Today is Wednesday, February 15th 2017 and this is the 47th episode of the Marshall Report. Welcome to the podcast.
In this episode:
1) Where I’ve been. China but not
2) Eight and other percentages
3) Investor traffic
4) Making the top ten
5) A medium link
Where I’ve been
I’m a firm believer that real estate is a lifestyle choice, a great career, but not a job. As such, the thing I like to do is to take off, take a break during the times when the demands of the job are low. I’m like a farmer or a fireman, there are things to do, just not that demanding when things are slow. Sure I miss stuff and clients don’t like it when I take off but I need a break too.
Some clients actually don’t care. Realtors sadly are a commodity, easily exchangeable for some. I have a colleague that picks up the slack when I’m away and he does a good job, he’s very capable, but he’s not me. It’s like you care if you are changing doctors, go to a different mechanic or perhaps hairdresser. You know they are very competant but it is just not the same.
I disagree with Neil Young. I believe it is better to fade away than to burn out, and the way the market has been in the past 12 months, burn out is a real concern. Last year, I never worked harder. It is all a blur of showing houses and writing offers.
So we went hiking in Hong Kong, orienteering in Macau, shopping and eating in Taipei. We rode ding dings, high speed trains, city bikes, airport buses and subway cars, lots of subway cars.
For me, it was a nostalgia trip. I got to see an old friend, one that I haven’t seen in 20 years. He still lives in Taichung. He hasn’t changed a bit, although now he has three kids and is on his second wife. We got to see our old neighbourhood and places we used to live and hang out. It was a lot of hanging out in coffee shops and sidewalk strolling and bike riding along the Keelung and the Tamshiu Rivers and hiking the Hong Kong Trail, the one in Kowloon and around Taiwan reservoirs and up and down other moutains.
That’s where I’ve been.
But now I’m back. Here’s what has been going on.
Eight and other percentages
The prediction, for what its worth is that home prices will rise on average 8% this year in Waterloo Region. Sometimes predictions are right. Sometimes they are wrong. I think 8% seems right. The seller’s market certainly seems to be continuing. Houses are sometimes selling for $100,000 over listing price with, I’m told, 23 competing offers.
Last year’s statistics were released and showed an average price increase of more than 10%. Single detached homes up by 12.5%. Townhouses up by 9.9%. Only condo units are lagging, pulling the overall statistics down.
Of course is not just KW, Hamilton is on fire and Toronto and Victoria. Even Vancouver, though it is slowing down now, prices there rose by 24% last year. Other places like Nanjing and Shanghai are near 40%.
It is a sad sad state of affairs if you are hoping to buy a home. That is for sure.
And no relief in sight.
Last year at about this time, the flood gates opened and real estate investors rushed into our market. KW, a misinformed reporter wrote, was a beacon of affordability with universities, an LRT and google – the be all and end all of internet companies. I’m no different. I love google and apple as much as I love my dog.
In January, I wrote a blog post about an investor survey. 22%, more than any other city, thought that KW was the best place to invest in 2016. GTA and Hamilton came in 2nd and 3rd. And then other cities in the near-Toronto market.
A link to the post I wrote was posted on Reddit. “Uh oh”, I thought, “now comes the anonymous comments from the trolls and the haters” I thought, and I was fully prepared to ignore them all and weather the misdirected storm.
But it never came. There were comments, but most of them were anecdotal evidence of the market that we are in and thankfully no one blamed me personally for that. On the contrary, I think most homebuyers are thankful to have the advice and good guidance of their chosen real estate agent.
Getting a link on reddit is good for the old SEO. I got a 15% bump in traffic for a couple of days because of the link, so all in all, it was a good experience. 100 new users entered my site, clicked around on two and a half links on average and then quietly disappeared again. That page has had over 1200 page views. That’s pretty cool.
I made it into my brokerage’s top ten again. That was nice. Two years in a row having my hard work and sales ability acknowledged. TheRedPin has 96 agent now. So I guess I’m one of the top 9.6.
I was actually #5 which is a good number to be. #1, 2 and 3 are all working too hard!
A Medium link
I posted a link. If you only click on one link, click on that one. It is on my KWrealestatenews.com website. It was from Medium.com by a local start up founder and it was called, “Debunking the myth of higher pay in Silicon Valley”. An excellent analysis of how financially you are no further ahead making twice as much money working in California.
Over the past few years, I’ve met more than a half dozen techies moving back from the Silicon Valley. They all complain about the cost of living and the traffic and surprisingly, many complain about the weather. I guess being “too perfect” or “too constantly invariable” can be a negative thing. But mostly it is the cost of living and the quality of life that they care about.
We do have an excellent, easy lifestyle in the region.
Check out the link. It is a great analysis.
GTA’s spillover effect on KW real estate prices
In Kitchener Waterloo, we have long said that whatever happens in the GTA real estate market will soon happen here too. It is the “spillover” effect. I have written about it before. We all felt it’s impact last year.
And we are feeling it this year.
The Canada Mortgage and Housing Corporation recently released a study outlining by exactly how much the spillover effect impacts our local real estate prices. The study looked at GTA’s home prices and those of neighbouring markets: Barrie, Brantford, Guelph, Hamilton, Kitchener, Peterborough, and St. Catherine – all centres considered to be within commuting distance to the GTA.
The study found correlations between home price movement in the GTA and surrounding areas. House price spillovers from the GTA are most prevalent in Hamilton, Barrie and Guelph with Kitchener coming in fourth. Brantford which is closer to the GTA than Kitchener Waterloo isn’t as closely correlated, which is interesting.
Long story short, a 1% shock to house prices in Toronto will lead to a 1.7-1.9% change to our real estate prices in KW within three years.
As always, there are links in the show notes to this and the other stories here.
January 2017. Record breaking.
The first month of 2017 was record breaking, not in a good way if you are a home buyer in Waterloo Region. Here are the numbers:
There were only 367 listings at the end of this January. By contrast, there were 1068 in January 2016.
Despite the low inventory, January 2017 was the busiest since January 2010. 327 properties were sold.
The average sale price of properties sold in January 2017 was 19.7% higher than in 2016.
The average days on the market was 22 days compared with 47 days a year ago.
The average single detached home was $501,821. That is 22.7% higher than a year ago.
It is mid-February already. If you are thinking of buying or selling real estate this year, It is time to lace up, limber up and get ready to go. Email me your thoughts, ideas and apprehensions. I’m here to help.
By the way, my plan is to podcast on the 15th and the 30th of every month this year.