Redfin CEO Glenn Kelman called real estate “by far the most screwed up industry in America.” I’d say that as screwed up as it is in America its even more dysfunctional in Canada. In the US, real estate data and listing information is far more open to both the public and to entrepreneurial innovation. In comparison, Canada is lurking in the dark ages.
It’s my belief that Melanie Aitken and the Canadian Competition Bureau are justified in shining their spotlight on the Canada Real Estate Association and their Multiple Listing Service (MLS).
CREA and its member real estate boards effectively control the residential market in Canada. Around 90 per cent of all home sales are completed using the Multiple Listing Service. This means consumers are forced to use MLS to effectively research homes for sale or market their property.
One could argue that CREA obtained this significant market share fairly and squarely and should be able to capitalize on its dominance as it so choses. One could even point to how Bloomberg has a similar hold on financial data whereby commercial stock traders must employ Bloomberg terminals to do their job – turning New York Mayor Bloomberg into a multi-billionaire.
The question then arises whether CREA aquired its position fairly or whether Canadian real estate laws have been stacked in its favor. Personally, I believe its a complex discussion as to how CREA came to be and its probably not the result of straight forward ingenuity and good service.
Regardless, the current situation is not good for the consumer and it therefore should change and with modern technology it will change. Those that argue the current situation is beneficial for the consumer are either out to lunch or are lying.
Consumers want choice. They want to research listings across the web and they want more data. They want to see sales histories of properties, they want instantaneous valuations of their homes, and they want to decide what type of assistance they require from agents and what they want to pay for. This is what the United States pretty much has with services such as Zillow, Trulia and Redfin. Why can’t we have that here in Canada?