Ken McLachlan, principle broker for Re/Max Hallmark Realty in Toronto, Ontario writes a very insightful post on his blog describing the differences between the real estate markets in the United States and Canada.
Interesting real estate times we live in. Our friends south of the border have been experiencing quite a different market than us. We had to know that the sensational growth of their market several years ago could not be maintained. Much of the real estate market acceleration in the States was fueled by speculators and secondary financing.
This type of play created a real estate market which wasn’t real. How bad was it? More than 30% of every residential real estate deal done in the States at one time involved a speculator, someone who was purely buying a property to trade in it like one would a stock. Their mortgage market fueled the strong growth as well. It wasn’t uncommon for a purchaser, (unqualified) to obtained over 100% financing on a property. No questions asked or verified at least.
Imagine the lure of buying a property with no money down with a payout to you the buyer on closing! Rates would be very very low to start, with “an adjustment” down the road. The adjustment time came and many many unqualified buyers found out they didn’t have the stomach to carry their “home” and simply walked away. So the lethal combination of owners walking away from properties in droves and 30% of the market now not interested in playing has killed the real estate market in many regions in the States.
At home, we haven’t had many speculators working in our markets and certainly our mortgage rules and habits are much more controllable. The debt service ratio is very very healthy in Canada which is another good indicator of a mature market. Price increases our moderate on average and supply – although a problem in some markets – is good.
Traditionally the real estate market in Canada has mirrored the market in the States. Not this time. We learned our lessons hard from the recessions of the 80’s and 90’s – hopefully.
In a buyers market, where listings are plentiful, real estate agents must put a lot of energy into marketing a property for sale, in order to attract and expose it to as many potential homebuyers as possible.
In a sellers market, where listings are harder to come by, it is important for agents to demonstrate to their prospective selling clients how they will go above-and-beyond other agents competing for the same listing.
Under either of these scenario’s, UniqueHomeSites provide real estate agents in Canada with a powerful tool to market their listings on the Internet, attract buyers, and win more listings.