Real Estate Bubble? Here’s Why I’m not Concerned

This article first appeared in the Toronto Sun Homes-Extra section, issue May 18-20.

Search “Canadian Housing Market” on the internet and you will surely encounter dozens of articles from all kinds of industry experts giving their opinion on this fiercely contested subject. You will find, as I have, that there is a commonality in these articles; they are consistently inconsistent. 

You will find the heads of major banks, economists and politicians all making conflicting points about current market conditions. You will read that we are in the midst of a real estate “bubble”, or that the market is stable, and everything in between. You will read immigration statistics, unemployment figures, interest rate trends & predictions, and of course, the dreaded debt-to-income ratio. The same statistics will be used to make completely different points and after a while, you may come to the same conclusion I have: it is all irrelevant.

As a homeowner, all of this information is applicable to me and is concerning.  It is concerning now, just as it was 24 months ago when I purchased a pre-construction condo.  And, the same concerns were there for my parents 15 years ago when they purchased their first home. But like my parents before me, I did not get caught up in the hype and hysteria that is often associated with the subject of real estate. It was difficult, mind you, especially when buying a home within a building that hadn’t even started construction. Worrying about market conditions as they stand today is difficult enough, worrying about what they may be like in two years is enough to drive you crazy. But the experience taught me an important lesson; understand the market conditions, but worry about the things I can control.

Here is what I knew then: I will always need a place to live, real estate prices fluctuate, interest rates go up and down and the sun will rise tomorrow (probably). These are indisputable facts, the “rules” of the game if you will. They gave me the context needed to make a buying decision that was right for me.

Here is what I could control: I knew I wanted to buy new, which meant pre-construction. That afforded me the luxury of being able to select a builder, so I settled on a great local developer with a proven track record of successful projects and a reputation for customer care. I couldn’t know for sure if house prices would go up and down in the two years it would take for my condo to complete, but I did know that the purchase price was well within what I could afford. Interest rates were the biggest variable, so I made sure I could afford my mortgage at the 25-year average rate (about 6.25%). With confidence in both my job stability & potential career growth, I was ready to buy.

Two years after buying, I couldn’t be happier with my decision. My developer of choice lived up to my expectations, my interest rate is considerably lower than what I budgeted for and most importantly, I am ready for the market fluctuations that may or may not be in our immediate future. Of course with any investment, there will always be risk. Understanding that risk allows you to make a smart investment, which will help insulate you from the market conditions that you cannot control.

“Social Media” Should be Considered A Swear Word

ou’re probably thinking, “What an odd title coming from a company that is in the business of social media.” But how many times a day do you hear the term, “social media?” I’m guessing a couple dozen, if not more. For us, who work in the online marketing space, it is easily 200+. The repetition of the phrase is not the problem. It’s the hype, stigma and emotional response evoked when hearing the term that we have a problem with.

From Facebook’s IPO, to every brand in the world wanting to connect with you via Twitter, Blog, Pinterest, Facebook or Instragram (the list is considerably longer), you can’t get away from the far reaching social media monster. Lost in this hype, we’ve found, is the fundamental reason why almost 1 billion people are on Facebook; to connect.

At some point, connecting meant a $ sign. There are actually statistics out there which calculate how much each Facebook user is worth in advertising dollars, based on variables such as age, sex and location (I’m worth about $9 annually, so forgive me for my bitterness). I remember back in 2006 when I first signed up for Facebook and there were no ads, very few brands; it was generally “clean.” I can’t say the same anymore.

This convoluted mess has become mainstream and businesses have jumped on board. They know traditional marketing & advertising has become far less effective, there is simply too much of it. Social Media allows for them to expose their brand to us within our inner circles, where we spend unguarded time and open ourselves up to sharing. Sneaky eh?

That’s why I say, no more “social media.” Your online strategy should be focused on connecting, communicating and at the risk of sounding lame, being a good friend. Offering advice, giving and listening should be your only purpose when operating on social forums.

As online marketing becomes the norm, eventually we will start tuning it out much like we do billboards, TV commercials and newspaper ads. I would argue most of us already do, making the subtle but significant switch even more important. If you own a brand, connect with your customers & target market the way they connect with their friends; honestly.