The “Butterfly Effect” in Real Estate

The “Butterfly Effect” in Real Estate

The “Butterfly Effect” In Real Estate

“Never underestimate the power of a butterfly’s wing.” – Brian McCullough

Monarch butterflies are considered some of the most beautiful creatures in the world, with their large size and vibrant orange, black and white markings.  Each Fall, Monarch butterflies travel from southern California to Mexico, and then in the spring, they lay their eggs on milkweed plants, of which the leaves are consumed by the caterpillars.  After transforming into butterflies, they will begin to arrive in Canada during the summer months.  It is quite incredible that these butterflies make up to a 5,000 kilometer two-way “commute” each year – a feat not undertaken by any other insect on earth.

What do butterflies have to do with real estate?  For many people who are looking to purchase a new home, having a garden to grow vegetables, fruit, flowers and herbs is an important feature.  Because Monarch butterflies also serve as pollinators, one way that a homeowner can support the butterfly’s unique ecosystem is to grow milkweed.  Milkweed is the only plant that Monarchs lay eggs on, and as caterpillars, it is the only leaves that they consume.  The milkweed also produces a substance that many predators consider poisonous.  It is important to ensure that the variety of milkweed is Showy Milkweed, as some types are considered to be invasive.  The Showy Milkweed is also considered to be deer-resistant and attracts not only the Monarch butterfly, but also bees, hummingbirds and other species that serve as pollinators.

Have you ever heard the term “butterfly effect”?  It is the theory of a small change creating a larger, more meaningful change that was coined by Edward Lorenz, a meteorology professor at MIT, who used a butterfly flapping its wings on one side of the world created a massive typhoon on another as the analogy behind his theory.  In real estate, the “butterfly effect” can be applied in some contexts.  It is always important to keep in mind that residential real estate is based on a demand for housing (a basic need), while commercial real estate, especially office space, is reliant on trade.

For example, the economy in China “flapped its wings” in 2018 as continued to experience tightening financial and trade regulations.  This, coupled with foreign buyer taxation and other BC government initiatives, had an impact in the number of home buyers and property investors.  However, owning a home remains a goal for many, and this optimism serves as the butterfly wings for the real estate industry.

So, next time you see a Monarch butterfly, remember the power of its wings.

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