Today is Thursday April 14, 2016. This is the 15th Episode of the Marshall Report. Welcome to the podcast.
In Today’s episode:
1. Blogging with benefits
2. Seller’s market or seasonal bubble?
3. 18 new places for food and drink in Waterloo Region
4. Real estate year to date and for March.
5. Cats and dogs
6. Blog and podcast content
9. Giving people what they want
10. Complicating simplicity
Blogging with benefits
Being a local blogger has some benefits. I’m having coffee with the mayor (again) at the end of the month. Dave tweeted to me to contact his office to set up a coffee date for us. I haven’t seen him since he was running for mayor. I think he’s doing a good job. What’s interesting is that he books his coffee dates six weeks in advance. He must be a busy guy. I’m busy too but I never book more than three or four days ahead.
I got invited to a residential community planning event recently. They wanted some local realtors opinions of what makes great neighbourhoods and neighbourhoods great.
And now I just got invited to Brew Donkey’s craft beer and tour service launch event. I’m not sure what this is all about, but I’m going. I think must be like a Niagara wine tour, where you visit a bunch of wineries, well breweries in this case, and have some samples and bring your favourites home. We are going to visit three or four local craft breweries. How could I say no?
I couldn’t. I almost never can.
Question of the week
This week’s question comes to us from Adam who lives in the Lakeshore neighbourhood of North Waterloo. As an aside, I’ve often wondered why this neighbourhood called Lakeshore. It is not really near any lakes. It is kind of close to the Laurel Creek Reservoir and somewhat close to Columbia Lake, but really Lakeshore?
Anyway, Adam writes:
I’m on the fence about selling a four bedroom home in Lakeshore. It looks like we are experiencing a seller’s market, but do you think this is a seasonal bubble? Will prices continue to rise?
Great question Adam. It is a question that many people have been asking a lot so far this year. We are about 110 days into the year and both prices are rising (a lot) and the volume and speed of sales is breaking local records. Will this continue?
If you had of asked me that a couple of weeks ago, I would have said that because of the warm winter followed by last year’s brutally cold winter, the statistics are a little skewed and misleading. I would have said that things will calm down once the weather warms up and people start listing their homes for sale. It is a seller’s market because we have such a low inventory of homes for sale. I recently read that the same thing is happening in Toronto.
However now that we are into the middle of April, I’m not so sure. Now I’m thinking that this is the new normal. Now I’m thinking that things will continue like this into the late summer.
The real estate market is like a big boat – the Love Boat or the Queen Mary. It takes a long time to make a turn. We are 110 days into this crazy market. It will take at least that long to make any corrections.
New food and drink in Kitchener Waterloo
Over the past few months while we have been both huddling inside avoiding the winter wind and while out and about in Kitchener Waterloo avoiding the LRT construction, a whole bunch of new places to eat and drink have sprung up. Here is a list of new restaurants, bars and coffee shops recently opened or opening soon in and around the region:
Amaya India Express
Arabella Park Beer Bar
The Berlin Bicycle Cafe
Brick & Mortar Market
CE Food Experience
The Chopped Leaf
Matter of Taste
Morals Village Hot Pot
Smile Tiger Coffee Roasters
Song Shi Fu
Rhapsody Barrel Bar
March Real Estate Statistics
The numbers for March are out. Home prices and sales volume are up and up. Yup. Up.
Here are a couple of highlights.
In March, homes in the $350-$400K range were the biggest sellers. 98 of those sold in March. It is an increase of 78% compared to March 2015.
Sales in the $300-$400K range year to date account for 36% of all sales.
The average sale price of all residential sales increased almost 6% to nearly $372K compared to March, 2015.
584 properties were sold last month.
Overall this year the Kitchener-Waterloo market has seen an increase of almost 24% over last year’s sales totals. There have been 1,350 sales so far this year.
All price ranges are up. The $500– $750K range, increased by more than 31% in terms of sales volume in March, compared to March 2015.
Cats and dogs
How much do you tip the cat sitter?
This is a first world problem. My guess is that you don’t tip the cat sitter anything. But I’m Canadian and a remarkably inconsistent tipper. I never know even if I’m suppose to tip, not to mention how much. A friend of mine casually mentioned to me that she tipped the guys who delivered her mom’s new washer and dryer.
“Really”, I thought, “I didn’t know I was even suppose to tip them”.
I’ll tip the Uber driver well, because he is going to give me a review. I’ll tip my barber and my barkeeper, but not the cat sitter. She’s already getting paid to come in while we are away on vacation to make sure the cat has food and water. The cat visit is her tip. If the cat shows up for his visit that is. It’s up to Mr Snuggles.
So there are lots of new services out there.
There’s a new Canadian dog walking app. It’s called Go Fetch. You sign up for $6 a month and then negotiate with the dog walker how much per walk. I wouldn’t tip that guy. He’s negotiating his tip as part of the service. In fact, he should tip me. He’s actually renting a dog and getting paid for it.
What a rip off.
Time well wasted
I was wondering how other real estate agents spend their time. How do they organize their days? How do they fill the time between clients and listings and meetings and showings and everything else we do?
When I started working for a big brokerage, I was always the first one in the office. I’d show up at about 9:30 and get to work. I still had the habits left over from working at the newspaper. But a lot of realtors work late into the night, so I wonder what they are doing during the day.
Now that I have a home office, most weekday mornings I spend the first hour and a half writing and then the next hour reading mostly about real estate, but also about stuff that interests me. Things like: North Korea, climbing mount Everest, long boarding, whatever seems to be in the news, like highjacking last week, the Panama Papers this week. There is always something that captures my interest for awhile.
Everything is relative and everything and everyone is connected somehow. Not everything is important, but it doesn’t have to be. Or maybe there is meaning to be found that can be applied somewhere else.
So with my real estate blogs, I only write about things related to real estate or to Kitchener Waterloo. With my podcast, I’m allowing myself to include things unrelated and that is a lot of fun.
The Danger Report
I have a copy of this year’s Danger Report. Danger stands for: definitive analysis of negative game changers emerging in real estate. The Danger Report is a yearly look at threats that could impact the residential real estate industry in Canada. I summarized the report in a recent blog post. Here are some key dangers
1. Commissions are too high but will consumers pay of a fee-for-service basis like lawyers and accountants?
2. Baby Boomer Sales People and those that are slow to adapt to emerging technology are getting pushed out of the business by young homebuyers who don’t want to do things in antiquated ways. Ain’t nobody got time for that.
3. Regulation is killing the moral and productivity of salespeople and brokerages
4. Incompetent, poorly trained or part-time salespeople are destroying industry credibility.
5. Consumers cannot differentiate between different salespeople and real estate brokerages. They don’t want another postcard or email marketing message. They want to work with someone who really cares about them.
6. The do-it-yourself model of selling a home still makes up about only about 10% of the market. But once someone provides a descent service or creates a better app, this will change.
7. The 80/20 rule states that 80% of the sales are done by 20% of the realtors. A recent study on sales and commissions found that 64% of the sales are done by just 4% of the agents. That can’t be right?
There are lots of dangers facing brokerages, boards and associations too. Most of the pressures come down to a clash between the traditional way of doing things with all of its waste and overhead costs and emerging technologies and the efficiencies create there within.
But brokerages and boards are slow to change.
Brokerage hire more income generating resources. (New and poorly trained agents.)
Boards protect their territories.
There are too many levels of control and they all cost the consumer money passed through real estate fees.
The Panama Papers
The Panama Paper story was in the news last week. It was a story about rich and powerful people hiding money in offshore accounts. It is all very complicated if you don’t understand international law and banking and taxes.
Of course no one was really surprised that the rich and powerful are hiding money offshore. We all know that there is a secret society that us regular people are not part of. But at least we have the Sunshine List (here is a link) so if you know a public official or someone who works for the school board or the University, you can look them up and see what they make. I think it is crazy that someone can make $112,000 coaching rugby. What’s up with that?
As for understanding the Panama Papers, here is an, “explain to me like I am five years old description” from Reddit
When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.
Now one day, you might decide “I don’t want mom to look at my money.” So you go over to Johnny’s house with an extra piggy bank that you’re going to keep in his room. You write your name on it and put it in his closet. Johnny’s mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.
Now all the kids in the neighborhood think this is a good idea, and everyone goes to Johnny’s house with extra piggy banks. Now Johnny’s closet is full of piggy banks from everyone in the neighborhood.
One day, Johnny’s mom comes home and sees all the piggy banks. She gets very mad and calls everyone’s parents to let them know.
Now not everyone did this for a bad reason. Eric’s older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people’s lunch money and didn’t want his parents to figure it out. Michael was stealing money from his mom’s purse. Fat Bobby’s parents put him on a diet, and didn’t want them to figure out when he was buying candy.
Now in real life, many very important people were just caught hiding their piggy banks at Johnny’s house in Panama. Today their moms all found out. Pretty soon, we’ll know more about which of these important people were doing it for bad reasons and which were doing it for good reasons. But almost everyone is in trouble regardless, because it’s against the rules to keep secrets no matter what.
This weeks call to action is for real estate agents
I asked a successful real estate agent in my office what his secret was. How was he successful year after year. His answer was simple. He said, “I give my clients what they want. They ask for it for a reason. So I give it to them”. That’s it.
Words to live by.
This week’s call to action is to give people what they want.
Sometimes the questions are complicated but the answers are simple. And sometimes the whole thing is simple and we just over complicate it.