Can crime and unlucky address numbers impact the selling price of your home?

Properties can become stigmatized based on past use as a grow-op, meth lab, or the site of a murder

As if navigating the GTA real estate market isn’t hard enough, throw in superstition and stigma and rules about disclosure and it can make a potential homebuyer’s head spin.

The prices of homes are supposed to rise and fall according to supply, demand and interest rates. The fundamentals of the market have remained the same for the most part. Price fluctuations relate to location, size and condition.

But those who have spent time in the market know there are odd quirks that persist. It’s not just location. Stigma and superstition can impact home prices though effects are often overestimated.

With tragic real-life situations such as a serial killer burying human remains at a Leaside bungalow where he worked as a gardener or the murder of Barry and Honey Sherman top of mind, questions of stigma in real estate persist.

Anomalies can pop up in the real estate market when a property is the site of a tragedy or a crime. “Stigma” is a dreadful word. But it is something that can attach to a property and affect value.

As a term, stigma is used in the case of real estate sales to mean knowledge of a traumatizing event that would trigger a negative psychological effect in a potential buyer. Properties can become stigmatized based on past use as a grow-op, meth lab, sex trade operation or the site of a murder or suicide.

It can even apply in cases where someone believes a house is haunted.

“Today, stigma issues are varied, from grow-ops, frequent flooding, mould, construction issues and then there are the cases of murder, suicide and ghosts, which are almost impossible to quantify,” said Barry Lebow, a longtime realtor and lecturer on stigmatized properties.

He notes that smaller towns will see property owners more highly impacted by stigma than those in larger cities.

A city such as Toronto has a deeper, more liquid market (that is, lots of buyers and sellers). So a stigma can fade.

Although there is no law about disclosing past murders or suicides and no public database to find such information, Ettore Cardarelli, president of the Ontario Real Estate Association (OREA), said there is a code of conduct that realtors follow.

“When it comes to homes with a stigma, realtors must follow a code of ethics, therefore providing all the necessary information to homebuyers,” she said.

But it is up to the realtor representing the buyer to ask the right questions.

At the top of the list of stigmatized properties are homes formerly used as marijuana growing operations. The number of dispensaries popping up in the city is enormous. Lebow said he is working on a 2018 update to an earlier study he did on grow-ops. OREA is also working on a report.

“We’ll probably see this issue of stigma come up more with the legalization of cannabis this summer. Realtors have expressed concern about this when it comes to home buying,” Cardarelli explained. “We have a number of proposals that we’ll be presenting to the provincial government soon, with the hope that they’ll take steps to ensure consumers are protected and homes are properly remediated.”

Another market anomaly that has popped up in Toronto more often in recent years is the concern over address numbers as it relates to Chinese superstition.

In the GTA’s luxury real estate market, Chinese buyers hold much sway.

As a result, the market is impacted by the same superstitions that might impact the market in China. And it’s not the only superstition that influences buying decisions. This is something savvy buyers and sellers need to understand and appreciate.

Paul Miklas, of Valleymede Homes, builds the biggest mansions in the country, almost exclusively in Toronto’s Bridle Path neighbourhood and almost exclusively for buyers from China.

Recently, he had an address changed on one of his builds from the number 14 to the number 12. Four is the worst number for Chinese people as it is closely associated with the word for death.

Another client dealt with having a four in a home address by placing mirrors throughout the house and consulting with a feng shui expert on the best way to counteract the bad luck associated with the number.

“In the beginning, it [swapping addresses] wasn’t allowed because people were just changing the numbers and the fire department or police or whatever would have trouble finding the house,” said Miklas, who is currently putting the finishing touches on a massive 50,000-square-foot home for a Chinese family.

In 2010 a real estate agent named Wendy Stimson reportedly requested the Town of Richmond Hill change the address of one of her homes from a four to a two. She thought it might give the property an edge

in the local market. Her submission set off a flood of similar requests.

In 2013 the Richmond Hill Town Council banned the number four from new development. Now residential towers in town and in nearby Markham typically skip the fourth and 14th floors.

Realtors who cater to the Chinese community today say they don’t see the effect of unlucky numbers on prices. The housing boom of the last five years took care of that.

“I don’t think it’s had an effect on prices,” said Albert Lai, a real estate agent with Re/Max. “When it comes to closing a deal, I don’t think it’s enough to change the price.”

Over the last couple of years any house is going to sell and without a discount due to the address.

“If it has an effect it might be in presentability. But that’s it. If the market is tight, the house is going to sell. There is no effect when the market is hot like it was last spring,” said Lai.

He notes it is a certain demographic that indulges in that kind of superstition.

“It tends to be people who are older. The younger, more westernized buyers won’t believe in that,” said Lai.