Author: remaxrealestategrandeprairie

 After a two year slump, the future’s looking bright again for Canadian real estate. Economists expect positive growth in the national housing market in 2020, supported by low mortgage rates, a solid job market, and a rising population. In fact, in a recent report, RBC Economics called 2019 a “turning point for Canada’s housing market.”1 To understand why—and where the market is headed—we take a closer look at some of the key indicators and summarize expert predictions for the coming year. More importantly, we explain what impact these changes will have on buyers, sellers, and homeowners in 2020 and beyond. SALES VOLUME WILL RISE After peaking in 2016, Canadian home sales volume fell in 2017 and 2018. Fortunately, we saw a turnaround last year as sales began to recover, and economists expect the trend to continue. In a recent “Housing Market Outlook” report, the Canada Mortgage and Housing Corporation (CMHC) predicts “home sales will increase in 2020 and 2021, offsetting the declines observed since 2016 by the end of the forecast horizon.”2 The Canadian Real Estate Association expects to see a modest rate of growth this year. “Sales are forecast to continue to improve through 2020, albeit slowly. National home sales are forecast to rise by 7.5% to 518,100 units next year, with most of this increase reflecting a weak start to 2019 rather than a significant change in sales trends out to the end of next year.”3 What triggered this rebound in market activity? According to Rishi Sondhi of TD Economics,“The beneficial combination of solid job markets, rising household incomes, healthy population growth, further distance from restrictive government policies and low mortgage rates have given a boost to demand.”4 RBC Economics believes the main impediment to growth will be a lack of supply to meet the reinvigorated demand. “In fact, low inventories in many local markets appear to be holding buyers back who are faced with fewer and fewer options,” noted RBC in its November housing report.5 What does it mean for you? The market is heating up as buyer demand grows. If you’re planning to purchase a home this year, be prepared to compete for the best listings. And if you’re a seller who has been waiting for the market to pick up, now may be a good time to act. HOME PRICES WILL INCREASE Home prices declined in many markets as sales volume fell. This year, however, sales are set to outpace the supply of new listings. That’s causing prices to increase as buyers compete for fewer available homes. “The rise in the sales-to-new listing ratio suggests that house price inflation will surge,” writes Stephen Brown of Capital Economics.6 Nationally, the CMHC expects the average sales price to exceed its peak 2017 level by the end of 2021, led by growth in Ontario, Quebec, and British Columbia. “Other regions will generally see modest gains over the forecast horizon,” predicts the agency in its Fall 2019 Housing Market Outlook.2 Rishi Sondhi of TD Economics predicts that affordability challenges will temper price growth in the country’s most expensive markets.4 However, low mortgage rates, rising incomes, and government interventions—like the First Time Home Buyer Incentive program launched in September—could help eager buyers stretch their budgets. What does it mean for you? If you have the ability and desire to buy a home, act soon before prices go up. Economists expect both home values and rental costs to rise this year, so you’re likely to pay more the longer you wait. HOUSING STARTS WILL STABILIZE In 2017, Canadian housing starts reached a 10-year high. But as the real estate market slowed, builders pulled back. The CMHC expects both single-family and multi-unit construction activity to stabilize this year and to rebound by the end of 2021 to levels consistent with historical averages, although well below the 2017 peak.2 Economists at the CMHC speculate that “the support to new residential construction from the expected improvement in economic activity and incomes will be offset by the projected slowing in household formation over the forecast horizon.” According to PwC’s latest “Emerging Trends in Real Estate” report, condominiums continue to dominate new construction in Canada. Their relative affordability has made them a favourite of both first-time buyers and investors looking to fulfill a growing demand for rental units. However, a narrowing price gap between condos and detached housing could shift builder momentum towards single-family homes.7 What does it mean for you? If you’ve had trouble finding a suitable home in the past, new construction may become an increasingly available option. We can help you assess both current and upcoming developments in our area. WE’RE HERE TO GUIDE YOU While national real estate numbers can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighbourhood. If you’re considering buying or selling a home in 2020, contact us now to schedule a free consultation. We’ll work with you to develop an action plan to meet your real estate goals this year.

START PREPARING TODAY If you plan to BUY this year:

1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.

2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.

3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call to schedule an appointment today!  Re/Max Grande Prairie Team North.

Phone: (780) 876-6784  Email: Brent@brentnorth.com 

If you plan to SELL this year:

1. Call us for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list.

2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.

3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage … and get you one step closer to moving when the time comes!

Phone: (780) 876-6784  Email: Brent@brentnorth.com

Sources:

1. RBC Economics – https://royal-bank-of-canada-2124.docs.contently.com/v/november-monthly-housing-update

2. Canada Mortgage and Housing Corporation – https://www.cmhc-schl.gc.ca/en/data-and-research/publications-and-reports/housing-market-outlook-canada-and-major-centres

3. Canadian Real Estate Association – https://www.crea.ca/housing-market-stats/quarterly-forecasts/

4. Huffington Post – https://www.huffingtonpost.ca/entry/home-sales-canada_ca_5d91eefae4b0ac3cddabd25c

5. RBC Economics – http://www.rbc.com/economics/economic-reports/canadian-housing-forecast.html

6. Huffington Post – https://www.huffingtonpost.ca/entry/house-price-forecast-canada_ca_5dde94f2e4b00149f727d91b

7. PwC – https://www.pwc.com/ca/en/industries/real-estate/emerging-trends-in-real-estate-2020/property-type-outlook.html#single

This is the answer that was given by a speaker at a real estate convention I attended in Ottawa when asked how his demographic shops for a home in 2018.

“When I am shopping for a home I am shopping for an agent using various social media sites at the same time. If your not on social media you will be non-existent to me. Once I have decided which agent to use I will contact you and if you have not responded to my request within an hour maybe two I will move onto my second choice. I will do all the research for you and I’m not looking for a good agent to build a long lasting relationship with I just want to get into my top three houses.”

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This is a post that I am sure that many of you have seen or maybe even posted.

“Who is the Best Real Estate Agent in (insert your market)? GO !!!

Stop for one moment and think how this is any different than going to a friends wedding of 300+ guests and taking the bands microphone and yelling out the same thing in the middle of the reception. Other than the bride probably shunning you for the rest of your life for being a jackass it is really the same…so why does it seem like the right way to find an agent?

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The Real Estate agents role has changed significantly over the past 10 years due to social media. But is it for the better for the consumer or are we headed for trouble?

A real estate agent is a licensed professional who represents buyers and sellers in real estate transactions.

I have built my business over the past 17+ years by providing my clients with exceptional service and building relationships to ensure that they would feel comfortable referring me to friends and family and especially using me again when their real estate needs changed, this is not enough. I have marketed the properties that I am contracted to sell using every medium available to me at a cost which is budgeted to be a little over 15% of my real estate income, this is not enough. When looking at real estate with clients I advise them, based on my past experience and market knowledge, on the long term outlook for the home and the expected resale potential should it not be their “forever home”, this is not enough. 

I think you get the point. The core fundamentals that you would want in a great agent are no longer enough because how an agent is found has changed.

So how is a great agent found in these days of social media? 

The two examples I opened with give you a little insight to the thoughts and process which many new buyers are finding an agent to use.

The first example really just solidified the thoughts that I already had and very well knew but to hear it really bugged me a little. A great real estate agent is not sitting by their phone or computer waiting for a call, text, email, PM, DM, Tweet, smoke signal, you name it, they are out with clients looking at homes or doing presentations and may not see that message inside of that time. A great agent is very busy and probably time blocks their response to general enquiries to make sure they give them the attention they deserve. Now I know there are agents that are notoriously bad at returning messages and that is their problem but is an hour or two really worth not dealing with someone that you have already deemed the agent for you? Don’t miss out on a great agent by setting the expectation that they are doing nothing but waiting on the next cold call.

The second example is one that I have seen way too often and hurts my heart a little.

“Who is the Best Real Estate Agent in Grande Prairie GO !!!

Now I can only speak to my local market but in this market of 225 active agents and the average number of different agents that are mentioned in posts of this nature is 74 !! Is it really possible that 1/3 of our membership are the best agent? I thought all this time of everyone advertising Grande Prairie’s #1 agent was just hogwash…I guess not. The funny thing is many of those mentioned, are a) no longer in real estate, b) have recently been fined for bad practice or bad ethics c) have not done any business in the past 6 months or d) have not even sold a home yet. I do answer back and thank the clients of mine that refer me within the posts as I do take that as a huge compliment but I also suggest to that person that they should make the effort to talk to their closest friends and family members to see if they have had experience with a real estate agent they would feel comfortable referring to them.  I always suggest that any one looking for an agent choose 3 agents from different brokerages in their local area and interview them rather than listening to the opinions of 290 acquaintances who may or may not have even used a real estate agent.

The dangerous part of this change in Real Estate that may be the Death of the Great Agent is that the thing we are most passionate about has become the least important part of our value….the Real Estate. What is deemed most important by the new buyers and to some point the sellers now is what your social media portfolio looks like. How many likes you have? How many followers do you have? How often do you post? Can they find you on their social media platform of choice? Somehow social media has become the new benchmark of a good agent rather than a good track record with past clients or even the knowledge and passion they bring to the transaction. My fear is that the great agents with a knowledge and passion to advise the clients correctly will be gone and the social media agent with no knowledge or passion for real estate will thrive by taking orders from a client with the same amount of knowledge of real estate as them.

This scares me because a large portion of a person’s wealth is in their real estate and when they receive bad advice during either buying or selling but especially buying that wealth can disappear quickly leaving them a bad feeling toward their Real Estate Agent. It is not the agents fault sadly but the consumers fault for allowing that agent to thrive based on nothing more than a social media platform.

Choose your agent wisely and allow Great Agents share their passion and knowledge with you. A Great Agent will represent you to achieve the best results possible to increase and protect your wealth but may not be the social media giant in your market area.