The World View- Unemployment, Interest Rates, Greek Bailouts, and the Price of Smokes-Oh My
One of my favourite things is coming into the office early Monday morning. I am all by myself, the office is quiet and for about a half an hour I can rehearse what I am going to discuss at the morning meeting. Invariably I add and edit what I’m going to talk about, and then I think about ways I’m going to make it interesting. Afterall, meetings have to be fun and informative. I knew from the get go that yesterday’s meeting was going to be a bit on the boring side. I needed to bring agents up to speed on some new advertising guidelines that just came out and to be honest, it is a topic that is pretty dry.
At the start of the meetings we talk about the deals that were done during the week and have a brief discussion about open houses. it is a great way to gauge the market and agents learn a lot from what others are doing. It’s a lot like our Mastermind meetings on Wednesdays. One of my agents mentioned that during his open house, a couple had asked about the impact of the financial markets on the Toronto market. It was a perfect segway into a rather lengthy discussion about financial markets, Greek rescue packages, unemployment, the dollar, immigration, interest rates and elections. Toronto real estate has been in a bubble. Not that overpriced, ready to crash bubble, but an almost impervious to disaster type bubble. Despite what is going on all over the world, home values keep going up and up and up. When is it going to stop? According to the consensus of the agents, and what they are seeing on the street, house prices will continue to rise for the forseeable future. Interest rates are making home ownership more affordable, but economic uncertainty is keeping a lot of sellers off the market. It is really a supply and demand issue. Factor in the stellar and booming new condo market where investment is almost outstripping construction starts and you start to get a picture of a market where the ones who didn’t buy two years ago are now kicking themselves down the street because the price of ownership for them just went up by $200k. Check out this article that was sent to me by one of the agents after the meeting. http://www.financialpost.com/personal-finance/mortgages/Speculators+foreign+investors+betting+Toronto+condo+market/4817203/story.html
So what is the point of all this? Simple. I believe that good agents today have a clear understanding that there are literally hundreds of factors that drive ( or don’t drive) real estate markets. While a strong idea of what’s going on locally is critical to the pricing and negotiating process, there is a need for a comprehensive “big picture” view. Let’s face it, our profession can only improve by understanding and communicating the underlying factors that drive our markets.