If you are a local realtor or if you are a buyer currently working with a local realtor, are already aware of this. If not, read on. There are big changes coming to our local MLS. Next week, we are changing platforms, moving from Fusion to Matrix. This change has many components, many improvements, more functionality, more scope and more ways for us to slice and dice and deliver up the data to homebuyers and homes sellers.
Real estate is data driven
Real estate has always been about information. Information is knowledge.
Knowledges power. Power corrupts and absolute power corrupts absolutely.
But it’s not all black and white. There are apparently fifty shades of grey.
In the olden days, (the waning years of the last century when life was slow and random, like old people on the sidewalks of Niagara-on-the-lake, strolling seemingly aimlessly, like their conversations about what no one knows), real estate agents and their brokerages were the gatekeepers to this all important real estate information on homes. We had hot sheets of yesterday’s new listings delivered to the brokerages in the late morning or sometimes early in the afternoon, except on weekends, when they weren’t delivered at all. Agents would hang around the offices, drinking coffee and swapping stories, telling lies, talking sports and weather as we waited, ants in pants, for the mailbag from the real estate board to arrive. When it finally got here, the broker, like a tinpot monarch in full regalia would ceremoniously and with the flourish of a Mexican sword fighter moonlighting in a now defunct local teppanyaki restaurant, replace yesterday’s hot sheet with today’s hot sheet.
It was as if a starting gun had been fired and we shot out of the blocks for a sprint around the track.
Because this information was so hard to come by, we were not all that keen to freely share with just anyone. That is understandable, isn’t it? Information was gold and we were fools for it.
We also had monthly catalogues of homes and realtor open houses as ways of sharing with each other and our clients information about listings new(ish) on the market. But those moved even slower than the real estate brokerage daily delivery from the board.
How else has real estate changed recently?
They are historically low. Although home prices are high and this is impacting the affordability of homes, mortgages are relatively easy to get. If you and your spouse have jobs and good credit, chances are good that you can get a mortgage. You might not be able to afford your dream house, but you sill likely be able to get into the market with a condo or even a freehold townhouse.
We have witnessed a condo explosion in Kitchener Waterloo in the past 15 years. If you think about midtown and the Red Condominiums, 144 Park, the Bauer Building, none of those were there in 1999.
Buyers are more discerning now. I know, because growing up I never lived in the same house for more than four years, that it used to be that homebuyers (at least my parents) would buy a house for its functionality. “Three bedrooms, garage, near a school…we’ll take it”. Today with the relatively free access to information, addition of finishing materials like granite, engineered hardwood, steel roofing, patterned concrete driveway… the ubiquity of real estate TV shows, glossy magazine, and real estate shiny object websites, homebuyers have options to consider and choices to make. They are interested in style over or as well as substance.
Almost no one used to invest in the real estate market back then. If people invested at all, it was in mutual funds. That’s changed.
It used to be that homebuyers were pretty much on their own. Home sellers hired a realtor to sell their home (they still do), but homebuyers did not have anyone, helping them search, find and buy and more importantly no one to represent their interests.
Lower commissions rates
They are too high now, I agree, especially in light of the ever higher market price of homes, but they used to be higher. Whereas real estate commissions are now 4%-5% of the home’s selling price, they used to be 5%-7%!
For all but the foolish and misinformed stalwarts of better days gone by, the internet has become the be all and end all preferred method for consumers to learn about homes for sale. Newspapers, magazines, tv, billboards and relocation companies are rarely relied upon for information about homes for sale.
The city centres cleared out, starting in the 50’s and continuing into the 90’s. The suburbs were where people wanted to live. Then things changed back. Now in Kitchener Waterloo and in most every city in North America, the core is where many people want to live. Walkability is the most often reason why.
Role of agents
As mentioned above, real estate agents used to be the gatekeepers of real estate information. Now we are trusted advisors and guides for our clients.
Further, real estate agents used to be employees of their brokerages. Now we are free agents.
Homes sell faster
Life moves pretty fast. The internet has helped with that. There used to be lots of wasted time, viewing houses that were nowhere suitable for clients. Now the first showing is online. Not only do houses hit the market for agents and home shoppers faster – in minutes instead of days or weeks, but they can be eliminated faster as well.
It’s a small world (but I wouldn’t want to paint it).
Parents of foreign students buy property for their child to use while they are in university here. Canadians buy real estate in Florida, Arizona and Costa Rica. Multinationals buy property for their offices. Business and governments invest in offshore real estate because it is a safe investment and a hedge on their local economies.
Work from home
Cities are getting bigger, but near-cities are experiencing the real growth. If I can work from home most days a week and go into my office in Toronto once in a while, why would I want to live in Toronto? Communication and transportation has made cities like Kitchener-Waterloo, Cambridge, Guelph, Hamilton, Barrie, Georgetown, Whitby…great alternatives.
No one ever asks, “is the board bag here yet” anymore. It doesn’t get delivered daily. I think it comes weekly or twice a week.
The Holy Roman Catholic church has changed. There is another new pope, better than the old pope. Change is constant, the only constant is change. If we never changed we’d still be living in caves, we’d still be ameba, we’d still be a big pre-big bang ball of matter.
I was working with a realtor until recently who could not accept change, social media specifically. She used to drone on anytime she had a captive audience about facebook and twitter and how its users were are navel-gazing hedonists, societal nihilists and vain and inglorious narcissists. Then she quit, retired back to New Brunswick.
I have some clients who recently fired their last agent, partly because she was still doing business the old-timey way.
I read this article today about the buskers festival and how unhappy the writer was that it had relocated. I like the new spot. It’s more like a carnival atmosphere now.
I read this article today saying that the newspaper industry will be out of business in ten years. I also read this story about how Waterloo Taxi has launched a smartphone app to compete with Uber.
I’m enjoying the new real estate platform already. It is like learning to use a really expensive bagel toaster at an all-you-can-eat breakfast buffet at a beach resort in Indonesia at the beginning of a two week holiday.