Upon referring a persuasive book to a good friend of mine, she admitted that she could be easily convinced of a wide range of ideas from any well-written book, whether it was “right” or not. This was a moment of honesty very few people can even admit to themselves, much less to others. Sometimes we agree with something we have read because we want to agree with it, or maybe it just “feels” right, or maybe it is actually true. The fact is, none of us have the tools to be experts in everything, but the problem is that we almost need to be experts in which “experts” we can trust. My first rule is if someone calls him or her self an “expert”, he or she usually isn’t.


Real estate speculation almost seems like Vancouver’s official sport. Everyone has an opinion and everyone seems to be an expert. It is safe to say that even in the last few years of troubling economic times, Vancouver has been the hottest market in Canada, and probably in the top 10 in North America. At times it can seem insane. Maybe it is. But this market has led to two speculating camps, both using what I call “funny math” to prove their point.


Don’t get me wrong, they are both convincing. Problem is, they are so convinced that they are right, that they ignore everything the other side says, when the truth likely lies somewhere in the middle (or is utterly unforeseeable either way). The two camps I speak of, in regards to real estate speculation, are the utopians and the doomsayers. Utopians believe that the market will forever keep rising and rising – there may be small corrections along the way, but Canada will always be safe and steady for real estate investment. Doomsayers, on the other hand, are always calling for the biggest collapse in real estate history – unaffordability cannot be sustained and the market is sure to dive at any moment.


Unfortunately, as real estate professionals, we sometimes get caught up in the speculation. It sometimes seems natural that we should should give our opinion on the future of the marketplace. But we shouldn’t. While we are professionals, we are also salespeople held to a code that we must put our client’s interest before even our own. It is almost entirely against our benefit to forecast a poor market. So when was the last time you heard a real estate agent say that he or she believed a downturn was coming? Utopians will usually quote population projections and livability quotients.


On the other hand, doomsayers generally advocate that their followers should rent until judgment day, when all the greater fools will get what is coming to them and those who waited can pick up the pieces of a crashed market (like many Canadians did on American soil). Doomsayers quote household and government debt numbers, unaffordability ratios and rising mortgage rates.


Unfortunately for both camps, they let their passion blind them and ignore the balance of the two. What ends up happening is that the general public doesn’t know who to trust. You can’t ignore the numbers of either. This isn’t a zero-sum game. You can’t tell people for 10 years that the market is going to collapse any day and expect credibility to last forever. You also can’t paint rosy pictures when history has continually shown the reality of real estate cycles, and the subtle or not-so-subltle warning signs for market corrections.


So do your own research and follow the money. You want to invest in real estate? Talk to a real estate investor who actually makes money buying and selling real estate. Not an author. Not someone who lives in New York or someone who wants to sell you something (like a book or membership to some exclusive club). Talk to someone you know has seen the market rise and fall. Want to buy a home? Understand that if you sell in the peak of the market, you will probably buy in one too. Same with a slow market. Don’t play the game. Buy and sell what you need. Get a good deal and let your REALTOR® do what they do best – sell your home for the best possible price and find you a home that matches your needs. They can inform you honestly about the past market and the current market – but REALTORS® are not soothsayers.

Read full post
Categories:   Abbotsford | Abbotsford East, Abbotsford Real Estate | Abbotsford West, Abbotsford Real Estate | accepted offer | advertising | affordability | Agassiz, Agassiz Real Estate | agency | Aldergrove | Aldergrove Langley, Langley Real Estate | amortization | autism | backup offer | Bedford Landing | Bradner, Abbotsford Real Estate | Brookswood Langley, Langley Real Estate | Burke Mountain, Coquitlam Real Estate | buyers | buyers market | buying | Canyon Springs, Coquitlam Real Estate | Cedar Hills, North Surrey Real Estate | Central Abbotsford, Abbotsford Real Estate | Chilliwack E Young-Yale, Chilliwack Real Estate | Chilliwack Mountain, Chilliwack Real Estate | Chilliwack N Yale-Well, Chilliwack Real Estate | Chilliwack W Young-Well, Chilliwack Real Estate | Clayton, Cloverdale Real Estate | Cloverdale | Cloverdale BC, Cloverdale Real Estate | CMHC | completion | contract of purchase and sale | contracts | conveyancing | debt | Downtown VW, Vancouver West Real Estate | East Newton, Surrey Real Estate | Eastern Hillsides, Chilliwack Real Estate | education | Elgin Chantrell, South Surrey White Rock Real Estate | finances | for sale by owner | Fort Langley | Fort Langley, Langley Real Estate | Fraser Heights, North Surrey Real Estate | Fraser Valley | Fraserview VE, Vancouver East Real Estate | fundraiser | government | Grandview Surrey, South Surrey White Rock Real Estate | gross debt service ratio | Guildford, North Surrey Real Estate | Hazelmere, South Surrey White Rock Real Estate | home evaluation | investing | June 2012 | King George Corridor, South Surrey White Rock Real Estate | Langley | Langley City, Langley Real Estate | loan-to-value | market analysis | market update | marketing | markets | MLS | mortgage rates | mortgages | Murrayville, Langley Real Estate | negotiations | open house | Parkinsons | Port Kells, North Surrey Real Estate | Promontory, Sardis Real Estate | qualifying buyers | real estate cycle | real estate history | renting | revocation | Royal Heights, North Surrey Real Estate | rules & regulations | sales-to-listing ratio | Salmon River, Langley Real Estate | Sardis East Vedder Rd, Sardis Real Estate | schedule A | sellers | sellers market | selling | Simon Fraser Univer., Burnaby North Real Estate | speculation | statistics | Sullivan Station, Surrey Real Estate | Sunshine Hills Woods, N. Delta Real Estate | Surrey | Vancouver | Walnut Grove, Langley Real Estate | Whalley, North Surrey Real Estate | White Rock | White Rock, South Surrey White Rock Real Estate | Willoughby Heights, Langley Real Estate
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.