Real Talk!

Yes, Virginia, there still is a real estate market…

While some of the GIANTS are forecasting a modest dip in the Canadian Real Estate market, economists remain optimistic. Real property remains one of the most stable and reliable investments.

The Financial Post recently reported on a survey of investment managers that was conducted by the Toronto-based firm Russell Investments. Almost 75% of those who participated said they expect residential market to climb in 2009- with gains that could reach ten percent or higher.

The Post remarked, “Granted, it's the not most unbiased of surveys, coming from a firm in the investment industry. But the popular outlook echoes the sentiments of other market forecasters in recent weeks.”

Back in 2002, Real Estate guru, Ozzie Jurock, said, “One thing is certain - whatever buyer types markets consist of - how confident these buyers are about their future will determine future values.” & today most consultants would agree.

I love to hear what people predict for the market. Here are a few of the recent comments I’ve heard:

* Real estate values are always local in nature- values grow where people go and people are leaving the city and coming to the country, in droves.

* People tend to buy when prices are going up, not when they’re going down but smart investors know the best deals are found in down markets.

* Right now, buyers can find some "screamin’ deals".

* The market will be more stable for the next year and, then, we’ll see it start to climb.

* It’s a market crest- not a slump. It’s all good.

* This market has legs!

* Some Canadian markets still need to correct. Ours corrected already.

* Watch for growth in the second quarter of ’09.

* Expect rising housing prices by the beginning of April ’09.

I recently came across an article in which U.S. Billionaires (most of whom got rich in real estate), were asked to make their predictions for ’09:

* “We will see less greed. People will start to care more about one another and not about what they can take from one another.”

* “…economic improvements will be faster than anticipated.”

* “The housing market will turn around in the fourth quarter”

No doubt about it, during good times, people get too greedy or too busy or whatever… and they stop doing proper due diligence… and that goes for everyone involved. I’ve seen it in action. My own prediction for the market in my area, for the coming year, reflects this. I believe:

Sellers have to take responsibility for what they are selling. Sellers need to totally understand disclosure. Sellers who want to get the highest value from their property must listen to the advice of their Realtor. The Realtor can tell the Seller what documentation is needed and what changes are required- but the Seller needs to gather the paperwork and make the changes- or reduce the asking price and expect the sale to take longer.

Buyers need to find a Realtor that connects with them… a Realtor that knows their “stuff”… a Realtor who will discuss their role and responsibility upfront and make the commitment to perform AND the Buyer should be prepared to commit to their Realtor. Buyers need to know what they qualify for, financially. Buyers need to be aware that they may need to do some homework before finalizing an Agreement for Purchase.

Realtors need to follow the law, the various codes of ethics and standards of business. Realtors need to have everything in writing and ask for identification, documentation and verification. Realtors need to be competent in all aspects of the real estate transaction and provide their customers and clients with quality representation. (For more details refer to articles on this website regarding “code of ethics” etc.)

In other words, Buyers aren’t going to pay a premium “just because”. Nobody wants to get hosed in a real estate transaction. Fair market value is determined by the Buyers and Sellers, Realtors give advice. & A Realtor’s best advice comes from experience and knowledge of the marketplace.

And it’s only common sense that, when you are selling something, it ought to be clean and tidy. It should be in good repair or priced to reflect the deficiency. Even though we know that we shouldn’t judge a book by its cover, good “curb appeal” can make the difference in getting showings.

In residential (or cottage) properties, the smart Seller will remove all items that are personal in nature. It’s best to put away the family photos and to keep personal hygiene items in drawers. Laundry should be out of sight. Clothes need to be put away. No dirty dishes should be left about. Garbage should be removed. Tidy, Tidy, Tidy.

I use the “hotel room” theory. Even a strange room can feel homey, if there’s nobody else’s “stuff” in it.

Sellers need to take their personal things out of the equation and allow the Buyers to imagine themselves in the space. Furniture isn’t usually considered a personal thing. Using the “hotel room” theory, people expect to see furnishings. Certain items are rather generic. (Unless they are unconventional- but this would fall into the category of personal décor).

Specialized and personal décor, colours, patterns etc. can be a good thing… and can be a bad thing. There are plenty of television programs that demonstrate the benefits of home staging and a good Realtor knows how to utilize this technique and will provide their Sellers with direction.

To achieve optimum results we must be prepared for the possibility of having to make some changes. Serious Sellers need to set their personal feelings aside and not be insulted. Using the hotel room theory: innocuous, neutral, uncrowded rooms are comfortable for the majority and Sellers should strive to appeal to as many Buyers as possible.

There will always be Sellers and Buyers- and Realtors. In 2009, I predict a strong market- for those with an intelligent approach and appropriate sense of value.