Tag: home

• Could a decentralized sales model work?

  

  Since I started blogging last year, I’ve been getting regular emails from both people I know and from readers I don’t know (but hope to one day meet) asking for advice on buying real estate. Usually somebody sends me the link to a place they’re thinking about buying, and they want to know what I think about the property and the neighborhood.

  I’m more than happy to help when I can and I try to be brutally honest in terms of what I think. What’s interesting about this dynamic though, is that I don’t have a vested interest in any of the outcomes. Whether I tell that person I love the place or that it’s shit, I don’t stand to gain anything. And that means I can be brutally honest. It’s for this same reason that customer reviews on websites can work so well. 

  Because on the flip side, if I make money when you buy, then guess what, I’m going to want you to buy. That’s how it works for any industry–from financial services to real estate to retail. That’s why some stores will promote the fact that their sales people are not on commission. Although you could argue that those sales people are then less motivated to help you.

  In any event, all of this got me wondering if there isn’t some way to take customer reviews to the next level. Could a decentralized sales model work?

  Last year I had a conference call with one of the chief officers of one of the top 3 real estate websites in the US and I was told that they had actually tested a “social buying model.” It ultimately failed, but it strikes me as an interesting concept. Reviews are starting to feel a bit dated now on the social web, but I think the idea of crowdsourced input is here to stay.

  Image: Flickr

  2014.05.25

• Are condos at a tipping point?

  I live in a condominium in the St. Lawrence Market neighborhood of Toronto. And recently, I’ve had a number of “empty nesters” ask me if they could come check out my condo and get a feel for what it’s like to live in a downtown neighborhood like the Market.

  And they’re asking because they’re contemplating something that has become quite common for folks whose kids have left the roost. They’re considering, for a number of reasons, selling their suburban home and right-sizing to a downtown condominium.

  Whether it’s because they want to free themselves of cutting grass and shoveling snow, they don’t like stairs anymore, they want to be able to lock the door and head to Florida for the winter, or they want an amenity rich urban lifestyle, the uptake on condos has been significant both in Toronto and other cities around the world.

  Indeed, the condo market has become great at serving “both ends” of the market: first time buyers/young professionals and empty nesters. But what I wonder is if we might be at a tipping point with respect to the middle segment of the market: families.

  The average new construction low-rise home in the Greater Toronto Area is roughly $650,000 right now. But this would be more for houses in the center of the city. There, you’re probably looking at anywhere from $650,000 to $1 million for a “typical” 3 bedroom Toronto house.

  By comparison, a new condominium might average somewhere between $550 and $600 per square foot in the city. So for a 3 bedroom condo at, say, 1,300 square feet, you’d be looking at somewhere between $715,000 and $780,000. Add in parking and you’re somewhere between the mid $700,000’s and just over $800,000.

  In all cases, we’re talking a lot of money. But the point I’m trying to make is that condominiums and houses are becoming cost competitive. There are obviously differences between both housing types, but if your goal is a 3 bedroom place to raise a family, that utility could be met in both cases.

  There may still be psychological/societal barriers to raising kids in a condo, but I wonder if we might be close to a tipping point now that the economics are starting to line up. What do you all think?

  2014.04.22

• Home as machine for living

  Earlier this week I wrote a post talking about how maybe developers need to position their homes as more of a “product”. After that post, somebody asked me about my thoughts on home automation and how I thought technology was going to creep into the home.

  Then today, I came across this networked washing machine prototype from the folks over at Berg. If you can’t see the video below, click here.

  Just like Nest, this is the start of taking really unsexy home devices—thermostats, smoke alarms and washing machines—and making them sexy and networked. The “internet of things” is a trend that I think we’ll definitely see a lot more of.

  Because more broadly speaking, our homes today are actually really dumb machines. Swiss-born French architect Le Corbusier used to refer to the home as a “machine for living”, but the thermostat is really the only adaptive device most people have in their homes. And it’s not even very good.

  When the temperature drops, most homes have one sensor (the thermostat) to tell the mechanical equipment that it should flip on the heat. It could be incredibly hot upstairs or in another room, but your home has no understanding of that. The decision is binary: heat on or heat off.

  There’s a lot more we could do.

  Zoned heating and cooling is an obvious solution, but I’m also imagining buildings that physically adapt and change to their environment. Designing buildings for climates like Toronto’s—where we have both extreme heat and cold—is incredibly challenging, particularly because our buildings are so static (other than operable windows in most cases).

  So while I do think that networked devices are great progress, I also think that we need to be looking at the bigger picture. Let’s think about the actual architecture of our homes and how we can truly make them responsive machines for living.

  2014.02.27

• Yale economist Robert Shiller awarded Nobel Prize in Economics

  Yale economist Robert Shiller – who is famous for his work on speculative bubbles and housing markets – was just awarded a Nobel Prize in Economics.

  By way of his Case-Shiller Home Price Indices, he has argued that from 1890 to 2012 home price appreciation in the US (in real terms) has been basically zero. It has been flat:

  

  As a result, he’s been very critical of the notion that homes should even be thought of as an investment. In this interview, he says the following:

  “So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000’s. And I don’t expect it to come back. Not with the same force. So people might just decide, “Yeah, I’ll diversify my portfolio. I’ll live in a rental.” That is a very sensible thing for many people to do.”

  He also gives the example of Japan, which saw a massive run up in real estate prices and homeownership rates in the late 80s, only to then see them fall and stagnate for the next 20 years.

  In the US, homeownership rates have gone from about 69% at the peak (2006) to roughly 65% as of 2013. The long term average is probably somewhere in between these two numbers.

  But homeownership is a fundamental and heavily subsidized part of the American dream. Could America ever be a nation of renters?

  2013.10.15