How does that headline catch you on an otherwise uneventful Friday morning?
Folks, I fashion myself a pretty honest guy, and I think I’m fair, and more impartial than most people in my business.
So let me be the first to call out one of the more outlandish prediction I’ve seen in years: Barry Fenton, President of Lanterra Developments, telling people that there’s going to be a 30-40% increase in average condo values over the next 3-4 years.
I know I’m a real estate salesperson, so this might seem contrarian, but I can’t possibly agree with Mr. Fenton’s prediction…
I know there’s a full minute of advertisements in the video, but it’s worth it – trust me!
Put it on mute, go warm up your coffee in the microwave, or just stare at the person across from you on the streetcar and see how many times he or she looks up at you in that one minute.
Any which way, you have to see this video.
I know I’m going to catch a lot of flak for this from my industry colleagues, who often wonder why I put anything negative out there, but COME ON!
How asinine is this prediction of 30-40% appreciation in condos in 3-4 years?
Let me be up front – I’m not a market bear. I do not think “the crash” is coming. In fact, I think over the next two years, we will see at least 2-3% annual growth in the real estate market, perhaps more.
But at the same time, I won’t blindly ignore all the bearish real estate articles, expert predictions, and negative sentiments out there.
I’ve said over and over again, “The media have accurately predicted eight of the last two recessions.”
And I have said on many occasions that “negativity sells,” and it’s part of the reason why despite our rapidly ascending market over the last two decades, much of the media coverage has been on predictions of doom-and-gloom, rather than a focus on appreciation, capital gains, and increased wealth.
So I do think that the negative media coverage of the real estate market has less to do with fundamentals, and more to do with what sells.
We don’t see nearly as much positive coverage as negative coverage, and for every market bull who gets their name in the paper (Benjamin Tal, anybody?), there are a dozen market bears predicting doom for the Toronto market.
But at the same time, I have to point out BS when I see it.
The last thing I want here is for the people reading this to think I’m bearish on the market, or predicting a correction, or even a dip in prices.
But I can’t watch this video without cringing.
I’m not cringing because of the actual prediction itself, which is pretty ridiculous. I mean, the last 20-years have been great and all, but this man is predicting up to 10% growth, each year, for the next four years – maybe more, if you care to finesse and cherry-pick his numbers.
But rather, I’m cringing because I just can’t stand to see somebody make a wild, outlandish statement that they know is exactly that, and smile while they do it.
This man is the President and CEO of a major condominium development company. And he is predicting 30-40% appreciation in condo prices over the next 3-4 years.
There’s nothing criminal about it. It’s not like the Banners Broker pyramid scheme.
But I don’t accept, for even a second, that this man actually believes what he’s saying.
By the same token, I didn’t think portfolio manager, Hilliard MacBeth, really believed what he was saying when he wrote a book about the 50% market correction that was about to happen in Canada.
And I most certainly did not believe that Nicole Foss actually thought the Toronto real estate market would drop 90% in value when she made this ludicrous prediction earlier this year.
People have agendas, no doubt about it.
And a cynic (there are many on this blog), will suggest that I have a vested interest in the Toronto real estate market continuing to climb, or at least people thinking it will.
I’ve said before that I will sell real estate whether the market is up, down, or sideways, and I think if, and when, the market corrects, my services, as a top, full-service agent, will be even more in demand.
So take it with a grain of salt when I say that my opinions are as truthful as you’ll find in this business, and while I don’t think the Toronto real estate market is going to drop 90% in value like Nicole Foss suggests, I also think for Barry Fenton, the President & CEO of Lanterra Developments, to suggest that the Toronto condo market is going to increase at double-digit rates for almost a half-decade, is as transparent as Garth Turner’s efforts to take people out of real estate and into his funds, or as pathetic as Hilliard MacBeth’s attempts to sell books.
Is there any sanity left out there?
Or are people just lined up to say stupid things?