Today I had the good fortune to attend the Odlum Brown annual address. It became apparent from the first few minutes of the presentation I did not know much about Bond Yields or Treasury Notes, but what I could sense was that the upbeat mood of the presenter pointed to a decent recovery in the Financial Markets for those who had heeded the advice of the firm. "Quality Value Driven Investments"....it kind of has a ring to it!
Interesting comparisons were made showing how when the stock markets are hot, and blue chip stocks rise, their cost to purchase becomes too expensive and they lose out as a buy option as they no longer meet the "Value" criteria, even though the earnings were decent. When compared to buys made using the "Value and Quality" criteria, those stocks outperformed the Blue Chip set by a wide margin....it got me thinking.
One of the recurring themes from many of the seminars I have recently attended, including The Real Estate Overview at Buildex and our own Macdonald Realty Fall Conference featuring Keynote Presentation by Craig Alexander, Chief Economist of TD Bank, is that taking a long range view of investing is the only sane approach regardless of where you put your money.
One of the most secure investments continues to be real estate. There is a huge difference between being an investor and being a home owner, we lose track of this in a hot market and perspective is lost. When the financial markets "correct" you can't live in your portfolio.
Now that speculative elements of the Residential market are being eroded by a more balanced approach, a fresh collection of Buyers and Sellers finally have a chance to catch their breath and make Quality part of the equation after 8 years of a "just get in" mentality. This is where we see Value shift....this is the real "correction" the media has missed.
A cruise through MLS to the 120 days plus on market listings show mostly a collection of overpriced fixer-uppers and new builds. Buyers are passing over these homes in favor of Better Quality Listings and those that don't have a hefty tax hit on a price that was contrived 2 years ago when the projects broke ground. In these same 120 days I have seen great homes go fast! When Quality meets Value, sales happen.
Keep this in mind for your next project or renovation and make Quality choices as any future buyer will appreciate the Value you added. In the meantime, enjoy your home!