Happy 25th birthday REM! Elsewhere on this site, the powers that decide these things have selected the most influential people in real estate in the past 25 years. At the time of this writing, I have no idea of the final choice but I was honoured to be asked for my input, presumably because of my columns in REM over nearly 20 years and being in the business for 44.
My initial choice was the baby boomer generation, who by sheer size has dominated every market for the past 25 years. Ever wonder why you’re still listening to rock and roll or why there’s a market for aging rocker concerts? Then I considered politicians and bureaucrats who drafted “no-fault” or at least simplified divorce legislation in Canadian jurisdictions. Divorce is cross-generational and a huge driver of new household formation and the demand for accommodation, whether it is owned or rented.
I finally settled on two Ministers of Finance; one Liberal, Paul Martin, and one Conservative, the late Jim Flaherty, who between them presided over 17 of the 25 years in question. The five-year posted rate dropped from around 13 per cent in 1989 to the present-day five per cent; fuelling the expansion of the secondary and investment housing market and the creation of new lending vehicles, especially the principal residence mortgage and line of credit, much maligned as an ATM but nonetheless a creative tool unimagined 25 years ago. If you force me to choose between the two ministers, my reluctant vote would go to Mr. Martin, the longer-serving minister with the largest drop in interest rates in his term. Reluctant, due to the untimely death of Mr. Flaherty, whose eulogies revealed a worldwide influence, placing Canadian banking as a role model during the financial crisis of 2008-2009.
Finally an honourable mention to Michael Wilson, who served seven years until 1991 (beginning his service outside REM’s time frame in 1984). Mr. Wilson (Conservative) had to wrestle the monster rates (18 per cent) he inherited from the Trudeau era. He rode to victory with Brian Mulroney, beneficiary of the public’s wrath at Pierre Trudeau’s national energy policy and overall weariness with that aging flower child’s ego and economics.
Let me share with you a comparison I made recently to a Chamber of Commerce annual general meeting. (Apparently their meetings to elect new directors and amend their constitution lacked a little in the entertainment segment.)
On Good Friday 2014, my wife went to her hair stylist, who mentioned a condo for sale in her building, a timely bit of gossip because of a recent visit from a friend of ours escaping the cruel Toronto winter. At the same time, her daughter called from Invermere, B.C. to say she had seen a chaise lounge for sale on Craigslist in a community near us. Could we check it out? An afternoon drive was in the works so while I drove, my wife took a smartphone photo of the outside of the condo building and sent it to her friend, together with the link to realtor.ca.
We checked out the furniture, took a picture, sent it to Invermere for approval, got it and paid the seller. In the meantime, our Toronto friend had stopped over and immediately ruled out a snowbound Edmonton for retirement. She texted her spouse, who was ice fishing in Ontario, to tempt him with the warmer climes of Vancouver Island. His text reply was succinct. “You can buy it with your half of the divorce settlement.”
No sale but it least both transactions were concluded within a couple of hours.
Now – flash back to 1980.
My wife couldn’t have gone to a hair stylist for two reasons – they were called hair dressers and the Blue Laws of the day would not permit a business to be open or any contracts to be written. There were no condos to gossip about and certainly no Craiglist to hawk second-hand furniture.
Had there been a house for sale for a friend in Toronto, I probably would have discovered it when I sorted out the daily pages printed and mailed from the MLS service of the real estate board. I would have taken a picture of the home with a black and white Polaroid Land camera. Because it was cool, 55 F, I would have developed the picture in a cold clip held under my arm while I wondered what to do with the gooey piece of film emulsion paper. Results would be modest. The photo would join a bundle of local papers – shopping flyers for the little woman, a golf club brochure for her hubby – and the whole package would be entrusted to Canada Post. Postal service, by the way was several times daily, six days a week.
In the fullness of time, the house would be sold to another, the weather in Toronto would improve and the result for our friend would be the same – no sale. It was a more serene time, despite high inflation and wage and price controls. From 1980 to 1990 house prices in my community rocketed up 45 per cent, from $55,000 to $80,000. Mortgage rates were 14 per cent in 1980, 13 per cent in 1990, with a foreclosure epidemic along the way caused by the 18 per cent to 21 per cent peaks in 1981.
In 1980, a tattoo meant you had lived outside the law. In Penn Jillette’s view, today it means you’ve been to the mall.
Change and choice are hard. Irrelevance is even harder.
Brace yourself.
Contact Marty Douglas by email at [email protected] . Follow or connect with Marty on Twitter, LinkedIn and Facebook. He is a managing broker for Re/Max Ocean Pacific Realty in Comox and Courtenay, B.C. He is a past chair of the Real Estate Errors and Omissions Insurance Corporation of B.C., the Real Estate Council of B.C., the B.C. Real Estate Association and the Vancouver Island Real Estate Board.
