The words of the year just came out last month, by the acclaimed word wizards of the Oxford Dictionary, Mirriam-Webster, and Dictionary.com. What is remarkable to me is that the words of a particular year really do not spill over into the next year. How can something so important as language, which we use every day, not seem to infiltrate our discussions in the next year, after those words had so much influence in the year prior. Maybe words suffer over exposure like celebrities - Payton Manning, Kevin Hart, or Ryan Reynolds…dare I even say Taylor Swift?

What were the words of 2022 anyway? Teal, homer, permacrisis, woman, gaslighting and (aside from woman) I do not think I used any of those words this year. As far as this year’s words go, dictionary.com’s word of the year was ‘hallucinate’ (something I do when I have a high fever), or in this case a nod to artificial intelligence and the production of false information. Isn’t that fake news? No, that was 2021’s word of the year. Mirriam-Webster’s word is ‘authentic’, another nod to AI, and the notion of deep fakes infiltrating our lives…sounds like a nod to politics in North America. Lastly, do not forget the word snobs at Oxford, their word was a non-word, it was ‘rizz’, which I was afraid to look up the meaning (enough from you Seinfeld fans, I know what you were thinking), however it is a nod to Gen Z and their own language, it’s a term to denote style, charm, and attractiveness. One can only hope to obtain this moniker at least once in 2024!!!

Conrad’s predictions of the words and or phrases we will be using in Real Estate in 2024.

Interest Rate ‘Rollbacks’ 

Thank you Walmart for bringing the word rollback to such prominence, this word or some facsimile of the word will be something we will hear next year. That will be music to the Canadian and US consumer’s ears. However, as far as I am concerned, I find that Jerome (Jay) Powell has way more ‘rizz’, when it comes to mortgage announcements - in the world of financial dating our Bank of Canada Governor, Tiffany (Tiff) Macklem is a serious swipe left!!!!!! I am getting tired of Tiff’s constantly scolding us as Canadians by saying, “It’s still too early to consider cutting our policy rate”, “Until we see evidence that we are clearly on a path back to 2% inflation.” Why can’t Tiff be more ‘authentic’ like Jay, when he said it is “not likely” that we will be raising rates, and lets begin to focus on “the question of when will it become appropriate to begin dialing back the amount of policy restraint in place.” He went further on to say that they may be looking at 3 rate decreases in the coming year!!!

Halleluia!!!! Powell really gets the consumer and the need for transparency and trust, a big swipe right!!!! I dare say that the BOC is in lockstep with the US Fed, and I believe Mr. Macklem is ‘hallucinating’ if he thinks we won’t follow the Fed as they rollback or dial back rates in the coming year. 

Joint Ownership

If affordability was the word of 2023 in the housing market, then joint ownership will command a spot in 2024, as consumers get more strategic about entering the market.  

‘Variable-Rate’ Mortgages are Cool Again

The rise of the variable rate mortgage as we enter the climate of rolling back rates in Canada, will prove to be a smart strategy if your mortgage is up for renewal in the coming year. Three consecutive rate pauses by the Bank of Canada is a charm, and should lead to rate cuts in 2024, maybe as early as the end of Q1 or the beginning of spring. 

Renewalpocalypse or Renewalageddon 

If the jump in the stock market is correct about long term rates coming down, and the fact that bond yields in the US and Canada are dropping, it looks like we may avoid that mortgage renewal shock after all. As a result, if you have to renew your mortgage this year, you can re-calculate your renewal at a lower rate, as rates retreat. A one percentage point drop-in current rates on a $500,000.00 mortgage, would save nearly $25,000.00 in interest over a five-year term.

When you factor in how wages went up 3 to 5 percent over the same period, renewalageddon may be averted. Furthermore, those who had 5-year fixed mortgage in 2019, around 3 to 3.5%, could be looking at 4.5% in 2024, but their new mortgage amount would be down over $70,000 at $428,674.00 and the new monthly payment will be $2,374.40 from $2,366.23. Bad news for the sharks waiting on the sidelines for sellers to be offloading their homes in 2024.  

Open Bidding

When the Real Estate Council of Ontario introduced ‘open bidding’ as a part of the new Trust in Real Estate Services Act, many of us in the real estate industry thought ‘when will we ever see using this in a market where homes are lingering on the market, and months of supply are at over 4 months’. Well, as rates take a rollback position, we may see more buyers entering the market. As supply decreases, we could find ourselves in that heated market (particularly at the lower price points) just in time to offer this new tool for consumers. 

‘Private Lending’

With the tightening of lending policies at the five major banks, many businesses have turned to non-bank lenders or private lenders. Of the $1.4 trillion in corporate loans insured in Canada in the third quarter, 40% came from alternative lenders. That says a lot, and this trend has found its way to consumer mortgages, smart money uses private, less-hassle and more flexible money, to be strategic, stabilize their circumstances, and move ahead.

‘Rise in’ - Home Sales, Consumer debt, Delinquencies

Month-over-month home sales have been erratic to say the least and year-over-year declines have made the headlines. 2024 will see these numbers reversed, unit sales will ‘rise’ as more optimism enters the market, and people cannot stand still forever. But there will be the other side of this story as the aftermath of a tight monetary policy of higher and higher rates comes to fruition. The credit -rating agency Equifax, recently reported that credit card balances have risen well above pre-pandemic levels, and the amount of Canadians who made the minimum payment also rose in Q3. It’s a strong indication that consumers are using credit to get by, as our household debt rose to $1.82 for every $1.00 we take in. Furthermore, it takes Canadians 15 cents of every dollar we take in to pay down debt.

‘Cookie-Cutter Houses’  

The federal government went way back for this one, back in 1944 Canada experienced a housing crisis of epic proportions, they set out to build well over 700,000 homes in ten years. Canada Mortgage and Housing’s predecessor came up with a catalogue of homes known as “Victory Houses” (post wartime homes) or “Strawberry Houses”, due to the fact the rectangular foundations were like boxes which held strawberries. This shining example of innovative architecture came with a descriptor of ‘affordable’ and ‘humble’, great labels. I loved watching the press conference when the federal housing minister, Sean Fraser proudly flipped through the old catalogue which had been out of print since the 1970’s. Are these guys kidding me!!!!! Much more goes into this than books full of pretty houses, planning, servicing, infrastructure, building trades shortage, cost of land, red tape, nimbyism, etc.

Solving Canada’s ‘Housing Crisis’

Wait a minute...’housing crisis’? That was a 2023 word. So much has been said and written about this topic. Our Ontario government flip flopped on their strategy of opening up more land to develop and we all know how that turned out. Can we please allow private and public partnerships to solve this one? The only thing we want from the government is resources and tax incentives to encourage/facilitate housing by the private sector, and the not-for-profit sector to garner investment to build more housing. 

5 Words to be Resolute About in 2024

Without question 2024 will be filled with opportunity and challenge, factors which will be out of our control, and some solidly within our grasp. The BOC might get nervous about inflation (November 2023 inflation held at 3.1%) and pause on rates instead of rolling them back, variable rates could come down in Q1 or Q2, and set the market on a whole new path. Open bidding may become common place, or a mere flash in the pan. Whatever we’re in store for, it would be those who focus on controlling the controllable who will win the day. So, if you are looking for inspiration to base your 2024 strategic plan around, I have assembled 5 words (phrases) to get you started. 

Be faithful to your intuition but make decisions after gathering all of the facts. 

Create a plan and be loyal to it every day.  

Change is a constant in our lives and remember to embrace it with an open mind.  

Always be steadfast when it comes to your goals

Life-long learning should be one of your most valuable guiding principles.