One of Vancouver Island's busiest real-estate brokages has evolved into a full-service, full market-spectrum agency after 15-years of specializing in high density and multi-unit residential offerings on southern Vancouver Island.
The Condo Group, founded in 2007, is now Island Realm Real Estate
, and having a conversation about the transition is Tony Zarsadias, The Condo Group's and now Island Realm's CEO.
Tony and Citified's Mike Kozakowski had the opportunity to discuss recent changes at the brokerage, the company's history, its new phase as Island Realm, and its future.
Victorians are very familiar with The Condo Group brand, but what many may not know is how and when the company got its start. Could you speak to this?
Taylor Conroy and Chris Gill were the original founders of The Condo Group in 2007. Taylor’s ambitious goals for the company, alongside his larger-than-life persona, lead to The Condo Group achieving significant market penetration early on by cornering the condominium re-sale segment through unique services and insight that provided buyers and sellers of condominiums with new tools to make informed decisions. A condo boom was also underway in Victoria, further fuelling company growth, and the market segment really began to take off throughout the south Island.
Taylor recognized how different the condominium market was from other forms of residential real-estate, and with his partner Chris, they developed a system of streamlining the research and disclosure process which was critical to making the right decisions when buying homes in multi-unit buildings; there was no brokerage or group of realtors as equipped as Taylor and Chris had become to service this segment.
To put a condominium buying process into perspective, it’s similar to buying a business and quite different from buying a house. You have to go through building inspection reports, review minutes, review the building history, and review depreciation reports; there are a ton of considerations when buying a condo, and from an asset class perspective, it can be a time-consuming affair to get it right for the client.
In 2009, I joined The Condo Group after transitioning from commercial real-estate, and in 2011, Chris and I bought out Taylor’s stake. I was drawn to the company’s unique way of doing business, and thought that what they were doing was brilliant. Taylor and Chris succeeded in getting everyone’s attention, and they did this by openly recognizing condominium buyers are not house buyers, and they have a very different home buying and home selling journey that requires a tailored approach.
In addition to the above, what else made The Condo Group so successful at helping purchasers buy condominiums and townhomes, and sellers find the right buyers for their units in multi-family buildings?
Most people would like to have more time with their agents, but that can be challenging for a realtor especially during busy periods. Managing the needs of clients, scheduling inspections, reviewing reports, viewing properties and negotiating deals can be so time intensive that unless an agent has sufficient human resources supporting them, critical information may be overlooked, or details missed, and clients may be left wanting a more personal commitment from their agent. Addressing this support system for our agents has been one of the keys to our success, and it’s as much the foundation of our business model today as it was back when the company was founded.
To help make the process more customer-oriented, we lift labour-intensive duties off of the shoulders of our agents, and those tasks are looked after by our dedicated support staff. This allows our agents to spend more time with clients, and less time managing administrative duties.
Over time, we started to see single-family-homes and larger properties also appear as listings from The Condo Group, bucking the trend of condominiums and townhomes. Even from the early days, was the eventuality of the Island Realm concept on the back-burner?
It has always been in the back of our minds. Our approach has always been to assisting our clients to buy and sell a variety of homes as they continue on with their homeownership journeys.
Ultimately, we grew with our clients, and developed life-long relationships with individuals who used our services to buy their first home, which was most often was a condominium or a townhome. Later down the road, they may purchase a single-family-home, and as our clients aged, they would begin to look at right-sizing or down-sizing opportunities, which often piqued their interest in condominiums.
The Condo Group was already serving the bookends of the market, and it made sense to start moving towards a new message as the brand began to feel disconnected to what we were doing, which in recent years, became an equal share of assisting buyers and sellers with single-family-homes and condominiums.
Borne out of a company that specialized in listings of homes in multi-unit buildings, we know Island Realm is a great resource for individuals looking to buy or sell condominiums and townhomes, but what’s new with Island Realm that may not have been available via The Condo Group?
The way we approached the condominium market as The Condo Group, as discussed above, is how we approach the single-family-home market, but the key difference is our new partnership with Peerage Realty Partners.
Peerage owns hundreds of real-estate companies throughout North America. They have an innovative vision, and they do not require brokerages or real-estate offices to conform to a single corporate brand and way of doing business. Their philosophy encourages their partners to stay true to their roots, with the benefit of a capital infusion from Peerage, and resources made possible through collaboration with company partners in a continent-wide network. In other words, Peerage seeks out companies that are specialists in their respective markets, and provides them with big company resources, while encouraging them to stay true to their roots as boutique service providers, which is initially brought them success.
Through Island Realm and its relationship with Peerage, we now have a collaborative relationship with Epic Real Estate in Kelowna, the Fraser Valley’s Fifth Avenue, and BakerWest, which is based in downtown Vancouver. We share market intelligence, insights and trends to help each other provide the highest level of service for British Columbians and newcomers to Vancouver Island, some of whom may already have relationships with our partner brokerages. We can also see which trends are ‘sticking’ in other local markets in BC, and which may be a passing fad. This is helpful as Vancouver Island tends to trail the real-estate moves on from the Lower Mainland.
Do you plan to open offices in communities outside of Victoria? And speaking of offices, you’re expanding locally, are you not?
We are planning to open an office in the North Nanaimo area or within Parksville-Qualicum by early 2023, although we already have staff working up-Island. In Victoria, we have opened a new office on Store Street at 502A Pembroke Street in the Design District north of Old Town. This office houses our pre-sale team, and is a location servicing the downtown core. This new location is in addition to our office at Tillicum Road and the Trans Canada Highway which caters well to clients on the West Shore and on the Saanich Peninsula.
|Island Realm Real-Estate's new office on Pembroke Street at Store Street in downtown Victoria. Island Realm Real Estate |
What would you say sets Island Realm apart from other brokerages operating on Vancouver Island?
I have a lot of respect for a number of local brokerages, and there are many professionals across the Island. Having said that, what makes us different is that we strive to hire the best people for the varying roles in our organization, for example, people who are detail-oriented are encouraged to work in roles that require attention to detail, and people who are people-oriented represent our front-line staff. This matching of abilities and preferences with job roles ensures the best people for a particular job are in that position, and this has been an important strategy for us. In fact, the ratio of agents to administrators is roughly equal. That goes to show just how much support our agents receive as they work directly with clients to meet their needs and focus on sales.
Going a little deeper with this example, we also position agents into roles where they will thrive, like matching agents with market segments and roles that suit their individual preferences and abilities. This means that some agents are more likely to thrive in the pre-sale market, while others, for example, are experienced in helping purchasers buy heritage homes and are considered local experts in that capacity.
What about the other side of the equation. Can you assist developers with formulating ideas for their projects?
Yes, we are equipped to help landowners and developers put together concepts for their projects, and to target their product to where demand is or is projected to be. These advisory services are an integral part of what we do at Island Realm. By doing so, we help mitigate project risks, and thereby increase the viability of investments. We provide these services for all market segments, including subdivisions and commercial projects.
Could you speak to the process of retaining Island Realm as buyer or seller, should someone wish to list a home with you, or seek your agents’ expertise to help find a home?
Most people’s homeownership journey starts online. When people make an enquiry on our website, we try to assess their needs through a phone call without assuming that they require a full-service approach. If they do, and if they do not already have a relationship with an existing agent at our firm, we try to match their needs with an agent who specializes in what they are selling or buying.
Once we’re on our way, the administrative team gets involved to book inspections, appraisals, and so on. In fact, this integration of our support staff with the client is almost equal with an agent as far as touch points go, so our administrative team is very highly involved in transactions.
Let’s change course and chat about the housing market on southern Vancouver Island. What are you seeing out there as we progress into spring?
In Victoria, the market is cyclical, and while each individual period of ups and downs may feel different, the trends are the same. However, the major kink in recent decades was COVID-19, because when the pandemic first hit, the market froze up and nothing was happening. The trickle effect was many months of pent-up demand eventually materializing further in the second half of 2020. Stemming from this, we also saw a sustained buying trend in 2021, and now into 2022.
What the pandemic also did was encourage more investment into homes rather than spending money on travel. People wanted to make their homes more livable, so they invested into improvements that also created more value in the market.
As to what is happening with prices, we appear to be reaching a ceiling that will likely be tapped this year. We are certainly seeing more hesitation across all asset types when it comes to pushing prices higher. But this doesn’t mean the ratio of buyers and sellers is changing. We remain very much in a seller’s market, with price ceilings acting only as the first sign of more balance on the horizon and a price plateau effect. And quite frankly, we do need things to normalize, and it is my opinion that this will happen later this year.
After the price boom, what about a decrease in prices? We often hear about a market crash threatening home valuations. Pundits and market ‘bears’ have been calling for a market crash in Victoria for 20 years. What is likely to happen, in your opinion, once we reach a price ceiling?
It is certainly possible that we could see a drop similar to in 2008, but even if we look back at that time, we saw prices correct by only about 5%-10%. The biggest corrections occurred among less desirable asset classes. I think it would be healthy for the market to ease up after seeing prices rise 50% in some cases, over the span of two years.
Where things get tricky in 2022 is with the new construction side of things. Even if prices may level-off or even correct, construction costs are escalating rapidly. This is a curious period for developers because costs are surging, and the pre-sale market may eventually be impacted by cautious buyers paying attention to interest rates and realizing they may not qualify for a mortgage on completion. So if the pre-sale market slows down, could this deliver more demand for the re-sale market? Will higher pre-sale prices drive re-sale prices higher, as well? It’s hard to say what will happen as inflation puts more pressure on new housing inventory amid everything else that is happening.
We’ve been hearing a lot about something called ‘missing middle’ housing, and how it can help densify existing communities throughout Greater Victoria. What does this mean from the buyer’s perspective?
The missing middle is a product of lack of housing supply in general. The only solution that I see, as far as creating more housing to meet the demand, is a simplification of new housing delivery. It can take several years from the conceptual stage of project planning, through to construction completion, and that’s causing much of the headache for buyers in our communities today when developers have so much trouble adding even gentle zoning to neighbourhoods. This gentle density, like townhomes, duplexes and multi-unit homes in the style of houses, is what we typically call the ‘missing middle.’
Unfortunately, most people don’t like change, and NIMBYism (Not In My Back Yard) leads to long drawn-out development approval processes as local community groups can strongly influence the decisions of municipal / City councilors. Ironically, this often occurs even when a development fits the official community plan.
Currently the development process is not transparent, it is difficult, costly, and our current system does little else than make housing more expensive. And speaking to cost, developers rely on investment capital to buy land and plan projects. This capital incurs high interest rates, so every month of delays has a cost that will eventually be passed on to the consumer buying the home or leasing the apartment. There is no way to get around it. With every delay, those costs grow higher and higher.
I believe that if developers knew their planning phase could be completed within two years instead of an open-ended target, this would impact the cost of housing immediately, and through missing middle gentle densification we will make homeownership in desirable neighbourhoods more attainable to local workers.
|An exterior view of Island Realm Real-Estate's new offices on Pembroke Street at Store Street in downtown Victoria. Island Realm Real-Estate |
And what about the supply of single-family-homes? Is this form of housing likely to decrease in prevalence on the south Island, given existing urban containment boundaries? Do you think these boundaries may be expanded as we face declining buildable land opportunities in our region?
As someone who moved here 22-years ago, fully recognizing how green and beautiful the region was then, I knew many more people would be making the move to the Island but in order to accommodate more people, how much are we going to allow the Island to change, and how far are we going to allow the sprawl to go? Demand is definitely there to continue to push boundaries.
Looking into the future, the single-family housing type may no longer be realistic, but a shared wall or two could be and that will provide strategic, gentle density in already developed areas.
Speaking from a personal example, not that long ago, a family house on my street was purchased by a developer and rezoned for six townhomes. I was somewhat resistant to this change at first, but it turned out to be the best thing for my neighbourhood. The developer redid the sidewalks, planted grass in the boulevard, and ironically, the higher density actually had a slowing effect on traffic. This investment turned out to be a blessing for my street.
Back to Island Realm, what can we expect from your rebranding and expanded services in the years to come?
The immediate change in our operations is our second office located across from the Powerhouse building on Discovery Street north of Old Town. This location, at 4,000 square feet in size, is where our project marketing and sales staff are situated. People are always welcome to visit us there.
By 2023 we are planning to open an office in north Nanaimo or in Parksville-Qualicum, as mentioned earlier in the interview.
We will also be providing market intelligence services that will be of special interest to developers, along with in-house multimedia (photography / videography / graphic design) services. Ultimately, our goal is to be Vancouver Island’s premier marketing firm dedicated to pre-sale projects.
For our clients, our partnership with Peerage provides us with shared resources across Peerage’s partners in BC, such as marketing, conveyance and legal services, and cooperation that is on a different level than what we traditionally see offered through local brokerages.
In closing, what has been the secret to The Condo Group’s, and now Island Realm’s, success in our marketplace?
We continue to find inspiration to innovate our services from industries outside of Real Estate. Employing, and adapting best practices from other industry leaders is at the heart of everything we do. Let’s use Apple as an example. They made things easier for people because their technology solved people’s problems in an intuitive way. That’s our approach as well, and we aim to recognize how the buying and selling mechanisms work, piece by piece, and continue to make them simpler for the client. C
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