Affordability is Key

, , ,

Despite how many reports are claiming that new construction is the key to developing a healthy recovery method for the real estate market, it would appear these reports aren’t looking in all directions very effectively. If they were, there would probably be a leniency towards re-visiting that mentality and developing a more comprehensive approach, rather than a shrouded one.

Fluctuations in the property market are of no surprise to many at this point, however these particular market activities seem to be telling a story not many want to hear – the market’s recovery is moving in the wrong direction. As it stands, new buyers are in a tough position when it comes to entering the market due to the revisited amortization constraints wherein down-payment amounts increased, while amortization lengths were decreased, meaning more money up front, and higher payments; a compromising situation indeed. So, what happens now? Property investors have incidentally taken the market by storm to scoop up properties at a healthily reduced rate to be owned as secondary properties, and rented out to the general population – presumably those same potential new buyers who can’t afford to get a piece of the market activity.

Reports are suggesting that one of the only ways this young buying population will enter the market is if their baby-boomer parents (the same demographic investing in the renter’s market) provide down-payments in order to make the endeavour more affordable. The means to do so come from their parents’ act of downsizing, thus freeing up funds that can be allotted to their offspring’s hopeful property purchases.

Our neighbours to the South have also released some purchasing statistics which indicate the trend that pains new buyers is one felt on both sides of the border, as the sales of previously owned homes hit the highest they’ve been in 3-1/2 years. Now, if you take a look at these impeding market factors it’s hard to lean on the argument that new developments are the way to go, as they are even less affordable than previously owned homes and provide no positive alternative to what’s paining the market: the low number of new buyers.

Instead of putting up new developments that hardly anyone can afford to the extent that would stimulate a positive increase in market activity, we should be focusing on resolving the impeding factors that are vice-gripping the market’s potentially young population. If amortization laws are revisited, or if market activity ceases to favour some and down-play others, and instead reaches a content equilibrium for the purchasing population, we could expect a healthy and fulfilling market recovery rather than the lop-sided one we’re experiencing now.

 

image courtesy of katerha

/by

Taking Advantage of a Renter’s Market

, , ,

The property market’s slow yet steady recovery is not a result of new home-owners entering the market, but instead can be attributed to the purchases being made by investors to capitalize on the market’s vulnerability and the current amortization restrictions, which were tightened up last year. Though the market seems unfruitful for new home-owners, investors are cashing in while contributing to market recovery.

The unfortunate circumstances of the adjusted amortization restrictions (increased down-payments and shortened amortization periods) have resulted in this paradoxical recovery, wherein existing owners are the ones who appear to be scooping up properties at the affordable rate which they’ve been lowered to. Purchasing a second home to reap the benefits of a mortgage that pays itself while increasing equity and (potentially) profiting from the value increase of the property.

New home-owners, as previously stated, are in a bind when considering the adjusted mortgage restrictions. Instead of being able to contribute to the market’s recovery directly, these parties are indirectly supporting its recovery by their participation in the renting of these secondary properties from investors.

The nature of the market’s recovery seems rather cyclical in this sense; investors buy the properties, and potential buyers instead rent from these investors and property owners while contributing to their mortgages and increasing the value of their properties. Unfortunately, this divide is one that may not be sustained for long, as every co-dependent relationship will eventually reach a threshold for its functioning potential.

Without loosening the belt on mortgage restrictions, we can expect this cycle to continue until it flops. Do you feel that the mortgage restrictions should be revised to encourage new buyers to enter the market, or should we continue down this path benefiting only the investors? Share your thoughts with us on Twitter @enviromint.

image courtesy of EraPhernalia Vintage

/by

The High Road to Success

, , ,

The world is filled with talkers, but not many walkers. The timeless question for many real estate agents and brokers is how they can differentiate themselves from the competition; to appear as the more legitimate choice when it comes to doing business. Many approaches are taken to try and achieve these levels of appeal, but we’re about to let you in on a little secret: It doesn’t take as much as you think! All you need is the right set of tools and (of course) to know how to use master them. Let’s take a look at some of the stepping stones to the debut of your real estate success story.

Presentation: We’re not talking about clean breath and nice clothes – hopefully you’ve figured that one out for yourself by now. When talking about how you present yourself to your clients, there’s much more to it than simply looking the part. One of these for example are e-mail and phone etiquette, which, whether you like it are not, are vitally important, especially when encountering a new lead. E-mail is undoubtedly the most adopted form of communication in the professional world as we know it, so to match your new clothes and fancy haircut, take the time to ensure that your e-mail appearance is acceptable and professional in order to further trust with your clients. Reply within reasonable mounts of time, don’t rush it (that’s how details get skimmed over, which freaks people out entirely) and make sure your spelling, phrasing, and signature are all on-point. Think of it this way: if a client you’ve never met before’s first impression of you is a grammatical e-mail disaster with no capitals, lackluster spacing, little to no detail, spelling mistakes, phrasing errors…we could go on. At the end of the day, no clients are going to trust you with the largest potential investment of their lives if you don’t appear smarter than a 5th grader. Having an e-mail signature with your contact details is also excruciatingly important (so that people can get in touch with you!).

Execution: Now that you’ve got a grip on how to look and sound the part, it’s time to play it. The execution of your tasks is just as important as how you present yourself; the only difference is that one is more ‘face-value’ than the other. This is the part where you take the slick professional agent that’s on your business cards, on your website, on the phone, and in e-mails, and make them come to life for your clients. How, you ask? Well, showing up to meetings on time, taking calls when they come through, returning to messages promptly, thinking ahead (for both you and your clients’ sake), and all-around being on top of everything so that your clients don’t break into a sweat every time you talk to them would be a solid start.

Looking for a better way to stay on top of everything? Well, look no further – we’ve got it!

The Deal Manager To Go now gives you the freedom of having what we like to call a ‘pocket office’ without having to buy new pants. We’re not kidding. It’s all in there. From entering deal sheets online, to tracking your expenses, checking deal archives, and personalized performance reports – there’s no reason for you to miss a beat again.

Want more? Check out the The Deal Tracker, bringing unparalleled communication effectiveness to the table. It’s essentially our answer to all your problems. Now you’ll never forget where you parked your deal! You’ll love the gentle reminders that not only you’ll be receiving, but also the effortlessness of the process, without a doubt. You no longer have to fret about sending 100’s of emails to remind lawyers, to remind clients, to remind you that you need to be reminded. Once you see how easy it is to track your deals in real time and how much communication time you’re saving, heck, you might just go out and do something crazy, like close more deals.

 

image courtesy of Lars Plougmann

 

 

/by

Generation Gap In Buyers

, , ,

Beyond speculating the ups and downs of the market, there seems to be a disjoint in most peoples’ thoughts about the future of the real estate market, and more importantly, its future buyers.

The future of the real estate market is dependent on an availability of properties, but also on the presence of an actively participating buying and selling population…which, at this point, is looking feeble at best due to the weight of insurmountable student debt that the next generation of buyers are dragging into the market by their ankles. Now, buying a house could potentially slip right off the list of practical goals for many of those who are classified as ‘the next generation’. After all, when weighing out paycheques, these future buyers are likely to contribute to their existing (not to mention huge) debts; and that’s a hindrance the market will unfortunately have to absorb one way or another.

The actuality of this more-than-slight oversight has manifested itself into what will be a pretty huge speed-bump in the potential future of the property market. While currently being sustained by a generation of predominantly successful and career-achieved individuals, this is about to shift to a large population of over-educated, under-paid and unemployed individuals. Scary isn’t it?

Conceptually, buying a house became even more intimidating for this debt-ridden generation when the amortization laws became even more constricted this past year. Even by cropping the amortization lengths by only 5 years, this translates into a whole lot more money that nobody (at least in this crowd) seems to have. Only time will tell if the student debts will gradually dissipate in time for this population of potential property investors to pick up their socks and put their money where their (poorly fed) mouths are. Hopefully the amortization laws will also become less stringent to give some lee-way for the market to absorb this hiccup and further encourage/ease the next batch of buyers and sellers into the market.

 

image courtesy of limaoscarjuliet

/by

Green Properties Save Money

, , , ,

via Vancouver Sun

An environmental program started by employees in 2006 has reduced energy consumption, water use and waste sent to the landfill at Cadillac Fairview’s Vancouver properties, the property management firm said Monday.

Cadillac Fairview’s Green At Work program began in 2006 at the company’s Waterfront Properties in downtown Vancouver. The program measures the company’s environmental impact and sets benchmarks to improve performance. Today it operates nationally, including at all of the Vancouver office properties managed by Cadillac Fairview (The Vancouver Sun is a tenant in Cadillac-Fairview-managed 200 Granville Street).

“At Cadillac Fairview we recognize that designing and operating our properties sustainably is both the right thing to do and the smart thing to do,” said Ultan Kampff, general manager, Pacific Centre and HSBC Building, Cadillac Fairview. The program works to reduce energy consumption and waste, improve environmental protection and encourage sustainable procurement.

Kampff said the program’s benefits include decreased operating costs, greater tenant loyalty and a healthier workspace.

“Employees today want to know they are working for a company that believes in sustainability,” Kampff said. “Tenants who occupy space in our buildings want to be able to tell staff that they are working in a building that’s operated by a landlord that cares about the environment.”

Financial rewards are given to facilities and employees when targets are met. For example, an operations manager in a building would be given a target to reduce the use of electricity, Kampff said. The manager might use strategies ranging from reminding staff or tenants to turn off appliances when they are not in the office, to suggesting using more efficient light bulbs or purchasing more efficient heating or air conditioning machines. If the manager meets or exceeds their targets, they would get a bonus, Kampff said.

Maury Dubuque, senior vice-president of office leasing at Colliers International, said virtually every client Colliers deals with considers green initiatives in the office a priority. There are two reasons for this, he said.

“Virtually every tenant of scale that we deal with has a corporate social responsibility platform, for one,” Dubuque said. “The second thing is that the younger generation — the millennials — demand it.”

He said the younger generation demands that their employer take sustainability seriously and that they have at least some environmental initiatives, such as paper recycling, composting or providing electric vehicle charging stations.

Nationally, Cadillac Fairview decreased energy consumption by 12 per cent and diverted 70 per cent of all waste away from landfills, Kampff said.

This month, the HSBC Building at 885 West Georgia St was certified LEED Gold in the Existing Buildings: Operations and Maintenance category. At that building, energy use was reduced 12 per cent from 2008 to 2012, while water use was reduced 27 per cent. The recycling rate was 65 per cent and 98.5 per cent of all waste was diverted from landfills in 2012, the company said. The 24-storey HSBC Building, built in 1986, contains both office and retail space and a large atrium entrance.

Cadillac Fairview owns and manages more than $21 billion of commercial real estate, including nearly 46 million square feet of leasable space in 79 properties across North America. The company plans to have all of its buildings within the Pacific Centre complex LEED certified by 2015.

[email protected]

Twitter.com/tracysherlock

image courtesy of stevecadman

/by

Personalized Professionalism

, , ,

During our recent sessions of crawling the internet, we seem to encounter more and more ‘lifechanging’ pieces of advice being thrown around to try and help agents and real estate stay on top of their game and innovate the industry…but what happened to just keeping it simple?

It seems that anybody spending too much time in front of a computer or on their smartphone now feels the need to share their ideas on a large scale to pollute the minds of those around them with their fixated ideas. We’re here to tell you to stop listening and start thinking. For instance, if you encounter a headline that resembles the following: 4 reasons Google+ beats out Facebook for real estate, you should probably put your noodle to work a bit before devouring this information like it’s your last meal.

‘Why? What’s wrong with that?’ You’re asking. Now think harder…

There it is! The size of Facebook and Google+’s user base is NOT EVEN COMPARABLE. So just because one self-declared tech expert decides to share their shallowly produced ‘innovative marketing techniques’ just take a step back and question them. Everybody nowadays is a marketing expert, so take what you read with a grain of salt. If it doesn’t sound like something that will work for you, then don’t do it.

It doesn’t take much for a good idea staring you in the face to make a lasting impression, so stick with what seems genuine and thought through rather than adopting a million-and-one different ideas, downloading hordes of productivity apps, and getting roped into the ‘social/e-marketing tips’ newsletter trend.

If you’re having trouble recognizing a new idea, let’s give this one a shot and see if you can see the difference between ‘those guys’ and our guys. Check out our new Deal Manager paperless office solution for agents and brokers. Simplify your business, shrink your briefcase, and save on paper. It’s that simple.

image courtesy of Victor 1558

/by

House Prices To Remain Flat Over 10 Years

, ,

According to predictions made by TD Bank, as outlined in the original article included below, house prices in Canada are estimated to remain constant (and flat as a pancake) for the next 10 years. How is this possible? Well, the market IS expected to see some increases, but these will only be as small as a couple % per year, max, which doesn’t leave much room for profit yields when you take inflation into account. So, yes, the market will, despite minor improvements, sustain its essentially flat state throughout the duration of the next decade. Here’s a snippet of the original article with a link for those who wish to learn more.

OTTAWA – Canada’s real estate bonanza of the past decade has come to end and the long-term trend as one of the most profitable places to invest is also not encouraging, a new research paper from the TD Bank argues.

The “special report” from one of Canada’s largest banks makes the case that gains in housing prices have been exceptionally strong over the last 10 years, even when accounting for a sharp drop during the 2008-09 recession. But now is the time for a bit of a payback.

The report does not predict a collapse in house prices as some analysts have suggested. In fact, it sees prices rebounding after a few years of a correction to as high as eight per cent.

However, the longer term trend is for home price gains to average about two per cent over the next 10 years — flat once inflation is taken into account, says TD chief economist Craig Alexander.

“I do not think we have a housing bubble in Canada,” said Alexander. “We have had abnormal strength in the market during a period of low interest rates and when rates go up over the next three years, you will get a cooling and weaker prices, but not a permanent shock and not a sharp correction.”

The bank said tighter rules for borrowers and lenders are only part of the reason to expect prices to moderate. Other contributing factors include the aging population, modest growth in both the population and the economy and, eventually, higher interest rates.

The bank thinks the market could correct by as much as eight per cent over the next three years, but Alexander said it is possible that prices won’t fall as much as that.

Some forecasters, including Capital Economists, have predicted a bigger correction is in the offing, arguing that houses in Canada may be overpriced by as much as 25 per cent.

But Alexander says that exaggerates the problem, believing the overvaluation is closer to 10 per cent.

The problem with the housing collapse scenario, says Alexander, is that typically a sharp price correction needs a trigger in terms of a steep increase in interest rates or unemployment, both of which appear unlikely at this point…

READ MORE: http://money.ca.msn.com/savings-debt/yourmoney/house-prices-to-remain-flat-over-10-years-td

Original Article By Julian Beltrame, The Canadian Press, thecanadianpress.com

image courtesy of rob_rob2001

/by

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

/by

Haunted Houses…Literally

, , ,

In the event of foreclosures or long-standing ‘For Sale’ properties, things aren’t always going to sail as smooth as they seem. Due to the peculiar nature of human beings, there’s never a set in stone safety measure that can be taken to avoid the property owners suffering beyond the scope of their house being foreclosed, or sitting on a property for months waiting for it to. That’s painful enough.

Unfortunately when you add people, poverty and/or curiosity to the mix, there’s an off-chance your property awaiting a buyer may in fact sprout an under the radar resident, or two, or three… It’s not an uncommon scenario for massive homes to host visitors without the owners being aware of it, but it gets even stranger when these squatters are able to stick around through legal loopholes. Apparently squatters have rights? More on that here–> http://www.managementtrust.com/blog/bid/94855/SQUATTER-S-RIGHTS

Another weird thing that can happen as the victim of a foreclosure is somehow getting stuck with the bill for the house you got forced out of. Yes, your foreclosure can somehow come back to haunt you…or at least your wallet. See, the way this works is that during the foreclosure process if the ownership isn’t transferred then the original owner despite their non-residency is responsible for paying property taxes and fees. Just what you need after having your house foreclosed! This is actually so common that there are nearly 2 million homes in the US that started the foreclosure process and never ended up concluding it.

Doesn’t it seem like these situations would easily be prevented with a few policy changes? You’d think there’d be a bit more care given to assuring the well-being of such large investments, no?!

Would you like to see these policies revisited to avoid potential problems down the road? Share your thoughts with us on Twitter @enviromint.

 

image courtesy of Sean MacEntee

/by

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?

For more real estate and environmental news, visit us on Twitter @enviromint

 

image courtesy of Luke,Ma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/by