Message From The CEO

A Year of “Flight-to-Quality”

Increasingly, the strength of the Royal LePage brand has been an irresistible drawing card

When we look back on 2009, I am quite certain that the Chinese curse, “may you live in interesting times” will seem an appropriate tagline for this rollercoaster of a year. The year certainly did not begin on a strong note. Dragged down by the worst global economic crisis in over half a century, the Canadian market suffered a horrendous drop-off in unit sales volumes during the dark days of the past winter. As steep and deep as the plunge was, the climb out of that abyss, starting in March, was equally as impressive. While I would advise against premature celebration with so many economic challenges still to resolve, it appears that the worst for this cycle is now behind us.

The Canadian real estate market has been a reliable source of advancement

The Canadian real estate industry and economy are cyclical in nature. We experience periods, such as most of this decade, in which the industry, and house prices, grow at a rate greater than incomes. And then the market ‘corrects’ which gives home prices and listings supply an opportunity to adjust to consumer demand. The important thing to remember, for both your own career planning and to reassure your clients, is that the Canadian real estate market has been a reliable source of advancement for a very long time. Industry growth over the decades has been approximately 10% per year, half of that in home price appreciation; half in increased unit sales. Few industries can speak to historical expansion of this quality.

If there is a silver lining to the storm clouds we’ve lived with during the recession, it is that Royal LePage has fared

considerably better than the competition. More brokerages and more agents are choosing to join our network. When market conditions are difficult and a market leader grows at the expense of others, we refer to this as a ‘flight-to-quality.’ Flight-toquality is a stock market phenomenon occurring when investors shun capricious bargains and speculative investments and put their faith in solid, bluechip companies. Well, it doesn’t get any more bluechip in Canadian real estate than your Royal LePage company.

When asked “Show me the value”, Royal LePage has the goods

As the market slowed in 2008, we found more agents and more brokerages were asking themselves, “what’s out there?” And “show me the value.” Increasingly, the strength of the Royal LePage brand, and

the quality of the products and services that the company offers, has been an irresistible drawing card. Royal LePage has enjoyed an exceptionally strong year in franchising.

To highlight just two examples of outstanding brokerage teams that have joined Royal LePage in 2009, I’d look to Calgary, Alberta and to Brampton, Ontario. In the west, we were very happy to welcome Royal LePage Solutions to the family. Formerly one of Keller Williams’ leading brokerages, they chose to move to Royal LePage in order to be part of something bigger and more enduring. Just northwest of Toronto in Brampton, one of Canada’s largest Coldwell Banker businesses decided that they too wanted to affiliate themselves with a market leader. A hearty welcome to Royal LePage Innovators!

At Royal LePage, we have been dedicated to providing the support you need to succeed, in bad times and in good, since 1913. The real estate market will forever fluctuate and keep us on our collective toes. Rest assured that we are stronger than ever, and very well-positioned for growth.

If there is a silver lining to the storm clouds we’ve lived with during the recession, it is that Royal LePage has fared considerably better than the competition.

In the recent years of plenty, consumers and REALTORS® alike have sometimes turned their back on quality. Some consumers have listed with low-service discounters, erroneously thinking that a house in a hot market ‘sells itself’ and therefore the advice and counsel of a quality professional isn’t necessary. Some brokerages and agents have been simply too busy to look around, sticking with what they have because it was the path of least resistance.

Phil Soper is the President and Chief Executive of Royal LePage Real Estate Services and can be reached at president@royallepage.ca.

Royal LePage has long been the leader in leveraging technology to provide innovative business and marketing services to the Canadian real estate industry. It will come as no surprise to you that we have been using different tools and approaches to leverage the phenomenon that is social media. Many of our clients are ‘enjoying the conversation’ that comes from participation in these social networks. It’s important for the company, and you, to be there.

Social media offerings such as Facebook and Twitter have a way of becoming trendy very quickly and waning just as fast. Our approach is to establish our presence, to help you take advantage of the technologies that make business sense, and finally to keep light on our feet – moving our focus when the value dissipates.

Many of you already follow my ‘mini-blogs’ or posts on Twitter. If you’d like to see how the system works and hopefully pick up some value in the process, please follow me at www.twitter.com. Address: PhilSoper.