A friend of mine was recently relocated from Boston to Dallas for employment purposes. Having visited him in both locations, my observation of the difference in home prices is startling. One need only acquire a window seat in the airplane and a rudimentary understanding of the concept of supply and demand to get a general understanding of why Dallas provides far more bang for your home buying buck. Land supply in flat, sprawling Dallas is comparatively unlimited. When endless supply of land was combined with low interest rates and ego, the result was an over supply of newly built monster homes. Today, a 7 year old 4000 square foot home replete with granite counters, wrought iron railings and Mediterranean tile in an upscale golf course community can be purchased for well below $100 per square foot. In Boston, if one could find a similar product at all, the price is likely to be four times that amount. While I did not have the time to visit with any realtors in these towns, an overview of the pricing and the supply of inventory led me to conclude that the Guelph market holds more in common with Boston than Dallas. I doubt very much, that Realtors in Dallas are using any Form 244’s while offers are accumulating!
Like Boston, our supply of land has been stifled, although in our case more for political reasons than physical or geographical ones. Is it a coincidence that our real estate values have remained solid and progressed upward throughout a period of less than certain economic times? Perhaps, but I doubt it. Just as local home builders were beginning to complain about a lack of inventory,the resale market, (and those who make their living in it) was buoyed. The best news for those in our line of work, and our clients, is that there is nothing on the horizon locally that would suggest things on the supply side are about to change. If anything, it will get worse. Or, depending on your vantage point – better!
Some people feel that we are headed for challenging times. Some believe that we are already in them. And while I would never want to minimize the effort needed to build and maintain a business, (be it a brokerage or a salespersons) – a careful overview of the challenges facing Realtors in other jurisdictions always leads me to favour our problems over theirs.
Thanks for reading and happy selling,