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advicearcher92-blog · 6 years ago

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Fewer sales, more supply and Millennial ‘X’ factor: Housing experts forecast 2019 market

(Credit: iStock and Getty Images)

National experts predict Chicago will have the worst housing market in the country in 2019. But some local experts and industry observers say the situation is much more complicated than that.

Chicago is not the only housing market that will experience pains this year. Nationally, home prices are expected to grow modestly, but sales figures will fall, Danielle Hale, economist with Realtor.com, said at the Chicago Association of Realtors’ 2019 Market Outlook forum this week.

“It’s going to be good but not great,” Hale said. “We had a record year in 2017, a bit of a slowdown in 2018 and we expect to see some further softening in 2019.”

The situation differs, however, the more locally you look. Even if the Chicago market as whole is forecast to have a down year, not every submarket will be affected the same, experts said.

“It’s not as dramatic here as its is on the coasts, but the market is slow,” said Steve Baird, president of Baird & Warner. “But everyone looks at what it was the year before, and it’s off a little bit.”

The Real Deal talked to a number of local and national experts about what they expect to see in the Chicago housing market. Here’s what they had to say:

Home sales

Most experts believe the volume of units sold will be down, but that there is no reason to panic.

After a number of strong years following the market crash, a downturn in the market was not a matter of “if,” Baird said.

“We’re now 10 years into a cycle, he said. “There’s going to be a downturn, the only question is when. So we’re basically predicting that the market will be off by low single-digits in terms of unit sales. The market itself is going to be off, but not by a whole lot.”

Matt Laricy, one of the city’s top producing agents and a partner at Americorp Real Estate, said a return to a more even market could be a gift in disguise for the industry, especially after crash and post-crash years saw the market bounce from horrible to great.

“We’re going to cool off, but it’s not the end of the world,” said Laricy, who is currently preparing a yearly market forecast video for his clients. “We just need to get to a normal market.”

Curt Beardsley, vice president of industry development at Zillow, said he thinks Chicago will have a better year in 2019 than in 2018, when home sales dipped slightly year-over-year.

“We actually think there’s going to be some more growth in next year than there was in the previous year, partially because of the constraints on inventory,” Beardsley said at the Realtors event. “A little bit more of it is going to open up. That will actually drive things better.”

Inventory

Most experts TRD consulted agree inventory will rebound in 2019 following years of historic lows. Hale said inventory is expected to be up 5 percent across the country. Laricy said he expects inventory to rebound much higher than that in some areas of Chicago.

While more available housing stock is a good thing for the industry, not all inventory is created equal.

“Supply is starting to come back, but it’s concentrated still in high-cost areas,” Hale said.

Before the housing crisis, new homes were about 12 percent more expensive than existing homes, Hale said. Now, new construction homes are 33 percent more expensive than the rest of the available supply, she said.

In Chicago, much of the new supply is concentrated in Downtown-area condo projects, many of which are loaded with luxury units.

“There continues to be a lot of headwinds to building multifamily,” Brandon Svec, market economist with CoStar Group, said at the Realtors event. “That’s why we see a lot of the new supply concentrated in the Class-A market.”

New units under construction right now could be of immediate benefit to the market, helping to ease inventory constraints and keep housing prices down. But the construction boom will pose a problem eventually, Svec said.

“Our expectation is we will start to see some of these projects that are currently proposed fall by the wayside,” Svec said. “Llooking forward probably six to eight quarters out in the future, we will see some pullback on new supply.”

The new inventory will be a good thing for buyers, who for years put up with bidding wars and homes flying off the market.

“I don’t think that buyers will feel that 24-hour gun-to-the-head” pressure, Laricy said. “Buyers will be pickier. They’ll have more options.”

The new market realities could cause sellers to be a bit more patient, said Jennifer Ames, one of the city’s top brokers and a partner at Engel & Volkers.

“The rules are changing, and buyers are more particular and more fickle than they’ve ever been,” Ames said. “People are a little less willing to stretch financially, and less willing to set down roots somewhere.”

Hot and cool neighborhoods

Whereas the overall Chicago housing market saw sales drop in 2018 by about 2 percent, luxury sales in the area grew. The ultra-luxury market had a record year in 2018, with more $4-million-plus homes sold that year than in any year prior.

That trend will continue into 2019, and will help buoy the Downtown market, where much new luxury product is concentrated, Laricy said. His office is predicting a 1.5 percent growth in Downtown sales compared to last year, although price growth will slow, he said.

Other neighborhoods that could see strong home sales is Bronzeville and other South Side neighborhoods like South Shore and Woodlawn. Those areas could see boosts from Opportunity Zones and the planned Barack Obama presidential library, Svec said.

“We’re starting to see some meaningful growth on the South Side,” he said.

Millennials: The market’s ‘X’ factor

Some of the Chicago-area’s housing market success will hinge on the activity of Millennials, experts said.

Millennials already make up 45 percent of mortgage borrowers, compared to 37 percent for Gen X and 17 percent for Baby Boomers, Hale said. Their share of the housing market will only increase from here, Hale said.

The National Association of Realtors’ annual home-buyer profile has recorded an average homebuying age of 30 that has stood for decades, Hale said. In 2020, the largest group of Millennials will turn 30, which will be good news for an industry that may need it.

“That’s going to be a huge tailwind for the housing market going forward,” Hale said the Realtors event. “Now, they’re facing historic affordability challenges.”

Where Millennials will choose to buy will be interested. While young people have flocked Downtown, bringing with them corporations seeking skilled workers, Millennials will likely turn back to the suburbs when it comes time to buy, Svec said.

But because so many jobs have moved from the suburbs to Downtown, Millennials will likely look for housing in inner-collar suburbs that have urban amenities like public transportation and walkability, Svec said.

And though Millennials’ preferences when it comes to housing have vexed real estate professionals so far, research shows they still want a broker to help them navigate the homebuying process, Beardsley said.

“The Millennials are more inclined to use professional help than the previous generation … because they are also ones that have done so much research themselves,” Beardsley said. “They have turned the lights on and they know where the pitfalls are, and they want a professional to help them with the pitfalls.”

Source: https://therealdeal.com/chicago/2019/01/18/fewer-sales-more-supply-and-the-millennial-x-factor-housing-experts-predict-the-2019-market/

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vsplusonline · 5 years ago

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What do we do with a problem like corona?

New Post has been published on https://apzweb.com/what-do-we-do-with-a-problem-like-corona/

What do we do with a problem like corona?

“The other day, my jeweller called saying the bangles I was interested in were available,” says a Mumbai-based PR executive who declined to be named. “I just thought, ‘how unnecessary at a time like this,’ and told them I wasn’t interested right now.” Among the businesses most hit by Covid-19 are anything to do with luxury. Whether it is jewellery, art, clothes, shoes or grand homes, major purchases are being put on hold. Consumers are beginning to exercise restraint, preferring to sit on cash.

A recent survey by investment firm Bernstein and Boston Consulting Group estimates that globally, luxury market sales could be dented by as much as $43 billion. India, whose nascent but growing luxury industry was estimated to be $30 billion in 2018 by Assocham, and projected to grow to $200 billion by 2030, is just beginning to feel the effects of the virus. Domestic demand is taking a hit, and so are exports: India acts as a “back-office” to many western fashion brands to whom it provides raw and semi-finished materials and components. But, as the coronavirus reduces demand from overseas, and as the country goes into lock-down mode with malls and retailers shutting shop, industry insiders see a bleak near to mid-term outlook. As a result, sales — already somewhat muted given our economic slowdown — are slowing.

Cecilia Morelli Parikh, co-founder of luxury retail store Le Mill

Retail blues

With most cities banning large gatherings, weddings, that big marker of Indian exuberance and a barometer for luxury spending in India, stand postponed.

“It has had a big impact on the fashion industry and stores,” says Tina Tahiliani Parikh, who owns the multi-brand boutique Ensemble. “Stopping the flow of NRIs to the country has been another severe blow. As social distancing is now the only way to stem the pandemic, most clients are postponing shopping unless it is urgent. Our teams are helping customers home shop and delivering at home [their web portal should be online in the next two weeks], but the industry is under a lot of stress.”

Fashion for social distancers

Try Raquel Allegra jumpsuits and Dries van Noten T-shirts (for a bit of drama to pair with your tracks). Brands like Maus from Sri Lanka, and Baon are great. I also think it is a good time to make yourself happy and just wear some great accessories, like Big Janda Vacintho earrings.

Cecilia Morelli Parikh, co-founder of luxury retail store Le Mill, agrees. “People are not looking to buy show-y pieces, since they have nowhere to go,” she says. “They are buying pieces that uplift them while at home, without breaking the bank, and I see this as a foreseeable trend in the future.” Le Mill is fast tracking a website that will launch in two to three weeks, and is increasing its Instagram content, given the brand’s high user engagement on the platform. In fact, it had an Insta-story on the various steps its home delivery service undertakes in light of the virus – including a stylist wearing a mask and gloves while handling the garment, steaming the garment to ensure hygiene, packing it in a sanitised garment bag, and delivering to the client via a private car.

Delhi-based designer Gaurav Gupta is anticipating a 50% drop in sales this month. “Stores have had almost no walk-ins because people are scared to go out,” he says, adding that while some are still coming to his stand-alone outlets wearing masks, he anticipates plummeting footfalls in the coming months. Gupta, whose clothes retail from between ₹50,000 to ₹5,00,000, says wedding orders for the summer months have also been pushed to later in the year, which will impact cash flow. Meanwhile, he is talking to his fellow design fraternity to see how they are grappling with supporting employees, who are scared to come to work but need their income. “It is a Catch-22; if there are no sales, how does the staff get paid?” he asks. For now, he is likely to consider a 50% rotational staff.

Losing their sheen

Mehernosh Heeramaneck, one of India’s most important jewellers, says budgets among the uber wealthy have definitely reduced. “I’ve never seen it like this, it is really scary,” he says. Some potential sales have been cancelled and, as a major buyer of important stones, he has imposed a moratorium on purchases till things settle.

Art’s good tidings

In the midst of evaporating sales and cancelled events, here’s some good news. On March 16, Sotheby’s Modern & Contemporary South Asian Art auction totalled $4.8 million in New York (the highest total for the category since 2017), with 91.1% of lots sold. The sale saw robust online bidding, with 33% of all sold works acquired online.

Also in disarray are local companies that work closely with western luxury brands. Gayatri Khanna Sabharwal, founder of Mumbai-based Milaaya Embroideries, says that all her production orders for Dolce & Gabbana, Etro and other high-end brands are on hold. “Some smaller companies have even cancelled their pre-Fall orders last week,” she says. “With Italy in quarantine, and numbers there still on the rise, they don’t see an end in sight. This is throwing the entire luxury supply chain into disruption, panic and worry about the near term, since so many people are dependent on these jobs.”

Real estate is faring no better. “There were at least 89,200 luxury units lying unsold across the top seven cities by 2019-end against 81,290 units a year ago,” says Anuj Puri, chairman of Anarock property consultants. He believes no price segment will be immune to the fallout of this pandemic. “In fact, buyers of high-end homes usually prefer multiple site visits, so the need for social distancing will be a dampener,” he notes, adding that “many developers are postponing their new launches and will wait to see how the situation unfolds over the next month or two”.

NS Harsha’s Recent Life exhibition at Chemould Prescott Road

Double down on digital

The art market is also impacted. Numerous art fairs in the region have been cancelled, in which blue chip Indian galleries participate and generate significant sales. Although Roshni Vadehra of Delhi’s Vadehra Art Gallery says that Covid-19 is not affecting them thus far, she predicts a slowdown, given market volatility. With Delhi banning gatherings of more than 50 people, the gallery is not doing any major exhibitions or events.

Shireen Gandhy, of Mumbai-based gallery Chemould Prescott Road, says it is hard to say how seriously this will affect business, “but looking at the global situation [of how seriously the art market has been impacted], it definitely will”. She adds that after a bustling start to the year — with two successful exhibitions of NS Harsha and Anju Dodiya — the city feels like a ghost town. How incredible to imagine that just a few week ago, things were so different.

Even as the world as we know it halts, luxury companies will have to re-think their futures, perhaps turning to AI and digital more aggressively. As Gupta says, “This is a humanitarian crisis and our reaction to this emergency will shape the consequences.”

Straight speak

This is unprecedented and we don’t know what the humanitarian, financial and, most important, the psychological cost of all of this is. For a long time I have been [saying] that… the value system needs to change, with a commitment to buy well and enjoy it fully, and not be flippant and define yourselves by what you put on your body or wear something only once because you’ve been on Instagram. As for us, we are wondering if we should shut the factory. I don’t want to lay people off because no one is going to get a job. Or should we take a pay cut and work three-four days a week? Assuming we don’t have to shut down because of a government directive! It is all too soon to say and this story has to be updated every week

Tarun Tahiliani, designer (to Team Weekend)

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#Fashion

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davidoespailla · 6 years ago

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The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

iStock; realtor.com

By now, the shock that Amazon is splitting its new headquarters into two—yes, two!—separate locations has subsided. Congrats, New York and DC! But as the fairy dust settles, it’s time for a reality check: Just a couple of months after the tech giant’s long-awaited announcement, there are some early signs of the real impact this will have on housing in the two urban markets that won the prize.

So far, it’s not quite playing out the way some pundits had predicted.

Without question, real estate agents in the HQ2 neighborhoods—Long Island City, across the river from Manhattan, and Crystal City, VA, a hop, skip, and a jump away from the Pentagon —are suddenly very busy. Investors are circling, and prices are swelling in anticipation of up to 25,000 jobs with average salaries of $150,000 moving into each location. But those hoping to see home and rent prices double overnight—or even this year—will certainly be disappointed.

Amazon’s meteoric rise has boosted real estate prices in its hometown of Seattle far beyond what anyone would have expected a decade ago. The billion-dollar question: Will the same thing happen in these East Coast cities?

“We’ll see a price impact,” particularly in the immediate vicinity of where the company sets up shop, says Chief Economist Danielle Hale of realtor.com®. “[But] New York and DC are already larger markets. … They will be able to adapt without the same run-up in prices that we saw in Seattle.”

Looking at Seattle’s past to predict the future

So how will it play out?

Since Amazon’s announcement, prices have jumped 10% to 15% in both Long Island City and Crystal City, say local real estate agents. Sales in Long Island City, where hundreds of brand-new, luxury condos recently came onto the market, have spiked.

But in Crystal City (which Amazon is quixotically trying to rebrand as “National Landing”), a neighborhood of offices and hotels where inventory is extremely limited, sellers have been pulling their listings off the market. They’re hoping these properties will fetch more when the Amazon workers roll in.

Those hopes are fueled by Seattle’s example: Since Amazon began its rapid expansion there in 2010, home sale prices shot up nearly 91%, to hit a median of $725,000 in 2018, according to data from the Northwest Multiple Listing Service. In the Lake Union area, where the company is based, prices zoomed up almost 135%.

But that was over an eight-year span, starting when the housing market was near rock bottom. Prices had nowhere to go but up, especially as the economy improved and more buyers flooded the market.

“Housing prices are starting from a much higher point than we were in Seattle,” says Jeff Shulman, a marketing professor at the University of Washington, who has looked at Amazon’s impact on his city. “You can’t expect it’s going to play out the same way.”

Despite the economic recovery, homes have gotten so prohibitively expensive in many large cities that when mortgage rates went up recently, the housing market began slowing down. There are simply limits to what folks can afford, even techies making good money at companies such as Amazon.

Market Median List Price Median List Price in HQ Neighborhood* Average One-Bedroom Rent in HQ Neighborhood** Seattle, WA $664,950 $499,250 $2,180 New York, NY $1,087,753 $992,500 $3,056 Washington, DC $599,000 $599,000 $1,956 *Neighborhoods: Seattle: South Lake Union New York: Long Island City Washington, DC: Crystal City ** rental prices from apartments.com

Salaries don’t stretch as far in NYC and DC

Let’s also face facts: A $150,000 salary simply isn’t the same in Seattle as it is in New York City and DC, which are already astronomically expensive markets. And we’re not just talking about the sticker price of homes.

There’s no state income tax in Washington state—a perk that can boost residents’ bank accounts. So while the overall tax burden (income, sales, property, and auto taxes) for those earning $150,000 was $20,153 in New York City and $12,975 in DC—it was just $8,579 in Seattle, according to the most recent Government of the District of Columbia report. There’s also a generally lower cost of living—enough of a difference to beef up a down payment, or get a larger mortgage.

“Your dollar just goes further in Seattle,” says Annie Radecki, a vice president at John Burns Real Estate Consulting.

The skinny on Long Island City

Once upon a time, Long Island City was a seedy, industrial swath of Queens filled with warehouses and crime. But developers capitalized on its proximity to Manhattan, just one subway stop away. Over the past decade or so, they’ve erected a slew of gleaming, luxury towers along the East River, building the neighborhood from the ground up. And renters and buyers have dropped big bucks to live in them.

But the neighborhood is still cheaper than nearby Manhattan, which is key to its appeal—and may put a ceiling on just how high prices can go. Even with the higher demand for housing imposed by the torrent of new Amazon workers, prices will likely remain 10% to 15% below Manhattan prices, predicts real estate broker Eric Benaim, of the brokerage Modern Spaces. (The median Manhattan list price is $1,495,000, compared with Long Island City’s $992,500.)

“Do I see it gradually growing and increasing? Yes,” says Benaim, who’s been boosting Long Island City for a decade and has most of the listings there. “[But] I don’t see it jumping up 100%.”

But if Amazon’s presence makes Long Island City the place to be, who knows how high prices could soar?

Before the tech company’s announcement, there was a glut of luxury rentals—and to a lessor extent, condos—on the market here. Landlords and developers were slashing prices and offering concessions. But since the neighborhood was selected, interest in condos has skyrocketed with investors and buyers, and sales have spiked. About 350 to 400 condos have been sold since the November Amazon announcement—compared with the typical 15 to 20 sales during this time period, Benaim says. And prices are up 10% to 15%.

“We essentially went from a buyer’s market to a seller’s overnight,” Benaim says.

The rental market isn’t likely to spike quite as dramatically until the hordes of Amazon workers move in. But with an average monthly price of $3,056 for a one-bedroom apartment, it’s not clear how much higher even Amazon workers could afford for rents to go.

For now, there are plenty of homes to go around. There are several hundred condos still for sale and about 1,000 vacant rentals in the neighborhood. Over the next three years, an additional 2,600 condo units and 6,000 rental units are slated to come online. That amount of inventory is expected to keep prices from getting out of control.

Other nearby Queens neighborhoods, like more affordable Astoria and Woodside, and close Brooklyn communities such as Greenpoint and Williamsburg are also poised to benefit from the spillover of tech workers needing places to live. Some Amazon workers are likely to also live in Manhattan, particularly the Upper East Side, given how quick of a commute it is.

Crystal City: A new name in search of an identity

The future of Crystal City, a vast expanse of concrete-and-glass office parks in Arlington, VA, is likely to be a bit different. It’s starting off at a lower price point than Long Island City, at a median $543,000, and there is a dearth of available inventory.

Sellers are holding off putting their properties on the market in hopes of fetching higher prices when Amazon workers move in, say local real estate agents. Only eight homes in the neighborhood’s 22202 ZIP code were for sale as of Wednesday afternoon, according to realtor.com data.

Meanwhile, foreign and out-of-state investors have descended, bidding up prices as they compete against one another with all-cash offers. Local real estate agent Jordan Stuart recently sold a one-bed, one-bath condo as an investment property to an out-of-town NBA player who wants to get in on the Amazon action.

Before the announcement, the $420,000 condo had sat on the market with just four showings in the two months since it had been listed. But after the news, he had 60 showings on it and five offers on the property despite raising the sale price to $450,000.

“They’re setting new [price] thresholds,” says Stuart, of Keller Williams Capital Properties. As the neighborhood becomes more desirable, he anticipates prices will go up 20% to 25% over the next few years before hitting a plateau.

Many new residents will be forced to look outside of Crystal City for housing, at least initially. They’re apt to head into greater Arlington, where there are plenty of high-rise apartment buildings and single-family homes.

And many folks, particularly younger workers, will head to buzzy DC areas like the Wharf, the city’s new southwest waterfront district. The $2 billion development includes restaurant, retail, and office space; a 6,000-person concert hall; and hundreds of luxury apartments starting at around $2,000 a month.

But most of the Amazonians’ salaries aren’t likely to be high enough to purchase million- or multimillion-dollar homes.

“I don’t think [prices] will double. It’s not that type of market,” says Stuart. “But what will shake out is still a wild card.”

The post The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing appeared first on Real Estate News & Insights | realtor.com®.

The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

#TRUSTED LOCAL REALTOR #The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

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restate30201 · 6 years ago

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The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

iStock; realtor.com

So far, it’s not quite playing out the way some pundits had predicted.

Looking at Seattle’s past to predict the future

So how will it play out?

But that was over an eight-year span, starting when the housing market was near rock bottom. Prices had nowhere to go but up, especially as the economy improved and more buyers flooded the market.

Salaries don’t stretch as far in NYC and DC

“Your dollar just goes further in Seattle,” says Annie Radecki, a vice president at John Burns Real Estate Consulting.

The skinny on Long Island City

But if Amazon’s presence makes Long Island City the place to be, who knows how high prices could soar?

“We essentially went from a buyer’s market to a seller’s overnight,” Benaim says.

Crystal City: A new name in search of an identity

But most of the Amazonians’ salaries aren’t likely to be high enough to purchase million- or multimillion-dollar homes.

“I don’t think [prices] will double. It’s not that type of market,” says Stuart. “But what will shake out is still a wild card.”

The post The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing appeared first on Real Estate News & Insights | realtor.com®.

from DIYS http://bit.ly/2D05ggr

#DIYS

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realestateagent532 · 6 years ago

Text

The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

iStock; realtor.com

So far, it’s not quite playing out the way some pundits had predicted.

Looking at Seattle’s past to predict the future

So how will it play out?

But that was over an eight-year span, starting when the housing market was near rock bottom. Prices had nowhere to go but up, especially as the economy improved and more buyers flooded the market.

Salaries don’t stretch as far in NYC and DC

“Your dollar just goes further in Seattle,” says Annie Radecki, a vice president at John Burns Real Estate Consulting.

The skinny on Long Island City

But if Amazon’s presence makes Long Island City the place to be, who knows how high prices could soar?

“We essentially went from a buyer’s market to a seller’s overnight,” Benaim says.

Crystal City: A new name in search of an identity

But most of the Amazonians’ salaries aren’t likely to be high enough to purchase million- or multimillion-dollar homes.

“I don’t think [prices] will double. It’s not that type of market,” says Stuart. “But what will shake out is still a wild card.”

The post The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing appeared first on Real Estate News & Insights | realtor.com®.

from DIYS http://bit.ly/2D05ggr

#DIYS

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gillespialfredoe01806ld · 6 years ago

Text

The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing

iStock; realtor.com

So far, it’s not quite playing out the way some pundits had predicted.

Looking at Seattle’s past to predict the future

So how will it play out?

But that was over an eight-year span, starting when the housing market was near rock bottom. Prices had nowhere to go but up, especially as the economy improved and more buyers flooded the market.

Salaries don’t stretch as far in NYC and DC

“Your dollar just goes further in Seattle,” says Annie Radecki, a vice president at John Burns Real Estate Consulting.

The skinny on Long Island City

But if Amazon’s presence makes Long Island City the place to be, who knows how high prices could soar?

“We essentially went from a buyer’s market to a seller’s overnight,” Benaim says.

Crystal City: A new name in search of an identity

But most of the Amazonians’ salaries aren’t likely to be high enough to purchase million- or multimillion-dollar homes.

“I don’t think [prices] will double. It’s not that type of market,” says Stuart. “But what will shake out is still a wild card.”

The post The Amazon Effect May Not Wind Up Being Prime for NYC and DC Housing appeared first on Real Estate News & Insights | realtor.com®.

from DIYS http://bit.ly/2D05ggr

#DIYS

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rebeccahpedersen · 6 years ago

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Predictions For The Fall Market!

TorontoRealtyBlog

Without a doubt, the blogs that take me the longest to write are always the “year-end” or those that start a particular market.

The year-end ones are really tough.

I believe I’ve honed these posts over time, and finally found a theme I can replicate every year. My “Top 5 Stories” and “Top 5 Posts” enable me to cover all the ground that’s needed, since I can look at both the blogs that got attention and/or caused a stir, whether the subject matter was notorious or not, and I can look at the stories themselves which helped to shape the preceding twelve months in the world of Toronto real estate.

But narrowing it down to only five posts, for each category, is tough.

I typically spend 3-4 hours looking through posts, re-reading, trolling comments, and then categorizing anything that I think could be in either list.

“Anything” often represents about 60% of blog posts. And from there, I have to make decisions, cutting posts with the same balance of tough-love and business-savvy that a general manager demonstrates when he tells a sixth-string wide receiver that he’s not on the 53-man roster, and a job at Foot Locker is waiting.

When it comes to my Predictions post, I usually write down my ideas, based on my overall thoughts on the market, stories I think will have legs, and anything statistical in nature that I want to explore. Then I go back to the previous two years’ predictions post, and try to avoid repetition.

But what if I told you that essentially none of my ideas are new?

1) Average Home Price Will Rise

I can’t make it any simpler than that, although, this needs a LOT more explanation…

There is so much to talk about when it comes to average home price, and there are so many ways in which one can manipulate the numbers to show the market in a better or worse light.

For me, I just want to know what’s going on in the market.

And it starts, at the most basic level, with the average home price in the month of September.

I will provide the first lay-up prediction and tell you that the average home price in Toronto will increase 4-5% from August to September alone.

A lay-up. It truly is.

While that sounds insane, and while a 5% per month jump would represent a 60% annualized return and we know that’s probably not going to happen, we need to wrap our heads around the hot and cold periods of the real estate calendar.

August is slow. No question about it, no arguing, and despite the odd “bidding war in August” story you saw in a newspaper, it’s a very slow month. Buyers are waiting for the “busy fall market, and the sellers are waiting for the buyers. In fact, sellers are taking their houses off the market in August, to put some time in between listings.

And it’s because August is so slow that I feel the average home price, in that month, is actually depressed.

My 4-5% prediction was based on my gut, but having gone back and looked at how the average home price has performed from August to September over the past nine years, it adds evidence to my supposition:

That’s an average of 4.9%, with a low of 3% and a high of 6.4%.

Knock out top and bottom, and we’re looking at a 7-year band of 4.0% to 6.4%.

That’s very consistent!

Now the one problem remains: we don’t know what the 2018 August average home price is!

I’m writing this blog on Monday night, and the stats aren’t out yet. I guess TREB has their hands full, I can’t imagine, with what…

In any event, I would imagine that the August, 2018 average home price is slightly below the July price, which was $782,129. So assuming that the price is around $775,000, that means we’re looking at an average price of between $806,000 and $813,750.

Now, some of you might suggest that comparing the September price to August; the comparison of a mighty month to a poor one, is misleading, or at the very least, unfair.

I might be inclined to agree, in part, with one but not two of the above. At the very least, I would prefer another data set.

So how about this: since June is typically the “peak,” or at a minimum, the “end” of the spring market, let’s run the above numbers again comparing June to September.

Here’s how things look:

In five of nine years, the average home price decreased from June to September.

The average decrease is 0.7%.

So using that number, and applying it to the $807,971 average home price in June of 2018, we’d come up with an expected average for September of $802,315, which is just on the outside, looking in, of the $806,000 – $813,750 range we predicted above.

Either way, not a bad second opinion on the prediction.

So that’s what I expect in the month of September, and I might even go as far as to predict that the average home price will come in at the higher end of that range, or above. That is based on nothing more than gut feeling, but I sense so much built-up demand, and my phone started to ring today – the first day back in the Fall Market. I think it’s going to be a busy one.

–

2) Sales-to-New-Listings Ratio Will Rise

Another theme so far in the 2018 market has been “slim pickings.”

To be less aloof and more economical, the market has suffered from low inventory.

Now as is often the case, we can pull numbers to show the inventory has been sufficient, whether it’s comparing to last year (when inventory was tragically low, resulting in a 20% gain in four months), or whether we’re looking GTA-wide.

But if you’ll indulge me, let me suggest that 2018 thus far has not seen the flood of new listings that we saw in the fall of 2017, after the slow summer.

September of 2017 saw a decade-low ratio of sales-to-new-listings, and having said that, the average home price still increased 5.9% from August to September.

The ratio of sales-to-new-listings is not one that is used all that often, but I view it as a measure of how tight the market is. When the ratio is high, obviously prices are rising, properties are selling quickly and in multiple offers (in the core), and the market feels far more erratic.

Here’s how the ratio looks over the past ten years:

The fall of 2016 was a crazy market; not quite like the spring of 2017, but it was, on its own, nuts.

That 65.5% figure makes sense, although I have to say that I’m really, truly surprised by the decade-low being the fall of 2017. Ask any of my clients who bought, or sold, in multiple offers, and they’ll tell you that the market didn’t seem to have an abundance of listings, and/or did it feel like sales weren’t plentiful.

The 6,379 sales that we saw last September wasn’t a decade-low, but it was third-lowest, and barely higher than the second-lowest in 2010. While I don’t think we’ll return to the 9,902 sales we saw in 2016, I think we’ll be over 8,000.

–

3) I Have No Clue What Will Happen With Inventory!

Okay, that’s not a prediction.

I could have said, “inventory will go up, or down,” but that’s even worse.

And I’m being a bit tongue-in-cheek because the chart I’m about to show you can be used to argue either side of the coin.

I’ve compared the new listings in 2016 to that of 2017, and then 2017 to what we’ve got in 2018 so far, and the results are interesting.

It would seem that so far, we’ve got the exact opposite of what happened last year:

Note that in January and February of 2017, new listings were down substantially.

This is what caused the rapid acceleration in prices, and that lasted through March, and well into April. It wasn’t until mid-April that things felt a bit “off,” and while it wasn’t felt in the central core until May, the trend had been set.

Note that in 2018, the exact opposite has happened.

Now clearly this is, in part, because the 2017 numbers were so low in January/February, and then so high thereafter.

So if we were to follow the trend so far in 2018, we’d be led to believe that the fall inventory will be higher than last year.

But if we assume that more people listed in the fall of 2017 because the preceding drop in prices put fear into them, then those numbers are inflated, and thus inventory will be lower.

Personally, I’m expecting inventory to be on par with last year. That’s not a “neither here, nor there” argument, but simply I think we’ll see less for sale in the central core, more for sale outside the core, and it’ll even out.

I think we’ll see a lot for sale in the higher price point – over $2,000,000, and a lot less of what “most” buyers want: entry-level condos, and smaller semi-detached houses.

–

4) The Bank of Canada Will Not Raise Interest Rates

Oh how expected!

A real estate agent predicting that one of the scariest ideas out there among on-the-fence buyers is a falsehood?

Well, call it a hunch.

And this article was also well-timed:

Bank Of Canada Expected To Keep Rates On Hold; But Reasons For A Hike ‘Solid’

The article is a bit of an excuse-maker, essentially saying that rates weren’t raised, however, they would have, could have, should have been, if not for A, B, C, and 1, 2, 3.

But note that the article contains two predictions of its own!

1) The chance of a rate hike on Wednesday is less than 10%. 2) The chance of a rate hike next month is 80%.

I don’t know where they’re getting those numbers. Perhaps they’re just pulling them out of nowhere, kind of like I do, sometimes…

So in the spirit of betting against popular belief, I’ll go on record suggesting I don’t see a rate hike this fall. Call it the Trump effect, call it the fear of a trade war, or call it a gut feeling I have that the Bank of Canada loves this idea that they “could” raise rates, but won’t; either which way, I don’t think it’s happening.

Just as a refresher, here’s where the overnight rate has been during the last 18 months:

5) “Housing” Will Be A Major Theme In Politics

We have a municipal election coming up on October 22nd, and whether we vote for 25 city councilors, or 47 (topic anybody wants to explore??), most of the interest from the general public will be directed at the mayoral election.

I don’t like either candidate, to be honest.

I know we’re not supposed to talk politics in an open forum, but what the heck. John Tory, who ran on the idea of being a “business man to run the city, like a business,” has proved to be a wet noodle that caves to every single politician, constituent, or dog with a cough, at every single opportunity. Jennifer Keesmat is a left-winger, and I tend to take my shots at the net from the right faceoff-circle.

At least Jennifer Keesmat put forth a transit plan that makes sense for the city long-term. $50 Billion is a start. Frankly, I’m waiting for the 50-year, $100 Billion plan that nobody will lay out, since politicians are only in office for four years, and voters don’t care about fifty years.

So alas, we’ll all just stand idly by and watch Toronto continue to cannibalize itself.

That wasn’t my point, but you know me and tangents…

Aside from transit, I have to think that housing is the biggest issue in the city of Toronto. And while the lack of transit trumps the lack of housing, since, as I’ve argued many times before, transit would allow people to live further out of the city, and thus the “problem” wouldn’t be as big, I do have to think that the price of housing is an issue on which more voters will be focused.

As we saw in the Provincial election, it was a race to see “who could promise more stuff.”

I argued that the NDP and Liberal parties were racing to see who could promise more free stuff, but as a blog reader pointed out, the PC’s were running on who could make more cuts, and thus it’s a round-about to the same argument.

As politics goes, we will likely see the same theme play out this year.

I believe that both Jennifer Keesmat and John Tory will spend large portions of their campaigns talking about housing, and while Keesmat will likely make bigger promises, with tangible details, and even put a price on it (whether those plans come to fruition or not, as is often the case), John Tory will, at the very least, make his own watered-down, non-committal, vague promises to “do something” about the cost of housing.

Whether it’s TCHC having a larger role, or building more social/affordable/subsidized housing, or whether it’s talk of helping the “middle-class,” which is always sexy in an election, I have to think that we’ll hear talk of housing over, and over, and over.

What we won’t hear is either candidate talk about “wants versus needs,” and maybe tell little Jimmy that he doesn’t “need” to rent for $2,450 per month at Bay & Bloor, but rather he simply wants to, and should stop complaining about the cost of housing.

Will real estate related taxes come up? More land transfer tax? Higher property tax? Probably not. If anything, raising the land transfer tax on the highest price bracket would be a likely outcome.

No matter what they do, they’ll never be able to trump the single-greatest tax of all time:

The $75 fee the city instituted to pay land transfer tax. Yes, there’s a FEE to pay a tax.

I also think housing will be a major part of the 2019 Federal election as well.

But don’t get me started on that election…

–

So that’s it, folks.

My five predictions, and I saved one more for another day.

The other prediction, or idea, is simply that the notion of “a home as a fundamental right in society today” will gain major, major momentum this fall, and into 2019. In fact, I think it’ll go hand-in-hand with prediction #5, and we’ll see a lot talk about it (mainly from Mr. Trudeau) leading up to the next election.

I’ll come back to this topic next week, as I read more than a few articles about this while I was on vacation, and made a note to bring this up for discussion.

So to the sellers out there: good luck.

And to the buyers out there: well, also, good luck.

The fall market flies by before you know it, so if you’re a buyer, may I suggest that you be diligent. And if you’re a seller, and you ‘need’ to sell, the list, re-list, re-list again strategy never works.

Happy pavement-pounding, everybody!

The post Predictions For The Fall Market! appeared first on Toronto Realty Blog.

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rollinbrigittenv8 · 7 years ago

Text

Proposing Solutions to Overtourism in Popular Destinations: A Skift Framework

A cruise ship in Venice. Cities across Europe are struggling to cope with increased tourism. bass_nroll / Flickr

Skift Take: As destinations scramble to reduce the impact of tourism on their citizens, foundational work must still be done to create a repeatable framework and process for preventing overtourism.

— Andrew Sheivachman

The world is in an unprecedented period of tourism growth, and not everyone is happy about it. Arrivals by international tourists have nearly doubled since 2000, with 674 million crossing borders for leisure back then and 1.2 billion doing the same in 2016.

As the travel industry has ramped up its operations around the world, destinations have not been well-equipped to deal with the economic, social, and cultural ramifications. Cities have often made economic growth spurred by traveler spending a priority at the expense of quality of life for locals.

Europe has been perhaps hardest hit by the stress of increased travel and tourism. Barcelona, Venice, and Reykjavik are just some of the cities that have recently been transformed by visitors.

For the last few months, news reports have reflected the truth about the global travel industry: Not enough has been done to limit the negative impact of tourism as it has reached record levels in destinations around the world. Anti-traveler sentiment is seemingly on the rise.

“I would consider [these cities] to be canaries in the coal mine,” said Megan Epler Wood, director of the International Sustainable Tourism Initiative at the Center for Health and the Global Environment at the Harvard School of Public Health. “The folks that have been protesting are from highly visited destinations and they don’t feel their lives should be interrupted by tourism.”

She continued: “They’re in a position of making a statement… something I’ve been discouraged about is the idea that people who are protesting are making a mistake. It’s important they make a statement because we need to hear from them and come to a new level of understanding of what this means. We need to very seriously find what their concerns are and figure out how to plan with those destinations and think about acting proactively.”

Why have some destinations thrown up their hands in helplessness in dealing with the deluge of tourists? And what have other destinations done to successfully limit the effects of increased visitation?

Skift has identified five solutions to overtourism, drawing from what destinations have done successfully to limit the influx of tourists, and we spoke to global tourism experts about their perspectives. We also looked at the ways in which travel companies themselves have been complicit and what more they can do to grow global tourism in a more sustainable way. We don’t argue that these are one-size-fits-all solutions for every trampled-upon destination, but they may serve as a solid foundation for beginning to tackle the problem.

Furthermore, we look to the future for ways in which the travel industry, in conjunction with local stakeholders, can better measure and limit the adverse effects of tourism.

If the travel industry can help connect the world and build bridges between cultures, why has it struggled to find a sustainable path forward?

1. Limiting Transportation Options

Travel has become more affordable over the last decade, particularly in Europe and developing economies in Asia with the rise of the middle class. Low-cost carriers have proliferated, while megaships from cruise giants have extended their reach around the world.

Various indicators show that more flights are taking place across Europe than ever before, particularly during the busy summer vacation season.

“[Increased travel has] been controversial in a way that is directly due to the fact that businesses arrive in a city and disrupt normal life and commercial activity,” said Tom Jenkins, CEO of the European Tour Operators Association. “In fact, cities are designed for tourism to disrupt normal activity, because tourists are not normal by definition in how they behave. They’re always disruptive and it’s always been controversial. Even if your city becomes rejuvenated, when you get foreigners arriving somewhere exerting financial influence over supply, you get a phobia.”

Why have some cities with pervasive tourism, like Paris, not had the same recent backlash as Barcelona or Berlin?

Jenkins notes that backlash against tourism is a consistent theme throughout European history; people said the same thing about the advent of railways and steamships warping the character of their cities that they do today about cruises and cheap flights.

Let’s take a look at Barcelona’s struggles with increased visitation in recent years. Data from IATA, MedCruise, and Visit Barcelona expose the massive influx of visitors to the city.

The increase in cruisers is particularly striking. Since Barcelona really hit the world stage thanks to the 1992 Summer Olympics, its cruise traffic has gone from about 100,000 cruisers in port to about 2.7 million in 2016. In the greater Mediterranean, the average number of passengers per call has increased from 848 in 2000 to 2,038 in 2016.

Top European Cruise Ports (in passengers) 2000 Passengers 2016 Passengers 1 Cyprus Ports .08 million Barcelona 2.7 million 2 Balearic Islands 0.6 million Civitavecchia 2.3 million 3 Barcelona 0.6 million Balearic Islands 2 million 4 Piraeus 0.5 million Venice 1.6 million 5 Istanbul 0.4 million Marseille 1.6 million 6 Genoa 0.4 million Naples 1.3 million 7 Naples 0.4 million Piraeus 1.1 million 8 Civitavecchia 0.4 million Genoa 1 million 9 Venice 0.33 million Savona 0.9 million 10 French Riviera 0.3 million Tenerife Ports 0.9 million Source: MedCruise

The impact of low-cost carriers, along with the relative strength of the euro in recent years, has also played an important role. While there has been a major focus on the influx of U.S. and Chinese tourists to Europe, evidence suggests that the most frequent visitors are actually from European countries. Indeed, according to surveys from Visit Barcelona, European tourists comprise around two-thirds of those visiting the city.

It follows that if cities and tourism boards would work to make it more difficult to access their destinations, by limiting cruise ship tenders or the access of low-cost carriers to airport terminals, that fewer visitors would be able to come.

There’s also a bit of a contradiction here: Often residents of areas that have been built up and developed by tourism blame the travel industry, and not their politicians and city planners, for the changes.

Boorish tourists become a target for protests and outcries, instead of the local and regional forces that have more or less enabled their ability to visit a destination en masse.

“The moment you start meddling with things, you affect the economic pattern of the town, and all kinds of problems arise,” said Jenkins. “There is a quite startling depiction of giant cruise ships in Venice, but someone gave permission for that at some point. Someone is taking their money. Someone with power and discretion said, ‘You come and park here.’ Similarly in Amsterdam, the inhabitants are very resentful, but the visitors didn’t organize their red light district and permit cannabis shops to open. The residents did. It’s just bonkers and it’s a planning problem, not a tourism problem. It has a planning solution.”

Amsterdam has recently restricted new tourist shops in its city center, a solid first step. The city is still struggling to cope with the effect of rampant homesharing.

Urban dwellers across Europe have announced their anti-tourism sentiment in various ways. Stakeholders should be looking forward and planning to craft a more equitable environment for both tourists and locals, even if it means reducing tourism and those who have built successful businesses serving them.

An easy way to do that — well, nothing seems especially easy when it comes to this issue — is to simply make it harder to visit instead of creating restrictions when travelers are already in destination.

2. Make It More Expensive

Travel has become more of a commodity purchase for consumers than an occasional luxury in recent years, spurred by low-cost carriers and affordable homesharing services.

“[Managing tourism] is a good thing to be talking about because our industry is good at selling the virtues of tourism, but we’re not very good at being honest with ourselves about what we do well and what we don’t,” said Darrell Wade, co-founder of Australia-based Intrepid Travel. “In some ways, the industry hasn’t progressed at all. There are nice towns [all over the world to visit], and you look at places like Croatia where there are several hundred islands, towns, and villages. There’s lots of great stuff to do, so let’s get out of the tourist area in Dubrovnik.”

Countries that suffer currency devaluation are also extremely susceptible to a tourism rush, as in the case of Iceland. We’re seeing this now in London following the Brexit vote, as well.

In recent years, Iceland has moved to offer more luxury accommodations and experiences in a bid to attract higher-yielding travelers as the country’s currency has rebounded from a crash in 2008.

Even if mass market tourism slows down due to increased costs, dropping Iceland’s annual tourism growth rate from around 30 percent to 10 percent, the cool-down would be beneficial for locals struggling to deal with rising cost of goods and a hot property market in Reykjavik.

When Skift went to Iceland last year, the country’s top travel and tourism executives told us the most attractive way to slow down growth is to create more luxury offerings for higher-spending travelers. As gentrification hits major cities worldwide, this can sometimes happen as a result of investment and real estate speculation.

Adventure and luxury tour operators and cruise lines are better positioned to provide experiences outside of the traditional tourist areas in a destination.

“Most of our departures are to the remote destinations, but we have quite a bit of presence in some of that heavily trafficked area [in Europe],” said Trey Byus, chief expedition officer at Lindblad Expeditions. “We take a different approach to that. The east end of the Greek islands is one of the most overrun places in terms of tourism, so we don’t go there during the busiest of seasons, we’ll go on the shoulder seasons. You take a look at the islands and there’s the obvious places where the mass tourists go where we avoid, places where the Greeks would go to holiday….We’ve been in the Adriatic for many years and at one point many years ago we considered a turnaround in Venice, but even then we said we’re not going to go there. That’s going to provide an awful first and last experience for us, so we took that off the map.”

There’s also the question of demand management, which few destinations have embraced in a significant way. Similar to the way attractions like Walt Disney World charge more for tickets during peak periods, destinations can increase the ticket price to access areas when demand is the highest.

Barcelona is considering a tax on tour operators to make it more expensive for tourists to visit, for instance, and the city already taxes hotels, apartment shares, and cruise ships. Perhaps a more concerted legislative effort to make visiting more expensive can replace mass tourism with higher-spending and more respectful visitation.

This would, in theory, at least, not only generate more revenue for cities to deal with the myriad complications of overtourism, but condition tourists to visit during periods of decreased demand when their impact on locals would be more limited. Over time, perhaps, tourists can be trained to be more thoughtful about their travel decisions. At the very least, life for locals would improve.

“What you see looking forward is obviously demand seems to be growing exponentially and you see more and more pressure,” said Jenkins. “Can they tweak capacity in a way that things can be spread out, and that the demand can be managed and controlled through price? I’m absolutely convinced. We’re seeing a huge increase in capacity in some places, can they carry on doing so? They probably can, given there is demand for them and money to facilitate that demand.

“There’s also the scope for demand management. People think if the price goes through the roof, they won’t have to manage the attraction. People will have to get used to paying more to visit peak attractions at peak times. The way we price things [in the travel industry], there’s no incentive to alter your arrival at all. It’s all the same price.”

Many remote destinations do a form of this with permits, only allowing groups of visitors in a few times a day. The Galapagos Islands, Machu Picchu, and others have embraced this form of demand management for decades. Urban destinations could take a page out of their playbooks by limiting access to high-demand areas and increasing the price of access at the same time.

3. Better Marketing and Education

There seems to be one issue that few destinations have figured out: How do you keep tourists from wrecking the environment or crowding cities?

Better education, and more realistic marketing, can help. Gone are the days where famous historic monuments like the Spanish Steps or Kensington Gardens will be accessible without a horde of tourists, and travel companies selling affordable tours need to do a better job of letting tourists know what they’re really buying.

London, for instance, has laid out a plan into the next decade to manage tourism growth, and it includes marketing its outer areas to tourists instead of downtown or Westminster. New York City unveiled a similar plan last year, looking to capitalize on increased tourist interest in Brooklyn.

If tourism companies sell travelers vacations based on certain promises, like deserted beaches and town squares, it can be a problem if their experiences don’t match expectations.

“I see it as everyone’s problem; some organizations are the source, like national tourist authorities, airlines, and cruise lines,” said Intrepid Travel’s Wade. “Part two is the traveler, because they’re a little on the lazy side and they don’t realize the image they saw online of a destination has 100,000 people in it in real life. This isn’t great for our industry either, because it’s a terrible product. I walked around Dubrovnik [recently], and I’m not enjoying it. We want to empower people and change how they think about the world. We don’t want to be sending them to hellholes, it’s not in our long-term interest.”

From an education standpoint, travel stakeholders have to present their products more realistically. They also have to educate their customers on what they’re really getting into on a trip, and the acceptable ways to behave while in-destination.

If travel is really about experiencing a distinct culture, then travelers should be prepared to respect localities and traditions; travel can’t just be a commodity. Some travelers, though, just want to relax on a beach somewhere with a beer in hand for a few days, without having to deal with the complexity of another culture.

“One thing tour operators can do to help destinations is to help educate them about planning or being prepared and thinking through how they’re promoting themselves and who they’re promoting themselves to,” said Yves Marceau, vice president of buying and contracting for tour operator G Adventures. “It used to take years for a destination to become super popular. Now, with China on the move and with social media, a destination can go from unknown to top 10 list within two years. The reality is if the destination has limited capacity, it can be overrun very quickly. You look at place like Iceland and there’s more tourists than Icelanders. That happened very fast, and you see places where it is happening even faster.”

By limiting the numbers of licenses available to tour operators, or the the time of day they can operate in the most popular areas, destinations can limit the impact of overcrowding while providing a suitable experience for visitors. While tour operators often decide to stagger tour timings, regulations can help bring along those that don’t.

Expectations for access can also be set for tourists before they arrive, so they aren’t disappointed or disruptive upon arriving. Exclusivity, as we’ve seen time and again, is actually a major selling point for consumers.

Fueled by compelling global marketing campaigns and the frantic pace of social media, travelers now expect to tick a certain set of boxes while traveling. Destinations need to be aware that the image they present to travelers, and the demand created for access to certain experiences, simply can’t be provided sustainably.

4. Better Collaboration AMONG stakeholders

A rarely discussed problem is that local, state, and national tourism boards are generally tasked with promoting tourism and business travel instead of planning and managing it.

“The large majority of funds that go to any discussion of how to manage tourism go to marketing tourism,” said Wood. “The rough estimate is maybe 80 percent of tax money that goes towards tourism in a destination generally goes to tourism marketing organizations, but they’re not management organizations, they’re marketing organizations. These people are starting to realize they could have a new role for what they do. What if you gave 80 percent of all the money to manage the destination? This was never a problem because we had a big globe and not many people traveling.”

Many destination marketing organizations have begun to reconsider how they can best serve the interests of locals instead of promoting rampant visitation growth. Executives on stage at the Skift Global Forum this year weighed in on their newfound approach to the problem, and this represents a good first step towards some sort of transition.

There is a deeper problem affecting destinations worldwide: There is no codified way to conclusively measure and quantify the impact that tourism has. While not impossible, it could be more fruitful for destinations to develop and test methods for solving overtourism by collaborating and trying to agree on a framework for finding solutions.

Several groups are working on this now, including Wood’s colleagues, but cities and travel companies need to come to the table as well. In the long term, it’s not enough for destinations to just manage demand; they need to measure and manipulate the specific effects of overcrowding.

“We need to come to an understanding of how to measure those impacts and it’s not as simple as demand [alone]… people are trying to speak too generally about the problems and there’s a tendency to vilify certain parts of the industry,” said Wood. “What I don’t think we can do is stop them from doing what they do. We need to do a good job measuring [the effects of tourism]. It’s well-known tourists want to go to specific places at certain times, so we have to think of other ways of managing their use [of destinations].”

Part of the problem, it seems, is having concrete details on where travelers go and how they affect the environment they are in, whether urban or remote. An international group of academics and tourism experts are working on a solution to this involving standardized monitoring methods in multiple cities worldwide.

Some places, like the Australian state of Tasmania, have experimented with offering travelers free smartphones that track their movements to provide more visibility to industry stakeholders on traveler behavior.

The more data and information cities have about the phenomenon and resulting disruption of overtourism, the better equipped they would be to act to prevent it by coming up with solutions based on evidence instead of conjecture or blacklash.

5. Protect Overcrowded Areas

It’s clear destinations haven’t done enough to prevent excessive..

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touristguidebuzz · 7 years ago

Text

5 Overtourism Solutions for Popular Destinations

A cruise ship in Venice. Cities across Europe are struggling to cope with increased tourism. bass_nroll / Flickr

Skift Take: As destinations scramble to reduce the impact of tourism on their citizens, foundational work must still be done to create a repeatable framework and process for preventing overtourism.

— Andrew Sheivachman

Europe has been perhaps hardest hit by the stress of increased travel and tourism. Barcelona, Venice, and Reykjavik are just some of the cities that have recently been transformed by visitors.

Furthermore, we look to the future for ways in which the travel industry, in conjunction with local stakeholders, can better measure and limit the adverse effects of tourism.

If the travel industry can help connect the world and build bridges between cultures, why has it struggled to find a sustainable path forward?

1. Limiting Transportation Options

Various indicators show that more flights are taking place across Europe than ever before, particularly during the busy summer vacation season.

Why have some cities with pervasive tourism, like Paris, not had the same recent backlash as Barcelona or Berlin?

Let’s take a look at Barcelona’s struggles with increased visitation in recent years. Data from IATA, MedCruise, and Visit Barcelona expose the massive influx of visitors to the city.

Boorish tourists become a target for protests and outcries, instead of the local and regional forces that have more or less enabled their ability to visit a destination en masse.

Amsterdam has recently restricted new tourist shops in its city center, a solid first step. The city is still struggling to cope with the effect of rampant homesharing.

2. Make It More Expensive

Travel has become more of a commodity purchase for consumers than an occasional luxury in recent years, spurred by low-cost carriers and affordable homesharing services.

Countries that suffer currency devaluation are also extremely susceptible to a tourism rush, as in the case of Iceland. We’re seeing this now in London following the Brexit vote, as well.

In recent years, Iceland has moved to offer more luxury accommodations and experiences in a bid to attract higher-yielding travelers as the country’s currency has rebounded from a crash in 2008.

Adventure and luxury tour operators and cruise lines are better positioned to provide experiences outside of the traditional tourist areas in a destination.

3. Better Marketing and Education

There seems to be one issue that few destinations have figured out: How do you keep tourists from wrecking the environment or crowding cities?

If tourism companies sell travelers vacations based on certain promises, like deserted beaches and town squares, it can be a problem if their experiences don’t match expectations.

4. Better Collaboration AMONG stakeholders

A rarely discussed problem is that local, state, and national tourism boards are generally tasked with promoting tourism and business travel instead of planning and managing it.

5. Protect Overcrowded Areas

It’s clear destinations haven’t done enough to prevent excessive tourism from hurting communities. The biggest problem is the speed at which tourism provokes change in a community. Cities want the increased economic activity from tourism, but are not well-equipped to make fast and responsive restrictions once unwanted changes begin to occur.

“It takes a lot of work and very quickly these smaller communities can be overrun, much quicker than a city like Barcelona,” said Marceau, of G Adventures. “Those are much more difficult things to fix. That’s a more difficult one because the effect of one company is not as impactful.”

Some cities like Barcelona have turned to legislation to curb the influx of tourists. Tour operators, as well, have shifted how they conduct tours, often staggering the times which certain groups arrive in order to reduce congestion.

As we’ve seen, however, tourism is often interlocked with overall economic development in cities.

“We should be really welcoming to tourists and, yes, it is disruptive,” said the European Tour Operators Association’s Jenkins. “You go to a city, and there’s lots you can’t have if someone wants to pay more for it. It’s totally normal for people to see areas you grew up in as a child become unaffordable as an adult; that’s because new people have arrived.

“In Barcelona, this is what happened. Tourism is economic activity which in broad terms has a very small environmental footprint and has a very massive economic impact. These are people who use existing means of transport and existing infrastructure and patronize preexisting forms of social enterprise.” There’s also the phenomenon of local business owners feeling resentment against businesses that find success catering solely to tourists, he said.

Marceau has noticed the phenomenon in destinations that have geared up for luxury tourism as well. He mentioned the development of Playa del Carmen into a series of luxury resorts as an example of how the benefits of even expensive tourism don’t necessarily reach nearby communities.

Perhaps large cities should take a page out of the playbook employed by smaller destinations such as the Galapagos Islands, Machu Picchu, and Palau that have had no choice but to limit tourism growth. Those have detailed and stringent forward-looking plans governing access to and the development of their attractions.

Why can’t cities develop similar strategies for coping with periods of the year when more tourists visit than its most popular areas can handle?

Breaking The Pattern

The reality is that the forces of global capital and travel have shaped the development of cities for centuries. Today, however, we are seeing more places built specifically for tourists.

“Even in places that have been built [specifically] for tourists, it’s interesting that tourists go to experience something that is not contemporary,” said Jenkins. “The result of this is places like Disney World or the hotels in Las Vegas. What normally happens is they start as tourism centers, then conference centers, then residential centers, and finally they don’t want tourists anymore.”

We’ve explored this tourism-driven gentrification before, and cities like these represent examples of locales that have embraced tourism and the transition towards an economy serving visitors and wealthy residents instead of the majority of locals.

Wood’s recent book Sustainable Tourism on a Finite Planet: Environmental, Business and Policy Solutions is a thoughtful examination of the issues at play related to overtourism. She concludes that the first step toward a solution entails international collaboration among cities, governments, and companies.

“What most people have seen is that government and industry are not collaborating enough,” said Wood. “They need to see the stakes are so high that joint solutions are necessary and have to be based on data, and not just industry data, because they set their own parameters…People, be they from the industry or a destination, don’t want too many people swamping what is a beautiful cultural or historic site.”

As the stakes become higher in cities around the world, it still remains unclear whether there is the will to push tourists — and their money — away.

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davidoespailla · 6 years ago

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The Housing Slowdown Is Here—and These 10 Cities Are Getting Hit Hardest

heyenge/iStock

Is the party really over?

Over the last decade, the seemingly unstoppable growth of the American housing market has created a bonanza for sellers, a cutthroat environment for buyers, and an endless source of fascination for just about everyone else.

It seemed to be an economic perpetual-motion machine. Could home prices in top markets really just keep going up and up … and up?

Well, no, actually. In the last few months, the real estate market has actually begun slowing down—including in some of the big cities that have been leading the go-go post-recession housing boom.

What does it all mean?

We decided to explore beyond the alarmist headlines to find the 10 metropolitan areas* that are seeing the biggest shifts—and why.

To be clear, prices aren’t always dropping in these places, which are predominantly located on the West Coast. Mostly, they’re decelerating, coming back down to earth. So bargain hunters can put their wallets away.

But in addition to a substantial increase in the number of home listings with price reductions, we found other potentially game-changing signs of market adjustments, including a surge in the amount of inventory for sale and the number of days on the market.

Here are the brass tacks: List prices only rose 7.3% nationally year-over-year in October.

While that’s certainly higher than most raises in compensation, inflation, and buyers’ comfort levels, it’s still less than the 10% annual hike the year before and the 8.2% jump the year before that.

Focus on the small victories, buyers! These markdowns can lead to more choices for those looking to purchase a home. And sellers, you’re still making bank.

Metros seeing the biggest slowdowns

Tony Frenzel

“There’s a rebalancing that needs to happen,” says Len Kiefer, deputy chief economist at Freddie Mac. “Prices have risen so high in some of these markets that it’s very tough from an affordability perspective [for buyers]. … It’s not surprising to me that we’re seeing a little bit of a leveling off.”

So stash the B-word, at least for now: The dreaded Housing Bubble isn’t poised to pop. There are simply more homes for sale now and fewer buyers vying for them. In other words, the market is returning to some semblance of reality.

“Are we going off the cliff?” says Honolulu-area real estate broker George Krischke of Hawaii Living. “I don’t have a crystal ball, but I don’t think so. … It’s a temporary slowdown and may be a plateau.”

To come up with our rankings of the real estate markets that are slowing down the most, we looked at annual price, inventory, days on market, and price reduction changes from October 2017 to 2018 in our realtor.com® listings in the 100 largest metros.

Let’s take a look:

Market Median list price Change in list price* Change in inventory* Listings with price reductions* 1. Stockton, CA $397,050 +3.4% +34.7 +299.2% 2. San Jose, CA $1,099,050 -0.1% +129.9% +110.6% 3. San Francisco, CA $899,050 0.0% +41.7% +56.3% 4. Nashville, TN $350,045 -2.5% +32.0% +22.5% 5. San Diego, CA $659,400 +1.4% +41.1% +28.5% 6. Oxnard, CA $685,000 -2.1% +15.0% +31.4% 7. Honolulu, HI $692,550 -0.4% +21.5% +25.0% 8. Dallas, TX $335,050 -1.4% +15.5% +14.0% 9. Seattle, WA $555,050 +12.1% +59.8% +36.2% 10. Portland, OR $455,050 +1.1% +22.1% +11.8% *Year-over-year changes between October 2017 to October 2018 Source: realtor.com listing data

So why are these housing markets slowing down?

1. Mortgage rate increases are sidelining buyers

Unless buyers are paying all cash for their digs—not a likely scenario for most of us ordinary humans—they are probably smarting from rising mortgage interest rates. That’s because even the smallest rate hikes of just fractions of a percentage point can add hundreds of dollars to monthly mortgage payments. Over the life of a 30-year loan, it can add tens of thousands of dollars.

Here’s what’s going on: Mortgage interest rates went up from 3.90% a year ago to 4.81% as of last week. That seemingly small 0.91% increase made mortgage payments $127 a month more expensive on median-priced homes of $295,000. It adds extra payments totaling $45,540 over the life of a 30-year fixed-rate mortgage, assuming that the buyers put 20% down. And of course, the more expensive the property, the more new homeowners will be forking over.

This is having an impact, real estate experts say. These increases are forcing some buyers to purchase cheaper, smaller homes and fixer-uppers in less sought-after locales. And it’s led many aspiring homeowners to go into standby mode—waiting to see whether prices will drop to make the whole thing more financially viable. With less competition come fewer bidding wars, and more inventory that isn’t being snatched up within an hour of the “For Sale” sign going up in the front yard.

Borrowers are facing a little “sticker shock,” says Julie Aragon, a mortgage broker at Julie Aragon Lending Team in Santa Monica, CA, who works with buyers from San Diego, No. 5 on our list, and Oxnard, CA, No. 6. “They just don’t realize how much [rates] went up. Even an eighth to a quarter of a percentage point increase is going to make a big impact.”

That’s particularly true in high-priced areas like the Southern California city of San Diego, where the median price of $659,400 is more than double the national figure.

“I’ve seen people lose $50,000 in purchasing power,” Aragon says. And that’s giving buyers pause.

Higher rates are also stymieing move-up buyers who want to trade their starter homes for larger, nicer homes, but are reluctant to give up their existing low mortgage rates to do so, says Ted Wilson of Residential Strategies, a housing consultant based in the Dallas area.

The reality is that rates are still low compared to previous decades, when double-digit rates weren’t uncommon.

“Folks have been used to a world of dirt-cheap mortgage rates,” says Freddie Mac’s Kiefer. “We’re moving to a world where rates are more in line with what we’d expect to see over the long term.”

2. Prices just got too damn high

Fact is, prices can’t increase at record levels forever. And we may have finally hit an inflection point in many bellwether markets.

“To some degree, the markets that went up the most and the fastest just pushed too hard [in prices],” says Patrick Carlisle, chief market analyst for Silicon Valley and the Bay Area at the real estate company Compass. “Over the summer, it was like something cracked, and people said ‘I can’t do this anymore.'”

In Silicon Valley’s San Jose metro area, No. 2 in our rankings, prices shot up a whopping 22.2% from 2016 to 2017. And this was already one of the nation’s most expensive places to live. But even hefty tech salaries can only stretch so far.

Add in those higher mortgage rates, and “that’s a whole lot more money that someone is going to have to spend to pay their monthly mortgage on a 1,500-square-foot, three-bedroom, two-bathroom ranch house that suddenly costs $2 million,” says Carlisle.

So is it any big surprise that about 36.8% of San Jose-area sellers have had to slash prices on their homes in the last year?

President Donald Trump‘s tax changes have also hit Silicon Valley and the Bay Area hard. (San Francisco comes in at No. 3 on our list.) Homeowners can now only deduct from their taxes mortgage interest on loans of up to $750,000, down from $1 million. This isn’t just a rich person’s problem—it’s hard to find even a modest starter home for less than $1 million in this region.

Then add in a new $10,000 cap on property and either sales or income taxes. Suddenly, owning a home is a whole lot more expensive.

The entire West Coast, long the growth capital of the United States, is showing signs of being overheated. “For everyone, there’s a maximum to what they can pay,” says Annie Radecki, senior manager at John Burns Real Estate Consulting, who covers Seattle and Portland.

3. Sellers want to cash in while they can—leading to more homes for sale

More and more homeowners, fearing that the real estate market has reached its peak, are champing at the bit to sell. And that has led to a relative glut of available homes—more than even the hottest markets can easily absorb.

“There’s a perception [among owners] that the market has had a good run and maybe it’s time to cash in,” says Honolulu broker Krischke. “The good times have to end.”

In Stockton, CA, which came in first in our slowdown rankings, price drops are common because sellers shot too high, says local agent Jerry Patterson of Cornerstone Real Estate Group. This is a city that has long been plagued by crime and poverty. But its location, about an hour and a half northeast of Silicon Valley and close to the vineyards in Lodi, CA, gave it a boost in recent years, with annual prices rising 8.2% last year and 14.3% in the prior year.

But with more homes for sale and less competition for them, “buyers are now in a bit more of a power position,” Patterson says. “[They’re] able to flex their muscles a little bit more.”

And sellers are learning the hard way that the danger of pricing their homes too high is that they can wind up stagnating on the market. “They’re entering what we call the ‘sludge,'” says Nashville real estate broker Brian Copeland, of Doorbell Real Estate. “There’s nothing wrong with their house. But that price becomes a stigma.”

4. New construction booms benefit buyers—but slow down sales

New construction in certain markets has given buyers more options—but developers may have overshot their goals, often to accommodate corporate growth. Just look at Nashville, TN, No. 4 on our list, where a new Amazon center is slated for location, and Dallas, No. 8, which has added more than 500,000 jobs in the last decade. About a third of Nashville-area home listings on realtor.com® and a quarter of Dallas-area listings are for brand-new homes.

In Dallas, “There’s more inventory than there is demand,” says Dallas-area Realtor Dee Evans of Ebby Halliday Realtors. But she’s beginning to see the pace of new construction slowing, and those extra units are being absorbed by buyers. “Hopefully, the builders will be smart about putting less new stuff up.”

* A metropolitan statistical area is a designation that includes the urban core of a city and the surrounding smaller towns and cities.

* Lance Lambert ran the data analysis on which this story is based.

The post The Housing Slowdown Is Here—and These 10 Cities Are Getting Hit Hardest appeared first on Real Estate News & Insights | realtor.com®.

The Housing Slowdown Is Here—and These 10 Cities Are Getting Hit Hardest

#TRUSTED LOCAL REALTOR #The Housing Slowdown Is Here—and These 10 Cities Are Getting Hit Hardest

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rebeccahpedersen · 6 years ago

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Conflicting Opinions?

TorontoRealtyBlog

That’s the truth of it: we’re just about to head into August, and you really can’t tell anything about the overall market by looking at one slow month in the summer.

Same goes for December, save for perhaps the first week to ten days.

But would anybody in their right mind sit down in the first week of January, analyze the December market statistics, and try to use them to predict what lays ahead in January and February?

December just isn’t your typical month in the real estate calendar, and by the same token, neither is August.

I sat down to film my Pick5 video on Wednesday afternoon, and as I searched by area with the MLS mapping tool, there wasn’t a single area in the city in which I could find five quality properties to feature, analyze, and discuss.

Listings are light right now, but that’s to be expected – it’s the summer.

And things are only going to get slower as we move through August.

This is the first time since the start of January that I’ve found myself without a single listing.

I had a listing up until this morning, but we’re taking it off the market. The listing is a detached house, over $2M, located north of the 401. So basically one of the toughest properties to sell in the city right now, and there is a lot of competition.

So rather than letting the property sit on the market all summer long, rotting, getting stale, and encouraging lowball bids, we figured we would “put some time in between listings,” as I always say, stop the “days on market” from racking up on MLS, and give the listing a refresh in the second week of September.

Not every seller has that luxury, of course. Some sellers are selling because they’ve just bought, and they need to sell.

Of course, not every agent has that luxury either. I’m doing what’s right for the seller in the long run, and I know the business is there down the line. Most listing agents would n-e-v-e-r terminate a listing before the contract is up, because they’re afraid of losing it. And dare I say, that like many buyers that use “hope” and “faith,” and are naive when they submit offers of the list price in competition, many listing agents just “hope” a buyer will come along to make an offer on their stale, over-priced listing in the slowest period of the year.

So what can we really learn from the next six weeks in the Toronto real estate market?

Not a whole heck of a lot, at least in terms of what to expect moving forward.

If you’re a buyer, well holy cow – get out there! New listings are scarce, yes. But in certain pockets (like the one I mentioned above), there’s a logjam of properties. And with August typically being a slow month, there just might be deals to be had, in certain market segments.

I’ll still most likely write a blog in the first week of August, analyzing the July-stats, and trying to draw conclusions. But as you saw last month, even I was willing to suggest that the stats, and what I was experiencing out in the market, didn’t always correspond.

We see this a lot in the media too.

Of course, that can be said of virtually any topic, or industry, or especially when it comes to politics.

Look down south and compare Fox News to CNN.

Now I’m not ignorant, so clearly I don’t watch or support Fox News. But as big of a fan of CNN as I am (not to mention free speech, humanity, common sense, and everything that goes in the opposite direction of Donald Trump), I will admit that even CNN goes too far in the other direction sometimes. It almost risks undermining their integrity, at times.

Here in Toronto, we have the Toronto Sun and the Toronto Star, which basically report the same story, with completely different facts and conclusions. The two newspapers could literally feature a photo of a bug on a windshield on their front covers, and one headline would read “Poor Bug Gets Squashed By Bad Driver,” and the other would read, “Hero Driver Takes Out Nuisance Bug.”

Like I said, we could play this game all day.

And when it comes to real estate, this theme is ever-present.

Take a look at these three headlines:

Now this set of headlines is tremendously ironic, because all of them are from BNN.

But right next to “housing market bottoming out,” we have “home prices set to fall further.”

And this isn’t even a case of The Star vs. The Sun – it’s the same media outlet!

Here’s one I saved from earlier in the month, when the June stats were released:

Global reports negativity – that sales in Canada are down to a 5-year-low, and down 10% since last year.

Financial Post reports positivity – that Toronto represents Canada’s biggest gain in home sales this year. Using Toronto to lead Canada is a bit of creative story-telling.

And last but not least, Globe & Mail tells us that a 10% drop is actually a plus.

If you’re a buyer or a seller out there, how the hell do you make sense of all this?

So try today’s headline on for size:

“Toronto, Vancouver housing markets still ‘highly vulnerable’: CMHC”

That was written in the Globe & Mail on Wednesday.

And if you read the article in full, you’ll see that even the CMHC doesn’t really know how to view the market, or even how to issue their own warnings, risk assessments, and outlooks.

From the article:

Despite slowing sales, CMHC chief economist Bob Dugan said the warnings about vulnerability have not been adjusted in Toronto and Vancouver because the agency needs long-term evidence that the market is changing.

“Prices can fluctuate and be up one quarter, down the next, and if every quarter we’re reacting to that and changing our message, it becomes a little more confusing what the overall assessment of the market might be,” he said.

CMHC’s assessment of risk in Toronto’s market has been unchanged since October, 2016, while Vancouver’s assessment has been unchanged since July, 2017.

–

So essentially, the CMHC is explaining that market “prices can fluctuate,” which is great, because all this time – I didn’t know that…

But they’re also telling us that they prefer to be behind the market, than in front of it. They like to make predictions based on what’s happened in the past, and they’re weary of altering those predictions for the future, until they have more past data.

Great.

All this time, I thought they had a crystal ball…

Better Dwelling also picked up the story:

“Canada’s National Housing Agency Thinks Canadian Real Estate Is Overvalued”

Take a look at the chart that dominated their article:

(Source: CMHC & Better Dwelling)

Yeah, well no kidding the CMHC don’t like changing their market outlooks!

There are eighty different assessments in that graph. Eight-zero.

And only ONE of them has been altered. Looks like Winnipeg is heating up!

So what then would you make of a headline like this:

“‘Market has bottomed out’: Housing prices in Toronto region set to climb again after brief slump”

Well, if you’re like me, you’re wondering

a) Who said this b) Why c) With what data

Was Albert Einstein’s great-great grandchild interviewed for this piece?

Maybe a few rocket-scientists?

At least an unbiased economist?

Nope. None of the above, but I’ll draw an analogy for you. Have you ever seen the owner of a restaurant outside on the street telling everybody “Don’t eat here, the food is awful”?

Well, by the same token, you’re probably not going to see the CEO of one of the largest real estate brokerages in Canada tell people, “The market is going to plummet. Stock up on bottled water, and stay inside.”

“Based on our analysis the market has bottomed out,” said Phil Soper, the CEO of Royal LePage.

–

Beautiful.

The best was the intro of the article, which made opinion sound like fact:

Housing prices in Greater Toronto Area are expected to reverse course in the second half of the year after a brief slump, according to a Royal LePage forecast, despite the threat of escalating Canada-U.S. trade tensions that could dent the Ontario economy.

–

Yikes.

Now to be fair, points b) and c) above were addressed, and that’s more than can be said with respect to a lot of predictions, and a lot of opinions. Your average random Internet-dweller loves to make opinions, but never back them up with data or facts. Of course on TRB, that rarely happens. Usually the readers provide so many links that the comments get flagged as spam! (PS if you’re ever wondering why your comment didn’t show up on the message board – that’s why).

So let’s look at what Mr. Soper said as to “why” prices are set to rebound:

Soper said recent headwinds for housing prices in the Toronto area will eventually be mopped up by the current under supply of new homes, as Ontario’s population continues to grow and in-migration levels reach their highest in more than 10 years. The province saw a net gain in migration over the first quarter of 2018, a nearly 50 per cent increase from the year earlier.

“We’re nowhere near the kind of housing construction rate that we need to accommodate these people,” he said.

–

Personally, I agree with him on that point.

The net migration in Toronto is likely 3-4 times new housing completions, and that’s a recipe for a massive housing shortage.

While we’re on that topic, here’s an excellent read:

“Toronto has lots of room to grow. It’s time to let that happen”

But perhaps that’s a topic for another day.

For a Friday in the middle of the summer, there are just too many thoughts happening in this one blog…

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rebeccahpedersen · 6 years ago

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Why Was June The Most Telling Month In 2018?

TorontoRealtyBlog

First and foremost, thanks to all the readers who chimed in on last Wednesday’s post with feedback on, and suggestions for, the new TRB layout.

Features as simple as having a link on the home page on the comment bubble, that takes you past the blog post itself, and directly down to the comments, were so crucial, yet overlooked. Thanks to the readers for pointing out a few things that I should have caught, and a few others that perhaps we can implement.

It warrants another mention: please try out the data hub!

It’s a work in progress, but we have every TREB sale at our disposal, in real-time, and we can do (almost) whatever we want with it.

No, we can’t share the actual sales for properties. TREB will immediately send me a “Cease and Desist,” even though there are a couple of agents out there currently doing it. But as I’ve been told by those in the know, “A ‘nobody’ that’s sending out daily email blasts with sales aren’t going to appear on TREB’s radar.” So I suppose I should feel good about that…..sort of……but not really?

Anyways, save for advertising what a particular house sold for, with the price and address, I can use the Data Hub to publish aggregate data, and the readers can use the tools to gain access to data that they wouldn’t ordinarily have.

For some of the folks that posted feedback last week, let me just say – you need to try it out again. Somebody said, “You need ‘freehold’ and ‘condo’ to be drop-down filters.” Well, they aren’t, but that’s because the pie-chart above is clickable. Once your search results have been returned, click on the freehold, or condo, and it will filter for you.

We’re going to add more filters. Bed, Bath, and Parking on their own aren’t enough.

But as you can see, the results are called instantaneously. There are millions of data points in the backend, and your search is returned in less than a second.

We’ll continue to work on it, but please, post comments or email me with feedback. Let me know what you like, and how we can make it better.

I’m thinking about posting the actual sales from the search result, but without the addresses. This would satisfy TREB rules, but also provide the users with a lot more data.

Okay, so back to the topic at hand.

It’s true, you really can make numbers say anything you want.

And as the readers, pardon the cliché – both “bullish” and “bearish,” continue to banter back and forth, there’s always an opportunity to select numbers and use them to prove your point.

As the TRB readers longed for new material last week and a forum to actually discuss real estate, and not my new layout, they took to the comments section of Wednesday’s post.

Appraiser and Chris had a back-and-forth about what data points to use, and for how long, in order to prove anything concrete about the market.

Innovator, critic, market-disruptor, and trusted-Realtor, John Pasalis, even had his rare bullish sentiments posted in the comments section:

@JohnPasalis Jul 10

“If the real estate bears out there can point me to any recent analysis (past 3 months) that argues why Toronto’s housing market is going to get worse in 2018, I’d appreciate it. Curious to read what others are finding because I don’t see any downward trend.”

And having just come out of a busy spring market, I would have to agree.

You know I’ve always maintained that there are ways in which I measure the relative strength or weakness of the market:

1) Look at market statistics 2) Draw from my own experiences

There are times when these two measures don’t align.

In the past, I’ve spoken about a red-hot market, ripe with multiple offer situations, when the average home price is downtrending, or inventory is up, or days-on-market have increased.

So when June ended and I took a look at the market data, I was honestly a little surprised by what I found.

I’m a bit late to this party, given it’s mid-July, but the blog re-launch had my hands tied. And I think I’d be remiss if I didn’t go back and look at the June stats, and share what I personally felt was the biggest take-away.

The average home price in Toronto increased by 0.32% in June, over May, and that in itself is quite unspectacular.

In the City of Toronto, that increase was 1.00%, which again, seems insignificant, although it’s worth noting that any investment that returns 1% per month, if done so in perpetuity, is nothing to sneeze at.

Before somebody suggests that I’m making more use of the “City of Toronto” statistic, compared to the GTA average home price, so far in 2018 compared to years’ previous, let me explain why.

While I’ve sold houses as far north as Keswick, as far east as Ajax, and as far west as Burlington in the past 12 months, this is Toronto Realty Blog, and 95% of my business is in the City of Toronto. My readers, for the most part, care more about what’s going on in the central core than they do about Kawartha Lakes or Scugog. So the “City of Toronto” numbers just seem to hold more water than the GTA-number, which as of late, is not a good indicator of what’s happening with your King West condo, Don Mills detached, or Beaches townhouse.

But just for comparative purposes, I’ll look at both numbers today in the chart below.

The May-to-June increase in average sale price of 0.32% in the GTA and 1.00% in Toronto might not surprise many of you, but they should.

Think about the market cycle just for a moment.

We start the year in January when it’s cold and dreary, when we’re coming out of the slowest month on the real estate calendar, and when sellers are just starting to list, so buyers are taking their sweet time becoming active.

February is a short month, but often a busy one, as the folks who started their searches in the New Year are making bids, and the folks who didn’t buy the year before are very active.

March is typically a hot month, and it leads us into the two busiest months of the year: April and May.

While September might have something to say about that, I would argue that April and May represent the “peak” of the market, both in terms of buyer/seller activity, but also price.

Then comes June, when things slow down a little.

School is out, vacations start, and most buyers have already bought, as most sellers have already sold.

June is a historically busy month, but not compared to May.

And this is why I was so surprised to see the average home price in Toronto actually increase from May to June, even if ever-so-slightly.

0.32% is nothing to write home about, but it’s significant for one major reason: it hasn’t happened in the last eight years.

TREB re-districting only enabled me to go back to 2011, but take a look at how the average home price in May compares to June, in both the GTA and City of Toronto:

If that isn’t the very definition of an “outlier,” then I don’t know what is.

When I wrote my June, 2018 e-Newsletter, I actually predicted that the average home price would decline. I figured that with increases every month from December through May, a drop in average home price in June was inevitable.

How couldn’t it be?

June is just a slower month than May, plain and simple.

My prediction was made based on my gut, not on these stats, which I actually didn’t compile until this past weekend.

So add me to the list of people who are surprised to see all the red numbers up there, followed by those in 2018 in the black.

The average home price in Toronto always drops from May to June. That is what these numbers are telling us.

And these aren’t exactly small numbers either.

The GTA-numbers on the left might be less volatile, but look at the City of Toronto – even without the massive 7.81% decline from 2017, when the market was weak from April onwards, we have two years over 5%, and from 2011 to 2017, the drops average 3.97%.

So while the 0.32% and 1.00% increases in the GTA and City of Toronto, respectively, don’t seem like much on their own, they represent an absolute breakthrough for the market.

My “gut” told me that June was okay, but it didn’t feel like March or April out there. I had some barnburner condo sales, but I felt as though the freehold market had dropped off significantly.

I had two tough listings in June, both under-priced with “offer nights,” both which only got one offer.

I’m pleased to say that I was able to get $150,000 and $95,000 respectively over-asking for each property, but the sellers in both cases were distraught that only one bidder showed up for their home.

These sales, I felt, showed me that the market had, in fact, slowed a little.

And throughout June, I continued to “feel” that the market had pulled back ever-so-slightly.

“Averages” are not exact measures of the market, but overall, it looks as though June was actually a very strong month, even if I had a couple of listings that didn’t produce the desired response.

So I guess the next question is: where do we go from here?

The GTA-wide average home prices in April, May, and June were $804,584, $805,320, and $807,871 respectively. That’s some kind of consistency!

July has to be slower than June, and although the chart above would dictate that looking at what’s happened in the past is no real measure of the future (at least in 2018), I have to think that we see the average home price in Toronto dip back down to $790,000 through August, before we head into a typically busy fall.

The average drop in price from June to July from 2015 to 2017 was 4.69%, 4.92%, and 6.01% respectively.

But based on the exceptional consistency in April/May/June, and the trend-breaker we just analyzed in June itself, I can see July and August being busier than normal.

It all lines up for what should, or at least could be a very busy Fall, 2018 market.

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rebeccahpedersen · 6 years ago

Text

Why Was June The Most Telling Month In 2018?

TorontoRealtyBlog

First and foremost, thanks to all the readers who chimed in on last Wednesday’s post with feedback on, and suggestions for, the new TRB layout.

It warrants another mention: please try out the data hub!

It’s a work in progress, but we have every TREB sale at our disposal, in real-time, and we can do (almost) whatever we want with it.

We’re going to add more filters. Bed, Bath, and Parking on their own aren’t enough.

But as you can see, the results are called instantaneously. There are millions of data points in the backend, and your search is returned in less than a second.

We’ll continue to work on it, but please, post comments or email me with feedback. Let me know what you like, and how we can make it better.

I’m thinking about posting the actual sales from the search result, but without the addresses. This would satisfy TREB rules, but also provide the users with a lot more data.

Okay, so back to the topic at hand.

It’s true, you really can make numbers say anything you want.

And as the readers, pardon the cliché – both “bullish” and “bearish,” continue to banter back and forth, there’s always an opportunity to select numbers and use them to prove your point.

As the TRB readers longed for new material last week and a forum to actually discuss real estate, and not my new layout, they took to the comments section of Wednesday’s post.

Appraiser and Chris had a back-and-forth about what data points to use, and for how long, in order to prove anything concrete about the market.

Innovator, critic, market-disruptor, and trusted-Realtor, John Pasalis, even had his rare bullish sentiments posted in the comments section:

@JohnPasalis Jul 10

And having just come out of a busy spring market, I would have to agree.

You know I’ve always maintained that there are ways in which I measure the relative strength or weakness of the market:

1) Look at market statistics 2) Draw from my own experiences

There are times when these two measures don’t align.

In the past, I’ve spoken about a red-hot market, ripe with multiple offer situations, when the average home price is downtrending, or inventory is up, or days-on-market have increased.

So when June ended and I took a look at the market data, I was honestly a little surprised by what I found.

The average home price in Toronto increased by 0.32% in June, over May, and that in itself is quite unspectacular.

Before somebody suggests that I’m making more use of the “City of Toronto” statistic, compared to the GTA average home price, so far in 2018 compared to years’ previous, let me explain why.

But just for comparative purposes, I’ll look at both numbers today in the chart below.

The May-to-June increase in average sale price of 0.32% in the GTA and 1.00% in Toronto might not surprise many of you, but they should.

Think about the market cycle just for a moment.

February is a short month, but often a busy one, as the folks who started their searches in the New Year are making bids, and the folks who didn’t buy the year before are very active.

March is typically a hot month, and it leads us into the two busiest months of the year: April and May.

While September might have something to say about that, I would argue that April and May represent the “peak” of the market, both in terms of buyer/seller activity, but also price.

Then comes June, when things slow down a little.

School is out, vacations start, and most buyers have already bought, as most sellers have already sold.

June is a historically busy month, but not compared to May.

And this is why I was so surprised to see the average home price in Toronto actually increase from May to June, even if ever-so-slightly.

0.32% is nothing to write home about, but it’s significant for one major reason: it hasn’t happened in the last eight years.

TREB re-districting only enabled me to go back to 2011, but take a look at how the average home price in May compares to June, in both the GTA and City of Toronto:

If that isn’t the very definition of an “outlier,” then I don’t know what is.

How couldn’t it be?

June is just a slower month than May, plain and simple.

My prediction was made based on my gut, not on these stats, which I actually didn’t compile until this past weekend.

So add me to the list of people who are surprised to see all the red numbers up there, followed by those in 2018 in the black.

The average home price in Toronto always drops from May to June. That is what these numbers are telling us.

And these aren’t exactly small numbers either.

So while the 0.32% and 1.00% increases in the GTA and City of Toronto, respectively, don’t seem like much on their own, they represent an absolute breakthrough for the market.

My “gut” told me that June was okay, but it didn’t feel like March or April out there. I had some barnburner condo sales, but I felt as though the freehold market had dropped off significantly.

I had two tough listings in June, both under-priced with “offer nights,” both which only got one offer.

These sales, I felt, showed me that the market had, in fact, slowed a little.

And throughout June, I continued to “feel” that the market had pulled back ever-so-slightly.

So I guess the next question is: where do we go from here?

The GTA-wide average home prices in April, May, and June were $804,584, $805,320, and $807,871 respectively. That’s some kind of consistency!

The average drop in price from June to July from 2015 to 2017 was 4.69%, 4.92%, and 6.01% respectively.

But based on the exceptional consistency in April/May/June, and the trend-breaker we just analyzed in June itself, I can see July and August being busier than normal.

It all lines up for what should, or at least could be a very busy Fall, 2018 market.

The post Why Was June The Most Telling Month In 2018? appeared first on Toronto Realty Blog.

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rollinbrigittenv8 · 7 years ago

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5 Overtourism Solutions for Popular Destinations

A cruise ship in Venice. Cities across Europe are struggling to cope with increased tourism. bass_nroll / Flickr

Skift Take: As destinations scramble to reduce the impact of tourism on their citizens, foundational work must still be done to create a repeatable framework and process for preventing overtourism.

— Andrew Sheivachman

Europe has been perhaps hardest hit by the stress of increased travel and tourism. Barcelona, Venice, and Reykjavik are just some of the cities that have recently been transformed by visitors.

Furthermore, we look to the future for ways in which the travel industry, in conjunction with local stakeholders, can better measure and limit the adverse effects of tourism.

If the travel industry can help connect the world and build bridges between cultures, why has it struggled to find a sustainable path forward?

1. Limiting Transportation Options

Various indicators show that more flights are taking place across Europe than ever before, particularly during the busy summer vacation season.

Why have some cities with pervasive tourism, like Paris, not had the same recent backlash as Barcelona or Berlin?

Let’s take a look at Barcelona’s struggles with increased visitation in recent years. Data from IATA, MedCruise, and Visit Barcelona expose the massive influx of visitors to the city.

Boorish tourists become a target for protests and outcries, instead of the local and regional forces that have more or less enabled their ability to visit a destination en masse.

Amsterdam has recently restricted new tourist shops in its city center, a solid first step. The city is still struggling to cope with the effect of rampant homesharing.

2. Make It More Expensive

Travel has become more of a commodity purchase for consumers than an occasional luxury in recent years, spurred by low-cost carriers and affordable homesharing services.

Countries that suffer currency devaluation are also extremely susceptible to a tourism rush, as in the case of Iceland. We’re seeing this now in London following the Brexit vote, as well.

In recent years, Iceland has moved to offer more luxury accommodations and experiences in a bid to attract higher-yielding travelers as the country’s currency has rebounded from a crash in 2008.

Adventure and luxury tour operators and cruise lines are better positioned to provide experiences outside of the traditional tourist areas in a destination.

3. Better Marketing and Education

There seems to be one issue that few destinations have figured out: How do you keep tourists from wrecking the environment or crowding cities?

If tourism companies sell travelers vacations based on certain promises, like deserted beaches and town squares, it can be a problem if their experiences don’t match expectations.

4. Better Collaboration AMONG stakeholders

A rarely discussed problem is that local, state, and national tourism boards are generally tasked with promoting tourism and business travel instead of planning and managing it.

5. Protect Overcrowded Areas

It’s clear destinations haven’t done enough to prevent excessive..

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rebeccahpedersen · 7 years ago

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Predictions For The Fall Market!

TorontoRealtyBlog

How ironic that a “predictions” blog post from me, is, in itself, very predictable.

Yes, I do this feature almost every fall, but it’s borne of necessity, since the army of Toronto buyers and Toronto sellers are about to square off like the Lannisters and the Targaryens. I’m just not sure how the analogy takes the white-walkers into consideration….

Anyways, let me put my thinking cap on here and provide a few predictions for the three months that lay ahead, but also highlight what you need to be aware of as we move into what is essentially the spring market, on steroids….

1) Prices will go up.

What a salesman, eh?

I mean, this guy is a real estate agent, he writes a blog, and he has the gall to tell the reading public “prices will go up.”

Well, if the shoe fits, wear it.

I’m not saying prices will go up because I want them to. As I have said before, many times, I have no vested interest in prices going up. In fact, with my wife and I looking to buy a house that is at least double the value of our condo, it would make sense for us to cheer for prices to go down, since, assuming all things considered equal, the amount our condo goes down in value will be half of the amount the house decreases in value.

So take what I say, with a grain of salt, if you so choose.

But I’m saying prices will go up because, simply, they will.

As I write this, I don’t have the August TREB data, but I can almost guarantee that prices will increase this fall.

I suspect that the Average Sale Price for the month of August will be somewhere in the $740,000 – $760,000 range, meaning that it could represent a fourth consecutive month-over-month decline, or could be moderately higher than the July figure. But either way, the number won’t be significant.

What is significant, is where prices were to start the year, where they went in the spring, and where they are now.

You’ve seen this chart from me on many occasions, but why not take yet another look?

This is the average sale price in Toronto going back to last summer, and on the right I’ve marked the increase in average sale price from last December to this April (26%), and the decline from April to July (19%).

Now again, take this with a grain of sale because it sounds like BS, but I don’t believe that the decline in average home price, from a percentage basis, can be directly applied to the market out there.

The numbers say that the average sale price is down 19% since April.

Can you show me a $1,000,000 house in April that’s $810,000 now?

Or a $500,000 condo that’s $405,000 today?

I haven’t seen it.

I’ve given a lot of newspaper interviews on this topic, and the person on the other end of the line is always saying, “Yeah, that’s the sentiment out there; I’ve yet to speak to an agent who agrees with the numbers.”

Delving into those numbers, and looking at why they’re so low (ie. more luxury homes being sold in early 2017?) is a topic for another day.

There’s no doubt the market has dropped since March/April, but not nearly to that extent.

So allow me now to make a couple of predictions within this prediction, or rather further explain why my #1 point is “Prices will go up.”

i) The September Average Sale Price will be higher than July or August.

This is a no-brainer, folks.

First and foremost, we’ll be coming off four straight months of declining prices. Doomsdayers be warned – there’s nowhere to go but up.

Secondly, and more importantly, there is so much pent-up demand out there, and while we expect the market to explode with new listings after Labour Day, there isn’t, and likely never will be, more supply than demand. We’re going to see prices pick up right off the bat, and that Average Sale Price will push back over $800,000 in September.

ii) The October Average Sale Price will be higher than September.

September will fuel October.

The market conditions, the sales, the prices, and the buyer and seller sentiment in September will set the table for the rest of the fall.

We might see a slow first or second week of September, as buyers wait and see how things are looking, and sellers hold back listings to get new “comparable sales” posted on MLS that help with their pricing, but once we’re underway, it’s going to be busy.

iii) Prices will go up 10% from the summer.

That $746,218 “Average Sale Price” from July of 2017 is just shockingly-low.

So is it really a stretch to suggest that we’ll add 10% to that?

The $920,000 peak in April might not be attainable this fall, but a 10% increase from $746,218 would only result in an average sale price of $820,840, which brings us back to a level found somewhere between January and February.

A 15% increase, which sounds absurd for a 3-month time period, would bring the average sale price up to $858,151, which is still significantly lower than the March/April peak.

I think a lot of people know this, and this is going to further fuel demand.

I have more investor-clients right now than I had in the super-busy spring market, all of whom are looking to pick up 1-bed, 1-bath condos for less than they’d have paid in the spring.

–

2) Conditions will be reminiscent of the spring – and some buyers will be caught off guard.

Nothing will ever rival January to April of 2017.

I spoke to a reporter from Report on Business over the weekend who is putting together a significant expose on the spring market, and I think it’ll be a fascinating read.

How did things blow up so quickly?

Low supply, high demand, new tactics (both buyers and sellers are to blame for that one!), and ultimately mania. Call it panic if you want, but I think “mania” is a better word.

This fall, I expect low supply and high demand, but not as low supply as the spring, and not as high demand either. Interest rates have risen, government initiatives have been taken, and the buyer pool seems a bit more cautious. There are a host of reasons why the market is not like it was in the spring.

However, there are a host of reasons why the market will continue to be busy, and continue to remind people of what the spring was like.

Not the same, but similar, and that’s an important distinction.

If you’re a buyer, and you think you’re going to walk into an $899,900 semi-detached house, and be the only buyer “because the market has cooled,” you’re in for a rude awakening.

Yes, the market has cooled. And yes, the media are obsessed with covering the topic.

But that doesn’t mean that it won’t be business as usual in the busy fall market.

There will still be offer dates, multiple offers, over-asking sale prices, and bully offers.

The current levels of supply and demand necessitate it.

We might only see, say, three offers on that $899,900 semi, whereas we might have seen nine in March, but buyers can’t hope, dream, and will their way to a market that simply doesn’t, and won’t exist.

I wish we were in a balanced market.

I wish “every person living in the city of Toronto could afford to own a home,” as the sentiment often goes.

But despite a drop in the average home price over the past several months, and softer market conditions, we are not in a buyers’ market. We are entering a very busy, very shortened part of the real estate calendar, and there will still be competition for virtually every freehold home in the core.

Buyers who come into the fall market will incorrect information, and perhaps illusions of grandeur, will get left behind.

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3) Rental battles will be fierce.

I’ve blogged about this over the summer here and there, so it bears mentioning once again.

When I was on vacation down in Idaho, I brought out a lease for a 1-bed-plus-den, 1-bath unit, listed at $2,150/month. All the lease agents in my office were teasing, “Get ready – you have no idea what’s coming!” They told me, “Some vacation you’re about to have!”

They were right. I got six offers in 36 hours.

But that was nothing compared to the stories I heard from the agents I spoke to.

One agent told me, “I just won a sixteen-offer bidding war for a rental in Liberty Village last night.” He was so happy, and so proud, and it was eerily reminiscent of the spring market for sales.

Another agent told me, “I’ve lost nine offers to lease………this week.”

I didn’t even know how that was possible, until he explained, in great detail, which nine properties he had lost out on for three different rental clients.

Some of you will suggest that the September 1st rental start date was the reason for the summer mayhem, and while that is a big date, I don’t think we’ll see a significant drop-off in activity in the fall.

In fact, the real reason for the fierce rental market, which is something I’d like to explore in Thursday’s blog post, is the unintended consequences from the Liberal government’s “Fair Housing Plan,” announced last April. There are fewer properties on the rental market, renters are staying longer, and there are fewer purpose-built rental developments underway. I’ll come back to this on Thursday.

I think the idea of paying $2,150 per month for a 700 square foot, 1-bedroom condo is crazy, and unfortunately, I can see how it’s impossible for somebody making $40,000 per year to find a way to live in this city. But circumstance and misfortune don’t change reality, and never will.

The demand for rental properties is high. The supply of rental properties is low.

Competition is fierce, and will remain as such.

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4) It will go by very fast.

I’ve heard this a lot lately, although it’s been about something else.

“It goes by fast,” people tell me.

“Blink, and it’s gone,” I’m told.

This is primarily in reference to raising children, as people who have gone through it love telling others how quickly the time passes, and ultimately how my daughter will be going away to university before I know it, but it could also be said of the fall market.

The “spring” market, which starts in the winter, and ends in the summer, runs from January 1st to June 30th.

It’s a six-month market, broken up in the middle by Spring Break and the Easter/Passover holidays, but it encompasses half of the year.

A lot of buyers who start their search in the “new year” end up dragging their feet, and after losing an offer or two, they end up buying a home in May, and moving in the summer.

In the fall, that timeline just doesn’t work.

The fall market is only three months. It starts a week into September, and by the time you’re a week into December, the market basically shuts down for the year.

This is part of the reason why I think a bit of mania will set in eventually. Not to the same extent as the spring, but if you’re a buyer still looking by the third week of November, and you know that the market dies out in the first week of December, you’re going to push a little harder, bid a little higher, and be more aggressive.

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5) The government will continue to meddle in the market.

You know when you get dry lips, and you keep licking them?

Licking them makes it worse.

But once you start, you just can’t stop.

It’s not necessarily an “addiction” per se, but rather an uncontrollable desire, both physical and mental, despite the knowledge that what you’re doing is having a negative effect.

I see a similarity when it comes to the government intervening in the real estate market.

The only difference is: they don’t seem to know what they’re doing is having a negative effect, or unintended consequences.

The “Ontario Fair Housing Plan” was a farce. It was 14 points of utter nonsense, and not a whole lot of people took it seriously.

The changes to the rental market are just insane. Forcing landlords to give a month’s rent to a tenant when the landlord wants to evict them for their own use is so over the top, it makes my stomach churn, and this is after the government brought in rent controls.

The Liberal government are continuing to lick their dry lips, and they just can’t stop.

They seem very set on the idea of regulating real estate agent representation, something I don’t agree with in the slightest.

Few governments are proactive; most are reactive. And just as the B.C. government leaped into action last year with a slew of new policies after revelations about shadow-flipping, and foreign ownership, the Ontario government must have watched that CBC “hidden camera” special on Realtors double-ending more than a few times, and now they’ve decided they need to act.

I’ve written entire blogs on this subject, so I won’t get into it now. I think the consumer deserves to choose their own representation, and they don’t need the government to meddle.

But the government has the taste for meddling, and I don’t think they’re anywhere close to being done.

What other policies could they put into place?

Your guess is as good as mine.

But nothing is off the table here.

The government doesn’t seem to think that building infrastructure to help move people to places, and allow greater urban sprawl, is the answer to the real estate crisis. Instead, they’re looking to win acknowledgement from the public with short-term, ineffective, band-aid solutions that they can announce in front of a podium.

So mark my words – we’re going to hear a lot more about government housing policies this fall, and as I said, nothing is off the table.

–

There we have it, folks!

My ‘brief’ thoughts on the market that lays ahead, starting today: the first day ‘back.’

Just like the first day of school when you were a kid, today had that undeniable feeling that summer is over. It was a couple of degrees colder, it seemed a wee bit darker out when you got up in the morning, and fewer people seem to be smiling.

Yes, we’re “back” from summer. And I never even got a chance to put my summer tires on my car…

The post Predictions For The Fall Market! appeared first on Toronto Real Estate Property Sales & Investments | Toronto Realty Blog by David Fleming.

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