Where We're At, Where We've Been, Where We're Heading
- ruthelewis
- Jan 14, 2024
- 5 min read
If you've been paying attention, and certainly if you work in real estate, the last 4-6 months have felt like a real trudge through the mud.
Speaking anecdotally, 2023 got off to a slow but promising start. With a little persistence and dedication, the spring market felt alive, and the possibility for a uphill ride felt right at our fingertips. I heard rumblings of a "dead cat bounce" but I had my blinders on and my eyes on the prize. My second quarter was fantastic and my third quarter got off to an excellent start. I focused on what I could control and did my best to ignore the rest.
Well baby, as much as I like to believe that we create our own realities, as things slowed down significantly in Q4 I had to admit...that cat was dead.
Dramatics aside, 2023 was a good year for me, especially as a newer agent in her first year full time in real estate and entrepreneurship. But the numbers don't lie. We have all at least seen, if not acutely felt, the reports that transactions were way down, listings were taking much longer to sell, potential buyers were having a hard time qualifying for a mortgage and affordibility seemed completely out of reach for many Canadians.
As we head into 2024, I'm reflecting on everything that has happening and looking at the future with as much optimism as I can muster. We have two rate announcements coming in Q1. I promise that every realtor and mortgage broker you know is doing everything they can to manifest rate drops. We're going to church, we're lighting candles, we're cleansing our crystals. We're trying here.
I got into real estate because I felt like it would be an excellent channel for my existing professional skills. I didn't entirely realize that it would call for me to become a political analyst and economic forecaster. I just wanted to be the nice lady who helped you find a house! But ok, that degree in Political Science that I'd long deemed useless (Sorry, Dr, Alway!) might have some purpose after all.
In creating this blog, I imagined writing a series of well researched and referenced essays to help myself and my readers understand exactly what is going on in the market. I've spent the better part of the last decade working in various capacities as a research assistant at McMaster University. I really value facts and evidence over emotional speculation- especially when it comes to advising folks on the purchase or sale of what is likely their largest asset!
For this blog entry, I wanted to write about the history of homeownership in Canada, and why it may not necessarily remain the gold standard asset class moving forward. In mid to late December I collected various articles and began reading a book about Neo-Feudalism. I was curious about how homeownership in Canada has evolved. What is the future of real estate as an asset class? ARE we moving towards a society of Neo-Feudalism with (land)Lords ruling over the tenant class?
And look, I found a lot of really interesting literature to help me address these questions. But I think I have to release the expectation on myself to produce an academic journal worthy piece of writing each time I want to share some of my findings in this space. Otherwise I'm going to over-prioritize researching and writing in this blog over actually doing the work of being a real estate agent. As of this date, I have not received any funding for this particular research; no one is paying me to do this.
So the following are some of my general reflections, followed by a few resources you can consult on your own. Forgive me if it's not in APA format. I won't be submitting this for peer review.
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In late 2023 the Canadian Government announced plans to turn to post-war strategies to help address the housing crisis that we are currently facing. The plan revives an 80 year old program in which the federal government provides builders with pre-approved blueprints to expedite the home building process.
Photo of war time homes in Saskatoon
This news inspired me to delve into the history of homeownership and government policy regarding housing in our country. I think it's important to remember that Canada as a nation is only 156 years old. As an entity, we don't have centuries of history to analyze-our history is very much still be written. But we can still look to the past for clues about where the housing market is headed as we approach the second quarter of the 21st century.
What I discovered in my research is that the current housing crisis is certainly not the first. I found a 1992 publication from the University of British Columbia prepared for the Canadian Mortgage & Housing Corporation(CMHC) titled "Housing a Nation: The Evolution of Canadian Housing Policy". It's over 160 pages and covers the time period between 1917 through the 1980s(Kinda underscoring my point that I don't necessarily have time for this). However many passages from the document could have been written today
"...the period of economic expansion which peaked in ____ generated a substantial increase in the volume of dwellings built for a rising, affluent middle class...However, the boom turned out to be short-lived when the country confronted the crisis of the great depression...Declining real estate ...and increasing numbers of loan defaults made lending institutions reluctant to offer mortgage money"
I mean...that sounds pretty familiar. But the year I left blank within the quote was 1929.
What I gleaned from the publication overall is that the Canadian Government has a history of somewhat ignoring housing issues and hoping that the market would correct itself in crisis times, until things became so dire, and public outcry so loud that they were forced to step in with meaningful policy changes and programs to stimulate the market.
In 2024, I think we have reached that point. The public is...not happy. The government has begun to respond. The good news from my research is that yes, things have gotten bad before...but then they've gotten better. I'm hopeful that they will. They must.
We may need to adjust our expectations of what homeownership might look like. The focus over the past century has centred on the nuclear family in the single detached home. That is neither the standard in the longer historical context nor the current standard globally.
But I've not given up on the idea that Canadians will be able to continue to invest in real estate and realize that gold standard dream.
Let us get these houses built. Let us get these interest rates down. Let me be the nice lady that helps you find a house.
~Ruth Elizabeth Lewis
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