As the Canadian housing market experiences a slowdown in many regions, the home staging industry is undergoing significant changes. Sellers, concerned about the costs associated with property revamps, are increasingly hesitant to invest in full-scale home staging services. This shift in seller behavior has prompted companies like Order in the House to adapt and diversify their offerings to meet evolving client needs.
Rachael Stafford, the founder and creative director of Order in the House, noted that their services have had to be modified to accommodate the changing market dynamics. These adjustments range from focusing more on decluttering and home organizing services to assisting clients in simple tidying up based on recommendations provided during initial consultations. Stafford highlighted that while some furniture rentals are still being used when necessary, sellers are showing greater reluctance due to concerns about the initial investment and ongoing monthly fees, particularly if the property does not sell quickly.
The change in seller preferences can be attributed, in part, to rising interest rates. During the years of a housing boom characterized by low interest rates, both real estate agents and homeowners were more willing to invest additional money in staging, knowing that they could expect a significant return on investment. However, with interest rates now on the rise, many clients are opting for a more conservative approach to staging, focusing only on high-priority rooms or areas of the property.
According to a study by the Real Estate Staging Association, the percentage of staged homes in Canada and the United States that sold for more than the seller’s listing price decreased from 63% in both 2021 and 2022 to 45% from January to September 2023. This decline in success rates for staged homes reflects the changing dynamics in the housing market.
Cailey Heaps, president of the Heaps Estrin Real Estate Team in Toronto, noted that staging companies are now more readily available due to the decreased demand. She also highlighted a significant shift in how sellers are approaching the duration of staging. Instead of maintaining staging throughout the listing period, some sellers opt to stage for the first month only and remove the staging if the property does not sell quickly. This cost-conscious approach allows sellers to rely on the initial photos taken during staging to attract potential buyers.
Katie Walker, principal designer at Katie Walker Interiors, highlighted that the prolonged listing periods in the current market have required home stagers to become more creative. In addition to traditional staging, which involves renting physical furniture, her company offers virtual staging as an alternative. Virtual staging involves digitally adding 3D models of furniture to photos of the property while removing some existing furniture, saving both money and effort.
With a potential rebound in the housing market expected in 2024 as the Bank of Canada considers cutting its key interest rate, there is hope that the home staging industry may experience increased demand once again. Staging continues to be crucial in attracting potential buyers who rely heavily on online listings and photographs when making their purchasing decisions. Sellers who invest in staging can potentially maximize the appeal of their properties and secure better offers, even in a more cautious market.
In summary, the Canadian home staging industry is evolving to meet the changing needs of sellers in a slowing housing market. Sellers are becoming more cost-conscious, and staging companies are adapting their services accordingly. While the industry is experiencing a lull, there is optimism that a potential housing market rebound in 2024 could lead to increased demand for staging services, which remain essential for attracting potential buyers.