Vacancy Rates Skyrocket in Calgary,or Did They?
Statistics can be manipulated to make almost any headline ring true. I can show you conclusive proof that Calgary’s vacancy rates have increased 276% from October 2006 until October 2007. The numbers to prove this are directly from the Canada Mortgage and Housing Corporation (CMHC).
Out of the 34 major centres that the CMHC survey, no other major centre had such a huge increase in vacancy rates as a percentage. If we are living in the areas surrounding Calgary, should we be concerned by this obvious epidemic? Or should we delve deeper and see what the numbers really mean?
To get a true idea of what the increase in vacancies has been, it might be better to look more closely at the numbers. In October of 2006, we were at a record low vacancy rate with only 211 units vacant out of approximately 40,333 rental apartments. This works out to a staggering .5% vacancy rate.
This October the total number of rental units had declined to 38,150 apartments, due mostly to condo conversions and the total vacant units ballooned up to 583 units. This huge increase works out to a vacancy rate of 1.5% which is three times as high as last year. Although a 1% increase from almost no vacancy is nowhere near as exciting as a tripling of vacancies.
Our skyrocketing vacancy amounts to only 372 more total units out of 38,000 total rental places. When you look at the numbers in a more accurate perspective, you soon realize the increase was very minor and is not even close to being an epidemic.
Even with Alberta’s incredibly hot economy, we knew things had to slow down at some point. Although you would be hard pressed telling someone that at 1.5% vacancy rate equates to a slower economy. All the booming activity in everything from oil and gas, to technology, manufacturing and even cattle ranching has elevated our concept of what normal is.
Now that our vacancy rates have jumped to 1.5%, you are already seeing some landlords and property owner’s panic. They are starting to offer a free month of rent to entice tenants or various other types of rental incentives. Yes, we have moved away from last year’s bidding wars between prospective tenants for rental properties, but we are still a long ways off from any need to panic.
So if you are already a landlord, don’t panic, look at the real numbers of what is going on. If you are a renter, there will still be some challenges to finding a great place, but there are more out there, and if you are an Albertan, don’t worry the boom isn’t over, we have a long ride left in front of us.
The New Era of Marketing
Have you seen the change? Or is it happening around you and you haven’t noticed? As a subscriber to an Internet Newsletter, you are part of the change already.
Internet and the speed of information sharing is what I’m referring to. We’ve found the response to advertising online is leaps and bounds better than print ads for our business. Within moments of posting a listing, we can start getting calls. This new Era of PC’s is everywhere, we are seeing less print advertising and a much wider Internet market.
Now if someone from Toronto or Halifax is moving to Calgary they do not need a copy of the Calgary Herald or Calgary Sun, they can go online to Kijiji, Craigslist, Homerent, Rentfaster or various other sites all online. Instead of trying to figure out what a 3bm/1ba w/dw,s,f n/s, no pt is, they can go online searching for 3 bedroom, 1 bath properties that include dishwasher, fridge stove and are renting to non-smokers without pets. Most online sites allow unlimited text and a minimum of three pictures providing better information for prospective tenants!
This lends itself to a whole new method of writing ads, posting pictures, and targeting prospects. Typical Internet users are so overloaded with information they have become accustomed to bullet point headlines, short bursts of information, and attention grabbing topics. There are gigabits of data out there right now that people can download to explain different techniques of writing ads and Internet marketing that has spawned several new niche markets.
One of the leaders of Internet marketing and its affect is Rich Schefren. Through his company Strategic Profits, he has released several free documents that explain some of what is happening with the world of marketing and how it is moving from the age of print to the age of information. You can get your own copies to read at www.strategicprofits.com .
Some of the interesting observations he brings up are the transition from traditional print, television, and direct mail type of advertising to the world of online experts, Social Networking (Facebook, MySpace), blogging, photo and video sharing (Youtube anyone?). As more people become connected to the Internet, they are being influenced by different media than previous generations ,and people who are unaware of this will be left behind.
This New World of marketing and information sharing also works incredibly fast in both negative and positive ways. If a website, blog or forum is full of information people want or are attracted to; its popularity explodes. Look how quickly sites like YouTube and Facebook have taken off. With these explosions, both positive and negative information are able to move quickly. There is nowhere to hide on the Internet and if something is exposed as a fraud, this information travels even faster.
If you are currently involved in any marketing and you do not have your own web site, blog, or business plan that involves using the Internet, don’t wait to get involved. The change is happening at a very fast pace, so you don’t want to get left behind. I’m a new Facebook user, so if you are currently also Facebook user look me up, I am under bill@housez.ca, if you are not on Facebook, it might not hurt to join and see what is going on out there!
In Closing
As 2007 ends, it has been another adventure filled year for us with both highs and lows. From a new home to the passing of a parent, we have experienced many levels of emotions, and are looking forward to 2008.
The Real Estate market is still causing confusion to the short term investors, but looks to continue to be a great area for people looking at long term growth. Our business has continued to grow and prosper, although with hiccups along the way, but without challenges, anyone could do it!
We have seen some great steps forward with our new web pages finally launching, our blog online (yes I know I need to be more active on it) and some exciting opportunities coming forward for 2008. If you have some personal success stories from 2007 I would love to hear about some of them and if you would like any topics discussed (or re-discussed) in the Newsletter please let me know.
We wish you all a Merry Christmas and a Happy New Year and look forward to another year with you.
Regards,
Bill and Karen Biko
KatSid Housez Inc.
