It’s an age old professional question. When it comes to the evolution of an industry, where does the momentum come from? Is it borne from some seismic professional shift? Is change a product of obsolescence? Does the industry understand the how and/or why of what consumers want to buy?
The answer to understanding the ebb and flow of the real estate industry, is to a certain extent all of these. But to really be able to predict emerging trends within the industry with the kind of accuracy needed to stay ahead of the consumer, and to have ample time to prepare before their arrival goes much further than forecasting and studying demographics. It’s about having an intimate knowledge of what makes consumers tick, and about translating the product, service and delivery of real estate to mirror these emerging trends.
To gauge the direction of these, Propertywire.ca talked to some leaders in the industry with their finger on the pulse of where the industry is going.
The typical client doesn’t even look the same as they used to, let alone have the same ideals and goals when it comes to housing, which underscores the inefficacy of relying on traditional ideas when focusing the future.
It’s not as though there has been a complete reversal, but there has been a clear shift in buying patterns with homeowners that encompasses a change to demographics, lifestyle choice and growing preference for many to stick close to the urban core. While, in the past, goals had been easily identified in a relatively straight, predictable pattern more en masse, moving upwards, and generally outwards towards larger properties, homebuyers now have varied goals and completely unique ideas of what their dream properties are – and where they are situated.
Says Don Lawby, President of Century 21 Canada Limited Partnership, “It used to be, 20, 30 years ago, most homebuyers were families…looking ultimately to end up with a detached home, a garden, nice neighbourhood with kids, trees and schools.Today, we have a lot of singles buying. We have married couples, looking for different things in major cities. It depends if they want to be in the central core, and really experience city life. And then the tendency is that they want to stay in the central core.”
“There are still people who want to raise a family, and still desire a single family detached home, but they are moving out to the suburbs. They may have to start in a town home or condo, with ultimate goal of paying down a mortgage, saving money, and then moving into a home that fits their long termlifestyle.”
Square footage continues to shrink as land becomes more expensive, and as lifestyle dictates a more hassle-free approach to living for many.
The average consumer doesn’t just look different on the outside- they are fundamentally different on the inside as well.
What is perhaps one of the most notable trends over the past several years has emerged on the back of the internet, advances in technology and access to information- particularly as it pertains to real estate.
With all of this information so readily at their fingertips, the average consumer is far more knowledgeable than they used to be- not just about the properties they are seeking out and of the markets themselves, but of what is available to them, and also have a more clearly defined visual idea of what they want in a property.
Toronto Real Estate Board (TREB) President Richard Silver says, that homebuyers today are far more educated than they used to be, and that there is a new emphasis on immediate access to visual information, which delineates how consumers expect to shop for property: “They are able to shop, much in the same way as someone who is buying a car. They get to see things, they get to see the inside of the house, virtual tours, all sorts of technology that allows them to not only get a sense of the house, but the mapping.”
A New Day, New Role
In years gone by, the REALTOR® was the hunter and gatherer of housing, going out, using knowledge of the market and of client’s needs to collect properties that would be suitable. What has happened is that with the increased education , clients are already coming to the table with this information in hand.Does this mean that clients don’t need to expertise of a REALTOR®? No- this just means that clients need their REALTORS® to do something else. The role of the REALTOR® has involved from informational to advisory- to a partnership in which experience, training and knowledge of the marketplace helps a client to understand the information at hand, and to distill it so that it helps them find the right property to meet their needs.
Lawby explains the change: “Years ago, they ( consumers) would come to a REALTOR® for full information- here is my wish list, I don’t know where any of these properties are, so you are going to have to find them for me. Today, it is ‘please interpret the information that I have’, ‘I have knowledge from searching the internet, but I need someone to interpret that knowledge.’ I need to make the right selection for a building, a right selection of an area.”
“People want expertise…the continued media (on housing issues), that causes concern- especially for first time homebuyers, is “I’m going to get a high mortgage, I’m stretching myself. Will the property that I am moving into maintain its’ value?”
So as Lawby says, expectations of what a REALTOR® offers in this new world order have shifted significantly, and it is crucial, in order to stay ahead of the curve, that REALTORS®s understand how to adapt to meet that need.“REALTORS® that have the knowledge, of the economic principles in the area- know the mix of people in the area, the type of industry, professions that they represent.
People want expertise today- from their lender, from their real estate salesperson. They can get it, and they should demand it. I am paying fair value, and I want to go look at enough to be able in my own mind to determine the value on the property that I am going to buy.”
As Silver says, the role of the REALTOR® has expanded to be the voice of reason, and that there are tremendous opportunities for building long-term relationships with a shift in client expectation as the guide: They also need someone to keep them on track to what is important. Sometimes people fall in love with a kitchen, and they realize that the bedrooms are too small. Or- it’s a wonderful kitchen, but the main floor family room is not going to work for their lifestyle. I think because a REALTOR® is a third party, they can also be a good advisor, especially if the REALTOR® gets to know them well, and establishes a good rapport.”
The Staging Factor
There is no denying the force and the popularity of the trend towards design shows and magazines.It’s not just the expectation of service from REALTORS® that has changed, consumer’s baseline expectation when they view a property has changed as well, which has implications for the REALTOR®, whether assisting the buyer or the seller.
These shows and glossy magazine layouts have simultaneously given visual context to consumer expectation, while raising the bar for those getting properties ready for sale. Staging is a trend whose impact is measurable, and is likely here to stay.Silver says , “The (consumers) are not willing to suspend belief to be creative. They want to see the house already staged. They want to be able to see themselves living in the house already. Whereas years ago, you’d go through the house and say, we can change the bathroom and do this- or if people didn’t have so much furniture…. People need to be able to imagine their things there. There is a lot more preparation from the sellers’ side, to get the house ready- and from the buyers’ side, the expectations are much higher.”
Another element that has made itself present over the last number of years is that of the Globalization of real estate.With property investment regulations stringent in some countries and with attractive, welcoming qualities for foreign property investors, as well as many infrastructure and social elements that many a draw, there has been a surge in Canadian property interest from various pockets of the globe. And like many consumers seeking property domestically, many of these global shoppers are doing so on the internet, underscoring the need for a strong online presence that displays the specific qualifications or training that may meet the unique needs of these groups, as well as lending a highly visual experience enhanced by professional photography or digital floor plans.
Silver explains, “The whole globalization that is brought on by technology, is a really big factor. REALTORS ®have to make sure that their listings are out there on the internet…. If REALTORS® have second languages, they have to make sure that people on the internet know that they do.”
How to stay ahead of the curve
As Lawby points out, sometimes the more things change, the more they stay the same. The success of a REALTOR® comes down to being able to provide service- and this equates to taking cues from the consumer.It comes down to paying attention, pure and simple, and in delivering on quality promises.
“You try very hard when you are viewing properties with clients to look through their eyes, and have them truly indicate the things that they don’t like, what they’d like to change, what would make it ideal. In some cases it’s just cosmetic; in some cases its’ structural”
“The key to providing service is to be attentive; pay attention. Ask questions. If you don’t have knowledge on a subject that you are being asked about then own up. Undertake that you are going to get the information, and source the information right away. The issue today for service in our industry is instant response, because the consumer is used to getting everything instantly because of the internet. If it’s not instant response, and if it’s not quality, backed up with research, it is not good service.”
So for REALTORS® trying to stay ahead of the curve and meet their clients at the door of opportunity, it is important to identify these trends, and then to translate them into actionable items in your tactical and strategic work. It’s not about unlearning what you already know in order to get ahead. It’s about rethinking what you already know in the context of a changing environment.