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These Ontario cities currently have the most and least competitive real estate markets

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A new report has ranked which Ontario cities have the most and least competitive real estate markets this year.

Zoocasa, a Canadian real estate website, analyzed and compared the market competition among 34 cities and regions across the province by looking at the sales and new listing data from October.

In doing this, it determined the sales-to-new-listing ratio (SNLR) for that month, which represents the total sales divided by the number of new listings in the area. Zoocasa says this “effectively” shows the supply and demand levels in each region, and can point out how much competition local buyers face.

It’s then divided into three different markets: buyer’s, balanced, or seller’s market.

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A buyer’s market – when buyers have more listings to choose from – has an under 40 per cent SNLR and a seller’s market – where demand surpasses the supply – is over 60 per cent.

All 19 cities in the Greater Toronto Area (GTA) are reported as balanced markets, meaning the demand and supply are balanced.

Toronto boasts a 54 per cent SNLR, Mississauga a 53 per cent SNLR, and Brampton a 51 per cent SNLR. Last year, all three spots were highly favourable to sellers.

Outside of the GTA, Zoocasa notes only six places are not in a balanced market territory.

Niagara Falls is currently the only city with a buyer’s market, with a 29 per cent SNLR and an average home price of $640,000. Last year, the border city was a seller’s market with an 82 per cent SNLR.

Sault Ste. Marie, Thunder Bay, North Bay, Sudbury, and Guelph are seller’s markets, which means the demand surpasses supply. Guelph is the only city among the five with average home prices sitting at over $700,000 on the market.

The affordability in these cities is what draws buyers in, Zoocasa says, especially since interest rates are so high.

Zoocasa notes housing competition has cooled in the GTA. But, if the Bank of Canada implements another rate hike in December, the market could favour sellers again.

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Opinion | Real estate feels too darn expensive. But are commissions to blame? – The Washington Post

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Regarding the March 21 editorial, “There’s a real estate shakeup — but more can be done,” and Megan McArdle’s March 22 op-ed, “We’ll soon learn the true value of real estate agents”:

As a residential real estate broker in the D.C. region for more than 40 years, I witnessed the creation of buyer representation nationally because of consumer demand. The purchase of a home is the largest and most complex financial deal most people enter into in their lives. They don’t do it often. The thought of a buyer not having an advocate makes me shudder. If you saw what I saw, you would, too!

Real estate agents handle so many issues. Some are questions about the physical condition of the property. Does the home have radon, lead paint, mold, asbestos or wells or septic tanks? Is it subject to obscure zoning rules, unusual property lines, conservation easements or historic overlays? We can tell buyers if a home inspector or contractor is reliable, and how to navigate mortgage financing guidelines or find a skilled underwriter. And we are their partners in the emotional parts of real estate: tough negotiations, nasty divorces or adult children who won’t move out.

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In helping buyers handle these issues, real estate agents create a community network of homeowners and service providers. Most people don’t know the depth of what their agent does for them. We can do a better job explaining that.

This is already a highly competitive industry. Inexpensive options for obtaining brokerage services have always been available to all clients. Sellers who choose not to offer compensation to a buyer’s agent will eliminate opportunities for Veterans Affairs-financed buyers and for most first-time buyers who cannot pay their agent because of loan-underwriting guidelines. That reduces access to homeownership unless these buyers buy without the benefit of representation. That feels discriminatory to me. Often, buyers would not even know they could buy a home without the help of a buyer’s agent.

Also, consider that for buyers and sellers getting their information off the internet, context is quickly lost. Relying on a website alone to buy a house or condo is sort of like diagnosing your medical problems by looking online and dismissing the need for a doctor.

Holly Worthington, Chevy Chase

I much appreciated the Editorial Board’s take on the National Association of Realtors with regard to “limited competition among agents on price and service quality.” For me, the editorial was, as Yogi Berra is famously thought to have said, “déjà vu all over again.”

From the spring of 1978 until the end of winter 1979, I led the Seattle office of the Federal Trade Commission investigation into NAR’s use of its multiple-listing services as a price-fixing scheme. The investigation, which received full cooperation from the NAR general counsel’s office, covered five metropolitan areas across the country.

Based upon MLS data, our investigation concluded that collusion between brokers was patent and the MLS was the vehicle that promoted price-fixing and service uniformity. My office sought to treat the listings database as an essential public service and proposed opening the MLS to consumers on a “user fee” basis. However, the FTC rejected the proposal in its entirety and reassigned the NAR matter to the Los Angeles office to pursue a market-driven, nonenforcement approach based on the development of “buyer broker representation.”

And here we are today. Perhaps there are lessons for the future in our work from the late 1970s and from the research conducted by our regional director, William C. Erxleben, on brokerage price fixing.

Michael Katz, Washington

As a long-retired Realtor, I was intrigued by Megan McArdle’s op-ed on real estate agents.

When I was active in the profession, I thought about a third of the active agents in my market were competent, knowledgeable and diligent and worked hard for their clients. Another third were inexperienced and learning, while the final third were unsuccessful and trying to find other employment.

Ms. McArdle wrote that she would pay pay a buyer’s agent between $500 to $2,000 for assistance. Her estimate of an agent’s worth assumes a buyer will establish market value, has knowledge of any needed inspections and understands the requirements when closing a transaction. I doubt many buyers have the necessary time and ability.

And Ms. McArdle ignored commercial and other nonresidential real estate transactions, which could be even more complicated. All buyers and sellers will continue to choose their agents. A more important question might be: What method could the industry develop to help them make an informed choice?

Certainly, technological innovations will affect residential marketing expenses. And it will be very interesting to see how the housing industry’s cost of goods sold evolves.

Frank Brodersen, Springfield

Contrary to the impression given in a recent Post editorial, a decrease in Realtors’ commissions will not decrease the price of homes. Home prices will continue to be determined by supply and demand, especially in a market in which there are very few listings. If real estate commissions decline, sellers might receive more money on closing. But in a market with hundreds of potential buyers and six listings, why would sellers lower their asking prices?

Roy Relph, Arlington

The editorial on real estate costs accepted without much question the narrative that waiving title insurance — which protects home buyers in the event that someone makes a claim to their new home — will help solve the nation’s housing affordability challenges. Unfortunately, the administration’s title insurance pilot program will exacerbate housing costs by exposing lenders, consumers and taxpayers to greater financial risk.

This experiment would allow some refinancers of federally backed mortgages to skip paying for title insurance in favor of inadequate verification methods. The program targets only higher-wealth homeowners, not first-time homebuyers. It will do little to spur new ownership.

And the program would put Fannie Mae, which was neither created, chartered, licensed, regulated nor reserved for such purposes, into the title insurance business. Fannie Mae helped implode the U.S. economy in 2008 and cost taxpayers more than $200 billion the last time it engaged in significant risk-taking beyond its charter.

For the protection it provides, title insurance is a good deal. While many other fees have increased, the cost of title insurance coverage has declined nearly 8 percent since 2004. We need to focus on the barriers to homeownership that exist today, but title insurance isn’t one of them.

Diane Tomb, Arlington

The author is chief executive of the American Land Title Association.

The long, and thorny, U.S.-Israel relationship

Regarding the March 25 front-page article “Gaza dissenter plans second act”:

This coverage of Josh Paul appropriately honored a man who acts on his conscience to bring an important and informed point of view to others.

However, the article gave the impression that Israel has always enjoyed an exclusive free ride from the highest levels of our government. This history is much more complicated.

No less a figure than U.S. Secretary of State George C. Marshall opposed recognition of the new state of Israel in 1948; he and his allies on the question feared ongoing war in the region and threats to U.S. access to oil. President Dwight D. Eisenhower demanded the withdrawal of Israeli forces from the Sinai Peninsula after the 1956 Suez Crisis and threatened to cut off U.S. aid if Israel did not comply. Citing larger geopolitical considerations, Secretary of State Henry Kissinger favored a stalemate rather than outright Israeli victory in the 1973 Yom Kippur War, even though Israel had been attacked. President George H.W. Bush withheld loan guarantees to Israel to accelerate Prime Minister Yitzhak Shamir’s negotiations with Palestinian leader Yasser Arafat. And in 2005, Prime Minister Ariel Sharon withdrew Israeli forces from Gaza in an attempt to improve Israel’s standing.

It is appropriate for Americans to convey to the Israelis what our nation has learned about warfare from the ugly experience of destroying Vietnamese villages in order to save them and inadvertently incinerating Afghan families unfortunate enough to live too close to military targets. But let’s not pretend that it’s simple to ask Israel to shield the innocent from a war started and pursued by people sworn to destroy it, or that any other nation has been held to this standard.

David Hornestay, Silver Spring

I want to offer high praise for the outstanding profile of Josh Paul. Mr. Paul’s thoughts and actions about the Israeli war on Gaza were measured and reflective of what many Americans , including me, think and believe. His integrity and determination to speak truth to power were inspirational.

I wish President Biden — who, until giving a catastrophically misguided hug to Israeli Prime Minister Benjamin Netanyahu in October, had been a good president — would listen to what Mr. Paul is saying. I agree with him that “what Israel is doing right now is deeply harmful to America” and contrary to the values America espouses around the world.

The courage demonstrated by Mr. Paul, a Maryland resident, and Sen. Chris Van Hollen (D-Md.), who has spoken out against selling Israel offensive weapons and in favor of more aid to Gaza, has given me reason to take pride in Maryland, our people and our leadership.

Robert J. Latham, Ellicott City

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A settlement in a U.S. lawsuit could upend the cornerstone of real estate industry: commissions – CBC.ca

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The cost of selling a home in the United States may be about to change dramatically.

A real estate trade group has agreed to a landmark deal to drop what was once a cornerstone of the industry: the six per cent sales commission paid to agents.

In Canada, two lawsuits filed against various real estate bodies want the courts to come to the same conclusion and force wholesale change in the way Realtors charge their fees when a home is sold.

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“We got here by a cartel of brokerages and real estate associations that control the rules, and they’ve done it for a very long time,” said Garth Myers, a litigator with Toronto law firm Kalloghlian Myers.

He filed the proposed class-action lawsuits in Federal Court on behalf of plaintiffs who allege that the Canadian Real Estate Association, the Toronto Regional Real Estate Board and several local brokerages and franchisors conspired to set fees and illegally drive up the price of real estate commissions.

At the heart of both the U.S. and Canadian cases is the opaque way in which real estate agents charge their fees.

Lawsuits revolve around Competition Act

In Canada, there are different fee structures in different jurisdictions. In Ontario, for example, a commission of five per cent of a home’s sale price is split between the buyer’s and seller’s agents.

With the average price of a Toronto home at $1,225,000 last month, Realtor fees would amount to $61,250.

In Vancouver, Realtors charge seven per cent on the first $100,000 of the sale price, and between 2.5 and three per cent on the balance. So agents would split between $29,500 and $34,000 in fees on a $1-million home.

A real estate 'For Sale' sign outside a single-family home.
In Canada, there are different fee structures for real estate agents in different jurisdictions. In Vancouver, Realtors charge seven per cent on the first $100,000 of the sale price, and between 2.5 and three per cent on the balance. (Ben Nelms/CBC)

In the U.S., agents generally charge a commission of five or six per cent.

But what is common among those different jurisdictions is that the fee paid to the buyer’s agent is baked into the price of the home, while a seller can negotiate with their agent and get a better fee.

A potential buyer can look up the details of a home on something called the Multiple Listing Service (MLS). The listing includes everything they would want to know about a property — from size and taxes to upgrades and amenities — but it doesn’t disclose the amount a buyer will pay in Realtor fees.

Myers said the existing system enables agents to steer clients away from homes that aren’t paying the full commission.

“It’s clear to us that consumers are being ripped off, it’s clear to us that the rules elevate the cost of buyer brokerage commissions,” he said. “Now the open question that the court is going to have to resolve is whether this is criminal conduct under the Competition Act. And that’s what we’re fighting about in court.”

It will likely take years before the cases are resolved.

WATCH | How sweeping U.S. real estate changes could impact Canada:

How sweeping U.S real estate changes could impact Canada

8 hours ago

Duration 6:22

A landmark legal settlement is upending the U.S. real estate market. CBC’s Peter Armstrong breaks down the possible ripple effects for home buyers and sellers in Canada.

U.S. industry pushes back

In the U.S., there is already fierce disagreement over what the court settlement — which ends legal claims from home sellers over real estate commissions — actually means.

On March 15, the day the $418-million US settlement was announced, the National Association of Realtors said fees have always been set by the market, not by collusion among agents. Besides, the group said, those fees have always been negotiable.

“Offers of compensation help make professional representation more accessible, decrease costs for home buyers to secure these services, increase fair housing opportunities, and increase the potential buyer pool for sellers,” the association said in a statement outlining the broad points of the agreement.

Rows of houses are shown in a subdivision.
A housing subdivision is shown in Middlesex Township, Pa., in April 2023. In the U.S., there is disagreement over what the $418-million US court settlement — which ends legal claims from home sellers over real estate commissions — actually means. (Gene J. Puskar/The Associated Press)

Since then, high-profile brokerages have pushed back against the notion that the industry will be forced to change as a result.

“Since the settlement announcement, there have been numerous articles and stories in the media on what this means for buyers and sellers,” Budge Huskey, president and CEO of Premier Sotheby’s International Realty in Naples, Fla., said in a statement released on Tuesday.

“Regrettably, most reflect a profound lack of understanding of the real estate business as well as mistaken claims.”

Huskey said the notion that sellers will no longer pay a fee to the buyer’s agent is simply false.

“There has never been any obligation for a seller to pay buyer agent compensation at any time, yet it has been a historical practice that’s worked exceedingly well since the advent of modern residential real estate,” he said.

Realtors in Canada, such as ReMax, aren’t saying much publicly while the cases work their way through the courts. A spokesperson for the organization would only say that “we do not comment on ongoing litigation.”

U.S. reaction watched closely here

“It’s important to note the litigations in Canada and the U.S. occur in different legal and factual contexts, and the litigations are at a much earlier stage here in Canada,” the Canadian Real Estate Association said in a statement to CBC News, adding that “we’ll continue to review U.S. developments.”

The statement goes on to say that buyers and sellers in Canada “have always been able to negotiate commissions with their agent…. On the buyer side, buyer representation agreements are required in at least seven provinces in Canada. These agreements set out terms like services and fees between an agent and their buyer. This represents more than 80 per cent of homes sold in Canada.”

Real estate experts on this side of the border have been watching the U.S. reaction very closely.

A man with grey hair and a grey beard, wearing a blue overcoat and tie, stands outside a building.
Murtaza Haider, a professor of real estate management at Toronto Metropolitan University, says he thinks the lawsuits in Canada will lead to the same outcome as those in the U.S. because the two real estate systems are so similar. (Pelin Sidiki/CBC)

Murtaza Haider, a professor of real estate management at Toronto Metropolitan University, said the two systems are so similar that he believes the court cases here will lead to the same outcome as those in the U.S.

But, he said, people should temper their expectations.

“We won’t have a system blow up. It’s basically giving the buyer the rights to negotiate with the agent, a commission for the services they may or may not use,” Haider said.

Down the road, he imagines a system where some buyers pay an agent a full commission to help them find a home, figure out a price and close the sale, while others will simply need someone to help them file the paperwork.

Haider warned that there may be some unintended consequences to changing the system. Currently, he said, the fee paid to both the buyer’s and seller’s agents is essentially included in the price of the home. Fees are not an extra closing cost outside the home price.

“Right now it’s baked into the mortgage amount, so you don’t have an out-of-pocket policy. But [if you] have the flexibility and freedom to negotiate, that amount [may be] coming out of your own pocket right away,” Haider said.

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Confidence growing among buyers as spring real estate market opens

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Open this photo in gallery:

Patrick Rocca, a broker with Bosley Real Estate, is listing a traditional four-bedroom house with a centre hall plan in south Leaside with an asking price of $2.399-million. He will allow offers any time at 111 Hanna Rd. because it is in the price bracket above $2-million.Bosley Real Estate Ltd.

The Toronto-area real estate market is heading into April with some renewed vigour now that March break has passed for Ontario schools.

Patrick Rocca, broker with Bosley Real Estate Ltd., holds off on listing homes that appeal to families during school breaks.

In Ontario, public schools take a one-week sojourn and private schools are off for two weeks.

With the Easter holiday falling in late March this year, many sellers have been holding off until April. Some activity has been dampened by the lack of supply.

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“There still is a lack of inventory – I think that’s going to change,” says Mr. Rocca, who is preparing to launch several listings in the coming weeks.

Some agents do list during school breaks because they figure not every family leaves town and the seller may benefit from competing with fewer rival listings.

But Mr. Rocca prefers to wait until more buyers are likely to be home and focused on house hunting.

“If you want to cover your bases and get 100 per cent of your market, wait until after March break,” says Mr. Rocca.

He viewed one house recently that was listed in March around the $2-million mark with an offer date scheduled for three weeks later instead of the usual one week.

The listing agent explained she wanted to give people a chance to return from vacation.

“Guess what – it’s still sitting on the market,” he says.

Mr. Rocca adds that prices are firming up again after sagging during the fall as buyers gain confidence that interest rates are not likely to rise.

One client was interested in a house that Mr. Rocca advised would be a good deal for about $2.5-million in the fall but the buyer wanted to hold out for a discount to the $2.3-million level.

The property was recently relisted and sold for $2.7-million, he says.

Houses are selling quickly in the segment below $2-million, he adds. Above that mark, deals are slower to come together.

“There’s still caution – it’s not 100-per-cent optimism – but it’s better than it was.”

Against that backdrop, the strategy of choosing an attention-getting asking price and setting a date to review offers is still risky, in his opinion. Agents typically set a deadline for reviewing offers when they expect multiple bidders.

Mr. Rocca is listing a traditional four-bedroom house with a centre-hall plan in south Leaside with an asking price of $2.399-million. He will allow offers any time at 111 Hanna Rd. because it is in the price bracket above $2-million.

Another property in north Leaside with an asking price of $1.9-million will also be listed without an offer date. But an older bungalow with an asking price of $1.6-million will have an offer date, he says, because it’s the type of property that appeals to a broad range of buyers, including families who plan to live in it and builders who may purchase it for redevelopment.

Ira Jelinek, real estate agent with Harvey Kalles Real Estate, recently worked with one couple who are selling their house in Toronto’s Yorkville neighbourhood in order to move to Durham Region, east of the city.

The couple has grown tired of the concentration of people and traffic around Avenue and Davenport roads, he says. In the smaller town of Whitby, Ont., they’ve found a house in an established suburb.

In addition to living with less congestion, they’re closer to family, he adds.

But overall Mr. Jelinek sees a shortage of listings in central Toronto this spring because many people who might downsize from their family homes are choosing to hold onto them.

Mr. Jelinek expects buyers to remain guarded until the Bank of Canada begins to cut interest rates.

“They’re very cautious before they make an offer.”

Farah Omran, senior economist at Bank of Nova Scotia, notes that housing sales in many markets across Canada dropped in February from January on a seasonally adjusted basis.

Peterborough, Ont. led the national decline with a fall of 15.2 per cent, while sales in St. Catharines, Ont. dropped 14.3 per cent and the Greater Toronto Area, 12 per cent.

Nationally, sales dipped 3.1 per cent in February from January.

Ms. Omran cautions against focusing too closely on monthly changes in the housing market – whether the swing is upwards or down. She notes that February’s sales were still higher than December’s tally and each of the three months before that.

Stephen Brown, deputy chief North America economist at Capital Economics, points to the data showing national house prices were flat in February compared with January as confirmation that prices have stabilized.

In addition, the latest data show inflation pressures are easing, says Mr. Brown, who sees a growing likelihood the Bank of Canada will cut its benchmark interest rate in June.

The economist doesn’t rule out a rate cut in April, but house prices may rise in the next few months, he says, which leads him to believe the policy-setting committee will wait to see how the real estate market heats up during the busy spring season rather than risk pouring fuel on the fire.

Mr. Brown is also keeping an eye on the federal government’s plan to restrict the number of temporary residents in Canada.

Last week Ottawa announced they will cut the share of temporary residents to 5 per cent of the total population from 6.2 per cent over the next three years.

Mr. Brown says population growth is set to plunge as a result and the new immigration plan raises the risk that the central bank will cut in April, though he still believes June is more likely.

Looking ahead, Mr. Rocca expects a brisk market at the peak of spring, followed by a traditional summer slowdown.

“I think it’s going to be busy right through until June.”

The fall may bring another spurt of activity – especially if the central bank cuts interest rates, he says.

But Mr. Rocca is warning sellers that the peak prices of 2022 are not returning any time soon.

“If you want to wait for a $2-million semi, wait a couple of years.”

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