Royal Bank says: market to slow (modestly), risk of crash is “low”

This article is based on the following projections for 2016 compiled by the Royal Bank: http://www.rbc.com/economics/economic-data/pdf/home-resale-fcst_can.pdf

As interest rates begin to rise in 2016, Canadian real estate activity is anticipated to slow “modestly”, according to the above report from Royal Bank Economics.

RBC considers an outright crash in real estate as having a very low probability. The analysts of RBC expect the general economy to expand and also that interest rates will likely gradually rise after the new year begins.

However, the bank notes that there is a possibility of a dramatic downturn in the real estate market if there is a plunge in employment, due to a deep recession, or if a dramatic surge in interest rates occurs.

The Royal Bank says the economic hit resulting from lower oil prices has not been impactful enough to shake up the Canadian real estate market.

In the oil-price dependent provinces of Saskatchewan and Alberta RBC says that the Canadian housing market is poised to post one of its best years on record by the end of 2015. Rock bottom interest rates have created strong demand for housing in other provinces, particularly in British Columbia and Ontario.

In July 2015, the Bank of Canada reduced their overnight lending rate, affecting variable-rate mortgages by 25 basis points — to 0.5 per cent. RBC predicts the central bank will raise the rate by 75 points to 1.25% during the 2nd half of 2016.

RBC has stated in their reporting: “It has long been our view that the eventual rise in interest rates from generational low levels will produce significant headwinds for Canada’s housing sector. Much of the market’s vibrancy in the past several years can be attributed to exceptionally low, and declining, interest rates.”

The expectation of the cooling is expected to be moderate & controlled. Home sales are expected to decline by less than 10% over several years – and average sales price growth decelerating to a rate of 3.2% in 2016.

RBC went on to say, “In our opinion, the risk of a crash, resales plummeting by more than 25% nationwide for instance – is low for three main reasons: First, we expect the Canadian economy to grow and create jobs and boost incomes. Severe housing downturns usually coincide with recessions.” Two other reasons cited are: 1) strong immigration and 2) the gradual pace at which interest rates are expected to rise.

RBC also does not expect average national home prices to fall outright, at least in the short term. However, certain segments of particular markets, for example condos in Montreal, could see a decrease. The risks of a nationwide home price collapse such as a drop of 25% or more are “quite remote,” according to their report.

Let’s hope this report remains on the said trajectory, because the future of the market seems bright for most of Canada through 2016!

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Have you created a blog for your real estate agent website? It is most advisable that you do, for several reasons.

Firstly, writing informative articles to your clients is a great way to earn their trust in your knowledge of the market, especially the local market that you are one the premier experts of.

Secondly, content for you blog is vital for SEO (Search Engine Optimization) of your website. The most relevant and high quality content that you can provide, the more likely that new prospects will be able to find your website in Google’s listings.

If you need ideas on what to write about, that’s what this article is all about; to help you formulate more content ideas for your blog articles; you should specifically tailor these ideas for your local area.

A. Write about new developments, new amenities, new subdivisions, etc.
New developments would certainly be of interest to your site visitors, new prospects, and current and former clients. New community parks, and even walking or riding trails display added long-term value for local residents of your service area. New shopping centers and new restaurants can make the locality appear especially attractive, fun, and active.

You can also include updates on improvement to infrastructure; those items are less sexy, but can convey an active neighborhood organization and responsible government officials. If it is already well known that traffic issues have been a sore spot in your area, writing about road expansion projects (if any) can help remedy client fears about that. However, if there are negative aspects to the area, it is probably best to not even bring up such topics – unless a solution for it is already well underway.

B. You can write about the interesting aspects of history of your service area(s).
Knowing the history of the neighborhood you work in can be interpreted and reflect your passion for the service that you provide.

You can go into why a particular town was founded (trading post, steel foundries, railroad junction, etc.) and the various industries that were born, or social movements or political events that happened there.
Interesting historical content like this gives your neighborhood additional context, explaining how the neighborhood became laid out as it is, or why certain styles of houses are more varied in one area compared to others. Such key details will influence prospects in a way of perceived appreciation for the area that they are considering purchasing in.

C. Feature locally-owned businesses
Blogging about a local business or various local business is a good way to build those types of business relationships in your community. Promoting a local breakfast spot or local business on your blog. Possibly in return, the business may even post your flyers or business cards in their entrances.
People will also likely bookmark your website to return to your blog, because they see you as somebody who is in the know. This is also a good way to help new prospects and clients get acclimated to the area. Your brand will also be more memorable when they are providing referrals to their friends.

D. Discussion of past and upcoming events
You can talk about how fun and exciting your neighborhood is by writing about upcoming events. Festivals, concerts, art showings, any public get-together, even free self-defense or classes, if it is interesting to you – it would be interesting to your readers as well. You can focus on family-style entertainment, couple events, single events, various age interest groups to showcase the variety within your area.

F. List the many scenic or naturesque attractions in the area
Most everybody of course loves nature. You can showcase some images of the best views around town, or come up with a “Ten things to do Outside”. You can get into some detail about various camping spots, trekking, lake or river cruises for the nature lovers that might surely makeup a healthy percentage of your site visitors. Since most people like nature, also like sports, start blogging about it, in a conservative measure even it can build even more bridges between you and your prospects.

E. Focus on entertainment and local pop culture
You can perhaps most easily scrape content off local variety website, perhaps giving a link back to those sites, but with a bit of digging perhaps you can find movies and television shows that were previously filmed in the area. People in general are way into this. If your area is big enough, perhaps you can find films currently in production.

Famous people from your area, which are usually listed on wikipedia, can add perceived value in noting which famous personalities got their start in your town or still call it home. These tid-bits of popular culture can serve as good filler conversation during car rides between property showings and are good bridge subjects on social media sites.

Now there is hardly any excuse left, if you have a spare hour to beef up your blog. Remember to add in imagery and photographs with your articles as well, if your website editor supports that. Another option is to hire a writer to fill out your website more. But the sooner you have more quality content hosted, the sooner search engines like google will boost your site rankings and visibility.

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Cultivating referrals is one of the biggest differences between working hard and working smart.

Attaining referrals should be a regular part of your business plan and requires a proactive initiative. Handing people your business cards at a social event or even business meetings rarely results in a profitable relationship; people are just to busy to care about increasing your income unless there is a mutual benefit.

Utilizing both traditional and online strategies can significantly boost your revenue. With online services such as LinkedIn, mining for referrals has become much easier and more effective.

Below are some additional tips for prospecting referrals:

Cultivating referrals is a continual process, not an infrequent task:
If you meet a person whom you think would be a good fit for your network, then it is much easier to gain a referral by first helping someone. Instead of approaching somebody with a request for help such as “I am a real estate agent around the city, here is my card… ” try “Would you have a business card? I’d like to know how I can help you increase *your* business”. The unexpected approach will get their attention, as it is highly unusual for someone to ask another about how to help the with *their* business.

Also keep in mind that many ‘Gen X’ and ‘Gen Y’ people today don’t rely on business cards, rather website or email electronic exchange; so don’t be surprised if many people today don’t have a business card – but the trick works the same. If you can help bring them a referral, then you can expect much better results from them in return.

Utilizing LinkedIn:
Check to see if your new contact is on LinkedIn: Find out more about them such as: who do they associate with? Who has endorsed them? Check into their company to further determine if they are a good fit for your own business objectives; if they meet your standards. Check their websites including their personal websites if they have one. If you feel comfortable with the person, and you think they have the right kinds of contacts who would be of potential value to you, then it is likely good to invest your time, and referrals you have for them, in building a relationship with them. Use LinkedIn as a tool to write a recommendation for their business; and also ask for recommendations to others for your services, from those that know the quality of your work.

The personal handwritten note:
Handwritten notes have only become increasingly uncommon; and emails have become passe. After getting their contact information, send them a handwritten note mentioning how nice it was to meet them, and how you look forward to supporting *them* with referrals to their business when possible.

Simply usually nobody wants to give you a referral until they know, like, and also trust you. They will question in their minds whether you will deliver. They don’t want to burn one of their customers or clients. You will have to develop some level of trust with them, which naturally may take some time.

Introductions:
Check your contact database and make respective introductions to your new contact using LinkedIn or email; when appropriate, that would be interpreted of value to those contacts.

Follow up:
Schedule a follow-up in about 10 days to 14 days, perhaps with an article or white paper that would help them with their business.

Did they respond in a month’s time?

If after a month you have not received a response from them, you can reconsider their potential value to you and if you want to try and re-establish a connection. Referrals should be considered a reciprocal activity; you would not want to give your valuable contact information and then not receive anything in return.

If you have determined this person would be an excellent addition to your database and business, maybe send them a useful book with a note that supports their business or another referral. Such a small gift as a book can create a positive impression that could last years.

Summary:
Nothing else will ever be as powerful or golden as a personal recommendation of one person’s services to another. Leveraging your relational capital can ultimately help you exchange referral with other connected individuals.

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