Is it the HST? Creeping interest rates? High prices? Something is killing the Canadian real estate market - Canadian real estate sales have dipped sharply – and expectations should be following suit.
A year ago, Canadians marveled at the strength of the property market here. Prices and sales were up, while we noted quite smugly, that Americans were seeing record declines and price erosion in their real estate listings.
What a difference a year makes.
In 2009, Canadian home prices jumped 19% over prices from 2008 – compare that to 2010, when prices have risen a comparatively modest 5%, but sales are way, way down – as much as 40% in some markets. Meanwhile, the Canada Housing and Mortgage Corporation announced that housing starts are down again – falling for a third straight month, more than 10% from their peak in April.
Clearly demand is down, but prices aren’t set to follow suit. Statistics Canada is anticipating that housing prices will rise by an almost imperceptible 0.3% in June – making that the 13th straight month that housing has gotten more expensive in Canada. The Canadian Real Estate Association (CREA) is predicting a 7.3% decline in sales for 2011, but still expects housing prices to rise.
So, what’s going on in a formerly red hot market? A slowing economy, rising interest rates, and according to many realtors, the HST in BC and Ontario (two of Canada’s biggest housing markets) have all combined to make people re-asses their decision to buy real estate.
Unfortunately, as these factors aren’t poised to go away any time soon, which means that Canadians might need to get used to a… stable property market.
Over the last ten years, a booming economy and then unprecedentedly low interest rates pushed many people to buy homes and investment properties – statistics from CREA show that the average price of a house more than doubled in the last decade – climbing an incredible 110%. However, going forward, the housing market might be much closer to the 1990s than the 2000s, if you ask Don Lawby, the Chief Executive of Century 21.
According to Lawby, the 1990s had a steady real estate market: prices rose every year, due to real factors like inflation and natural market demand, but not factors like impending taxes, mortgage rule adjustments and speculators trying to get huge returns on their investments.
Is a stable property market bad? No – it’s probably better. People selling real estate will need to adjust to the fact that property may not be the get rich quick scheme it once was, but more buyers may be lured out of the woodwork, enticed by the safety of a stable market which promises no big gains, but no threat of huge equity destroying corrections either. For years, everyone wanted to buy real estate to see how big they could win – those with a lust for gambling might just have to go back to the stock market.
Image: Canadians might just have to get to a market that rises slowly and steadily.
More and more real estate agents are investing in Customer Relationship Management software (CRM) because they’ve been told it will make their lives easier and increase their sales. Adopting a CRM system isn’t a magical sell-more solution for realtors though. There are no guarantees that it will make a business more productive and more profitable – the only guarantee is that it will cost money! According to research firm Meta Group Inc, 55% to 75% of CRM solutions fail to meet their initial objectives. If that initial objective is increasing sales for a realtor… then what customer relationships is that software actually managing?
That said, as many real estate agents will tell you, a successful CRM system is an incredible tool for them – allowing them more time, more flexibility and more automation in their day to day tasks. So, the decision – should you take the customer relationship management plunge – is not an easy one. Only you can determine, based on your personal needs if a system will be a boon, or just a money wasting bust.
However, to ease the decision making process, we’ve done some research and put together a short quiz. Give yourself 2 points for a yes, 1 for a maybe and zero points for a no – then tally up your scores and see how you did.
Do you have a large audience (at least 250+ people) that you need to communicate with regularly ? Yes / Maybe / No
Does everyone in your business who communicates with clients track what they said so others can know what has been said/promised/done? Yes / Maybe / No
Would you get a benefit (more sales, more leads, lower costs, etc) from communicating with your clients through direct channels? Yes / Maybe / No
Will personalizing your communications and tailoring them to your customers help you with your business? Yes / Maybe / No
Do you need detailed information about your contacts like demographics or transaction history? Yes / Maybe / No
Do you already have lots of data, but feel you need a way to track it better (ie, centralized and connected) to make it easier to find for yourself and others? Yes / Maybe / No
0–4: While many real estate agents swear by customer relationship management software, you probably don’t need it. Your business seems to run well the way it is, and there aren’t a lot of direct benefits to be gained for the cost of a real estate customer relationship management system.
5–8: You answered with a lot of maybes, and that’s where you are with CRM – maybe you need it, but maybe you don’t. There is room for improvement, but before adopting a potentially expensive solution, you may be able to use your existing system better.
9–12: What are you waiting for? You know what you need to do with your customer data to take your business to the next level – so go out there are do it! If you’re in this category, you would benefit from implementing CRM software. Start putting together a list of your requirements, and determining which solution is right for you. You won’t regret it!
Any Realtor will tell you that Real Estate is a competitive industry – between competition from other agents, demands from clients, and the breakneck pace of technological updates to keep up on, it’s not surprising that some agents might be wistful for the simpler days when adding their listings to MLS, printing out some direct mail pamphlets and taking out a few advertisements in the local paper were their real estate sales tools. So how are successful agents marketing property now? How do you sell real estate today? It’s as simple as BYOB. No, not Bring Your Own… Beverage… The new sales tools are all about setting up a Brand, using Yourself as a tool, getting your listings Online and setting up a Blog.
Brand Chances are when you are thinking about a major purchase, you’ll gravitate to a brand that fits your needs. How do you know that a Honda is a better fit for you than a Hummer? Simple – if you’re looking for a car that’s reliable and fuel efficient, you know that Honda is a brand you associate with those qualities. If you already associate a brand with the things you’re looking for, you’ll turn to that brand when you want to buy. Real estate is no different. A potential client is looking for an expert in the type of home they want to buy or sell. If someone is looking for to sell their high end downtown condo, they’re not going to start with a real estate agent that is primarily in the business of selling family bungalows. Take what you know, and make it your brand. If you have a lot of interest in local history and architecture, brand yourself as a Historical Homes Expert, and use your knowledge to connect to people who want a heritage home. Drive sales using a unique brand as a real estate tool.
Yourself If you feel that Twitter and Facebook are replacing ‘real’ interactions with people, you’re about half right. Yes, people are increasingly socializing online, but that doesn’t mean that they don’t want to actually socialize – quite the opposite. In the age when anyone can connect to anyone else, the best real estate sales tool you can have is… yourself! Engage your twitter followers, follow your local hashtag, attend things like ‘tweetups’ and actually become friends with the people you talk to online. Put yourself out there as not only a real estate agent, but a friendly, local expert.
Online Putting a listing onto MLS is now just one sales tool. Creating a website to showcase your listings, putting videos of house tours up on YouTube (way better than just a few photos), using location based listing services and specialty real estate websites can greatly increase the chances that a listing will be seen. There are numerous online real estate tools that can be used to market and sell real estate and not just to locals – buyers from other areas, and people looking for investment properties in other markets are likely to use online services to find properties. Getting online and getting exposed is the way to sell real estate.
Blog When you want information on something, you probably hop online and Google it. Looking for a Realtor is no different. So how do you make sure your name, and your website comes up first? Blog, blog, blog!
A blog demonstrates that you know about the local market, have good insights and are at the top of your game. It also gives a search engine something to find you with. If you want to position yourself as the top seller of high end condos in Vancouver, start a blog – they’re one of the most powerful real estate sales tools. If your blog has lots of posts about condos, apartments and downtown Vancouver living, it’s more likely to be picked up by search engines; therefore, when someone searches for “downtown Vancouver Condos Real Estate Agent” your blog will be one of the first to show up.
Last week the Globe and Mail ran an article that suggested that not everyone needs a real estate agent to sell their property. The idea was, with enough time, effort and marketing know-how, anyone could attract buyers by using For Sale by Owner services (FSBO) and leveraging the power of the internet – blogs, websites, social media, etc.
Of course, these are all things that Real Estate agents knew already - if you advertise in the right places, potential buyers will see your product. However the question then becomes, if everyone can use these tools to sell one home, how can a Real Estate agent them to sell many, many homes? Answer: Social Media Real Estate Marketing - a successful real estate agent doesn’t just list a property online – they leverage social media to increase awareness of their services, their listings, and connect with buyers wherever they might be. But how do you use social media to sell a home?
Get on Facebook & Twitter: Most Real Estate agents have a Facebook page and a twitter account. However, a good real estate marketer isn’t using social media to arrange movie nights – their accounts and pages have links to their listings, interesting news, and discussions with their followers, clients and fans about real estate. It’s a place people can go to get good information and engaging discussion. A savvy real estate marketer will have links back to their blog as well.
Reading and Writing Blogs: A successful Real Estate Agent will have a lot of good ideas about the best ways to stay motivated, find the best possible homes for their clients, and sell real estate in their area. The best have blogs where they share this insight – positioning themselves as thought leaders in their areas. The very best read other’s blogs, taking in new information and using it. Every client wants an agent who is informed and knowledgeable, so use a blog to demonstrate how informed you are and keep yourself at the top of the game. A good blog will allow readers to share posts they like on Twitter and Facebook – even further maximizing the potential for exposure.
Creating a Connected Marketplace: Putting a property listing on MLS is just one of the many ways to help sell it. There are many excellent real estate lead generation services that connect buyers to sellers outside of the traditional channels. Putting pictures online is one thing, listing a property with information about its location and neighborhood, connecting it to mortgage and auction services, and exposing it to buyers from all over the world is something else entirely. These services can also be integrated with Twitter and Facebook, and help drive traffic back to a blog.
Seems circular, right? Well yes, but that is essentially the point. Each part feeds back into one another; connecting messaging to marketing to awareness. What do you think? What are the best tools a Real Estate Agent can use to connect to buyers and sellers? Do you want more specifics? Let us know in the comments section.
Luxury real estate sales in Canada are soaring, breaking pre-recession sales records as buyers are capitalizing on low interest rates and increasing economic confidence. RE/MAX released its first quarter Upper End 2010 Report on Monday, showing a marked increase in luxury home sales in markets across Canada. The report noted that, "Canada's sound banking system, political stability, and strong dollar are attracting foreign investment -- and that is spilling over into high-end residential real estate.”
According to Wayne Schrader, a RE/MAX Broker/Owner and specialist in luxury properties on Vancouver Island, consumer confidence is playing a big part in the rallying sales. “Markets are picking up and turning the corner,” said Schrader. “People are realizing the big recession didn’t materialize in Canada, and at the same time, prices have come down and are much more attractive.” The Conference board of Canada echoes Schrader’s sentiments - its economic forecasts predict the Canadian economy will grow at a healthy 3.2% in 2010. An upswing in the economy makes the current market conditions even more attractive, as buyers take advantage of the current low interest rates, noted Schrader. But why have sales increases have been so sharp, in some cases bettering years that were fueled by the white-hot real estate markets of the time? According to Schrader, and the report, they key is balance. High end property prices have softened from their previous peaks explained Schrader, which can make luxury real estate look like a better investment for some buyers. “Ample opportunity and a good selection of product exists, and savvy purchasers are taking advantage of favourable conditions,” said the report. According to the Elton Ash, Regional Executive Vice-President of RE/MAX in Western Canada. the luxury “segment of the market was hardest hit when the recession took hold, yet its comeback has been fast and furious.” Comparative sales figures back up Ash’s statements. In the first quarter of 2009, high end property sales had slumped - only 411 properties classified as “upper end” were sold by RE/MAX across Canada. This year, the number has leapt to 1,111 - an increase of more than 170%. Comparing that to 2008’s first quarter sales of 894 high end properties shows overall sales in Canada are still up almost 24% over pre-recession numbers.
The upswing in luxury home sales in Canada mirrors a better than expected recovery in the US real estate market. New home sales in the United States increased 27% in March, the biggest month over month increase in US home sales in 47 years. While the average US home price in 2010 has only increased 4% over 2009, strong government incentives for both first time home buyers and current homeowners have increased demand. Finally, what do you think? Is the combination of lower prices and advantage of low interest rates making luxury properties look more appealing? Or, is this a reflection of pent up market demand - did potential buyers hold off until the markets rebounded? Let us know in the comments.
A few weeks ago, we posted an entry with 10 tips on what to include-and how you should take a great set of photos to showcase your property for sale.
While I was writing that particular blog post, I stumbled upon a website known as Lovely Listing.com. Their tagline is ‘Odd Finds in Real Estate’.
After taking a look at the website, I would say that it’s definitely ‘odd finds’ in real estate.There are features, items and issues that should never be showcased in photos to sell a home and yet, are taken by actual real estate agents and homeowners wanting to sell their properties.
As a tribute to Lovely Listing.com, here’s a list of the top 10 features you should never include in photos of your property.
Bathrooms with uncovered windows. Now, there may be prospective home buyers who desire to have natural light and air circulating through their bathrooms. That being said, I don’t think they would appreciate having an open window in their bathroom that faces the neighbors and allows them to share the intimacy.
Kitchens under renovation. Understandably, many homeowners want to renovate before putting their homes on the market to boost its value. But is it necessary to include a photo time line of every step of the renovation? Buyers want to see the finished product, not the process.
Bedrooms with lava-colored carpeting. Now, we understand that that particular carpet color was all the rage back in the 80s. Nowadays though, buyers are interested in modern and contemporary features and lava-colored carpeting just doesn’t cut it.
Guns hanging next to the kitchen window. Everyone has their own interests and we’re not discriminating against anyone. But, really, guns? What if the potential homebuyer has children? Not the safe haven we all imagined our dream home would be….
A family barbeque on the back patio. Homeowners have lives and the right to enjoy their homes with anyone they wish. But, personal photos of your family memories really have no business being in the real estate listing to sell your home. After all, people want to imagine their family having a meal in the backyard, not yours.
Mold in the basement. Common sense tells us to remove all harmful substances or debris from our homes for our family’s safety. Why would you want a picture of the evidence to end up in your listing?
House in a bubble. I understand the desire to be creative with your photos. Really I do, but how is putting your house in an actual bubble adding to the appeal? If anything, it does lend itself quite well to jokes about the current housing market.
Dark photos of people. I mentioned in the previous post about being careful in including people in your photos. It doesn’t help for a prospective buyer to imagine what their new home may look like with people breaking in.
Outhouses in the backyard. See my above comment about the lava carpet, it still stands for this.
Living rooms with couches on the ceiling. Remember what I wrote in the previous post about taking a lot of photos so you can fix what’s wrong in the room? This is exactly why you should do that.
You might remember a blog post where we talked about the Top 10 Tips on Property Photos. We gave the best tips that we could find on how to take-and what to include-great property photos to help sell your listings.
After thinking about it, we realized that photos are not the only element that drives a buyer to a property. So why not expand on that list? Here are the top 10 tips on how to make your listings stand out from the competition (including the photos!)
Photos, photos and more photos. We won’t go into detail here, only to say that the higher quality of the photos, the more appealing it is. Refer to our post about property photos for more details.
Include special extras. As we said before, photos aren’t the only thing potential buyers are interested in. Think about including a floor plan, maps or photos of the neighborhood to show them where they’d be living.
Virtual tour or not? What about a virtual tour? They show more than what photos do and allow house hunters to ‘walk’ through the property and see it for themselves. Think about whether or not there are unique features in the home that you especially want to call attention to.
Sales pitch. The language you use in the listing helps as well. Use compelling sales language and make your description as in-depth as possible. Highlight the features, the area and lay it out logically. It has to be accurate right down the spelling and grammar. Consider writing an intro to the listing before getting down the sales pitch.
Add more information. Prospective buyers are hungry for as much information as you can give them. Describe the neighborhood, talk about how the home is animal-friendly, or list the price guide.
Aim for the top. Look for the premium option in advertising packages. It will help position your listings higher up on the totem pole and catch the eye of more buyers.
Take advantage of features. Grab everything you can on paid for positioning, audio, mapping, info sheets and neighborhood data. It’ll put you ahead of the pack in terms of a complete package for buyers.
Dare to be different. Does your listing merit a special open house or something else?
Stay ahead of the game. Do your research on competition and your market. Could you utilize more features on the portal?
Flaunt it. Tell everyone you know about the property. Email it, blog it, tweet it, facebook it, talk about it, make phone calls about it, link to it, whatever it takes.
And finally, make sure your listing is kept 100% up-to-date, and this includes saying when it’s been sold.
As house hunters scour the listings for the property of their dreams, the next best thing to viewing the property themselves is a fantastic set of photos. Photos give potential buyers visuals on what features a property has and the layout. It is the very first impression that house hunters receive of a home and it can intrigue them as easily as it can turn them away from purchasing the property. After all, pictures are worth a thousand words and a beautiful set of photos go a long way to turning a house hunter into a buyer.
There are a few things to keep in mind in order to take great photos. Here’s a list of 10 tips on how to take amazing property photos.
Cover all of the essential features. Make sure you give prospective buyers every angle and shot on the essential rooms and features inside the home. Rooms that are absolutely crucial to a property and shouldn’t be left out include the bedrooms, bathrooms, kitchen, living areas and the backyard if the property has one. Also, include special features such as fireplace or pool as these could be selling points for buyers.
More is best. Don’t be afraid to include as many photos as possible. A floor plan is also a great inclusion if it’s possible.
Watch for intruders. Is there something in the photos that shouldn’t be there? Take more than one shot of an area so you can see whether furniture is misplaced or items are in a room they shouldn’t be and fix it for the next photo.
Watch the weather. While it’s not something you can control, photos showing an overcast sky or dreary afternoon light should be avoided. You can work around this with different camera setting or Photoshop, of course, but it is best not to overdo it.
Don’t leave buyers hanging. Taking a picture of only one side of the room, even if it’s to focus on the best attributes can make potential buyers wary of what’s lying outside of the frame.
Work different angles. Taking different angles of the same area gives prospective buyers the sense of perspective. Avoid the temptation to take crooked angle shots or use the wide angle lens, however.
Be careful with the flash and mirrors. Remember to turn the flash off in rooms that have lights on or if you’re taking a photo that includes windows. Also avoid taking pictures of yourself in front of a mirror.
Give a sense of life in the home. De-cluttering is a great idea to allow house hunters the space to imagine living in the home, but don’t go too far. Bare rooms signify a lack of care in the home, but going out of your way to include obviously constructed scenes will only give buyers a sense of falseness.
Know your camera settings and your tripod. If you’re taking the photos yourself, you have to understand the aperture, shutter speed and ISO to make your photos work harder for you. Shooting interiors at a slower speed for instance, makes them look better. A garden can look better in shade, and in harsh sunlight you might want to use a flash. There are courses you can take to learn more about how to make your camera work for you.
If in doubt, see the pros. While it is more expensive to hire a professional photographer, it could be well worth the cost.
Yesterday, I spoke about the first mistake any developer can make in project marketing and sales. As I said, I've seen a lot of developments stall or self-destruct at the hands of a developer who felt like he or she "knew it all." I told you about my friend the hotelier, who became a developer, then a travel "guru," then a marketing and sales "expert" capping off this illustrious and varied career with a stint as a financial products broker. His development is still just a patch of dirt.
Continuing in the same vein of "knowing it all," today I'll tell you what I've seen happen to developers who entrust their marketing efforts to brokers and sales people. Until recently, I've seen a lot of luxury brokerages trick developers into thinking that they were the total solution - a sales and marketing firm. I'll show you why sales and marketing under one roof make ineffective and wasteful bedfellows.
Mistake #2 - Hiring a Sales Agency and Branded Real Estate Broker to do a Marketers Job. In recent years, marketing real estate projects was more than just a lucrative enterprise for those who were doing the marketing - it was pure profit, plain and simple. There is a good reason for that - the best marketers got the job done.
When a luxury brokerage brand steps in and decides to become a marketing company they begin to over-leverage. Sure, they can leverage off their brand name for what seems like a quick win and surefire success, but this also means that they are leveraging off their core business. When brands experiment and begin to "know it all" (not unlike the hotelier I described yesterday), the Developer takes the hit. With a big name and a willingness to take an even bigger budget, I've watched developers dump literally millions of dollars of untraceable fancy print ads and ineffective web sites - all the while the brokers and agents who should have been motivated by selling the project, were lining their pockets with marketing dollars.
Marketing is a science - and a bit of an art. Marketing drives sales, sure, but as with any science or art (or both), this is something that is best left to experts, not amateurs (think about giving a High School Physics student the keys to the Hadron collider!). In my many years of working with the real estate industry, I've never once seen a brokerage bring in a graphic designer or copywriter to close the deal on a multimillion-dollar home; so why should the opposite make any more sense? The reason commissions exist is to get the sales team to work hard to close the sales, this is what they know and this is what they (should) do. The marketing team brings in the leads and brands the project; this is what they are paid to do. When both teams are working in their core capacity, the result is success. When the incentive model and expertise gets muddled - the result is millions spent, and a project bankrupt due to a wasted budget. I've seen this happen on a number of occasions.
Do yourself a favor. The next time a real estate brokerage says they can market your project, thank them for their enthusiasm, and offer them 2% more on the back end - so long as they carry the marketing load on the front end. Or spend your money wisely and get a marketing group and resources that brings in Quality, Quantity, and Qualified leads. Send the sales guys these leads so they can actually close the sale and earn their commission - the way they were supposed to get paid.
In this week's Globe and Mail, the title “B.C. Housing Market in Deep Freeze” caught my eye. To me, deep freeze is not such a terrible thing. For example, say I bake a really delicious pie, and I can’t eat it all. I might not want to eat it that evening, but I still intend to eat it sometime, so I stick it in the deep freeze and defrost it a few weeks later. Granted, it’s not quite as delicious as it was when it was fresh, but it still tastes pretty good.
According to the Globe and Mail, new developments in Vancouver, and across BC seem to be stalling, or stopping completely. Vancouver developer Ward McAllister talks about the fact that no-one appears to be beginning new projects in 2009.
The article goes on to talk about a variety of different opinions as to how this year will play out. Some say that by the end of 2009 the housing market will have returned to some kind of normality, while others are being more conservative, and saying that we have a few more years yet. Many are suggesting that there will be no upturn until a year from now around the time of the Vancouver Winter Olympics in 2010. That’s a long time if you are depending on building-related work. It is estimated that one in ten people in BC works in the construction industry, or in a job related to it. Therefore we are not just talking about obvious job losses, for people like welders, bricklayers or foremen, but factory workers who produce materials, or marketing people who work for developers, or the developers themselves. If there are not any new builds in 2009, there are a number of people who will directly suffer, and then the trickle down will indirectly affect us all.
Some solutions as to what developers and others in construction can do to are mentioned in this Globe and Mail article. They include:
·Building rental apartments
·Selling the land meant for condo developments and such to BC housing, to see if they might want to use the land for public housing projects
These are great ideas. Whether BC housing will take them up on the land offer (if everyone is trying it, then probably not) is debatable, but the idea of building rental apartments is an awesome idea. According to an article I read in Forbes a while back, housing and building supplies are coming down in price, so developers could use these now less expensive materials to build decent apartment housing (a rarity in many BC cities, I’m talking about you, Victoria) which will provide an income, and can be sold when the market upturn happens, whenever that is.
The Globe and Mail talks about some developers who have made enough money in the past to ride this out. Many of them are planning more complex, intensive sites, which require more permits and planning than regular condo developments. Planning for the future is another good way, as long as one can afford it, and still be around when it comes to building it!
In terms of terrifying headlines, in my opinion ‘deep freeze’ is better than ‘recession’ ‘downturn’ ‘crash’ and my personal favourite ‘depression’. It implies that that pie is going to be in the freezer for a long time, but eventually, we’ll be able to defrost it, and get on with things…and I for one am getting the ice cream ready.