Ever get that feeling? You know that feeling where it’s like you’re just one step behind in this whole real estate game? Like everyone else has got that secret playbook.
Uh Huh.
And you’re just kind of left there guessing. Like what’s the deal?
Yeah, I hear you.
Well, today we’re cracking that code right here, right now with the power of supply and demand.
It’s like the cheat sheet you’ve been waiting for.
Absolutely. It’s like that insider info that’ll have you spotting opportunities like a pro.
You’ll be seeing those green lights everywhere.
Everywhere.
What’s so fascinating about this whole supply and demand thing is how straightforward it really is.
I mean, more people wanting homes than there are homes. Prices are going up, more homes sitting around than buyers. Prices have to go down, right?
It’s really that it’s that basic
you got I mean, imagine just picture this being able to size up a whole neighbourhood just by looking at like what a couple of key numbers. That’s what we’re diving into today.
We’re giving you the tools to cut through all the noise. and make smart decisions.
No fluff, just straight up knowhow.
Yeah, absolutely. And trust me, we’re not talking about some get-rich quick scheme here. This is about understanding the fundamentals, the stuff that separates those who just scrape by from those who actually build lasting wealth in real estate.
This is the long game, right?
Exactly.
Okay, so let’s break it down. Think back to remember that bidding war we talked about last time?
Oh, yeah. That was a wild one.
Yeah. Well, turns out there’s this one key indicator that could have completely tipped the scales. Right. Yeah. And it all starts with these total sale listings. That’s our first clue.
Okay. So, how many properties are actually up for grabs, right?
Exactly. It’s like, think of it like, you know, when you’re browsing online, right,
and there’s just like tons of choices,
you know, you’ve got the power, then, right?
Yeah. You’re like, “Okay, I can, I can be picky.”
Exactly.
That might mean it’s a buyer market.
It’s like walking into a store having a sale. You know you’re in a good spot.
Exactly. But here’s the thing, and this is where it gets juicy, right? High listings alone, they don’t tell the whole story.
There’s always more to it, right?
Always, always more to it. Okay, so let’s say you’re checking out this town, right?
Okay.
Tons of homes for sale, like for sale signs everywhere.
But here’s the catch. It’s also got this history of really slow economic growth.
Oo, that’s not a good sign.
That’s a red flag, my friend. That’s like that awkward silence at a party.
Yeah. You know something’s off.
Yeah. You’re like, “Okay, what’s what’s going on here?”
Exactly. Got to read between the lines. Imagine the flip side, right?
Okay.
You stumble across this neighbourhood, barely any for sale signs.
Oh, interesting.
And when a property does hit the market, it’s gone. Like that
snapped up.
Poof. Vanished. That’s where our next indicator struts in.
Days on market. This one’s all about speed.
Okay, so we’re talking like how fast are these homes selling, right?
Exactly. We’re talking less than 65 days on average.
Wow, that’s quick.
That’s fast. Now, picture this. You find this like an amazing dream home, right?
Okay.
But it’s been sitting on the market for like 200 days.
What’s the deal with that
exactly? What’s the story there?
Right. Something’s up.
Could be overpriced, hidden problems, or just like, I don’t know, bad vibes in the neighbourhood. Who knows?
Bad vibes. Yeah. You can’t quantify that. But it’s real.
It’s real. Those are the questions that Days on Market forces us to ask.
It’s like dating, right? Like if someone’s been single for a suspiciously long time,
Yeah.
you got to wonder what’s going on there.
You start asking some questions.
Exactly.
Exactly.
All right. Now, let’s shift gears a little bit. Let’s talk about rentals.
Okay.
Have you ever imagined the worst-case scenario? You’ve got this rental property
and it is just sitting there empty.
Oh, it’s brutal.
Months empty. No one’s living there.
Just bleeding money.
Talk about a nightmare, right?
The worst.
That’s where vacancy rate comes in.
Okay. So, that’s like the percentage of empty rentals, right?
Exactly. And this this hits your bottom line directly
because if no one’s living there, you’re not making any money, right? No money, you’re losing money at that point.
Exactly.
You got to aim for that sweet spot, that two to three percent.
Two to three. Okay.
That’s the magic number that signals, okay, things are healthy. There’s not too much competition, but there’s enough out there to attract tenants.
It’s about finding that balance.
Exactly. You want that steady stream of rental income, right?
Of course, who doesn’t?
Okay, so we’ve got what we got? We’ve got listings. We’ve got how fast these homes are selling. And we’ve got that magic vacancy rate. trifecta.
But there’s one piece missing from this puzzle.
What’s that?
The people. The actual people living in these neighbourhoods. That’s where the renter population makes its grand entrance.
Okay. So, we’re talking demographics. Who are these people?
Exactly. Think of it like this. You wouldn’t open a bakery, right? Without knowing if people in that area even like bread,
right? That’s that’s good business sense right there,
right? Same goes for rentals. Got to understand who’s renting, why they’re renting. That’s your audience.
Know your audience. It’s marketing 101.
Exactly. So, like if you’re targeting those young professionals, those trendy downtown areas might be a good bet.
Yeah. They love that city vibe.
But if you’re after families, okay, then you’re looking at those suburbs with those good schools, the parks.
Got to have those good schools.
Got to have it. It’s all about aligning your investment with the people who will actually be living there.
Makes sense. Makes sense. Now, speaking of hot markets, we got to talk about auction clearance. rates, especially in those really competitive cities.
Oh, yeah. Those are nail biters.
Those are intense.
Okay, so paint a picture for me. What do those auction rates tell us?
All right, so imagine this. An auction where like more than 70% of the properties get sold. That’s a screaming sign.
That’s a lot.
That’s high demand. Like way more than supply.
It’s almost like a feeding frenzy.
Exactly. Everyone wants a piece of the pie.
Everyone wants it. Okay, so now that we’ve got all these tools in our detective kit, let’s put them to the test.
Let’s do it. Let’s dive into a real world scenario and see how it all plays out.
I’m ready. Let’s go.
All right. So, picture this. We’re in the heart of the city.
Okay.
Properties are like hot cakes at a pancake breakfast. Gone before you can even blink.
It’s a feeding frenzy out there.
Days on market. Forget about it. We’re talking like a blink and you’ll miss it kind of situation.
Shorter than my attention span.
Sounds like a surefire win, right? I mean, what could go wrong?
Well, hold on a second. Remember, numbers can be deceiving.
Oh,
yeah. They tell a story, but sometimes they leave out the juiciest plot twists, you know?
Oh, okay. So, like what? Like there’s more than meets the eye here.
Exactly. Exactly. What if what if all those crazy fast sales are actually hiding something like a vacancy rate that’s through the roof?
Oh, so it’s like it’s like everyone’s buying but no one’s actually living there.
That’s exactly it. It could be a sign of short-term hype, you know, not actual lasting demand.
Ah, so it’s like that trendy new restaurant everyone’s buzzing about, but then a year later,
boom, gone.
Out of business, nobody’s going anymore.
Exactly. It’s all about separating the fads from the fundamentals.
Okay. So, how do we do that? How do we tell if it’s the real deal or just a flash in the pan?
All right. So, let’s flip the script for a second.
Okay.
Imagine this. You got a neighbourhood where rental listings, they’re vanishing faster than, I don’t know, like a popsicle on a hot summer day.
Okay, I like it.
Rents are steadily climbing. And that vacancy rate, oh, it’s practically non-existent. But we’re talking lower than my chances of winning the lottery. Low.
Exactly. That’s the sweet, sweet sound of a landlord’s market, my friend.
Music to any investor’s ears, right?
But hold on. It’s like I’m getting this flashback to like econ class.
Didn’t they say something about markets being like, I don’t know, like roller coasters, always going up and down, never staying the same.
You’re thinking about market cycles and you are absolutely right.
Okay. So, it’s not all smooth sailing then.
Not exactly. They’re a force to be. reckon with. You can’t just ignore them. Just because a market’s on fire today
doesn’t mean it’s going to stay that way forever.
Exactly. Exactly. Take interest rates for instance. When those bad boys go up, borrowing money gets a whole lot more expensive.
Yeah. Suddenly those monthly payments are looking a little scary,
right? And that must-have neighbourhood is not so appealing anymore.
That’s how those interest rate hikes hit you right in the wallet.
Right where it hurts.
It’s like planning a dream vacation. You know, you’re all set and then bam, airfare doubles. overnight. No,
suddenly you’re reconsidering that trip to Bali.
Makes sense. And then you’ve got government policies. Those can be real curveballs.
Okay. So, like what? Give me an example.
Well, think about things like first-time home buyer incentives.
Those can really shake things up. They might cause this like a temporary surge in demand, right?
Yeah.
But then what happens when those incentives disappear?
Oh, everyone’s left in the dust.
Exactly. It’s like someone yelling floor it and then slamming on the brakes.
That’s a recipe for whiplash for sure. No doubt about it. And of course, let’s not forget about the big kahuna, the economy,
the one and only.
When the job market’s strong, people are feeling good about their finances, that fuels demand like you wouldn’t believe.
So, wait, are you saying that if I’m seeing help wanted signs everywhere, that’s actually a good thing for real estate.
It could be a sign. Yeah. A strong local economy, people with jobs, they’re more likely to buy homes, rent apartments.
Huh. Never thought I’d say this, but those help wanted signs are starting to look pretty Good to me.
It’s all about perspective.
It really is. But I’m guessing the opposite is true, too, right?
Oh, absolutely. Recessions, those can send shock waves through the entire market.
Yeah, those are never fun.
No, not at all. Job losses, uncertainty, it creates this ripple effect that’s hard to ignore.
Talk about a roller coaster ride. So, we’ve got interest rates, government policies, the economy, all these hidden forces at play.
It’s like a game of chess. Got to think several moves ahead.
So, are there any other wild cards we should be keeping an eye on? out for.
Well, there is one game changer we haven’t even touched on yet. Climate change.
Okay? And we’re not just talking about beachfront properties turning into swimming pools, right? This is bigger.
Way bigger. It’s about areas prone to extreme weather. You know, floods, droughts, wildfires,
the kinds of things that make you rethink your dream home location.
Exactly. And they’re already impacting demand. People are starting to weigh the risks of living in those areas.
So, that charming cabin in the woods might not seem so charming if it comes with the constant threat of wildfires, right? You have to factor in those long-term risks.
Makes sense. So, what about the flip side? The places that are, you know, maybe a little more resilient to climate change.
Ah, those are becoming very attractive, potentially driving up demand and prices.
It’s like the whole real estate map is being redrawn right before our eyes.
In a way, it is. And it highlights this really crucial point. Relying solely on the numbers can be a trap.
You’re saying we need to look beyond the data.
Exactly. You have to consider the human element. The things numbers can’t always capture.
So get out there, talk to the locals, get a feel for the community, that kind of thing.
Precisely. Numbers tell a story, but they don’t always reveal the whole picture. The lived experiences, the nuances, those are what really shape a neighbourhood’s future.
Okay. So, if data isn’t everything, what are some common mistakes you see people making when they’re trying to crack the real estate code?
One big one is getting caught up in the hype.
Oh, yeah. FOMO. Fear of missing out.
Exactly. Remember, real estate, it’s a long game. Don’t let a few flashy headlines or a temporary dip in prices throw you off course.
It’s like that saying, time in the market beats timing the market.
Exactly. Patience is key. Another common pitfall. Underestimating the importance of having a good team.
Okay, so we’re talking like woo.
I’m talking real estate agents, mortgage brokers, financial advisors, the whole shebang. They bring this invaluable expertise tailored to your specific situation. It’s like having a crew of expert navigators guiding you through those choppy real estate waters.
That’s a great way to put it. Remember, real estate can be a fantastic investment, but it’s not some get-rich quick scheme,
right? There’s no shortcuts.
None whatsoever. Takes planning, research, and the willingness to adapt.
Speaking of adapting, remember that other big shift we talked about earlier, the rise of remote work?
Oh, yeah. That’s a game changer.
That’s where things get really interesting because it’s like someone hit fast forward on the future of how we live.
It’s a whole new world out there.
It’s like we’re living in a whole new world now, right? Remember when we were all tethered to those offices, stuck in those concrete jungles.
Yeah, things have definitely changed.
But now it’s all about work-life balance, you know, and a lot of times that balance, it’s not found in those pricey city centres.
You got it. And that shift, it’s reshaping the whole real estate game
big time. I mean, think about it. Those downtown apartments, the ones that used to be like the ultimate dream,
right? Everyone wanted one.
Exactly. But now suddenly that spacious home office with a yard in the suburbs, that’s starting to look pretty good.
Especially when you factor in the price difference.
Oh yeah, that’s a big one. So those boring suburbs we talked about with the good schools and the parks,
they’re not looking so boring anymore, are they?
Not at all. They’re like the new hot spots. And it’s not just suburbs. We’re seeing vacation towns. Those places have amazing internet. They’re turning into year-round communities.
People are ditching the rat race and embracing the remote life. I mean, who wouldn’t want to work from a beachside bungalow, right? But it’s not just about the location anymore.
Nope. The must haves are changing.
Totally. It’s all about home office space, strong internet, and being close to nature.
It’s a whole new set of priorities.
It’s like the house hunting checklist got a major upgrade. But what about Okay, what about those folks who still want that city vibe, that sense of community?
Ah, that’s where things get really interesting.
Okay, tell me more.
We’re seeing this huge surge in flexible living spaces. Think home offices, multigenerational suites, even co-living.
Co-living. So like roommates, but intentional.
Exactly. It’s about creating this built-in community catering to a more flexible lifestyle.
And that I think highlights something really important here, right? The future of real estate, it’s not about predicting the next big thing.
It’s about understanding the human needs driving those changes.
So it’s less about chasing the hottest zip code and more about understanding how people actually want to live their lives.
Exactly. Supply and demand, they’re not just numbers on a spreadsheet.
They’re about people.
They’re driven by our desires for connection, for flexibility, for a place that feels like home, whatever that looks like for each of us.
Well said. Well said. So, to all our listeners out there, those savvy investors ready to ride this wave of change, what’s the one key takeaway? How do we stay ahead of the curve in this ever-evolving real estate world?
Keep learning, stay curious, and remember, the best investment you can make It’s in knowledge. The more you understand these forces shaping the market, the better equipped you’ll be to navigate all the opportunities out there.
Couldn’t agree more. And hey, never underestimate the power of a good days on market figure
and a rock-solid internet connection.
This has been an incredible deep dive, wouldn’t you say? We’ve gone from deciphering the basics to uncovering those future trends that are literally changing how we live, work, and invest in real estate.
Absolutely. It just goes to show you this field, it’s always evolving. There’s always something new to discover,
always. And on that note, until next time, happy investing everyone. Remember, knowledge is power, especially in the world of real estate.
