancies on the documents with my signatures," said MacKenzie.

MacKenzie went to Vincenzi's real estate office in Coquitlam, and demanded a meeting with his boss, Jason Watson, who insisted in a recorded conversation that Vincenzi’s days as a realtor were done.

"Ultimately by the end of the day, I can't say it will be tomorrow, but probably by Monday he won't have a license," said Jason Watson, managing broker at Sutton Group – West Coast Realty.

This would be a just fate considering these actions appear to be fraud and theft. Which begs the question, were the police called and criminal code charges laid?

Interestingly MacKenzie claims that Janet Watson, the managing brooker at Sutton Group - West Coast Realty told her not to call police.

Watson wanted MacKenzie to let the Real Estate Council of BC handle the matter instead. Mackenzie was assured Vincenzi would lose his license permanently, a punishment she (MacKenzie) felt he richly deserved.

Now faithful readers have commented frequently that the punishments handed out by the RECBC are often nothing more than a minor slap on the wrist, a cost of doing business.

So what happened to Vincenzi?

Originally, a hearing with the Real Estate Council of BC was scheduled for late March, but it was cancelled after Vincenzi agreed to a consent hearing, where he would admit to wrongdoing and agree to accept the council’s punishment.

After 16 months, CTV reports the council finally made a decision, but CTV doesn't reveal what that decision was in today's news story. Presumably that will be the topic of Part 2 to be aired tomorrow.

A quick search of the RECBC disciplinary decisions internet page doesn't reveal any announced decision yet.

Will Vincenzi get the the standard 21 day suspension, requirement to attend training and a $1000 fine? 

Or will he have his licence permanently revoked, a fate this client Janet MacKenzie believes is a punishment he "richly deserves"?

Guess it depends what sort of faith you have in the RECBC.

(hat tip anonymous in comments section of yesterday's post)

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