Category: Real Estate

Little Italy Neighbourhood Guide

Electric, vibrant and one of Ottawa’s favourite neighbourhoods, Little Italy, is not so little anymore. From it’s small and modest beginnings to an integral cultural hub in Ottawa, featuring trendy boutiques, fine dining, and luxury living, Little Italy has seen exponential growth in recent years. While this neighbourhood has grown and expanded over the years it hasn’t lost its charm and tight-knit community appeal.

Let’s take a closer look at Little Italy’s past, present and future. . .

PAST

Little Italy first got its start when Italian immigrants originally settled into the area in the early 1900s. The second wave of immigrants then settled in the area over a decade later, around 1913. It was at this time that the Italian community founded the St. Anthony of Padua Church, which quickly became the cornerstone of the Italian community.

What was once a predominately Italian community soon became home to Irish, French and Asian descendants, making Little Italy an inclusive, vibrant, multi-ethnic community, that is home to many.

While Little Italy is home to an array of cultures and ethnicities, the heart and core of the community is still very much Italian and proudly so. The community hosts Italian heritage festival and events each year, with it’s the major one being the Italian Week Festival that has taken place each year since 1975.

In honour of its Italian heritage, the community has also given two predominant streets in the neighbourhood Italian street names. Preston Street, which is viewed as the main artery through Little Italy has been given the name Corso Italia, and Gladstone Avenue, another main artery, is honoured as Via Marconi.

PRESENT

Currently, home to festivals, boutiques, restaurants, and a unique energetic vibe, Little Italy is an electric community that is thriving, and everyone wants to be a part of this urban oasis right here in Ottawa.

As briefly mentioned above, Italian Week Festival which has been taking place since 1975 is a major celebration every year that draws thousands upon thousands to flock to Little Italy. This festival brings guests from near and far and offers them the opportunity to “be Italian” and honour all the Italian culture, history, art and food that the neighbourhood has to offer.

If you’re are a foodie and also into the restaurant scene, Little Italy is the place to be. With a wide range of options catering to everyone, this neighbourhood is a great place to be whether you’re looking for a fine-dining experience or a place to meet up for brunch. Italian food, French food, Greek food, Thai food or Indian food, it’s really all here. There are so many great options in Little Italy, some popular ones include; Giovanni’s, EVOO Greek Kitchen, Flap Jacks Pancake Shack, RAW Pulp + Grind, Two Six {Ate}, Pure Kitchen, Stoneface Dolly’s, Pub Italia, The Moonroom, Heart & Crown, and Di Rienzo Grocery & Deli, just to name a few.

Not just for the foodie and restaurant connoisseur but also for those who want to have a good time. Home to some great entertainment including, Absolute Comedy, Murder Mystery Ottawa and the Gladstone Theater, it is never a dull moment. Or looking for a place to get your sweat on, this neighbourhood features yoga studios, martial arts gyms, and a number of fitness studios.

Be it summer or winter, Little Italy is ideal for any season! In the summer Preston Street is lined with patios and Dows Lake is just at the end of the street, along with bike paths and the canal to enjoy. In the winter heading to Dows Lake to go skating and then making your way up Preston to grab a hot drink is a Capital tradition not to be missed out on.

Little Italy is ideally situated in walking distance to Dow’s Lake and neighbouring neighbourhoods, including’ LeBreton Flats, Hintonburg and Centretown. With events such as Winterlude, Bluesfest and the Tulip Festival just minutes away everything you could ever need is all at your fingertips.

Even with all the expansion and continued development, Little Italy has managed to keep its community charm that has drawn many people to the neighbourhood in the first place.  With many of the businesses in the community family owned and run, Little Italy still has the same charm and welcoming feeling today as it did when the community first got established, making it an easy place to feel like you’re right at home.

Current developments in the area are offering residences a chance to live in one of Ottawa’s most loved neighbourhoods.

Claridge Icon

Currently under construction, Claridge Icon will be an astounding 45 stories offering amazing views of the city.  Under the design of one of Canada’s most distinguished architect firms, Hariri Pontarini, Claridge Icon is adding an extra oomph to Little Italy. Offering one and two bedrooms to it’s residences; one-bedroom units start at $598/sqft, one bedroom plus den at $592/sqft and two bedrooms at $639/sqft making the building average at $609/sqft.

Sky Condos

Sky Condos, a Richcraft group development, is currently in it’s planning phase and will soon be offering Little Italy Ottawa’s tallest residential building. The development will actually be comprised of a trio of towers which in total will create Sky Condos. With a staggering 1,120 units, ground floor commercial space and a large plaza, Sky Condos are going to be offering so much to the Little Italy community.

SoHo Italia

Right at the gateway of Little Italy comes SoHo Italia. Offering mesmerizing views of Dows Lake, a convenient location to all the action and a place for its residences to work, live and play. SoHo Italia is bringing luxury 21st-century condo living right to Little Italy.

SoHo Champagne

SoHo Champagne, offering city living at its finest right in Little Italy. The epitome of luxury and high-end living offered, SoHo Champagne will be redefining the condo game in not just Little Italy, but in all of Ottawa. Floor-to-ceiling windows and skyline views that can’t be beaten, SoHo Champagne has one bedroom units starting at $499/sqft, two bedrooms at $507/sqft, rounding out the building average to $503/sqft.

Hom

From fitness studios, terrace retreat gardens to dog washing stations, Hom truly is home. Entirely LEED silver certified, Hom offers its residences an impeccable standard of living quality. Steps away to all the restaurants, shops, and fun Little Italy has to offer and with numerous suite options, there is something for everyone. An average one bedroom is $455/sqft an average 2 bedroom runs at $435/sqft, making the building average $445/sqft.

Radcliffe

With views of Dow’s lake and Queen Juliana Park you might never want to leave the Radcliffe, but with a location just minutes from some of Ottawa’s hotspots, including, Little Italy, it is fun to venture out. Minutes from Little Italy, residences of the Radcliffe get to enjoy all the latest foodie places to eat, hit the trendy shops, hop on the walking and bike trails and soak up the community vibes. The Radcliffe offers one bedroom suites at $499/sqft and two bedroom suites at $507/sqft making the building average $503/sqft.

Norfolk

Norfolk offers high-rise living, steps from Little Italy and Dows Lake. Featuring an exercise center, party room, security, storage lockers and suites completed with the finest of detail. Norfolk Condo has various suites available that suit every need. One bedroom units averaging at $443/sqft and two bedrooms units averaging $415/sqft. The building average at Norfolk runs at $429/sqft.

170 Preston

Right in the heart of Little Italy, One Seventy Preston offers 15 condominium suites and stands at five stories tall. Recently completed in 2018, One Seventy Preston is featuring the latest in boutique condo living. Large floor-to-ceiling windows, private balconies, and a rooftop terrace are only a few of the perks for residences who choose to make One Seventy Preston their home. With exquisitely detailed floor plans and two bedroom suites averaging at $417/sqft, One Seventy Preston is a gem in the core of Little Italy.

FUTURE

New LRT Stop

The New LRT will have a stop right in the heart of Little Italy, on Gladstone, making this area even more of a hub than it currently is. The LRT stop is going to bring people, businesses and a mass amount of development to this community. It will now be easier than ever for members of the community to commute around town. It will also add ease for tourists and others to explore this cultural gem right in the Capital. With the increased foot traffic, the number of businesses increasing and development perspective soon to come, this neighbourhood is going to become more of a hotspot than it already is.

The LRT is going to give the residences in Little Italy and Ottawa an efficient, modern and more economical transit system that meets the current needs of our city and has the ability to meet future needs as well. The LRT is a smart investment in our city and will allow for manageable growth in the future. The potential for Ottawa that follows the Light Rail Transit system is undeniable. The LRT is transforming Ottawa and Little Italy is lucky to be at the forefront of such an inaugural expansion and forward moving initiative.

 

Rich with history, culture, and a vibrant beat, Little Italy’s future is brimmed with so much potential. With the soon-to-be LRT stop, condo developments and a steady attraction of both locals and tourists, Little Italy is marking itself on the map more and more. From small beginnings to extraordinary growth and community development, Little Italy is stealing the show in the Capital, and we are okay with that!

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Members of the Ottawa Real Estate Board sold 192 condominium-class properties in December 2018, a decrease of 6.8% from December 2017.

The average sale price for a condo in Ottawa remains reasonable and steady at $285,764, an increase of 11.1% from this November last year. *

Year-end figures show an average sale price of $278,316 for condos, up 3.2% from 2017.

Condo sales were up 13.1% with 4,058 units sold in 2018 versus 3,587 in 2017.

Curious about December 2018 market statistics for residential class properties in Ottawa as well? Click here to read the full story.

 

*Average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

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November 2018 market statistics continue displaying trends indicative of a fast-paced real estate market for Ottawa in 2018.

Members of the Ottawa Real Estate Board sold 295 condominium-class properties in October 2018, an increase of 0.3% from November 2017.

The average sale price for a condo in Ottawa remains reasonable and steady at $285,764, an increase of 11.1% from this November last year. *

Between $175,000 to $274,999 was November’s most prevalent price point in the condominium market, accounting for almost 47% of the units sold.

Condo sales continued to lead the way in November which included a higher average price percentage increase than single-family residential sales this month.

Curious about November 2018 market statistics for residential class properties in Ottawa as well? Click here to read the full story.

 

*Average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

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iBuyer

Buzzwords, the world has been suffering these terms for a long time! Everyone talks about ‘FinTechs’, being an ‘Entrepreneur’, or going on the ‘Keto Diet, just to name a few of 2018’s buzzwords. Society always seems to come up with a new buzzword that we all use, yet its much more hype than real substance. The real estate industry’s buzzword of 2018 has without a doubt been iBuyer.

The term iBuyer has been the talk of Wall St and the real estate industry over the last few months. Everyone is trying to get into this space; Zillow, OpenDoor, and even Coldwell Banker have been engaging with this buzzword. With all of this hoopla around iBuyer, let’s take a look and see what it’s all about.

What is iBuyer? (Hint it’s an algorithm)

At its core, it is a platform that uses an algorism to generate an offer on a property. The platform uses the algorithm to calculate the value of a home based on a variety of factors including location, size, potential work needed, and discounted cash flows to come up with a value for the property. This value is not the true market value of the home. It is a slightly discounted value that creates a profit margin for the buyer.

How does the Process work?

The process is relatively simple. A Seller would fill out a form about their home and provide details about the house. If the algorithm deems it a worthy property, the iBuyer would make an offer, conditional upon inspection. After which, a price reduction may be asked for. Alternatively, someone representing the Buyer can go inspect the property, take their findings to the platform and use it to make an unconditional offer on all things considered.  Once the offer is made, the Seller can accept it, reject it, or counter it. Once a deal is finalized, the closing date of the deal can be done in a matter of days. Everyone likes a quick closing in real estate!

How does the Buyer benefit from iBuyer?

First and foremost, the majority of people that use iBuyer are the owners of the platform i.e. Open Door or Instant Offer on Zillow. These large platforms build the platform and algorithms in order to buy properties for a discount that they can resell for a profit in the future on their platforms. Typically, these “Buyers” are looking for properties that need repairs so they can add value through renovations. Sounds like the oldest business model in the book, buy low and sell high.

What are the Seller’s Benefits?

Seller have a lot of headaches when it comes selling their home the traditional way. They have to make sure their home is always showing ready with everything perfectly placed and staged to show your home in the best way. This standard of being showing ready is incredibly difficult, it’s something that most people struggle to keep up with. There are dishes, toys, iPad’s, books, bags, and whatever else you have all over the place (Yes, we all have messes in our homes). Add in the consistent upheaval of your schedule from Buyers wanting to see your place from 8 am to 8 pm 7 days a week, you have a nightmare on your hands. Not only do you have to clean up after your every single move, but you have to put your whole life on hold to let people into your home. I’m getting anxious just writing about it. In comes iBuyer to save the day! Get your home showing ready once, get a photographer to take amazing photos, and then your done. You can relax, have your own mess, and have your life back while you sell your home. In some cases, you don’t even have to do that. All you need to do is fill a form online and presto! Offer received.

iBuyers provide lighting speed offers with quick closing dates, which means you could sell your home faster. Imagine you’re on vacation, sitting on the beach. The ocean view is breathtaking, you can smell the salt of the water. As you’re enjoying the view with your favourite mocktail (who are we kidding, cocktail!), you get an email with an offer on your home. Wow, what a dream! iBuyer makes this a reality… at least the offer part. The vacation is probably not paid by iBuyer.

Do Sellers Really Win?

Most sellers aren’t inclined to accept a below market value offers (5% – 10%) plus a commission (4% – 6%). There would be a subsect of Seller that would take advantage of this i.e. in the case of a divorce, bankruptcy, or relocation. Otherwise, I don’t see Sellers, at large, accepting anything less than top dollar for their homes. For the iBuyer service providers, there is an unspoken risk to them. Most of these providers are technology companies, not construction companies. Their goal is to buy properties at below market value, do a minor or major renovation to the property and sell it on the market at a premium. Sounds pretty easy right? Wrong. Warren Buffet has said on multiple occasions, “Invest in what you know and understand.” With all due respect to these companies, their core competency is in building the technology of these platforms, not in the construction business or understanding the real estate market. My prediction is that these companies will struggle with controlling construction, have higher financing costs, and shrink their profit margins. Combine that with a peak in the real estate market, these companies could be holding massive losses on their books if they’re not careful. As most of these companies are publicly traded, you can expect to see lower than expected earnings and a drop in share price.

Down the line as these platforms and consumer behaviour evolves, I can see the consumer being able to make pricing decisions online with readily available, relevant, and accurate sales data (through platforms likes DigiRealty.com). I can also see everyday buyers making an offer online through these platforms with relative ease. All of this said, the one thing that won’t change is our fundamental human emotions. We all feel happiness, anger, sadness, and excitement. Those emotions will always play a roll in our lives. And when you walk into a home and see a little doggy door that reminds you of the house you grew up in, that emotional connection you have to that memory is what connects you to a home. Not an iBuyer platform.

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Green Buildings and LEED Certification in Ottawa

Leadership in Energy and Environmental Design

There is no doubt that buildings are responsible for a vast amount of carbon dioxide emissions and energy use within our community and on a global scale. With an increased rate of builds that doesn’t seem to be declining anytime soon, there is a societal demand to create a more sustainable solution. LEED or Leadership in Energy and Environmental Design offers new builds, existing builds and homeowners to take part in their green build initiative.  A demand for more sustainable living and working conditions, LEED certification presents its clients with a solution that is both energy efficient and cost-effective.

LEED certification is a third party, globally recognized rating system that is recognized as a mark of excellence and sustainability accomplishment for green builds. LEED certification has become a standard of measurements for green builds in 160+ countries and is raising awareness, fostering creative solutions to sustainable living and offering a more healthful and environmental conscious resolution to the building industry.

Working on a point scale, LEED offers four levels of certification to its clients; certified, silver, gold and platinum. With four levels of certification, LEED is adaptable and accommodating to a wide range of buildings and projects, making it available to any fit and project goal.

Points are allotted to each project based on five major categories that have environmental impacts and human benefits. The five categories include; sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality. The goal of the ranking system is to inspire and help as many builds as possible strive for a high level of achievement in each of these categories.

Why LEED? LEED certification and green builds not only benefit the buildings occupants and/or homeowners but the community at large. Green builds facilitate a healthier environment from the inside out, producing better air quality, more natural light, reduction of waste, decreased water consumption and energy conservation. Green builds create a more healthful environment, boost production and leave a green legacy, all a driving factor of LEED certification. As an industry that can do more harm than good, it is time for homeowners and project builds to become more consciously and environmentally aware and it is LEED’s aim to do just that.

The History of LEED

The goal from the start was to educate builders and to help them establish responsible construction practices. Robert Watson set out to change the building market in 1993 with the hopes of defining green building.  LEED’s environmental movement continued to raise awareness and competition for the construction of environmentally and sustainable friendly buildings. Over the years LEED’s standard has grown into a complete and comprehensive classification system that covers a large portion of the development and construction process.

Since 2015 LEED builds in Canada alone has led to energy savings of 12.9 million eMWh, which is enough energy to power 435,000 homes in Canada for an entire year and water savings totalling 24+ billion litres. LEED builds have also contributed to recycling over 2.97 million tonnes of construction waste and a reduction of 2.49 million CO2e in greenhouse gas emissions. These astounding results only continue as more and more businesses, project leads, and homeowners turn to this green solution.

LEED certification continues to incorporate and adapt as new green technologies come onto the market, which is part of what makes it such a comprehensive and globally sought-after initiative.

Why is LEED Certification relevant today?

LEED certification is more relevant and needed today than ever. We are living in a society and a time where build after build, project after project is going up and our environment and health continue to be impacted because of it.

There are countless reasons why buildings should seriously consider being a green build and doing their part in helping to create a sustainable earth. LEED is an innovative answer to this societal push for eco-friendly living, human well-being and sustainability. LEED offers its clients practical ways to achieve sustainable eco-conscious living, save money and promote public health and a more supported and sustainable environment.

This internationally recognized ranking system proves its relevancy because it is not just a system that is designed for one type of build over another, it offers options to projects of any kind; from large government buildings to hospitals to new builds – there is something for every project of every size. There is even an option for single, low-rise or mid-rise family homes to take part and get involved.

Not only is this a world-class ranking system for inspiring and fostering solutions for single structures, but it also applies to whole neighbourhood development projects (containing residential use, non-residential use or a mix) from inception to build, including neighbourhood redevelopment. From a neighbourhood to an entire city, LEED is for the community. Working with the entire city or neighbourhoods within the city, LEED can measure and manage the city’s energy use, water use, waste, transportation and total human experience and offer improvements.

Why do we need an organizational environmental measuring system, such as LEED more than ever before? According to the City of Ottawa, almost 50% of greenhouse gas emissions come from heating, cooling, lighting and operating buildings? By a new or existing building becoming LEED certified by the Canada Green Building Council (CaGBC) occupants have better air quality reducing allergens, financial savings and increased resale value. Certified LEED builds can also qualify for local utility rebates and homeowner reductions through various insurance groups and the Canada Mortgage and Housing Corporation (CMHC).  Most importantly, projects who get involved are doing their part to achieve a more sustainable environment and improving the lives and well-being of the occupants of the building.

With regular evaluations and modifications to adapt to advancing and evolving technology, LEED is and will continue to be compatible and well suited for everyone and every project. The continuous assessment of the existing rating system and application of new science and technology will not only continue to make LEED relevant in this industry it will continue to be at the forefront of green builds.

Who is LEED certified in Ottawa? 

With the benefits far too great to ignore, several builds in Ottawa have jumped on board and have been recognized by LEED for their level of excellence in their contribution to the advancement and betterment of sustainable living and working conditions.

Lebreton Flats LEED

LEED Certified Silver

The following developments have ranked Silver on the Leadership in Energy and Environmental Design ranking system, meaning they have earned 50-59 points in the following five categories; sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality.

Hideaway LEED

LEED Certified Gold

The following developments have ranked Gold on the Leadership in Energy and Environmental Design ranking system, meaning they have earned 60-79 points in the following five categories; sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality.

  • Central Phase 1 – Received LEED Gold certification July 9th, 2014
  • Central Phase 2 – Received LEED Gold certification December 14th, 2016
  • The Rideau – Received LEED Gold certification January 18th, 2018
  • The Vibe – Received LEED Gold certification January 18th, 2018

Prominent LEED Buildings in Ottawa

There are several prominent and outstanding LEED-certified condos in Ottawa that have been recognized for their commitment and efforts, in the above mentioned five categories, to improve the quality of life and wellbeing for their residences.

One3One Holland was certified a Silver LEED building on December 10th, 2015. One3One Holland is distinguished for its efforts and contributions to create a sustainable, environmentally friendly and more health conscious atmosphere for their residences. A one bedroom at One3One averages $441/sqft and a two-bedroom averages $448 sqft.

Central Phase 2 also a highly distinguished certified LEED condo in Ottawa, as of December 14th, 2016 sits at a prestigious Gold level certified showing its dedication to its residences. A bachelor at Central Phase 2 averages $475/sqft and a one-bedroom averages $474/sqft.

Another prominent condo in Ottawa, that has been noted for its great efforts and green build achievements, The Rideau was certified LEED Gold, January 18th, 2018. The Rideau offers one bedroom averaging $565/sqft, two bedrooms $660/sqft and Penthouse suites averaging at $811/sqft.

The Vibe in Ottawa is also to be noted for its mark of excellence on achieving LEED Gold certification on January 18th, 2018, offering its residences a higher quality of wellbeing and eco-conscious solutions. One bedroom units at The Vibe average at $547/sqft and two bedrooms for $600/sqft.

Since the first certified LEED building in Ottawa, The Currents, which became officially certified on January 18th, 2011 many other projects and developments have followed suit and have seen the tremendous benefits of taking part in Leadership in Energy and Environmental Design and getting certified themselves.

LEED Platinum the Currents

What is the future of LEED Certification?

As more and more people become consciously aware of the building industry’s impact on the environment and people’s health and wellbeing, there is only going to be a bigger demand. LEED and its ranking system have inspired so many and will only continue to inspire more green builds and spread awareness throughout Ottawa and the world.

The latest model, LEED v4 is the future of LEED certification and has upped the expectations on all levels of a build; right from project inception to project completion. Running now off a more performance-based approach, LEED v4 offers knowledge to its customers and then offers practical solutions on how to apply the newly learned knowledge. This knowledge is then measured in the form of practical tasks complete, which offers more goal focused points based on each unique project.

LEED v4 is showing major improvements on:

Flexibility – now offering more flexibility with different tactics to offer each unique build and project to allow each development to find the best fit.

Smart Grid Approach – LEED v4 is bringing a smart grid style to its customers and is recognizing and rewarding the projects that contribute to and engage in demand response programs.

Materials & Resources – Now emphasizing materials and resources used on a project and beyond the total amount used, creating a more whole and comprehensive look at the structural impact.

Water – Offering a more complete strategy to utilize water efficiency by assessing the entire buildings water usage.

Better customer service – now offering a more effective and efficient certification system process, easing customer use.

Since the inauguration of LEED certification, there has been a remarkable amount of growth and improvement shown to cater to the rapidly evolving social climate that is demanding solutions for providing a better quality of life and a more sustainable way to live. Not only does LEED continue to find and adapt efficiently to these needs and demands but does so in a cost-effective way.

LEED, Leading the Way

The demand for a more sustainable, energy-efficient, cost-effective and healthier way to live is only going to escalate as society continues to expand and more people become aware of the environmental and human impact that takes place with expansion.

LEED certification is at the forefront of this huge societal push and is acting as a paradigm to initiate, inspire and drive the industry to do better, be better and offer better. Leadership in Energy and Environmental Design is trailblazing the way to establish an industry that sets standards and places a high value on more conscious buildings, living and working environments.

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The October 2018 Market Statistics For Condominiums in Ottawa have Arrived!

October 2018 market statistics continue displaying trends indicative of a fast-paced real estate market for Ottawa in 2018.

Members of the Ottawa Real Estate Board sold 324 condominium-class properties in October 2018, an increase of 24.1% from October 2017.

Average Days on Market (year-to-date) for condominiums in Ottawa are down 24% from 68 to 51 days.

The average sale price for a condo in Ottawa remains reasonable and steady at $271,350, a small increase of 0.6% from this October last year. *

Between $175,000 to $274,999 was the most active price point for condos in Ottawa this month, accounting for almost 53% of the units sold.

Lack of supply remains a force in Ottawa’s real estate market, compared to last year, condo inventory is 34.5% lower than October 2017.

Curious about October 2018 market statistics for residential class properties in Ottawa as well? Click here to read the full story.

 

*Average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price and conditions will vary from neighbourhood to neighbourhood.

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Real Estate Franchises are Losing Stock Value

Remax and Realogy Stocks Tank Amidst a Changing Industry

No one seems to be talking about this. Large Real Estate Franchising Groups are Losing Stock Value, and Fast.

The two largest conventional bricks and mortar brokerage conglomerates stocks are tanking. Remax and Realogy have lost close to 50% of their stock value in the past 52 weeks.

On the other side of this news, private investments are fueling over $2 billion in new funding into efficient/scalable broker concepts. $2 billion in market cap lost on one side, $2 billion in market cap gained on another.

Remax and Realogy Stocks

Royalty Fee Models Don’t Align With Franchisor and Agent Member Long-Term Growth

Brokerage Holding companies such as Realogy and Remax rely on incremental individual contributions from their Franchisors agent base. These royalties flow upward from the Franchise to the Holding Companies. The challenge with this model is that both the Franchisor and the Holding Companies are not truly aligned with the agent members due to the conventional cap system. The cap model sees contributions diminish, if not disappear, once an agent member hits certain annual milestones. Low producing agent members (of which form the majority of membership base) contribute a royalty through their Franchise to the Holding Company, in an amount that is very similar to that of a top producing agent member.

In an industry where consumers are demanding efficiencies, the bottom is being weeded out and the 2-10 annual transaction type REALTORS® are finding it harder to justify their value. It is only obvious that the days of mass agent membership are under pressure and the result will be disastrous to the large franchise brands of the past.

Large Real Estate Franchises are Losing Stock Value, and Fast

If this opinion proves to be correct, unless these large franchise holding brands can divert their strategic resources into acquisitions of emerging counterplays, this trend will continue with the steep and aggressive slide that is becoming of a fragmented industry. Paving way for a bright future for forward-thinking scalable, agile operations and technologies, such as DigiRealty.com and others.

These large brands are proving to be the authors of their own misfortune. The brands in the position to stand out as industry stewards became balance sheet adjusters and profit wielders, as opposed to innovators. The results will be obvious.

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Zillow in Canada

Is there an equivalent to Zillow in Canada?

Zillow Group has become known for providing American Real Estate Searchers with a fast and easy to use, map-based real estate search platform. Along with their easy to use search platform, their website displays an abundance of property data, as well as their custom Zestimate™ feature which provides searchers with a quick and effortless way to research home prices. This allows Real Estate Consumers to do their own research by browsing real estate listings and sales data, prior to engaging with a professional of their choosing or with one of the Realtors® paying for Premiere Agent™ advertising space on Zillow’s platform. Is there currently a Zillow in Canada, or an equivalent that is trying to fill in the gaps?

To dive into whether there is a Zillow in Canada let’s first delve into Zillow’s monetization model. Their model is structured by collecting Premier Agent™ fees from REALTORS® paying to appear on listings within geographic regions of interest. This allows Premier Agents™ an opportunity to receive Buyer side leads on property listings that were supplied by another REALTOR®. With their acquisition of Mortgage Lenders of America, Zillow is also looking to collect orientation fees when they provide mortgage leads submitted through their platform to external lenders. These orientation fees may play into their home buying angle as well.

Update on Zillow in Canada

With regard to Zillow in Canada, the group recently made a move to display Canadian listings on their platform and they are in the process of adding more listings via alignments with Brokerages on this side of the border. The UX of the website is classic Zillow and very clean, but the listing inventory is low and the high-value data sets (sales data, Zestimate™ etc.) available stateside are not currently present.

Comparable Platforms to Zillow in Canada

In Canada, all the real estate boards feed their listings to the national website, Realtor.ca. Realtor.ca is operated by CREA, the Canadian Real Estate Association. This website has a national presence but is missing many of the features Zillow offers such as providing solid data and ease of use to search on their platform. Realtor.ca is typically referred to as clunky, dated and old.

On the surface level, DigiRealty.com would be the best Canadian listing provider with a similar user experience to Zillow. DigiRealty’s focus is to provide searchers with the most intuitive, fast and easy to use real estate search site. DigiRealty.com and Zillow also have similarities and differences in their monetization model. DigiRealty.com is operated by DigiRealty Technologies, which also owns and operates a wholly owned subsidiary real estate Brokerage. This entitles the company to monetize both commissions and advertising placements from aligned Agent Advertisers.

For readers that are unaware, here is a high-level overview of how some of these platform models are organized. Start off by viewing the sales channel as a funnel. Consumer traffic is in the top of the funnel (pageview etc.), consumer inquiries are in the middle of the funnel (leads, profiles and inquiries received by the Agent Advertiser), and a successful conversion/sale is at the bottom of the funnel (a closed deal). Obviously, the more deals that make it through the funnel, the more the platform can charge their Agent Advertisers for placements.

All things considered, Digirealty.com is likely the closest platform to Zillow in Canada

DigiRealty has an advanced map-based UX, fine-tuned advertising, placement and lead routing systems and a dynamic ‘go-to-market’ plan that will not be burdened by the bottlenecks that are existing for the established first movers. Where DigiRealty intends to excel, is always increasing the top of the funnel, along with focusing on reinventing the middle of the funnel activities centred around speed and thoughtful in market alignments. The already existing monster platforms know there is a problem with response speed and responder market knowledge alignment. Unless a multi-year revenue dip is okay with shareholders, they will be stuck with legacy premier placements and the associated downfalls.

DigiRealty believes that in-market, knowledgeable, lightning fast response speed and on-the-ground Agents will drive conversions. As a result of not having legacy booked revenue (that must stay on the books) from a potentially depleting premiere agent advertiser pool and a slow to response placement routing system that will bottleneck conversions DigiRealty is able to be more agile.

I wonder if the legacy, single player agent advertisers will leave platforms due to increases in response speed pressures that their small business cannot meet? If this is the case and we assume that qualified teams can nurture more middle to bottom of funnel leads to a conversion, will the resulting revenues offset the lost revenues? How does this transition look? It seems hard to imagine a case whereby a platform can service fast trigger teams and slow-moving placement agent advertisers at the same time. On a platform level, the teams likely provide better funnel to conversion movement, it will just be interesting to see how the shake back takes place.

In short, maybe the question should be, is there a Digirealty.com model in the states?

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Pain Points Faced by the Real Estate Industry

What are some of the biggest pain points and problems faced in the real estate industry today?

Some of my Coles notes on the biggest pain points and problems faced in the real estate industry today are as follows:

At current, real estate industry professional (Agents, Lawyers, Mortgage Brokers, Appraisers, etc…) make up the largest collective interest group attempting to monetize the economic derivatives of a given real estate transaction. The problem with this is that each of these independently self-interested professionals is also spending their marketing, advertising, and product development dollars in silos (to serve themselves/their individual businesses). The cumulative value of this independent spend would likely, if gathered in a collective, be multiple times greater than even the largest platforms development and operational expenditures.

The following statements combine to describe the industry’s largest pain points as I see them today:

  1. Fragmented industry professionals & digital spending: The largest interest groups spend in silos, which results in a product that is too small to fix industry challenges or to truly innovate.
  2. In the examples of unified spending we see today (at national associations/boards) the existing leadership groups have little to no foresight on how to spec, develop, monetize, deliver on and protect or grow digital products that will benefit their professionals; transactions, user search, compliance, etc… Unified spending on products that are innovating in this space is where these leadership groups should be concentrating to make an impact for the professionals they serve.
  3. Nimble digital groups are finding product market fit by actually selling to their customers and needing to provide value to maintain their recurring revenue. Boards and associations are drowning in a cyclical pool of collect, misspend, collect, misspend, collect, misspend, compounded over years of this repetitive and unchallenged behaviour.

“On the other side of addressing the pain points of conventional industry, we must also open up the true/productive conversation – What does the industry look like in 2,3,5,10,20 years and what opportunities will emerge for forward thinking interest groups as a result. There are many… many… many products to look into. The serious groups are actually trying to organize while addressing the market, finding product market fit with future thinking professionals and building the bridge between industry and consumer”. – Jeff Mziray – CEO – Digirealty Technologies

Side note, some of the large digital platforms/interfaces/media companies are lacking some on-the-ground-intelligence and practical application of process-based real estate knowledge that will be vital to providing a fulsome and innovative real estate technology product that will be able to scale with the industry.

The conventional industry has the opportunity to come together with technology to help shape the Real Estate industry of the future. However, if the industry does not ban together soon, we could be facing another industry disruption that will change the face of the real estate industry as we know it today… Think Blockbuster > Netflix, Think Taxi > Uber. Can industry conventional hit back? If yes, it will be fun to see what it looks like!

My two favorite search portals in the US side are Trulia and Zillow. My two favorite Canadian platforms are Digirealty.com (biased built in) and Zolo. As of October 14th Zillow has officially launched real estate listings in Canada on their .com. On first overview the site is operational but the sold and Zestimate features are not available and listing inventory is very low. I will keep an eye on this and update this article when/if the updates take place.

Jeff

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Ten Steps of the Home Buying Process

Beginning the journey to homeownership can be overwhelming and stressful. But with a little planning, you’ll get the home that’s right for you. A home that strikes a balance between your “wish list” items and the practical realities of the property, location and the housing market. Before you know it, you’ll have a place to call your very own. A place to entertain. A place to decorate. A place to raise a family. It really is an exciting time!

To help keep you on track, below are ten steps of the home buying process to assist you in buying your first home.

STEP 1 – Build a Budget

An effective budget will map out your plan to set aside money for your down payment and additional costs. It will also help determine the price of a home you can afford.

STEP 2 – Investigate Mortgage Options

There are many different types of mortgages. If you don’t have the 20% down payment for a conventional mortgage, you can get a high ratio mortgage, combined with mortgage default insurance, that allows for a smaller down payment. You should be pre-approved for a mortgage before you start house hunting.

Consult with a mortgage professional to discuss what options are available to you and learn more about how to get started.

STEP 3 – Choose a Realtor

Your realtor will play a vital role in your home buying experience. The best realtor will be a combination of a personal advisor, consultant and negotiator. He/she will show you homes that match your criteria, guide you through the home buying process, negotiate the best possible price for your home and deliver your closing documentation.

STEP 4 – Get a Lawyer

It’s important to hire a lawyer who specializes in real estate. You could find yourself in a bidding war for the home you want, and it doesn’t hurt to have a lawyer look over any offer to purchase before you submit it. A real estate lawyer will also conduct a title search and check for outstanding taxes and liens on the property.

STEP 5 – House Hunting

* Create a wish list

House hunting can be a lengthy process. To save yourself time, know exactly what you want in a home beforehand. Think about your immediate needs, future plans and lifestyle. When you look at homes, you may be tempted to concentrate on the home, but don’t forget to look at the whole property: the lot, the neighbourhood, the surroundings. How close is the home to facilities and services important to you?

STEP 6 – Make the Offer

Your agent presents the offer to the seller. This document includes the price, conditions, deposit and closing date. The seller either accepts, rejects or counters the offer (also called “signing back” the offer).

STEP 7 – Home Inspection or New Home Warranty

Hiring an inspector is voluntary, but it’s a smart idea for resale homes. You can choose to make your offer to purchase the home conditional on the outcome of your inspection. If your inspection reveals major problems, you can negotiate those repairs with the seller before your deal closes, or legally withdraw your offer.

What is a New Home Warranty?

New Home Warranties are typically used when you buy a brand new home. The builder provides a New Home Warranty to cover things like deposits and completion dates, along with labour and materials for at least one year after the home was built. It also protects you against structural problems for a minimum of five years.

STEP 8 – Finalizing the Deal

Finalizing the deal will include the final approval of your mortgage, a meeting with your lawyer to finalize details like insurance and conditions, and the results of a title search.

STEP 9 – Moving Preparations

There’s a lot to do before you move. Line up utilities and other services like phone, cable and internet. If you rent, you must give your landlord notice. Also, forward your mail to your new address and hire a moving company. Preparing these things well in advance will help you make a smooth transition to your new home.

STEP 10 – Closing Day

This is the day you legally get possession of the house. Your lawyer completes the paperwork (so the home is in your name), payments are finalized and you receive the deed and the keys. Congratulations on your new home!

 

Andrew Thake, Mortgage Agent

Dominion Lending Centres – Smart Debt

www.andrewthake.com

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