Mortgage 101 – Special Guest James Dwyer: Nova Scotia market updates and trends | November 2021 Part 3

In this special episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on CityNews 95.7, the guys bring in guest James Dwyer to share his perspectives and experiences in Nova Scotia’s real estate market. James and the guys talk about Nova Scotia’s market currently lacking inventory, interprovincial buyers impacting the local market, the new additional deed transfer tax for out-of-province buyers, and what it’s like to continually see clients get out-bided in today’s market.

James Dwyer has been a realtor for about a decade and currently works with Engel & Völkers. He started his career primarily working with first-time home buyers and while he still continues to work with those clients today, he also developed a special passion for helping families find their perfect home after he and his wife started their own family and had two daughters. For him, it’s not about finding a house, it’s about improving the quality of life for the next chapter of his client’s life. You can check out Jame’s website at jamesdwyer.ca.

Mortgage 101 with Clinton Wilkins & Todd Veinotte: Nova Scotia market updates and trends | November 2021 Part 3

Don’t feel like watching the video? Check out the transcript below.

Transcript:

Welcoming James Dwyer to Mortgage 101

Todd Veinotte: [00:00:00:07] Alright, so without further ado, let’s mention why it’s more crowded in here. I’m just kidding, of course. James Dwyer joins us. James Dwyer is a real estate advisor. He’s actually been on my radio talk show before and offered great advice to my listeners. He’s with Engel & Völkers. Is that how you say that?

James Dwyer: [00:00:19:10] Close enough, yeah. “Ang-gle” and Völkers.

Todd Veinotte: [00:00:21:19] Engel. Not “Aungle?”

James Dwyer: [00:00:22:17] No.

Todd Veinotte: [00:00:22:23] I think it sound should be “aungle.” Are you sure?

James Dwyer: [00:00:24:07] Well, where I come from, everyone calls it the Anchors and Volkswagens, so.

Clinton Wilkins: [00:00:28:01] Oh, that’s easy.

James Dwyer: [00:00:28:23] That’s great, actually.

James’s career with first-time home buyers

Todd Veinotte: [00:00:30:08] Alright. Tell us a little bit about the depth of your experience and in the real estate world here in HRM.

James Dwyer: [00:00:35:19] Yeah, I’m coming up on my 10th year in business now. Originally from Newfoundland and so built my business actually with first-time buyers in 2012, 2013 at the beginning of a buyer’s market. So being in this type of a market is definitely a flip, if you will, from what I kind of cut my teeth with. But it’s definitely, definitely interesting times for sure.

Todd Veinotte: [00:01:00:04] Yeah, 10 years, that’s pretty good. You get a decade under your belt. You’ve seen pretty much everything, right?

James Dwyer: [00:01:06:00] Yeah, I think so. And again, it comes down to the ebb and flow of the, you know, buyer’s market, a balanced market, a seller’s market and having the know how to navigate all three of those, I think, is a cornerstone to success.

Todd Veinotte: [00:01:18:17] I wouldn’t want to be building your business off first-time home buyers right now.

James Dwyer: [00:01:22:24] No, no, no, exactly. It’s the pivot, right from one to the other throughout the marketplace. But ultimately, you know, the things that you learn through the business and throughout the years from representing both sides, you know, brings a lot to the table to help both.

Nova Scotia market lacks inventory

Todd Veinotte: [00:01:38:20] Give us an update on the market right now.

James Dwyer: [00:01:41:12] Man, we’re lacking inventory. You know, fundamentally, the biggest issue right now is that, you know, over the summer, we’ve seen median sale price kind of drop month over month over month. And then September, bam, it jumped right back up and wiped out all those losses. And then, you know, you’re thinking, “Oh, wow, the man must be back,” but it’s a lack of inventory.

So, September 2020, we had 840 houses, I believe, come on the market. September this year was just over 400. So, you know, that’s half the inventory. And if anything, we see in what happened in 2021 in January, February, March, I mean, it was the wild, wild west because there was no inventory.

And so if we’re seeing these numbers now, I wonder what we’re going to be up against when we get into those months in January, February, March, April with those, you know, if the inventory levels continue to decrease even more so than what they were in 2020.

Clinton Wilkins: [00:02:31:23] Are you seeing the multiple offers, James, that we were seeing kind of before? Because I’ve heard, you know, through the grapevine that, yeah, there’s less listings, but the competition isn’t as fierce as it was. Is that right?

James Dwyer: [00:02:42:08] One hundred per cent. Yeah, it sputters. We brought on a number of listings over the last two weeks, and some have been just, you know, traditional lots of viewings, multiple, multiple offers, seeing a lot of properties with deadlines come and go. And then all of a sudden your inbox is full the next morning because everyone thinks they’re skirting around the competition.

And I think it’s just, you know, buyer’s evolution of how to handle this environment, right? They’re not getting caught up in it as much as they were before. And I think it’s just the evolution of the strategies for, you know, real estate agents to get the best for their clients.

Local vs interprovincial buyers

Todd Veinotte: [00:03:16:16] So why are they not getting caught up in it in the way that they were before?

James Dwyer: [00:03:20:11] I think we saw a lot of fatigue in the market, particularly leading up to the spring market of this year. And then over the summer, we’ve seen a subtraction, a little bit of some of the interprovincial migration.

And then the local buyer just kind of taking a step back saying, “You know what, maybe I’ll take the summer, relax a little bit” and then the fall just kind of really pick things back up, especially with local clients. We’ve been able to get quite a large number of them into homes in August and September.

Todd Veinotte: [00:03:48:27] So the people, Ontario, we heard about this kind of rush of people living in Ontario, Calgary, all these large areas saying, “Hey, I can sell my property and go to Halifax and Nova Scotia and do quite well.” Less of that’s going on, then? Is that what you’re telling me?

James Dwyer: [00:04:03:02] It would appear on the surface. Yeah, I mean, they’re still there. I mean, there’s still a lot of that exodus coming through here, but we’re starting to see a lot less. I really, really believe it comes down to the environment, right? So in the last shutdown in Ontario, and I believe they had probably one of the worst shutdowns in North America.

Clinton Wilkins: [00:04:22:24] Yeah, I would agree.

James Dwyer: [00:04:24:00] So what do you think most of these people were doing? They were on their phone all the time and they were going, “You know what? I got to get out of here,” and they’re looking at properties all day because they couldn’t go anywhere, couldn’t do anything.

Todd Veinotte: [00:04:33:11] Yes.

James Dwyer: [00:04:33:21] Right? So, I think that led to some of that, you know, hotness that we felt in January, February, March. And then when their shutdown lifted after our shutdown lifted, it was summertime.

And I don’t know if about you guys, but I mean, if that was me, I think I would have sat back and if I was living in Ontario, I’d be like “You know what? This is going to be my summer. I’m not looking at real estate. I’m going to be living at the beach and, you know, to the bar.”

Clinton Wilkins: [00:04:55:04] We’ve definitely seen that lately. I can tell you that, like every third call was a call from Ontario. James, you saw this. We’re not getting that influx of calls even in our office right now, which I think is interesting.

Possibility of additional deed transfer tax on out-of-province buyers

Now, James, I have a good question for you. Earlier this week, the province was kind of floating around an idea of an additional maybe deed transfer tax for out-of-province buyers. Have you heard any rumblings, you know, for any consumers that are basically looking out-of-province now with this, maybe, you know, getting sworn into law next year?

James Dwyer: [00:05:26:01] I think when you look at the type of property that a lot of these people are looking towards, that extra two per cent, I don’t think it’s going to make that much of a difference in their eyes, because they’re coming from markets where the values of their homes are usually two or three times higher than ours. So most likely, they’re financing very small portions, if at all.

And so if you’re throwing an extra five, 10, 15 thousand dollars at them as an upfront expense, I think this is the cost of doing business for them.

Clinton Wilkins: [00:05:52:07] I would agree.

James Dwyer: [00:05:53:21] Yeah.

Todd Veinotte: [00:05:54:27] Or it’s another tax grab for the government.

A better option? Defer deed transfer tax for first-time home buyers

James Dwyer: [00:05:56:03] Well, exactly. I think more importantly, though, if they were going to be doing something like a tax, I think they should have been looking at something like, you know what, maybe you defer deed transfer tax for first-time home buyers to help stimulate that, because the first-time home buyer has more expenses than anyone else in the process of buying a home.

Todd Veinotte: [00:06:10:16] That 1.5 per cent, right?

Clinton Wilkins: [00:06:12:03] And less cash.

James Dwyer: [00:06:13:07] They have the least amount of cash and they have to come up with the most because they have no equity to work with, right? So if the government was like, if they were really serious about it and getting you Nova Scotians or first-time home buyers into properties, maybe you say instead of doing an upfront cash payment, maybe you defer it, tie into property taxes, or and then defer it over a five year period.

That way, the government still gets their money and two, it’s not so much a financial burden for that buyer, right? Rather than throwing this tax at interprovincial migration.

Todd Veinotte: [00:06:37:21] Probably not going to go for that, though, because they like their 1.5 per cent up front.

Clinton Wilkins: [00:06:41:00] Well, I think, and 1.5 is really going to the municipality. And I know every municipality is obviously a little bit different. I’m curious, though, if maybe the province would visit something similar to what they do in New Brunswick and in P.E.I., where non-residents and properties that are rentals actually pay a higher property tax. You know, going forward.

Maybe that would be more of a deterrent if we’re actually looking to defer or deter people that are trying to buy rental properties or second homes or whatever in the province. I wonder if that would make a difference?

No secondary home options left in Ontario

James Dwyer: [00:07:12:05] Yeah, I think I think it would, but I mean, you know, look across the board, I mean, Ontario just recently were talking to agents out there and it’s like secondary homes, cottages, camps, that sort of stuff. Like they’re non-existent on the market.

Clinton Wilkins: [00:07:23:09] They don’t even exist.

James Dwyer: [00:07:24:04] Because they all got bought in 2020, right? And so they pivoted and said, okay, where else do we go? “Ok, cool Nova Scotia. I can get all that for practically nothing and be on the ocean,” right? And so we’re starting to see that pivot coming through. So I don’t know if it’s sustainable over the long term, I think it’s situational.

An Ontario agent found investors make up 80 per cent of buyers in Ontario

Clinton Wilkins: [00:07:38:03] I don’t think we have the empty homes and the empty condos like they do, maybe in some of these other markets. Because, I know in B.C. and Ontario that is a bit of a concern and I think, you know, the real estate market there is inflated due to the demand, but there actually is supply that’s just being tied up.

James Dwyer: [00:07:55:24] Yeah, I think you’re right on that. There was an agent in Ontario who, one of his clients actually wanted to know very specifically who was the buyer’s agent representing. Where they actually representing people to buy homes, or were these investors. And for whatever reason, they wanted to sell somebody that was looking at it as a proper home.

But they found it was about 80 per cent were actually investors. And this is downtown Toronto. And so now they’ve made a part of their process to collect that data to find out where these buyers are coming from. Because if you’re seeing that level of investment coming out of Toronto, it’s only going to trickle down to the rest of us, right?

Clinton Wilkins: [00:08:29:09] Yeah, I think that’s a good point.

Watching first-time buyers continue to get out-bided

Todd Veinotte: [00:08:31:00] James, a question for you, I don’t want to run out of time. When you have first-time home buyers and they’ve got their pre-approval, they know they’re approved and you have them out there and they’re looking around and they’re getting in bidding wars. How difficult is it to watch them lose these bidding wars and get frustrated because it’s got to be part of it, and you have to deal with that? Tell us about that experience that you’re dealing with right now.

James Dwyer: [00:08:56:07] Yeah, no, without a doubt. I mean, a lot of this stuff really comes down to that initial conversation. You know, I have it with all my first-time home buyers. Like, it’s hard not to fall in love with a home, right? I mean, you do stupid things when you fall in love with houses. So I always say, to try and keep my clients grounded, you got to look at this, the fundamental reason is it’s a business investment first and foremost, right?

And when you can take it from that mindset, you know, you’re less likely to make some of those mistakes. Some of those emotional decisions in the biggest purchase of your life, like that’s the last thing you want to do: To grossly overpay for any home.

Unfortunately, in the market that we’re in, yeah, you’re probably going to have to overpay a little bit. But if you can kind of keep that within the right framework of the marketplace, you know, if the market houses are selling like that, you just never want to be that guy, right? And that’s part of my job is to bring that information, to give that information to my clients so they can make educated decisions when they’re making these offers. And you know what?

I always tell them the same thing, too, is that you know what, there’s a good chance you’re probably going to lose a couple of these offers because guess what? Somebody is going to come in there and be that person that does this with their offer price. And it may not be a good decision because you know what they’re probably making an emotional decision.

Todd Veinotte: [00:10:01:02] What about people on the other side of that? That are selling. It’s probably a good thing they don’t meet, right? They don’t meet the people offering the homes because they might like them. Yeah, and want to give them a deal, or whatever.

James Dwyer: [00:10:12:27] So, yeah, normally, you know, we always kind of keep that separation, right? You know, as a professional, you know, service that we provide, I mean, it’s creating that buffer, right?

Todd Veinotte: [00:10:22:18] So why is it important that that buffer is in place? Do you think?

James Dwyer: [00:10:25:29] It’s so that, you know, there’s not rash decisions or information that’s given up in such a way that could hamper or hinder your opportunity to purchase or sell, right?

Including “love letters” with home offers

Clinton Wilkins: [00:10:37:10] What do you think about these love letters? I’m seeing some of these come through.

James Dwyer: [00:10:40:00] Yeah, I mean,

Clinton Wilkins: [00:10:41:14] How many love letters have you guys sent?

Todd Veinotte: [00:10:43:03] What do you mean?

Clinton Wilkins: [00:10:43:26] Like in your life? I don’t know. But like, I’m seeing love letters coming in with these offers.

Todd Veinotte: [00:10:47:08] Oh, is that right?

James Dwyer: [00:10:48:02] Yeah, it was quite common over, a quite common tactic we’ve seen in 2020.

Todd Veinotte: [00:10:53:14] Like what they love about the house?

James Dwyer: [00:10:54:25] Well, it’s almost like a letter of like why we want to buy your house.

Todd Veinotte: [00:10:58:23] Oh, I see.

James Dwyer: [00:10:59:09] “I could see my, you know, me and my wife and raise our kids here and our little dog lucky.”

Todd Veinotte: [00:11:03:08] Pull at the heartstrings.

James Dwyer: [00:11:04:25] Exactly, right.

Clinton Wilkins: [00:11:06:08] It does go the purchase agreement and like the lenders are getting this and you know what? I think a couple of people have been caught up because there’s been some half-truths in these letters,

James Dwyer: [00:11:14:13] I don’t know, like, to be honest with you, if you’re selling your house and someone offers you, I don’t know, $50,000 more than anybody else that offered. Is a letter really going to have an impact at that stage? I don’t think.

Clinton Wilkins: [00:11:26:01] Probably not.

James Dwyer: [00:11:26:14] You know, $50,000 or a nice little love letter?

Clinton Wilkins: [00:11:28:06] If there’s two, it could work against them.

James Dwyer: [00:11:31:05] Yeah.

Clinton Wilkins: [00:11:31:09] It could work against them. But I think, you know if there’s two offers and everything being equal, like, which one do they pick? And in some cases, they might have really hate the letter. I don’t know.

James Dwyer: [00:11:39:18] Well, in the United States they actually banned them.

Clinton Wilkins: [00:11:42:22] Oh, have they?

James Dwyer: [00:11:43:14] Yeah, they banned them altogether for a multitude of reasons because you can also get discrimination through it too.

Clinton Wilkins: [00:11:48:28] Of course, yeah. And I think that’s a really fine line, for sure.

James Dwyer: [00:11:51:24] Yeah.

Thanks for coming on the show, James

Todd Veinotte: [00:11:51:28] How do people get a hold of you?

James Dwyer: [00:11:53:18] Easily, they can look me up. JamesDwyer.ca, or check us out at engelvoelkers.com.

Todd Veinotte: [00:11:58:19] Just as simple as that.

James Dwyer: [00:12:00:00] Yeah.

Todd Veinotte: [00:12:00:20] Okay. Do you like Clinton?

James Dwyer: [00:12:01:20] Clinton’s wonderful.

Todd Veinotte: [00:12:02:16] You just say that because he gives you business.

Clinton Wilkins: [00:12:04:21] I mean, it’s reciprocal. You know, James probably sends me more clients than I sent James, so, you know.

Todd Veinotte: [00:12:10:10] Alright, that’s enough of the love in here.

Clinton Wilkins: [00:12:12:10] Well, you know what?

James Dwyer: [00:12:13:00] Love letters? Love it all.

Clinton Wilkins: [00:12:14:10] It’s not even February, but it is Financial Literacy Month, so thanks for that.

Todd Veinotte: [00:12:19:06] James, thanks for coming in. We appreciate your time.

James Dwyer: [00:12:21:02] Thank you very much.

Todd Veinotte: [00:12:21:18] That’s James Dwyer. Is it “aungle?”

James Dwyer: [00:12:24:00] “Ang-gle,” Engel & Völkers.

Todd Veinotte: [00:12:25:02] Good Lord, Todd, get it right. Engel & Völkers. We’ll be right back on Mortgage 101: Your Guide to Homeownership right here on CityNews 95.7.

If you have any questions, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.

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