A new year means new resolutions, and we should start fresh when talking about Vancouver real estate.
Happy 2012! In keeping with the spirit of the brand new year, I say we resolve to look at our dynamic real estate market in a fresh way. Let’s proverbially “sweep out the old” and make room in our news for market stories from a fresh perspective.
First, we should agree not to discuss things that don’t exist. There are three things I don’t want to hear about anymore in the real estate world for 2012, so let’s clear the air and get off on the right foot here.
What bubble? If I never have to hear one word again this year, it would be “bubble.” One of the most compelling aspects of the bubble is there is no way to predict it.
In each historic case of bubble markets (characterized by rapid price increases and a sudden pricing collapse), it is the unpredictability in forecasting that is the common thread. While economists and pundits have claimed affordability indices are the true measurement of anticipating a housing bubble, there is no historical data to support it.
All of the market bubbles in Japan, the U.S. and Australia, had their own underlying economic and political drivers. Our country’s lending policies are conservative and are coupled with record-low interest rates. B.C. is known for exceptional regional livability, low unemployment and excellence in education.
Let’s face it – if there is a bubble correction, most single-family homeowners won’t be affected. In any market, few “win” on both ends of the deal. Buy low/sell low and buy high/sell high would be the norm for most. Let’s agree to disagree until we can discuss it in hindsight.
Real Estate Fees
The Competition Bureau issued a notice last year that real estate agents can now be competitive with their fees. Psst … they always were! Some people just didn’t know to ask.
Like everything in this world, there are different ways to pay for services. My lawyer charges me by the hour or he takes 30% off the top of a settlement. That’s if I get a settlement, but then he accepts the risk. Realtors can do essentially the same thing. You can pay in advance, you can pay a flat fee, you can pay for a myriad of services a la carte (can I have cheese on my listing? But no dessert! I’m saving room on my bottom line) or you can pay for “full”service, payable after services rendered. The world is your oyster, but please, no more about fees being competitive.
This phenomenon was anecdotal. Briefcases full of money? Investment fraud in mainland China driving the Richmond market? Really?
Many have tried and few have been able to quantify the number of actual foreign investors in our market. Landcor produced the only measurable statistic regarding foreign investment. The company measured the number of assessment notices mailed outside of Canada, and less than 0.4 per cent of 2010 sales were sold to foreign investors.
Until you can measure it, let’s not speak of it.