Property Re-listing Leads to Bad Data
Real estate boards across North America publish their data fairly promptly, shortly after month-end, accompanied by press releases. If we look closely, it becomes clear that some numbers are misleading.
The common practice of “re-listing” distorts key metrics like average days on the market and new listings, painting a skewed picture of the housing landscape.
Re-listing occurs when a property is removed from the market, only to be re-listed shortly after with little to no changes. There are good reasons why agents and sellers should want to do this:
The sellers don’t want viewings while they are on holiday.
The Sellers are switching agents, and listings are linked to agents.
The home was listed at a price that didn’t catch anyone’s attention, so they re-list it at a lower price.
Buyer agents sometimes filter for recent listings to see if there’s something new to show their clients. Seller agents re-list so their old listing will appear in the buyer agent’s search.
While it might seem harmless, it’s significantly impacting the data used to analyze market trends, particularly in cities where the practice appears to be abused.
Toronto Monthly Re-listings as a Share of Total New Listings
Toronto — Record Number of Cancelled Condo Listings
Days on the Market
Average days on the market (ADOM) – a key indicator of market activity – are skewed. By re-listing a property, agents can effectively reset the clock, making it appear that homes sell faster than they are.
Artificially low ADOM creates a false sense of urgency for buyers, pushing them to make hasty decisions or make offers without risk-mitigating conditions (e.g., subject to financing and a satisfactory property inspection).
Making the market look hotter also leads sellers to list at higher prices than the market will bear. In this scenario, if the home doesn’t sell, the agent proposes to re-list it at a lower price. There is an irony that re-listing skews the statistics in a way that leads to more re-listing.
ADOM is a more straightforward market metric for buyers and sellers to understand, and we believe they rely on it more than other metrics like sales-to-new listings, sales-to-active listings, and months-of-inventory.
Case Study: Metro Toronto
In July 2024, the average days on the market for a detached house in Metro Toronto was 22 days. This key market indicator signals to buyers that houses are selling quickly, that they should rush to view and make an offer if they like a home, and that they have very little power to negotiate.
However, if the average property is re-listed twice before a sale, the adjusted average days on the market is 40 to 60 days.
If you divide the total active listings by the number of monthly purchases, you have a ratio called months of inventory. Essentially, this is how many months it should take to sell all the properties for sale if purchases continue at the current pace. In Metro Toronto, the inventory for detached houses in July was 4.1 months or roughly 128 days.
This implies that detached houses are re-listed 5.8 times before they find a buyer.
Source: Toronto Regional Real Estate Board
Months of inventory is a more reliable measure of market balance than average days on the market.
Inflated New Listings
Economists and industry analysts use the sales-to-new-listings ratio to determine whether the market is balanced, favours buyers, or sellers.
When a property is re-listed, it’s counted as a new listing, even if it’s the same home that was just on the market—it is double-counted. Inflated new listings can give the impression of a plentiful supply of homes, while inventory might be tight in reality.
Re-listing creates a distorted view of the market that can lead to bad decisions for financial institution leaders, government policymakers, buyers and sellers alike.
These institutions make major strategic decisions and steer market participants based on erroneous data.
RBC — Toronto Region Sales-to-new-listings Ratio
RBC Royal Bank uses this ratio in its monthly market reporting covering Toronto, Montreal, Vancouver and Calgary.
The Bank of Canada examined this ratio in their Indicators of Financial Vulnerabilities report.
Bank of Canada — Sales-to-new-listings for Canada
Different Regional Practices
The Bank of Canada was looking at national Canadian sales-to-new listings. The problem is that different regions have varying practices regarding recycling listings; this means that larger markets like Toronto, where new listings are most inflated, have an outsized influence on the economic analysis of the national housing market.
Also, when property investors decide where to invest in a rental property, the varying practices make it difficult to draw meaningful comparisons between Canadian cities. Likewise, when homebuyers move between cities for work, they assume that market indicators work the same regardless of where in Canada they live, and they are unaware that some markets have distorted market data.
Properti Edge
It is distressing to know that real estate boards publish misleading statistics that lead to conflicting interpretations of market conditions.
Several potential solutions exist, and they require either government regulatory intervention or the Canadian Real Estate Association to implement changes.
In the meantime, any analyses of trends and forecasts published by Properti Edge, do not rely on new listings or ADOM.
It is crucial for our clients to have accurate and reliable data from which to draw insights and inform decisions.
