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Staying Competitive- How The Power And Voice Of The Real Estate Industry Are Changing – Forbes

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Last week, Warburg Realty* became part of Coldwell Banker’s Global Luxury Group. Warburg is just the latest in a series of mergers and acquisitions which is gradually shrinking the pool of independent luxury brokerages in New York City. With CORE’s 50 percent sale to The Related Companies, followed by the sale of Stribling to Compass in 2018, and now Warburg, the landscape of New York’s luxury firms echoes the brand consolidation which has swept almost all industries in recent years. And the rest of the country fares no differently. For most brokerage CEOs, this decision is being spurred by an awareness of how profoundly the business of real estate has changed in the last decades. Here is the how and why:

Through the early 1980s the residential sales business in New York, as in most of the rest of the country, was a family affair. Most brokerages were run by founders or long-time owners. Douglas Elliman was the exception, having already had more than one corporate owner. The firms were small, as was the entire business. Property listings were written on file cards and were given non-exclusively to a handful of firms. Agents worked hard to acquire those listings, making cold calls and walking the avenues chatting up and tipping doormen. No one co-broked listings, since none were given exclusively to agents. There was no central listing repository. The only advertising was columns of listing ads in the New York Times Real Estate section and the occasional display ad in the Times Magazine or, as time went on, Quest Magazine. No firm had more than 60 or 70 residential agents; L.B. Kaye, where I (along with a number of other industry executives) started my career, had fewer than 50.

There were no condominiums at that time and a limited number of co-ops. Artists actually lived in Soho, in unimproved or barely improved loft spaces. Alphabet City was not a safe place to venture, and the Lower East Side was not much better. The Bowery was still inhabited by winos. 

The mid-80s brought a cascade of rental-to-co-operative conversions to New York. Landlords saw an opportunity to cash out of buildings. At the same time, they maintained cash flow by creating wraparound mortgages at high interest rates which they imposed on these conversions. Because of this trend, the number of apartments for sale probably tripled between 1980 and 1988, until the market crashed and conversions and sales both ran aground. 

During the early 1990s, multiple changes shook the market. First, we were forced to acknowledge that, as the number of co-op buildings exponentially increased, the old way of handling listings no longer worked. File cards gave way to the first clunky computer listing systems. Exclusive listings and co-broking came to Manhattan, championed by a small company led by Susan Byrd; her work transformed the way we sell property here (the superbroker Sharon Baum is one of the few remaining Susan Byrd veterans still plying her trade among us). Equally significant, the brilliant innovator Barbara Corcoran forced upon her reluctant colleagues the twin ideas of branding and marketing, which many of us were slow to understand were NOT the same thing as advertising. 

And so, as the millennium turned, the industry was poised on the cusp of a sea change: technology, branding, and capital pushing their way to center stage of our formerly tame backwater of a business. Over the past 20 years, the goalposts which enabled small firms to continue to succeed kept moving.  Cendant (now Realogy) acquired Corcoran and then Sotheby’s Realty, Douglas Elliman changed hands to become a part of the Vector Group portfolio, Terra Holdings took over Brown Harris Stevens and Halstead, Town Residential came and went in New York to be replaced by its vastly better capitalized and more sophisticated sibling Compass, which spread throughout the country like a wildfire fed by a seemingly bottomless pit of capital. The worst excesses of the finance and tech industries came to the real estate brokerage market, as huge companies offered six-figure signing bonuses as well as multiple assistants and vast marketing budgets to agents, all in the belief that today’s loss leader would somehow morph into tomorrow’s profitable company. 

In such an environment, a small residential company faces the ultimate challenge: not how to be profitable but how to provide competitive, best-in-class technology, customer relationship management, and seller engagement tools to its agents. In the end, these considerations drive many small and mid-sized brokerage owners into the arms of big national firms. These national players connect agents with like-minded agents in every major city and town in the country and often throughout the world. In addition, they provide their agents with the ability to match any tools a competitor may offer to win client business. The power and voice of the industry have thus gradually moved from the many to the few. With so many issues critical to real estate at stake before the Department of Justice and other government agencies, we all trust that these few have the deep understanding of the industry required to create a best-case outcome for us all. 

*Disclaimer: Frederick Warburg Peters is the CEO of Warburg Realty, which he sold to Coldwell Banker. Warburg Realty, of which Peters will remain CEO, will operate under the name Coldwell Banker Warburg starting in January 2022.

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A Large Canadian Real Estate Brokerage Has Forecast Prices Will Rise Up To 20% – Better Dwelling

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  1. A Large Canadian Real Estate Brokerage Has Forecast Prices Will Rise Up To 20%  Better Dwelling
  2. House prices in Canada will rise higher in 2022, real-estate report says  CTV News
  3. Canada’s Real Estate Prices are Expected to Rise 9.2% in 2022: RE/MAX  Storeys
  4. Housing prices in Ottawa will rise five per cent in 2022, Remax estimates  CTV News Ottawa
  5. 2 Factors That May Impact the Real Estate Market in 2022  Real Simple
  6. View Full coverage on Google News



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Why real estate agents are urging Canadians not to wait for spring to sell their house – Ottawa Sun

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Rising mortgage rates could mean a spring slowdown for Canada’s housing market

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The pandemic-triggered housing boom has shredded a number of long-standing assumptions Canadians have about real estate.

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Distance from, not nearness to, downtown cores is now a key buyer desire. Communities that were unpopular with buyers two years ago because of a lack of jobs or amenities are some of today’s most active markets. Even taking out a gargantuan mortgage in the midst of a crushing global recession went from “undeniably risky” to “par for the course” seemingly overnight.

And this Great Real Estate Rethink continues: A new survey by real estate brokerage Royal LePage finds that 79 per cent of real estate professionals think sellers should list their homes this winter rather than waiting until spring 2022.

Winter is traditionally the slowest season for home sales in Canada. But buyers have already tossed aside so many real estate traditions. What’s one more?

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Survey says…

The pro-winter listing sentiment is strong across all regions.

Realtors in British Columbia led the way, with 93 per cent of respondents in the province saying they would advise their clients to sell this winter; 87 per cent of agents in Quebec and 85 per cent of those in Atlantic Canada shared the same view.

The proportion of agents in favour of winter listings were lower in Ontario (72 per cent), Alberta (73 per cent) and the remaining prairie provinces, Manitoba and Saskatchewan (75 per cent).

While those numbers are all high, many of the real estate agents surveyed — at least half in every area of the country — were advising their clients to list in the winter even before the pandemic. The reason then is the same as it is today: A painfully low number of homes for sale has created a seller’s market so rabid that weather is the last thing desperate buyers are worried about.

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“Typically we see a seasonal adjustment in real estate activity,” says Adil Dinani of Royal LePage West Real Estate Services in Vancouver. “However, last year, we saw one of the busiest winter markets in our history. Even if there are fewer buyers in the winter, it is unlikely there will be enough inventory on the market to satisfy demand.”

That could be especially true in Toronto, where there were only 7,750 homes left on the market at the end of October.

“That’s versus 17,000 last year,” says Cameron Forbes, general manager and broker at RE/MAX Realtron Realty in Toronto.

But Forbes still believes that a spring listing is better for sellers, pointing out that since 1999 there have, on average, been more homes on the market in the winter in the GTA than in the spring. If selling in a low-supply market is the goal, why not wait until the spring, when the market will be even more depleted?

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“All things being equal, that’s a better time to sell your home,” he says. “That’s why agents will generally recommend that you wait to list in the spring market, when your home shows well and, frankly, when buyers are out looking to buy.”

Low supply vs. the harsh Canadian winter

You may have noticed that the areas where the preference for winter listings were lowest are in parts of the country where winter can be especially brutal. (Ontario’s placement in this category may have more to do with fears around what an extra three or four months might do to the province’s already sky-high prices.)

And this one could be particularly messy. Both The Weather Network and the Farmer’s Almanac are preparing Canadians for a potentially long, storm-filled winter.

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Article content

Can sellers in hard-hit markets really plan on buyers being hungry enough to brave the elements and view properties when winter’s at its most miserable?

Regina-based Royal LePage agent Shayla Ackerman, no stranger to extreme winter weather, says listing in the winter is not something she would recommend unless a seller has no other choice.

“Our winter market slows right down,” she says.

But in Montreal, which also receives its fair share of colossal snow-dumps, Century 21 Immo-Plus agent Angela Langtry expects buyers to be out in droves.

“We are still in a low-inventory market, especially for houses,” Langtry says. “I always say that the serious buyers come out in the snow storms.”

A spring housing slowdown?

Capitalizing on raging buyer demand is not the only reason to list your home this winter.

Advertisement

Article content

The Bank of Canada announced in late October that it is ending a key pandemic emergency measure: buying billions of dollars in bonds to keep interest rates low, including those attached to mortgages.

If mortgage rates begin rising, and mortgage amounts begin shrinking, buyers may have less buying power in the spring. Listing now may give sellers one last shot at enticing buyers while they have more money to play with.

But Paul Taylor, president and CEO of trade association Mortgage Professionals Canada, isn’t sure a rise in interest rates will impact buyers’ budgets in the next few months.

“Almost everyone is qualifying at a 5.25 per cent stress test rate today,” Taylor says, referring to the benchmark interest rate lenders use to evaluate mortgage applicants’ ability to repay their loans.

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Article content

Even if the Bank of Canada were to raise interest rates by 100 basis points, or one per cent, over the next 12 months, Taylor says buyers who qualified at 5.25 per cent would still have at least 200 basis points worth of breathing room, meaning their mortgage budget “will be effectively unchanged.”

Taylor expects a 0.25 per cent increase in the BoC’s overnight rate, which should trigger a rise in variable mortgage rates, in the spring. He says two additional increases could occur before the end of 2022.

“I expect the media coverage of the tiny rate increases will scare many and slow the market, which is likely very good for everyone, but I don’t think we’ll see enough of a slowdown to erode prices,” Taylor says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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Why real estate agents are urging Canadians not to wait for spring to sell their house – Financial Post

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 on


Rising mortgage rates could mean a spring slowdown for Canada’s housing market

Article content

The pandemic-triggered housing boom has shredded a number of long-standing assumptions Canadians have about real estate.

Advertisement

Article content

Distance from, not nearness to, downtown cores is now a key buyer desire. Communities that were unpopular with buyers two years ago because of a lack of jobs or amenities are some of today’s most active markets. Even taking out a gargantuan mortgage in the midst of a crushing global recession went from “undeniably risky” to “par for the course” seemingly overnight.

And this Great Real Estate Rethink continues: A new survey by real estate brokerage Royal LePage finds that 79 per cent of real estate professionals think sellers should list their homes this winter rather than waiting until spring 2022.

Winter is traditionally the slowest season for home sales in Canada. But buyers have already tossed aside so many real estate traditions. What’s one more?

Advertisement

Article content

Survey says…

The pro-winter listing sentiment is strong across all regions.

Realtors in British Columbia led the way, with 93 per cent of respondents in the province saying they would advise their clients to sell this winter; 87 per cent of agents in Quebec and 85 per cent of those in Atlantic Canada shared the same view.

The proportion of agents in favour of winter listings were lower in Ontario (72 per cent), Alberta (73 per cent) and the remaining prairie provinces, Manitoba and Saskatchewan (75 per cent).

While those numbers are all high, many of the real estate agents surveyed — at least half in every area of the country — were advising their clients to list in the winter even before the pandemic. The reason then is the same as it is today: A painfully low number of homes for sale has created a seller’s market so rabid that weather is the last thing desperate buyers are worried about.

Advertisement

Article content

“Typically we see a seasonal adjustment in real estate activity,” says Adil Dinani of Royal LePage West Real Estate Services in Vancouver. “However, last year, we saw one of the busiest winter markets in our history. Even if there are fewer buyers in the winter, it is unlikely there will be enough inventory on the market to satisfy demand.”

That could be especially true in Toronto, where there were only 7,750 homes left on the market at the end of October.

“That’s versus 17,000 last year,” says Cameron Forbes, general manager and broker at RE/MAX Realtron Realty in Toronto.

But Forbes still believes that a spring listing is better for sellers, pointing out that since 1999 there have, on average, been more homes on the market in the winter in the GTA than in the spring. If selling in a low-supply market is the goal, why not wait until the spring, when the market will be even more depleted?

Advertisement

Article content

“All things being equal, that’s a better time to sell your home,” he says. “That’s why agents will generally recommend that you wait to list in the spring market, when your home shows well and, frankly, when buyers are out looking to buy.”

Low supply vs. the harsh Canadian winter

You may have noticed that the areas where the preference for winter listings were lowest are in parts of the country where winter can be especially brutal. (Ontario’s placement in this category may have more to do with fears around what an extra three or four months might do to the province’s already sky-high prices.)

And this one could be particularly messy. Both The Weather Network and the Farmer’s Almanac are preparing Canadians for a potentially long, storm-filled winter.

Advertisement

Article content

Can sellers in hard-hit markets really plan on buyers being hungry enough to brave the elements and view properties when winter’s at its most miserable?

Regina-based Royal LePage agent Shayla Ackerman, no stranger to extreme winter weather, says listing in the winter is not something she would recommend unless a seller has no other choice.

“Our winter market slows right down,” she says.

But in Montreal, which also receives its fair share of colossal snow-dumps, Century 21 Immo-Plus agent Angela Langtry expects buyers to be out in droves.

“We are still in a low-inventory market, especially for houses,” Langtry says. “I always say that the serious buyers come out in the snow storms.”

A spring housing slowdown?

Capitalizing on raging buyer demand is not the only reason to list your home this winter.

Advertisement

Article content

The Bank of Canada announced in late October that it is ending a key pandemic emergency measure: buying billions of dollars in bonds to keep interest rates low, including those attached to mortgages.

If mortgage rates begin rising, and mortgage amounts begin shrinking, buyers may have less buying power in the spring. Listing now may give sellers one last shot at enticing buyers while they have more money to play with.

But Paul Taylor, president and CEO of trade association Mortgage Professionals Canada, isn’t sure a rise in interest rates will impact buyers’ budgets in the next few months.

“Almost everyone is qualifying at a 5.25 per cent stress test rate today,” Taylor says, referring to the benchmark interest rate lenders use to evaluate mortgage applicants’ ability to repay their loans.

Advertisement

Article content

Even if the Bank of Canada were to raise interest rates by 100 basis points, or one per cent, over the next 12 months, Taylor says buyers who qualified at 5.25 per cent would still have at least 200 basis points worth of breathing room, meaning their mortgage budget “will be effectively unchanged.”

Taylor expects a 0.25 per cent increase in the BoC’s overnight rate, which should trigger a rise in variable mortgage rates, in the spring. He says two additional increases could occur before the end of 2022.

“I expect the media coverage of the tiny rate increases will scare many and slow the market, which is likely very good for everyone, but I don’t think we’ll see enough of a slowdown to erode prices,” Taylor says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

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