The Changing Retail Landscape

  People often say to me "you are really smart" and I beg to differ.  As a kid I was an average student and I have never been afraid or embarrassed to share the fact that I repeated grade 3.  At some point however things changed and I became almost obsessed with learning and being "informed" about what goes on in the world especially business and while I am flattered by comments where people say I am smart, there is a difference between exceptionally intelligence and being knowledgeable through information gathering. 

  Early in my career I spent several years in and working up through the retail sector including close to 10 years with Canadian Tire.  It was a great experience, I learned a lot and over the years it has served me well as I advanced through several executive management positions in both Canada and the U.S.  mostly in the manufacturing sector before entering the real estate profession.  Even today I am a voracious reader and ever day I awake thinking "what can I learn today?"  I have also tried to impart this attitude in my kids.

  As a REALTOR® I follow what's happening in the market very closely and not just in the residential but also in the commercial real estate sector as well, particularly retail. Retail like many other segments of the economy such as manufacturing has gone through wide scale change and recent announcements would indicate it is far from over.  Think of the many long standing retailers we have seen disappear, Eatons, Simpsons, Sears, Woolworths, Woolco, Towers, K-Mart, Zeller's and let's not forget about Target's disastrous and short lived expansion into Canada.

  The next casualty I have been expecting to fall is Hudson's Bay.  Their stores are for the most part dated, poorly merchandised with products that in my opinion are over priced and offer poor value for consumers.  In late February Hudson's Bay announced they were closing their Home Outfitters stores and some Saks Off Fifth locations claiming that it will allow them to "further streamline their retail portfolio....."  This could prove to be too little too late.

  Information just released indicates that clothing retailer Gap is closing 230 stores in Canada and the U.S. and at the same time as Hudson's Bay announced the Home Outfitters closing Payless Shoes was doing likewise for their retail outlets across Canada.

 Online shopping through the likes of Amazon is taking a lot of heat for the demise of many bricks and mortar retail outlets but I am not convinced that they alone are entirely to blame.  Let's face it, we are an aging population and personally as I get older I find that I need less.  We instructed our  kids not to buy us Christmas gifts as we need nothing.  Even when I am in need of or in the market form something I expect value whether it's for cloths or a car.  A dress shirt at the Hudson's Bay for $130 is not in my opinion good value no matter how nice it may be.  In addition I no longer find traipsing around a huge mall fun.  Yesterday while in Barrie for a medical appointment I did visit Georgian Mall.  The first thing that jumped out at me was that there is still a Sears sign on the exterior of mall surrounded by peeling paint.  It's been over a year since Sears announced they were shutting down their Canadian stores.  I am surprised that this sign hasn't been taken down and the building freshened up a bit to help attract shoppers at a time when there are other options.

  I will confess that I do some shopping online including Amazon which is typically not for cloths especially for shirts, pants, and shoes etc. that you really needs to try on.  While Costco has a good prices on clothing, the lack of dressing rooms makes size selection a bit awkward.

  Overall I believe the real issue at hand is that we are simply "over retailed" relative to demand.  Some retailers have expanded too aggressively through store expansion and acquisition much of it resulting in huge debt loads that they now find they cannot afford.  I also believe that in recent years retailers have benefited from increased consumer spending driven by low interest mortgages, home equity loads, credit cards and other sources of money.  Many real estate markets across Canada slowed in 2018 and this trend is expected to continued for the next year or two.  If home price appreciation slows or worse drop even slightly, this will certainly have an impact on consumer spending so to place all of the blame on online shopping is neither a fair or accurate analysis of what might really be going on with retail.

  As it has been said many times, we are in the "information age" and I am a great believer that acquiring accurate and timely information is knowledge which is why I endeavour to absorb as much knowledge as I can.  It's not about having a negative attitude it's about been informed so I can be a better person and in the case of real estate so I can provide in depth, accurate and relevant information in order to best serve my own needs and those of my valued real estate clients.

  What are your thoughts?

Consumers Want & Are Entitled To More Real Estate Data

  Over the past few years it seems that real estate has become one of the if not the hottest topics out there.  I get stopped on the street and in the grocery store by people (some of whom I do not know) asking me "how's the market or "what's going on with real estate?"  Not only is real estate of interest from an investment standpoint but judging by the myriad of home improvement shows on TV, home decorating, renovating, buying a second property for vacation purposes and or just moving up to something larger place are all playing a role in our fascination with real estate.

  Lately there has been an added emphasis both inside and outside the real estate community about a number of so-called "disruptive" new players entering the Canadian real estate market some of which are coming from the U.S.  Many have new "business models" removing the buying and particularly the selling process away from REALTORS® putting it into the hands of consumers alleging that there are considerable savings to be had in the form of not paying commission to a real estate salesperson and their brokerage.  A recent story with CBC about this trend asked "Is it the early days of a real estate revolution?"  It may not be a revolution but yes things are changing.

  Technology has played a huge role in our daily lives and real estate is no exception.  When I entered the real estate profession back in 2001 it was the almost the pre-Internet era and we still had MLS® catalogues that were printed by weekly.  By the time the catalogue was received many of the properties were already sold.  When the first "online" MLS ® systems started to appear we could load photos of homes online albeit about three.  Photo capacity was increased so as to permit nine, then thirty.  Now the number of photos we can upload is almost unlimited in addition to floor plans, virtual tours etc.

  Amongst the new players entering the Canadian real estate market are Zillow, Redin and an  Purplebricks who are based in Britain.  Whether these so called disruptors "revolutionize" our market remains to be seem but there is no question the real estate ;landscape is changing.  Some of these companies (and others) have raised tens if not hundreds of millions of dollars in investor financing yet they have yet to make any profit.

  Consumers want, need and in my opinion are entitled to more information that will assist them with their real estate buying and selling decisions.  As real estate professionals it is our responsibility to help them every step of the way  with their real estate buying and selling needs and along with the changes that have already taken place along with those yet to come, we need to adjust our roles in order to provide greater consumer value to the real estate buying/selling transaction.   As professional REALTORS® we need to be the providers of relevant and helpful consumer centric information rather than the self imposed "gatekeepers" of said information.

  On the the things consumer want is better access to data particularly for properties that have "SOLD."  Last year the Toronto Real Estate Board (TREB) lost a long standing case with the Competition Bureau claiming that releasing sold information etc. posed a threat to privacy issues.  As a result of the courts ruling, consumers can expect to see sometime in the near future more information available to the public.  Typically our practice is not to release MLS® "sold" information on a property until the sale has closed.  Sales sometime do fall apart and don't close be it for financing or other reasons. As a consumer, you would be both unhappy and disadvantaged if the sale price of your property was freely given out, the sale was not completed and the property have to be put back on the market for sale.  Would you want the world to know what you accepted or are prepared to take for your home?  I suspect not.

  I will report further on this subject in future posts, in the meantime I would love to hear your comments or feel free to Contact me if you have any questions or concerns as it relates to your particular real estate situation rickcrouch@propertycollingwood.com.

Real Estate Mistakes Happen.....That Shouldn't!

  An interesting article is circulating online about the unfortunate situation that a couple in the U.S. found themselves in regarding property they own.  See  "Local family calls out Zillow over real estate mistake."

  The incident in question involved the owners home on Lake Geneva which is located near the Illinois/Wisconsin border north of Chicago.  I lived in Chicago for four years and I am very familiar with Lake Geneva as I boated there.  It has a history as being the summer playground of Chicago's who's who including the Wrigley gum and Schwinn bicycle family's plus it was the location of the first Playboy Resort Hotel in the U.S. which opened in 1968.  

  The property in question was apparently listed for sale on Zillow a large online real estate portal in the U.S. and they are now in Canada and was stated as being in foreclosure when in realty it wasn't. The owners owned outright with no mortgage and it was not even for sale.  Zillow was apparently quick to realize the mistake and withdrew the listing.  The question to ask is how did this happen in the first place?

  Consumers often question the value that we as REALTORS® bring to the real estate transaction.  As I have stated in the past and for those that may be unfamiliar with our profession, in Ontario as in most parts of Canada, we operate under law which in Ontario is the Real Estate and Business Brokers Act.  Both the "Act" and the Canadian Real Estate Association (CREA) have strict Code of Ethics guidelines that those of us licensed top practice real estate must adhere to.  Mistakes like this shouldn't happen and as per Article 4 of the CREA Code "A REALTOR® has an obligation to discover facts pertaining to a property which a prudent REALTOR® would discover in order to avoid error or misrepresentation."

  Whether I am representing a Seller or a Buyer, I routinely verified everything regarding a property from room and lot sizes, to taxes, zoning and other matters.  I know first hand of a recent transaction outside of the local real estate market where the buyer of a $950,000 property sued the seller for $750,000 alleging misrepresentation.  The case dragged on for two years with the seller and the two REALTORS® via their insurance paying out over $130,000 just to make the matter go away.

  That is a lot of money in anyone's books, more importantly you can't put a value on the worry and stress that an ordeal like this has on you plus there is the added cost of legal fees.  Don't let this happen to you.  Whether you are buying or selling hire a REALTOR® that you feel confident with and don't be afraid to ask any questions regarding matters that are of importance to you.  It's all part of what we should know and the services we provide as real estate professionals.

  Zillow is now making inroads in Canada.  The U.S. real estate market is a very different from what we have in Canada.  There is no "national" MLS® system in the U.S. like we have in this country.  Like their banking industry the U.S. market in terms of MLS® coverage is very fragmented.  Only time will tell how successful Zillow becomes here, watch this blog for future posts and updates.