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July Market Update: Skin Deep

Blog, Featured Blog Posts | August 6, 2015

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Beauty is only skin deep. A statement one would say which means a ‘person’s character is more important than their appearance’. I was reminded of this statement as I looked through photos from a recent trip to the Greek island of Cephalonia. The beauty was amazing; however as a tourist I had no idea of the financial ruin that the country was in. And in fact, over the last few weeks; the financial nightmare has grown to the point where Greek citizens can only withdraw 60 euros per day! Can you imagine the challenge of living on less than $100 dollars a day? Many of the Greeks have resorted to cashless bartering or trading goods and services to survive and do business.

As a tourist last September I was aware of the Greek financial crisis, mostly because of what I had read and heard on the news feeds. However, if I wasn’t listening, reading, and being curious about the Greek people’s issues, I would have gone about my touristy things without realizing there were issues at all. In fact, when you look at my photos you will see no signs of a financial crisis on the island. It was only when talking to the locals – the people on the ground – did I realize how grave the situation was. They were in a state of disillusionment. No hope for the future and no hope for their children to have a productive life in Greece. The Greek Government was, and is, operating without a financial compass. There is no hope and it’s truly a sad situation, especially when you think of Greece’s rich history. The result is that these people have no leading indicators that the Government, country, and financial well-being will improve.

This was a great reminder for me that we as people need hope or indicators of where we are going. The Greek people I talked to felt like they were simply ‘existing’ with no clear and concise direction for their futures. Direction is essential to our well-being and is essential to our real estate portfolios as well. How do we decipher which way to go?  What to buy, sell or hold? What to do when the country of Canada is told last week we are officially in a recession? My advice is to turn to the leading indicators, but not the usual indicators. Yes….GDP, job growth, building starts, and other indicators are important. However, these indicators tend to be on a larger scale and are not transferable to regional and local markets. Turn to the local indicators. Indicators such as the number of homes in a specific price range in a specific area vs the number of sales for the specific area. Or, how many expired listings that the specific area and price range had over the last few months?

The Canadian real estate market is mostly aligned with the major indicators. In many parts of the country and in some property types, the real estate market is struggling; even in the Fraser Valley! The single-family market is as hot as it is ever been, however the condo market continues to struggle. In fact, some local condo areas have seen a decline in prices. Investors need to dig deep – deeper than the surface – to find the indicators that give themselves confidence and direction to stay on course.

I hope you enjoy this month’s stats package and photos of Cephalonia.

604-807-4366 or randy@eximus.com

STR (Sell Through Rate) Formula = Sales ÷ Active Listings + Failed Listings + Sales  ​

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