The "Real Estate" Market or the "REALTOR®" Market?
"How's the market?"
This is a question I get asked on almost a daily basis and although this three word question seems simple enough, I believe this basic question is the cause of much confusion and misunderstanding about the state of the real estate market.
When people ask my "how's the market?", I like to clarify what they mean by responding with the question: "Do you mean the Real Estate Market or the REALTOR® market?". Although this may sound like a silly response, I believe it brings to light a common communication breakdown between REALTORS and the people that they meet every day. You see, we REALTORS are a pretty narcissistic bunch, and when people ask us how the market is, we like to assume they're interested in how our individual business is going. That's why you often will get answers like, "quiet", "dead", or even "crazy!", which are not words that describe the true state of our current Kelowna real estate market but they may describe an individual REALTOR'S week, month or year.
The thing that causes the confusion and missunderstanding that I mentioned earlier is the fact that when a member of the public asks a real estate professional about the market, they are usually interested in the general state of the local market and how that will affect him or her and the property that his or her family owns. When they hear dramatic answers like "dead", or "really slow", or even "crazy", they relate those inaccurate terms directly to their own situation.
You see, the "real estate market" and the "REALTOR" market are two completely different things. Let me give you some details to help explain:
- In the last 30 days, 166 residential properties sold in the Central Okanagan through the MLS system. With 2 REALTORS participating in each transaction, this means that less than half of the REALTORS in the Central Okanagan had a sale in the last 30 days (over 700 REALTORS). It's not surprising that a lot of REALTORS are feeling the crunch and using dramatic terminology to describe the current state of their individual business.
- in 2011, there were 3638 residential transactions throught the MLS system. Althought this is about 60% of the sales recorded in the record breaking year of 2007, it is also a very stable, sustainable number of transactions for a balanced market on the low side of the real estate cycle. The number of transactions has remained quite stable over the last 3 years.
Although a lot of analysts and experts would use words like "balanced, "recovering" and "sustainable" to describe our current local market, the reality still exists that a lot of REALTORS are struggling and will respond to questions about "the market" with answer about "their business". If you hear high-drama answers out there describing our current low-drama real estate market, make sure you get some facts and figures to back up the drama.
Posted by Grant Wiebe
on January 23, 2012