Changing Consumer Trends

Any of you on this site are probably avid Internet users nonetheless the following information will no doubt be of interest. While recently attending the National Association of REALTORS® conference in Las Vegas, many of the sessions I participated in dealt with changing consumer trends. Most of these were focused to a degree on technology and how it continues to impact our lives and the habits of today's consumers. Recent studies reflect that computers have and will continue to replace televisions in the bedroom. It is estimated that on average, most households have 26 electronic devices of some sort in the home.
Traditionally, advertisers have spent on average 42% of their advertising budgets on TV ads and we've all heard reports of companies spending hundreds of millions of dollars to secure a 15 second ad during the Super Bowl. The second greatest advertising expenditure has been on newspaper or other print advertising and this represents 30% of all ad budgets. More and more whether buying everything from books to collectibles or cars to real estate, consumers are using the Internet not only as their primary source of information, but also to make a direct purchase. Personally, I am a semi-regular online buyer. I have purchased numerous items from online sources the largest of which was a boat on eBay.
To date, online advertisng accounts for only 6% of all advertising budgets versus over 70% for TV and print ads (combined) yet on average, 30% of consumers are using the Internet to satisfy their information and purchasing demands. With real esate that number is much higher as reports indicate that 75% to 80% of consumers contemplating a real estate transaction are using the Internet to find an agent, obtain meaningful real estate information or to look for property etc. This would suggest that a huge shift is forthcoming in how companies of all sizes allocate their ad budgets and this is where Google, Yahoo, eBay and the likes see huge potential for increased revenues in the future.
Hardly a day goes by that I do not receive email inquires about my listings. At the same time, I can not recall when I last had an inquiry as the result of a print ad for a property either in a local paper or from one of the area's many magazines all of which are excellent publications. The fact is, today's consumer wants information that is current, they want it 24/7, they want it personalized for them and they want it for FREE! No where can these demands be better met that online. Personally, I embraced the importance of having a strong online presence some time ago. Local real estate activity continues to be driven in a large part by consumers whose primary residence is outside the area. Again, reaching these buyers and sellers is best accomplsihed not via print media but online. This blog and my personal real estate website http://www.propertycollingwpood.com/ reflect my committment in this regard.

Where did all the water go?

One of my real estate associates and I spent some time recently discussing a topic that is becoming increasing more frequenct both within and outside the real estate community, the declining water levels in Georgian Bay and indeed the Great Lakes in general. Locally, the barometer I use to monitor levels in the Bay are the shoals, or should I say newly formed "islands" off Northwinds Beach. Not so many years ago, one could gaze northwards across Georgian Bay and see nothing but blue water. Today, the horizon is punctuated with numerous shoals which seemingly protrude higher above the surface of the water with each passing month. Another scale I use is at my own cottage on Manitoulin Island, where in the spring of each passing year I am pushing my dock further and further out from shore in order to gain enough depth to dock a boat. Not long ago, the water level in the photo above was at the tree line along the shore.

This fall, Lake Superior which by and large has enjoyed water levels relatively constant in recent years as compared to the declining waters of Lakes Michigan and Huron saw its level drop to one of the lowest on record. While climate change may be responsible for some of these dramatic declines, many people are pointing the finger at other causes such as the outflow of water from Lake Huron via the St. Clair River.

Years ago the U.S. Army Corps of Engineers dredged the St. Clair River to enhance the shipping lanes which was necessitated in part by the increased size of great lakes ships. Some of these larger vessels were constructed right here in Collingwood. Add to that is the fact that the St. Clair River bed is eroding thus increasing its depth and the transfer of water from Lakes Michigan and Huron to Lake St. Clair which is in fact rising as the former two decline.

To grasp the severity of the problem I recommend viewing part of a CBC report accessible via the Georgian Bay Association website at http://www.georgianbay.ca/. This website also offers some excellent historical and other information pertaining to the cycles affecting the levels in the Great Lakes.

This is an issue that has an enormous impact on our area including waterfront property values, recreational activities and many aspects of our economy in an area which is becoming increasingly driven by tourism. While one might argue the cause, declining water levels in the Great Lakes are a reality and affects us all. Immediate action is required if we are to preserve the lifestyle we all too often take for granted. If you have or are feeling the affects of this situation please post comment.

What is 'MLS®?

Real estate buyers and sellers have seen or heard the term 'MLS® but do you know exactly what MLS® is? Even those familiar with the term MLS® may not understand the important role it plays in the the buying and selling of real estate or how it works.
MLS® is a registered trademark owned by the Canadian Real Estate Association and stands for "Multiple Listing Service." When sellers list their property for sale with a REALTOR®, most choose to do so with an MLS® versus exclusive listing. Properties listed on the MLS® system are done so in a spirit of cooperation. With an MLS® listing, the listing Broker commits to "cooperate" with other Broker members giving them equal opportunity to show and sell the subject property. Traditionally this has benefitted the seller by given their property added exposure to all REALTORS® within a given market. With the advent of the Internet and the Canadian Real Estate Association's website http://www.mls.ca/ properties for sale on MLS® are now accessible online to potential buyers everywhere.
In Canada we are extremely fortunate to have a nation-wide MLS® system as such is not the case in the U.S. Like their banking industry, MLS® in the U.S. is very fragmented with several MLS® systems typically existing in each state. These systems are not linked thus making it difficult for today's online real estate consumer to gain full access to all properties currently listed for sale. Current estimates put the possibility of a nation-wide MLS® in the U.S. similar to what we have in canada as 3 to 5 years away. In the meantime, several 3rd party websites in the U.S. such as http://www.zillow.com/ have filled this void by accepting property listings on behalf of both licensed REALTORS® as well as For Sale By Owners.
Consumer visits to http://www.mls.ca/ typically number 2.5 to 3 million a month making http://www.mls.ca/ the most popular real estate consumer website in Canada. With this post is a survey asking: Have you ever visited http://www.mls.ca/? Please take a moment to complete the survey and if you have any comments or questions please do not hesitate to contact me.

Highway 26 Speed Limit

The recent articles pertaining to the newly posted speed limts on the east and west side of Collingwood were certainly brought home to me yesterday. While travelling west to Thornbury on Highway 26 I couldn't help but feel how painfully slow it has become leaving Collingwood. I was beginning to wonder if my transmission was slipping but realized I was keeping up with the traffic ahead. With the newly posted speed limit of 50 km per hour I swear the trip to Thornbury is 10 minutes longer and this will become worse once the new traffic light is installed west of Georgian Manor Resort. With the ever increasing traffic we are seeing in the area it hardly seems appropriate to be restricting it further with ridiculously low speed limits especially on an artery this is essentially a "highway."
No one, myself included will argue the need for reduced speeds in school zones such as the Pretty River Academy to the west of Collingwood. One might ask however is why would a municipal government allow for a school to built on what is a provincial highway, one that is only going to get busier and should in fact be widened. We could ask the same question of our municipal planners as to why we have commercial businesses on industrial land, a courthouse and grocery store on the waterfront of a town whose economy is significantly tourism based but that is for another post. Unless for a special event the students are not typically at school during the evening or weekends or for two months in the summer, yet the 50 km per hour zone exists 24 hours a day 365 days of the year. Many school zones have reduced speed limits before classes commence, at the end of the day when students are leaving and during lunch hours all these times are duly noted with "flashing signs" which probably garners more driver attention anyway. Perhaps this option was considered but I suspect it wasn't.
The reduced limit will no doubt be a cashcow of revenue for the local constabulary but is that what we want visitors to the area to remember us for? Like them or not, Intrawest as a corporation has based their success on drawing visitors to their resorts not just once but again and again with the focus on extending their visitor's length of stay and creating valued memories. I am afraid and in fact hear regularly from clients that with all of the growth and traffic congestion in Collingwood, they are looking elsewhere ie: Thornbury for their next place of residence. The problem is at 50 km per hour they can't leave town fast enough! Hey, maybe that's the strategy behind all this.

U.S. Real Estate Market vs Canada

Many of my clients and potential buyers are inquiring as to what impact the U.S. sub-prime mortgage fiasco will have on the Canadian real estate market. As President of the Georgian Triangle Real Estate Board for 2008, I just returned from the National Association of Realtors annual conference in Las Vegas where I participated in a number of forums pertaining to this matter.
As is often the case, media coverage of the sub-prime mortgage collapse is somewhat over-stated and real estate Boards and Associations in the U.S. are actively trying to counter the exaggerated "negative" press. The basic facts are as follows: The sub-prime mortgage debacle is the result of a "perfect storm" set of economic factors all converging at the same time. The economic destruction caused by the fall-out of sub-prime mortgages is serious and will cost in excess of $400 billion, more than the U.S. savings and loans mess of a few years ago. The situation stems from thousands of mortgages having been processed on behalf of borrowers with no or bad credit histories. In addition, over 90% of appraisers in the U.S. reported that properties were over-valued yet despite this, mortgages were granted and often for as much as 105% of a property's value. The situation was further aggravated by the fact that many of these sub-prime mortages were interest only loans and or were with issued with "zero" money down.
It is estimated that only 1 out of every 195 properties are affected, not a bad ratio. In excess of 35% of American homes are "mortgage free." The states most impacted by this situation are Florida, California, Ohio, Indiana and Michigan. Florida no doubt contains the greatest number of properties that are secondary homes which are often the most vulnerable and first to be sold when values start to fall. California is notoriously expensive with $400,000 and $500,000 mortgages not uncommon even for modest homes. The three northern states hardest hit were already experiencing depressed real estate markets much the result of huge job losses created by the restructuring of the Big 3 auto makers. By all accounts, the U.S. real estate market in 2007 will be their 5th best year on record and barring the onset of a major recession, it is forecasted that 2008 will see continued improvement to their domestic housing market with normal conditions resuming in 2009. Canada's economy continues to out perform that of our U.S. neighbours and consumer confidence remains high. Although interest rates have increased, home ownership in Canada is still very affordable. The Canadian Real Estate Association forecasts that national home sales will increase by 8.1% in 2007 and many provinces will enjoy record sales for the year. The Georgian Triangle is no exception. Sales through the the local real estate Board's MLS® system in 2007 will exceed $500 million. Much of the real estate activity in our area is being driven by the influx of people relocating to our area for recreational and retirement purposes and this trend is only just beginning. In his book Boom, Bust, Echo, author David Foote demonstrates that "real estate is affected far more by demographics that it is by economics." No where is this more evident than in the Georgian Triangle and while nothing is certain, the U.S. sub-prime mortgage market should have little or no impact on area real estate values and or sale.