Will Housing Become A Luxury?

Everybody right now is complaining that there’s too many houses on the market; which is true. There is certainly a bit of a general market flood occurring in most areas of the country. However we might be too quick to complain because the future or real estate might take a different turn than expected once the market recovers.

At the current rate of market activity, new developments are being executed at a sufficiently sustainable rate. There’s a good availability of workers, costs are relatively low, the listing prices of new properties, due to the nature of the market, are also low, and the rate of new developments is manageable due to low market activity. However we may be getting ahead of ourselves to be pushing for a quick market recovery.

Once the market’s demand and activity stabilizes, new developments will predictably increase, but it’s not looking like enough craftsmen will be available to sustain this potentially increasing demand. And if there’s anything we can say for sure, it’s that once the market recovers, there will certainly be an increase of new development proposals. Now the issue is finding people to build them.

Within the next 10 years, Canada will see an estimated shortage of 800,000 skilled workers due to the lacking emphasis on the social importance and demands for tradesmen. This situation could play out negatively or positively depending on which side of the fence you’re on.

If you were hoping on building a house in ten years, you’d better start saving your pennies (still getting used to that one) nickels, because the price tag is going to look a whole lot different than the one you were expecting. However, for property owners, this may not be such a bad thing.

Due to the labour shortage, house prices will predictably rise due to the squeezed rate of supply and demand, single-handedly increasing market value. Now, this also goes hand in hand with a smaller index of available properties due to the foreseeable housing shortage. That being said, the increases in value may be bittersweet to those looking to eventually sell and settle down in ‘the perfect place’, because that ‘perfect place’ will look like a ham to a herd of wolves when the time comes around.

Real estate comes at a price – that prices varies in many degrees including long-term investment. At this point there’s a large availability of affordable properties on the market, so get ‘em while they’re hot, because ten years from now things might be taking a strange turn.

image courtesy of Dave Stokes

We’re Experiencing Some Turbulence

Though the United States are reporting their Q4 as having the strongest quarterly growth in over seven years, it seems that we aren’t so lucky.

Canadian home sales are in fact taking a slight dive, as we predicted in our blog post, Here We Go Again.Despite our neighbours to the south prospering, our real estate market is not comparable to theirs for a number of reasons, however one would think that with both markets making a slight recovery that they should be following the same streamline.

However, The Vancouver Sun reports that this January we saw a near-23% decline in housing starts, leading is to believe that buyers aren’t in the mood for it yet this year; and sellers are clearly white-knuckle gripping the deeds to their beloved yet not-so-valuable homes. (Buyers and sellers failing to see the ‘give and take’ in the market. We aren’t going to go off on that tangent…because we already did here: Stop Forcing It!)

So now that we’re left with slipping market enthusiasm, not to mention our now lacking new developments, what can be done to inject some life back into real estate?

A NAR survey result posted by Chicago Agent Magazine revealed that agents in 2012 were statistically less experienced (measured in their number of years in the real estate industry) than those in 2011. What does this tell us? Well, if we look at the public’s lacking market participation, shorthanded developments, and the United States’ doing well while we aren’t, one could easily draw the conclusion that the entire real estate experience has become stagnant and stale.

Rather than blaming the public’s lacking participation with the market/industry, maybe it’s time the market participated with them instead by offering services and experiences that entertain and excite your clients about the wonderment and limitless possibilities to be discovered in real estate investment. The typical opinion of real estate agents is declining, so it’s time to take control, tighten up your business, man the hatches, and execute an expedition to the frontiers of scared sellers and new buyers. Agents need to step it up!

The only way we can expect the market to recover is by encouraging participation within; so why not be the draw instead of complaining that there isn’t one?

Sizzling Marketing

An article released by the National Post is bringing a particular amount of attention to the world of real estate marketing.

A Calgary, AB, based real estate agent recently released a billboard advertisement that’s been drawing a lot of attention; whether that attention’s a good or bad thing we’re still unsure. The billboard featured a photo of the young female agent Diana Arvatescu with the caption ‘Let Me Take You Home, It’s Gorgeous Inside’ as the message of the ad.

What started out as a clever innuendo campaign has now developed into a critique of the appropriateness of this style of advertising, and it’s place in real estate, as critics believe it to be too sexually implying and could put the agent in danger as a result.

Though critics may be overly assumptive in predicting that harm would come to the young Diana, the larger issue now is where the boundaries are to be drawn regarding appropriate advertising in a relatively conservative industry such as real estate.

What are your thoughts on this campaign? Is Diana going too far, or simply adding some spice to a bland industry?