The Real Data
Often, there is a bigger story behind data that is presented to us as factual numbers. Sometimes it is intentionally misleading, but usually, it's just that the provider cannot show the data in a fashion that makes more sense. Sometimes the data is displayed incorrectly, or the data point is so old that it can’t be used.
I recently have looked into data posted by both the Calgary Real Estate Board and Switzerland’s Institute of Snow Research. The data from both interested me for different reasons but brought me to the same conclusion.
Calgary Real Estate Listings
I’ve seen several posts recently by journalists about recycled listings in both Vancouver and Toronto. A recycled listing is when a Realtor lists a property, and then the property either expires or is taken down by the agent, only to be listed a few days later. There is an advantage to doing this for the Realtors and homeowners. A home with less ‘Days on the Market’ (DOM) appears to be more desirable to potential buyers.
Here is a definition of a recycled listing from the Huffington Post article I read:
“Realtors in the struggling detached home market in Vancouver are "recycling" listings — pulling homes that aren't selling off the market, then bringing them back as supposedly "new" listings at a lower price.”
Why is a recycled listing good for sellers?
Whether or not you agree with what’s happening with the data that is being presented, these are the reasons that recycling listings makes sense.
Recycling a listing is good for a seller as it gives them a higher probability for selling their home because their home doesn’t appear to be sitting for sale for an extended period of time without selling. Many people think that after a home has been sitting on the market for over 90 days that there is possibly something wrong with the house. Many buyers ask themselves “What’s wrong with that house?”. When in actuality nothing might be wrong with the house, it might be just a reflection of the current housing market in a particular city. Recycling a seller’s listing makes it appear that their home has been on the market for a shorter time, maybe 7 days vs 97 if it wasn’t recycled.
Why would Realtors recycle a listing?
Realtors benefit from recycling listings too. In the articles I’ve read it talks about how the Realtors are recycling listings to keep home prices artificially inflated so that they can get paid a higher commission. The Huffington Post article I read seemed quite biased and anti-realtor. That’s nothing new, I’m used to people assuming the worst with Realtors, but I think this one is a long shot. That’s certainly not why I recycle listings, the difference in a commission on a sale price difference of $10,000 to $30,000 is negligible. I feel that the Huffington Post article did not take into consideration that we are obligated, by law, to do the best job for our clients.
Why would I ever let a home show that it has been sitting on the market for 97 days when I can make it appear like it’s only been on the market for 7 days? Especially if my obligation is to look out for the interest of my clients. The seller’s hired me to represent them, not the buyers. It’s the requirement of the buyer and their Realtor to do their due diligence and see that the home has been on the market longer than it appears.
When I recycle a listing, it sends a new email to everyone who has a search setup looking for a home similar to that home. Why wouldn’t I take advantage of this in the interest of the sellers?
It doesn’t mean that I think the ‘days on market’ data that is being presented is right. Personally, I feel that Realtors who are not doing this for their clients are not doing everything they can to represent their sellers fully. It takes at the most an hour to recycle a listing, yet I continue to see homes on the market for 84 or 147 days on the market. Take the extra time and recycle their listing is most often what I am thinking when I see this. I’m definitely willing to manipulate the system to represent my clients to the best of my ability, that’s what I am getting paid to do.
How are recycled listings affecting housing market data?
Have read these articles I said to myself “How are these recycled listings affecting what we see in the Calgary housing market?”
It’s hard to search for recycled listings, I thought of a couple ways that would be extremely time-consuming considering there are currently 8,255 listings on the market in Calgary as of an hour ago. I decided to use a random sample population and see how it broke down. After talking with a couple of friends, I decided to look at the new listings that were listed today, 7 Sept 2018. That way the sample population was unbiased, it didn’t depend on home type or location, since I looked into the stats around noon there are likely a few more homes that hit the market today after I finished.
Here are the Calgary Real Estate Boards August 2018 statistics, to note are the 56 days on market average for all housing types.
As of noon today, there were 67 new listings in Calgary of which 25 had been recycled. That means that 37.3% of the listings coming on the market today are not showing an accurate ‘days on market’ DOM. In fact, of the 25 recycled listings, 9 had been recycled twice, 8 had been recycled three times, 3 had been recycled four times, and one listing had been recycled 5 times. The average ‘days on the market’ for these 25 listings should show 145.6 days but instead if shows zero…I don’t feel the stats being presented to the public by the Calgary Real Estate Board do not accurately tell the story of what is happening in the Calgary real estate market. I have been looking into some other statistics recently too, and I also don't feel that they tell the full story of what the data shows.
Deepest Avalanche Burials.
For those of you that don’t know I was involved in an avalanche in April of this year. In that avalanche, we were able to save our friend from a burial depth of 4 metres under the snow in a companion rescue. Companion rescue means a rescue that involves the people on the scene at the time of the accident, not using a team that is flown in or called in to help.
In my research, I've come across two burials in particular that I wanted to learn more about. I know what the statistics look like for a rescue at 4m, grim, and I found it odd that in a paper that was given to me that analysed avalanche rescues in Switzerland for 93 years that there were two people wholly buried, deeper than 4 metres who survived. I had a suspicion, similar to the days on the market reflected in the Calgary Real Estate Board statistics that there was more to these stories than the data suggested.
Switzerland compared to Canada.
In Canada, there are not a lot of places that if you are in trouble in an avalanche and you do not self-rescue that you will have a positive outcome. Meaning, if you are unable to locate and dig out your friend within the initial stages of an avalanche that the buried person is unlikely to survive. If you depended on a rescue team showing up, the likelihood of a positive outcome is low.
Contrast that with Switzerland. In Switzerland, help is much closer and there are teams of rescuers on standby waiting for a distress call. Their teams can respond very quickly when a cry for help is made and can make a difference in finding someone alive. Their teams of rescue professionals are often close enough to the accident to get there in time to make a difference, unlike in Canada where it can take hours for help to arrive.
Switzerland also represents some other possible factors in these deep survivals that the Canadian Mountains do not. More people live and drive through exposed locations in Switzerland. Some of their deepest survivals have been people who were actually buried in buildings, not people who were out backcountry skiing. I had an inkling that these two deep burials, with survivors in Switzerland, were not companion rescue. I decided to reach out to the avalanche professionals there to learn more.
What about my suspicions?
After a couple of attempts using Google translate and emailing addresses that I found online I finally reached someone with the Institute of Snow and Avalanche Research. They confirmed my suspicions that the two people listed as survivors from avalanches, that were buried deeper than 4 meters were in-fact not companion rescue scenarios. Not only that, there was more to the story. Both were, in fact, military members who had been buried 6 meters and 7 meters deep respectively!
It is insane to think that someone can survive a burial from that depth. I was told that during the rescue 100 people were digging for the buried men and that the rescue took 1 hour and 45 minutes to remove them from the snow. 100 rescuers are nowhere near comparable to a companion rescue when you are just out with your friends in the mountains.
My suspicions were confirmed, there was more to those stories than the data indicated, just like my suspicions about recycled listings in the Calgary housing market were correct too.
Thoughts on data
Watching tv and reading things online I never take stats and data that I see as gospel. Often, there is some type of trickery taking place, or data is presented in a way to benefit the presenter. Think about how many times you’ve been watching tv and a reporter has used data to strengthen their argument, or used statistics to make you more emotional about a topic. Usually, there is more behind the numbers they are presenting than what is discussed.
Having seen the articles on recycled listings from other cities made me want to look into what is happening in Calgary concerning the market here, and researching the deepest worldwide avalanche rescues brought my attention to these two burials in Switzerland. I’m glad I took a look at the listings in Calgary, it gives me more information and knowledge to help my clients. I’m not surprised to learn that there was more to the story of the two burials in Switzerland either. I suspected in both cases that there was more to both stories and there was.