Why I keep asking why

My daughter is in her final semester of her four-year program at Syracuse University. Recently, we were talking about how she had difficulty fitting in her electives to complete her degree.

“If this wine-tasting course could only be in the morning, or this Zumba course be online, I could totally make it work with the rest of my schedule,” she said.

Yes, and yes — you read it right. Those are legitimate courses. And yes, I explained that most people do not drink wine in the morning (unless they are real estate agents), and the physical nature of Zumba would not lend itself to distance learning.

It made me question the state of today’s higher education, so I did some digging and found some Ivy League schools were not immune to this new-age curriculum. From Harvard’s Witchcraft and Charm Magic, to Princeton’s The Unbearable Whiteness of Barbie, to Columbia’s course on zombies, to the University of Pennsylvania’s Getting Dressed (based on the Midwest’s fashion sense, I get that) and, of course, tree climbing at Cornell.

So I decided to go back in my mind to when I attended university at McMaster. Many of these so-called “bird” courses to boost your average were courses like world religions or the sociology of deviants, which I heard was like a true-life Dexter. But there was one university urban legend that fascinated all first-year students. It all centred around the “Why?” final exam story.

According to legend, a philosophy professor hands out an exam with a single word on it: “Why?” Most of the students spend the entire exam time allotted feverishly writing a long essay. As the story goes, there was one student who embraced the short-form style of the question and answered either “Because” or “Why not?” and, as a result, received the only A grade.

My buddies and I searched our entire four years to find a course that even remotely resembled that, and we came up empty. However, I have a hunch this story was the personification of what learning is all about. It was told and perpetuated to make us transcend the circumstances we are in by asking one simple question: Why?

I’m not talking about “why” as a means of questioning being subordinate, but to ask why before we jump into a long diatribe that often suits our own agenda.

The power of why

If we all prepared ourselves with various strategies or paths to solve for why we are being asked to do a market evaluation, how productive would we be?

Today’s sellers fit into various buckets of housing situations, with some being part of the “double cohort” of mortgage renewals — those who bought or refinanced in 2021 with 1.9 per cent fixed rates, or those who bought or refinanced in 2023 when rates were high and strategically chose three-year fixed, anticipating lower rates on the horizon. Now their ship has come in.

Both scenarios may have similar outcomes, with different ways of getting there, which require more asking of “whys” than “whens” to provide a more holistic solution.

It may be a great time for either of these two types of consumers to take a different strategy or approach. Maybe it’s move-up time or maybe it’s downsize time. Whatever it might be, there is a solution that transcends current market mindset conditions and plays more into a strategy that revolves around the client’s needs, not wants.

Take into consideration a seller who needs to move but wants to wait for home prices to increase (only their house, of course). If homes increase at two per cent per year for the next five years and your mortgage is four per cent, the interest cost alone would wipe out any gains if your loan-to-value is 50 per cent or more.

Are you prepared to strategize rather than just spew the many attributes you and your company have to sell their home? It’s time we all look at a holistic approach to the problems we are solving for our clients.

Why not rent your house instead of selling it?

When I was actively listing properties, I dealt with many a seller who dug in their heels and said, “If I don’t get my price, I will take it off the market and rent it!”

Most times, I would bury my face in my hands and say, “You don’t want to have to deal with tenants who will destroy your home.” That worked maybe one per cent of the time, but what did happen all the time was the client felt I was using scare tactics and not the facts.

So I decided I was not only going to provide the potential seller with a market analysis of their property to list for sale, but also for rent.

By calculating cap rates (ROI), cash-on-cash returns, combined with principal paydowns plus market appreciation, compared with the non-taxable gain if the seller decided to take their capital or equity and move up, this detailed discussion closed the door on the rental option — unless it made financial sense.

Why can’t I predict the market?

Who says you cannot? As far as I am concerned, the housing market is a reflection of income.

Conventional wisdom would have us believe that as household incomes grow, so go housing prices. To further this theory, financing the purchase of a home is based on an income multiplier. Three or four times your income is a quick way to see how much mortgage debt you can carry, assuming you have no other consumer debt.

When we compare household income growth to home price growth, we see a massive imbalance. Incomes grew by 36 per cent over the last 30 years, while home prices rose by a whopping 132 per cent.

If income growth didn’t fuel house prices in Canada, then what did? Cheap money, the emergence of the investor class, demand growth fuelled by untethered immigration, supply hindered by red-tape-laden municipalities, government demand-side supports and incentives, and the bank of mom and dad.

Now that immigration is dramatically tempered and foreign students who gobbled up housing in the past are no longer welcomed, with mortgage rates in neutral territory and the possibility that incentives may be more broadly applied to buyers of new construction rather than focused on first-timers, we finally have a purer economic environment. One that will again link incomes to home price growth, allowing for better predictability around Canadian household creation, which truly drives market demand.

Why are private equity firms buying single-family homes?

There is an anecdote I am reminded of once in a while. In 1929, Joseph P. Kennedy was getting his shoes shined when, as the story goes, the shoeshine boy started giving Kennedy stock market advice. Kennedy responded by selling off all his stock holdings. His theory was that when shoeshine boys were speculating on the stock market, it was overcrowded and a crash was near.

He coined the phrase: “When they are in, I’m out.”

But what about when private equity firms, like BlackRock, are in on something? Should we be in?

The reason private equity firms have targeted single-family homes is that they see long-term price gains in a very tight market. With single-family starts at their lowest levels in history, signalling a shortage of supply, significant price adjustment from the peak of March 2022 (approximately minus 30 per cent), construction workers retiring, and builders racing toward affordability by building smaller attached products, all signs point to upward pressure in this category.

Why can’t people see past their own lives?

Have you ever posted something on social media and wished you hadn’t?

Some of you may say yes and point to a post with a political bent that rubbed people the wrong way, misreported facts or figures, or attracted negative comments about something you felt was humorous or harmless, but someone else found offensive.

I think we should all go a little deeper into our post history to answer this question.

We are all guilty of self-aware blindness. When we post a meal we had, a vacation we are on, a view from our cottage, our reflection in a mirror (I’m going to get heat for this one), or ourselves at the gym — who are we posting this for?

The fancy-dish-posting crowd will tell you it is part of their neighbourhood showcase strategy. Then why are you posting a meal you had in Las Vegas?

Newsflash: no one cares if you are in great shape, as long as you are healthy enough to get past the conditional period on the sale or purchase of their home. Your clients don’t care if you have a six-pack.

If they constantly see you at the gym, they may feel you are too busy working out rather than working hard to find them a home.

Before every post, you should ask yourself one question: why am I posting this photo or piece of content? If the answer is to show your industry expertise, then post it.

“But why am I getting so many shares on a humorous post?” Because people are sharing it either in disbelief or to mock you — unless you listed Drake’s house.

None of us is of celebrity status (I wish a famous person were reading this article) for those shares to be genuine fandom.

Why do I write?

Why do we do anything creative, for that matter? Is it because we need an outlet? A place to express our thoughts on a platform to satisfy our need to be heard?

Believe it or not, that is not my motivation at all.

In the words of author Seth Godin: “…blogging is one of the top five career decisions I’ve ever made.” Godin is a true proponent of writing as a way to build discipline, clarity and a trail of ideas. The discipline comes from the immense research it takes. The clarity is the byproduct of great research. The ideas come from the interpretation of that research.

I write to hone my skills as a real estate practitioner. It makes me better at what I do. Creating great content not only empowers the creator to be an expert in their industry of choice, it also empowers the people they choose to serve.