I bought a condo last week.

Shall we start there?

Or shall we save that for an entirely different post?

Gawrsh, I mean, with only two posts per week now (insert emoji of blushing individual looking, for lack of a better term, “sheepish”), I really need to plan out my topics and stories with some sort of schedule!

Well, I do believe that’s a topic for another day, and thus we will indeed explore it in full another day.

But a little more than two weeks into the 2024 market, it’s all crickets.  Virtually no listings, and most of what’s being listed was already on the market last year.

Early prediction: January of 2024 will see the fewest sales EVER in a month of January.  And that’s not an indication of a “bad” market, since listings are so scarce.  In fact, I think the lack of inventory will lead to competition, and prices will rise substantially in the early spring.

With that said, let’s get back to the topics that are “on our real estate minds in 2024,” starting with one that always scares the hell out of me…

5) Government’s “Bright Ideas”

Hey, whatever happened to that huge federal government program that was supposed to get all kinds of buyers into the housing market?

What was it called again?

I swear, I can remember just about anything in my life – of relevance, but I can’t remember the name of this program.

Maybe that’s because the program is now completely irrelevant?

The “First Time Home Buyer Incentive” or FTHBI was launched in September of 2019 to much fanfare.

The federal government was going to be partners with home-owners!  Rejoice, Canada!

The Canadian Mortgage and Housing Corporation, which of course stands firmly on the backs of Canadian taxpayers, was going to provide interest-free loans for any eligible first-time buyers to help reduce mortgage payments and get more Canadians into the housing market.

My goodness did we spend a lot of time talking about this!

And even in 2023, we still talked about it.

Except that, in 2023, we talked about things like this:

“Why A Program For First-Time Home Buyers Fizzled In Toronto And Vancouver”

Apparently, only 385 households in Toronto, Vancouver, and Victoria took advantage of this novel, ground-breaking program – over the course of three years!

Remember, the federal government stated that the FTHBI would help 100,000 families, or more.

I don’t know a single person who has used the program.

I don’t know a single real estate agent who has had a client use the program.

I don’t know a single person, that knows a single person, that knows of a single person, anywhere, that has used the program, or even thought about using the program.

What a complete waste.

Time, effort, energy, money.  Public policy.

I shudder to think how many man-hours in Ottawa were spent on this, let alone the person-hours.  Yikes!

This policy was introduced in September of 2019.

And what was that thing that happened in October of 2019?

Um, oh, right – the federal election!

And when is the next federal election in Canada?

2025.

While we’re not exactly like the United States, where there’s an election every four years, but politicking for the next election begins 3 years, 11 months in advance, I do expect to see a lot of politicking in Canada this year.  It’s really a two-horse race and always has been.  The NDP are only relevant as far as their support for the Liberals goes, unless they were to merge with the Liberals, but hubris would never allow that to happen.

Elections always scare me because of what parties and political leaders will do to get elected.

Promises.

And I don’t mean the song by guitar legend, Eric Clapton.

I mean the promises that are made, often pulled out of thin air, to gain favour with the population.

You see, I hypothesize that only a very small percentage of the population understands that there is no such thing as “free.”  So when political candidates announce “free this” and “free that,” every election cycle, only a few people are actually aware that the money to pay for it actually has to come from somewhere.

Ergo, it’s often the party that announces the most FREE STUFF that gets elected.

I don’t think that’s going to happen this time around, since I don’t think there’s anything Justin Trudeau can do to beat Pierre Poilievre, but we’re going to have twenty-two months from here-on-out of the Liberals trying to win back the population, and there’s nowhere they can make a bigger impact than with respect to housing.

So far, nothing that any level of government has done on the housing front has had a meaningful impact.  Challenge me on that if you want, but provide me with an example.

And at the municipal level, last year was a disaster on the housing front.

Remember this blog post?

“Monday Morning Quarterback: Olivia Chow’s $0 Housing Plan”

In October, Olivia Chow announced a massive $36 Billion housing plan, almost all of which she expected the federal and provincial governments to pay for.

It didn’t seem that the other two levels of government ever knew they were involved!

As I said at the time, this meant Olivia Chow was either a mad genius or an absolute fool.

But with a $46.5 Billion budget shortfall forecasted over the next decade, this was a very, very odd announcement.

And don’t get me started on the idea of a “lottery” for housing in Toronto, because that’s what virtually every idea the municipal government possesses amounts to in the end.

So far in 2024, Olivia Chow has hardly affected housing in Toronto at all!

Oh….wait….

“Toronto City Staff Propose 10.5% Property Tax Hike As Part Of 2024 Budget”

Huh.

And the tax could increase to 16.5% if Ottawa doesn’t provide the funding that the city of Toronto is demanding?

Right.

Can we just blame this all on John Tory?  Or Rob Ford?  Or David Miller?  Or…..William Lyon Mackenzie?

At the provincial level, the Ontario government announced last year that they would remove the 8% tax on new purpose-built rental housing.

That’s great!

And if the federal government followed suit, then we could see a full 13% less tax on the development of desperately-needed rental housing.

But that tax revenue will have to be replaced by taxing someone, something, somewhere.

Sorry to be the Debbie Downer here, but there is no “free.”  Taking money from your left pocket and putting it into your right pocket isn’t a net gain.

In any event, at least the Ontario government continues to openly discuss their “goal of building 1.5 million homes by 2031.”

I just wonder how they’re actually going to do that.

So what’s in store from our three levels of government in 2024?

I can’t even imagine.

But no matter what happens, I’m sure we’ll be talking about it here on TRB…

6) Industry “Tinkering”

Define the word “soon.”

“…in or after a short time.”

Sure, okay, but now define short time.

If you’ve had your eyes open at any point during the last decade, you’ve undoubtedly seen a real estate lawn sign with a “COMING SOON” sign or rider atop the sign itself.  I think we’re all familiar with the concept of a “coming soon” and I think we’re all aware of the marketing intentions behind it.

For one thing, advertising a property that isn’t yet on the market gives you more time to advertise it.  In a red-hot market when we list a property on a Tuesday and set an offer date six days later for the following Monday, we really only have those seven days to “advertise the property.”  By placing the coming soon sign on the front lawn, we’re able to let the public know about the offering well in advance of the listing.

But as listing agents, we’re also able to solicit what we call “cold calls” from the general public, and this is where things get really tricky.

If you believe that “absolute power corrupts,” then you believe, like I do, that virtually any advantage or benefit given to mankind will eventually be abused.

In either 2022 or 2023, I can’t quite remember, I saw a “coming soon” sign on a lawn on Parkhurst Boulevard in Leaside.  The house is on my way to work so I see it every day.  And by “every day” I mean every day for a month.

Then it was two months.

Then three.

It was at that point – three months, when I went to the RECO website and filed a complaint.

This property wasn’t coming “soon,” if at all.

I honestly believe that this listing agent put the sign up strictly as a way to solicit cold calls, attract leads, and gain business.

The general public absolutely hates these “coming soon” offerings, but the hatred has less to do with the definition of “soon” and more to do with the idea of the property “coming” to market.

If you saw a “coming soon” sign on the lawn of a property, you would assume, first and foremost, that this property was eventually going to be listed for sale, right?  It’s “coming soon.”  Coming – to the market.  Coming – to MLS.

Except that, years ago, listing agents would put “coming soon” signs on lawns as an attempt to sell the property before it came to market.  And how did they do that?  Usually, by “double-ending” the sale, which is something that the public also hates.

You’re a real estate agent.  You have a listing coming to market.  You place a “coming soon” sign on the front lawn and you receive a phone call from a couple who lives in the area, currently renting, who are interested in the house – and have no agent.  So you scoop ’em up, sell ’em the house, and “double-end” the sale.

Greasy.

But it happened a lot, and that’s why RECO eventually changed the rule regarding “coming soon” listings to say that they must come onto MLS, and could not be sold beforehand.

It took some time for “those agents” to adapt, of course.

I distinctly remember a property near Bayview Village that had a “coming soon” sign and a client of mine asked me about it.  I called the listing agent to inquire and she said, “Oh, we just sold that.”  Of course she did.  I asked her, “Did you provide the buyer?” and although it was a gotcha question, her ego couldn’t be held back and she proudly said “Yup.”

I filed a RECO complaint there too.

But as of January 3rd, 2024, there are even more changes regarding exclusive listings.

First and foremost, we have a timeline!  Finally!

A “coming soon” sign can only be posted at a property three calendar days before the property is listed on MLS, and of course, that property must be listed on MLS and cannot be sold off market, as per the changes four years ago.

But more importantly, and more controversially, the Canadian Real Estate Association has effectively banned all “exclusive listings.”

Yep.

There’s no trick here.  No confusion.  No catch.

A listing agent can sign an exclusive listing, but he or she cannot market it.  That effectively makes exclusive listings useless, and thus it effectively seeks to “ban” them, in my not-humble opinion.

The rules of allowable marketing are simple:

An agent may market one-to-one.

An agent may market within his or her brokerage.

So what can agents not do?

Basically, everything that we have done previously.

An agent may not market or discuss, in any way, a listing that he or she has “coming soon” to market, in a group setting.

No marketing/discussion to any groups larger than one person(s).

No marketing/discussion to the general public.

No marketing/discussion in email blasts to agents.

No marketing/discussion on a Facebook group.

No marketing/discussion on a well-known Signal chat for about 900 of the top agents in Toronto, where most of the exclusive listings are posted.

How does this help consumers?

Personally, I believe that real estate agents abused the benefit for so long, either by leaving “coming soon” signs up for weeks or months, or by selling properties off market before they “came” to market, that CREA finally stepped in.

However, I also believe that CREA did this to have more control over organized real estate and to ensure more properties appeared on the MLS system and a large percentage of the properties that were sold off-market would end up being recorded on MLS.

Shane Dingman covered this in a recent Globe & Mail article:

“New Rules Target Use Of ‘Exclusive’ Real Estate Listings”
The Globe & Mail
January 3rd, 2024

Realtor and lawyer, Mark Morris, provided an excellent quote in the article:

“CREA is being protective for no valid reason.  hey are over-stepping their bounds in a significant way. … What we’re doing now is limiting what they [sellers and buyers] can do in the free market.

What is actually going on here is that MLS and the boards have been terrible at addressing people’s actual needs; they’ve not provided for a system that allows for exclusive listings and not provided for a system for assignments.  Cooperation is a choice and the seller should have that choice.”

I agree.

But OREA recently forced its membership to accept a health plan for all members, and TRREB backed OREA, with both organizations threatening consequences for agents.  There was a massive mutiny within the industry and hearts were broken, friendships ended, colleagues divorced, and the fallout is ongoing.  I’m surprised there hasn’t been media attention on this, but maybe the public doesn’t care about the inner-squabbling of a bunch of whiny, overpaid, entitled Realtors?

In any event, pre-construction and commercial listings are not included in the new rules for exclusive listings.  This is strictly meant to ensure that resale residential properties are listed on MLS.

How many agents will adhere to the new rules, remains to be seen.

But consider that if was having lunch one afternoon with Chris Bibby, David Batori, and Robert Francis, I wouldn’t be allowed to mention my upcoming listing at 148 Fairfield Road, for $1,479,900.  In fact, the four of us couldn’t discuss any of the properties we’re going to list.

Don’t ask me how this rule is going to be enforced because you already know the answer.

But this debate goes back years.

“CREA Steps Back On A Controversial New Policy About Home Sale Listings”
The Toronto Star
November 23rd, 2022

That article appeared in 2022 after the initial attempt by CREA, to limit exclusive listings, had been rebuffed by those in the industry.

The article was written by Bob Aaron, who is an extremely well-known and well-respected Toronto lawyer and real estate columnist.

In the article, he describes a correspondence with then-CEO of CREA, Michael Bourque, in which the two shared their respective opinions and disagreements.

But as was the case with the forced health plan by OREA, this exclusive listing policy by CREA was going to move forward, no matter what.

That’s politics for you.

I’ve long maintained that if 90% of a population said “no” to something, it would have zero effect on the government’s desire to see it through.

Just as a federal government might act, make decisions, or introduce legislation that 50%, 60%, or 70%+ of the population doesn’t want, there’s also the same issue present in organized real estate.

Now, one thing that we did not discuss last year was the new real estate legislation known as the “Trust In Real Estate Services Act,” or TRESA.

This is going to replace the “Real Estate Business Broker’s Act,” or REBBA, which was introduced in 2002.

Because REBBA was introduced in 2002, it was probably written well before that.

I started writing blogs about how REBBA was out of date as early as the Toronto Realty Blog was invented!  My issues had more to do with the pre-construction industry, but in any event, a re-write was long overdue.

But TRESA has far more to do with representation than anything else.

The biggest take-away or the largest story resulting from TRESA is that sellers are now allowed to disclose the contents of offers during a multiple-offer process.

Prices.

That’s what it means.

A seller can say to his or her listing agent, “You can tell the buyer agents representing the seven buyers who submitted offers what all the offer prices are.”

This has been called the “open offer process” and the word “transparent” has been used.

But many people are asking, “Why would a seller want to disclose all the prices?”

Not only that, there’s no guidance on the nitty-gritty.

What if there are seven offers on a property and the listing agent discloses the seven bid prices to all seven agents, but then five of those buyers re-submit their offers at higher prices – is the listing agent now obligated to disclose the revised prices?

You might say yes, but TRESA doesn’t say anything.

I could write an entire blog on the idea of an “open offer process” or simply, how what TRESA allows, doesn’t allow, and doesn’t account for, but I want to get through this in due time!

The intent of TRESA wasn’t to make the “open offer process” the poster-child of the new legislation, but rather it was intended to clear up representation.

Once again, we find that legislation is needed to police the “bad actors” in the industry, of which there are many, I will admit.  But it seems that one of the biggest issues in real estate over the last several years was consumers not knowing or not understanding who is working on their behalf.

Let’s say that a property is listed for sale in Mississauga by listing agent, John Smith.

Two unrepresented buyers, Carla and Daniel Jones, see the “FOR SALE” sign and inquire about the property.

Listing agent, John Smith, meets Carla and Daniel Jones, and they tour the property, talk about home, the price, the offer process, and more.

But wait……whom does John Smith represent here?

Isn’t he acting “in the best interests” of the seller?

And what happens even if Carla and Daniel decide to make an offer on the home through John Smith?

Over the last several years, a lot of buyers have complained that they thought they were being represented by the listing agent, only to find out that the listing agent worked for the sellers.

Duh.

But legislation is often intended to protect people from themselves, ie. the need to make seat-belts mandatory, so much of TRESA was designed to ensure consumers fully understood agency.

Not only that, it introduced the option of a “self-represented party,” ie. the guy who wants to make his own offer, without an agent, and has the worst offer 99.9% of the time, but I digress…

We also saw the introduction of “designated agency,” for which an actual agent is named in a Listing Agreement, as opposed to the brokerage.  The arcane idea that the entire real estate brokerage represented the seller of a property as soon as the listing was signed, even if that brokerage had 1,000 agents, is now gone.  I don’t believe that this is how agents worked in practice at any point in the last couple of decades, but at least now we have this out of the legislation.

So what was the response to TRESA?

“New Ontario Act Strives For Transparency In Real Estate Industry, But Comes Up Short”
The Financial Post
January 1st, 2024

That’s just one opinion, but it was provided by two prominent real estate critics.

Maybe all the “industry tinkering” isn’t on your mind this year, but it sure is on mine.

Consumers will be impacted; I just don’t know if they’ll care.

And I don’t think that organized real estate is finished making changes, for better or for worse…

7) Affordable Housing

This will be a story every, single year in our city.  Forever.

But is it on our minds?

You’re not a bad person if this isn’t something you’re concerned about.  There’s a lot of competition for our attention these days, and dare I say that if you’re a person living comfortably, let alone well, you might not have this on your radar.

Any city as large as Toronto is going to need affordable housing, but the definition of “affordable” is a moving target.

And to whom the housing is delivered, where, when, and how, are questions we have been unable to answer over the last several years.

But maybe there’s some light at the end of the tunnel here?

Despite my thoughts above on the “bright ideas from government,” or lack thereof, it’s nice to see headlines such as this one in the mainstream media:

“Toronto Is A Step Closer To Building One Of The Largest Affordable Housing Projects In Decades”
CBC News
January 12th, 2024

This project is going to use city-land in the development, through a partnership between the city, CreateTO, Civic Developments, Windmill Developments, and Co-Operative Housing Federation of Toronto.

That’s a lot of partners.  Call me a fatalist, but the more hands in the pie, the more voices at the table, and the more egos and feelings involved, the more any partnership or joint-project is to experience inner turmoil.

But it’s a step in the right direction, even if the project is “only” 918 homes, of which 612 are rent-to-income.

If we wanted to be pessimistic, however, or maybe just “realistic,” we could point out that this is part of the Housing Now Initiative that Toronto’s City Council approved in January of 2019.

Why is that a bad thing?

Well, because of this:

“No New Affordable Units Built Linked To Toronto’s Housing Now Plan, 4 Years After Inception”

That article is from May of 2023 and we explored it on TRB last year.

So my pessimism, cynicism, and realism with respect to the “largest affordable housing projects in decades” is based on the fact that it comes after four years of absolutely nothing.

The response from the media has been great!

“Toronto’s New Co-Op Housing Points To A Dense, Beautiful Future”
The Globe & Mail
January 13th 2024

This is from Alex Bozikovic, who is the Globe & Mail’s architecture critic.  He’s usually on point and has offered some valid opinions on development and zoning in the city over the last few years, but I wonder if the headline (which writers don’t choose themselves) is romanticizing this a little too much?

We saw four years of inactivity from the Housing Now Initiative and now we have one project to fawn over.

Is this sort of like when your 2-year-old points to a cup, successfully mutters “cupppeee,” and you scream aloud with excitement, pride, and satisfaction?

The “Affordability Action Council,” or AAC, recently suggested that the government needs to build one-million rent-geared-to-income community homes by 2030.

The AAC noted, “You can’t rely on the private home building sector to build affordability, that’s not their job.”

Let’s see how much progress the three levels of government are able to make on affordable housing in 2024…

You know, I do have other issues on my real estate mind, but I’m going to leave it here for now. 🙂

At some point, we need to talk about the real estate market, right?

Wait…..is there a market right now?

Let’s table this for Thursday…