While many sectors have been rocked by the COVID-19 pandemic, real estate sales throughout Canada have surged in 2020 and 2021. National sales numbers for October, recently announced by the Canadian Real Estate Association (CREA), show that 2021 has already set the new high bar for annual sales, even with a full two months to go before year-end.
Specifically, those CREA national statistics show that:
● Home sales on Canadian MLS Systems were up 8.6% from September to October 2021, the largest month-over-month increase since July 2020
● The national average sale price in October 2021 was an 18.2% year-over-year increase
● For the number of actual transactions, October 2021 is second highest October on record (by a large margin), second only to the record-setting October 2020 numbers
Canada’s two strongest local markets in Toronto and Vancouver have been leading the charge. In early 2021, the Toronto Regional Real Estate Board reported that home resales in that city had a record February with 52.5% year-over-year increase, with condos leading the way. Similarly, Vancouver’s market performance for that month hit a 73% year-over-year increase, with both detached houses and condos seeing surges.
A New Marketplace
Home buying in Canada is changing in some significant ways. The home buyers themselves are changing, driven by both the COVID-19 pandemic and the shifting priorities of younger buyers.
For many Canadians, buying a home is still a major financial milestone and the largest asset most people will own. With gains outpacing most investment products, homeowner’s equity is the cornerstone of their financial portfolio. However, during the pandemic people came to see their home as more than just a place to live. Their home is now also their office, school, gym and restaurant.
The younger generation also uses a different buying process. They’re re-defining the way things are done on many fronts, including making major purchases. With a younger demographic and its new “home buying psychology,” we’re seeing these new trends:
The buying process is increasingly device-centred — People are using their smartphones, tablets and laptops for every part of the buying process. A 2021 article on BetterDwelling.com says Google searches asking “Should I buy a house?” hit a record high in Spring 2021.
Once they make the decision to get into the market, buyers are also going online to:
● Search for available properties
● Get a look-and-feel for the properties
● Following virtual interactions instead of in-person visits to sales centres or open houses
The online process is enhancing the traditional approach of asking a realtor to provide information or making an in-person visit to a presentation centre or open house.
Buyers are increasingly purchasing homes “sight unseen” — Shopping with these technology devices in hand means buyers can purchase their properties without ever walking through the home or visiting a presentation centre. It’s happening. The news media is reporting on the increasing trend of Canadians buying homes “sight unseen.”
The way developers and realtors are meeting those buyers’ needs is changing too, with new technologies and tools.
The Transaction: Meeting Buyers Where They Want
As buyers do more of their shopping online, developers are meeting them where they want to be met — either virtually, in-person or a hybrid.
For example, buyers have traditionally made multiple home visits before making their final decision. Even those visits are moving online, as many companies are using 3D visualization software to allow buyers to take virtual tours. It makes the process slightly different as making multiple home visits becomes less common.
Similarly, technology like Avesdo TMS allows developers to meet buyers in the online environment by facilitating seamless, compliant transactions.
Whether it’s online or in-person, the shopper chooses to buy once they’ve formed an emotional bond with the home. Of course, when it’s done virtually, you’re not at the table to start the contracting process and make sure it’s done right. That’s why Avesdo TMS platform offers some key features to make the contracting move ahead as smooth as possible.
Deposit by Credit Card — Avesdo TMS allows users to take an initial deposit via credit card reservation. Taking deposits is also a key step in the funnel: you’re immediately identifying those truly ready to purchase from the others.
Ensuring Legal and Compliant Contracting — Avesdo TMS also leads both parties through a compliant step by step contracting process ensuring things aren’t missed, rules are followed, required signatories are gathered and money’s are not transferred into trust until the deal is firm.
Digital Inventory — Interested buyers have done most of the information gathering and review online and when they are ready to make a final decision, Avesdo TMS allows for the home to be purchased online or through email; which the developer can manage along with all the in person deals through a single system.
Signature — Once reviewed, the buyer can sign all required documentation using Avesdo’s proprietary e-signature software — whether that’s at the presentation centre or on an iPad in the presentation centre or in the buyer’s home.
Closing –– Along the way as the project is being built Avesdo makes it easy to send out amendments, track deposits and realtor commissions and ultimately manage the dates and documents to ensure a smooth close.
The Avesdo TMS users benefit from total visibility and flexibility. From start to finish, Avesdo provides developers with the process management they need to increase efficiency, reduce risks of error, manage a dynamic process in a hybrid environment and make for an overall better experience for all sides.
Home Buying is Moving Online
Home buying is moving online. It’s a big shift. Property law is among the oldest forms of law, and buying a home is the most bricks-and-mortar business of all. As a result, real estate transactions have established practices using the traditional paper contracts. However, the shifts in buyers’ demographics and the psychology of their buying practices means developers must meet buyers where they are — in an online world of buying.
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