May 28, 2008
Realtors settle Internet Policy lawsuit
The National Association of Realtors agreed to give discount Internet brokers access to its listings of home sales, resolving a U.S. antitrust lawsuit that accused the trade group of trying to restrain competition. The settlement, filed in U.S. District Court in Chicago, calls for the realtors group to revise a policy that let real estate agents exclude their sales information from Web sites. The government said the practice propped up an old-fashioned business model and harmed consumers who can save 1 percent of the price of a home by using a Web-based broker.
“Today’s settlement prevents traditional brokers from deliberately impeding competition,” said Deborah Garza, deputy assistant attorney general in the Justice Department’s antitrust division. “When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates.”
The agreement comes as the housing market, in the midst of a two-year slump, has showed no signs of recovery. Today, the Commerce Department reported that sales of new homes in April were the second lowest since 1991.
U.S. sales of previously owned homes probably will fall to 5.39 million this year, the realtors association said in a May 15 forecast. That would be a drop of 24 percent from 2005’s all-time high of 7.08 million, making it the worst housing recession since the four-year slump.
On-Line Realtor Pleased
“We are reasonably happy but not completely overjoyed,” Glenn Kelman, chief executive officer of Redfin, a Seattle-based on-line brokerages, said in an interview. “It throws the gate open to all sorts of business models.”
Kelman said the settlement will still allow realtors to bar some on-line comments and price comparisons from firms such as Seattle-based Zillow.Com and Cyberhomes, a service of Fidelity National Financial, Inc. of Jacksonville, Florida.
Richard Gaylord, president of the realtors association, said in a statement that the settlement will let the group focus on “re-energizing the housing market” during a difficult period.
“Competition is alive and well in the real estate industry,” he said. “In fact, the competitive nature of our industry is even more apparent in times of market turmoil like those we are currently experiencing.”
Internet Brokers
Internet brokers, who seek to cut costs by charging only for the services a seller wants, sprung up in the 1990s and now operate in all major metropolitan areas.
Traditional real estate agents for such companies as Coldwell Banker Residential Brokerage and Re/Max International Inc. usually charge a commission of 5 percent to 7 percent of a property’s sale price, while discount brokers charge 2.5 percent to 4.5 percent, or a flat fee depending on the services provided.
In 2006, consumers paid $93 billion in real estate commissions, the Justice Department said.
In most markets, real estate brokers participate in the Multiple Listing Service, which lets them share information about properties that are for sale. By using the service, brokers and buyers can get listings on almost all homes in the market.
About 800 of the listing services across the U.S. are affiliated with the National Association of Realtors, which sets policies governing their use.
Listings
Realtors usually give their clients printouts of the listings and not full access to the database. However, some brokerages that operate online let customers see all the Multiple Listing Service information via the use of a password.
Those sites, the Justice Department said, help real estate agents be more productive and let them pass cost savings onto home buyers with lower commissions or rebates. The agency filed its case in 2005 and it was set to go to trial in July.
The Chicago-based realtors group, which has more than 1.2 million members who work in the residential and commercial real estate industries, didn’t admit or deny the Justice Department’s allegations in settling the case.
The agreement puts the group under enhanced government oversight for 10 years. There was no financial penalty. Garza, speaking to reporters in Washington, said the Justice Department generally doesn’t seek fines when it first tries to halt anti- competitive behavior.
“What we’ve done is achieve a very lasting and important change to the conduct” of the realtors association and its affiliated listing services, Garza said.
May 14, 2008
Home sales see small April gain
Canada’s residential resale market eked out another small gain in April, as sales activity continued to retreat from the peak reached last year, the Canadian Real Estate Association said on Wednesday.
Existing home sales in Canada’s major markets edged up 0.8 percent in April to 27,039 units after a 0.9 percent increase in March, according to CREA, an industry trade organization representing more than 90,000 realtors.
The average price rose 3.2 percent to $334,293 in April, the smallest year-over-year price increase in more than six years, CREA said.
According to Douglas Porter, deputy chief economist at Bank of Montreal, so far this year home resales are down 11 percent year-over-year, and prices are up a moderate 4.8 percent.
“The sales drop and the modest price gain are well down from years of double-digit increases, and further confirmation that the boom days are over,” he said.
The number of newly listed properties reached 52,775 units last month, up 1.8 percent from the previous month. The differential between the increase in sales and the number of new listings resulted in a “more balanced” resale housing market, according to CREA.
“This means buyers face less competition in their search for a home,” CREA’s president, Calvin Lindberg, said in a statement.
The retreat in house sales activity in Canada is still far from what has occurred in the United States.
“Notably, no city in the country has reported a price decline from year-ago levels over the first four months of the year, so the slowdown is still far from mimicking the U.S. experience,” Porter said.
But the more than 8 percent increase in the number of new listings this year shows that another period of double-digit price gains is not coming soon, the economist said.
May 5, 2008
Toronto Real Estate Update
GTA resale housing market moderate in April, but prices up
With 8,762 houses sold in the Greater Toronto Area, April’s resale housing activity was down seven per cent from the record 9,452 transactions from the same timeframe a year ago, Toronto Real Estate Board President Maureen O’Neill announced today.
“The market is showing signs for a healthy 2008 compared to the diminished activity we saw in the first quarter of the year,” said Ms. O’Neill. “We continue to experience a supply and demand situation and to-date, it remains a sellers market.”
Sales activity however, was markedly different in the 416 and 905 regions. With 3,467 transactions in the City of Toronto, sales were down 10 per cent from a year ago. The 905 region was down five per cent from April 2007 sales, with 5,295 homes changing hands.
April’s GTA average price was $398,687, up eight per cent from the same period a year ago. In the City of Toronto, the average price was $446,781, up six per cent from last April. In the 905 region the average price increased five per cent compared to a year ago, to $367,196.
Several neighbourhoods experienced strong sales in April.
Scarborough East (E08) saw an eight per cent overall sales increase compared to April 2007, driven by robust detached home sales.
Caledon (W28) experienced a 15 per cent increase compared to the same timeframe a year ago as a result of strong condominium sales.
Condominium sales also drove Willowdale (C07) to a 32 per cent increase from a year ago.
In Thornhill sales increased eight per cent from last April due to strong detached home sales. “The number of listings on the Toronto Real Estate Board’s Multiple Listing Service has increased to 24,539, up seven per cent from a year ago, which is good for homebuyers, who will find a greater range of options in the market,” said Ms. O’Neill. “With prices continuing to appreciate and increased listing inventory there are favourable factors in today’s market for consumers.”