Mortgage 101 – housing prices and historic lows for inventory | March 2022 Part 4

In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on CityNews 95.7 and CityNews 101.1, the guys talk about the current home prices and if they will go up or down, the historic lows for housing inventory, and discuss the pros and cons to selling your home right now.

Mortgage 101 with Clinton Wilkins & Todd Veinotte: Housing prices and historic lows for inventory

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

Transcript:

“Inventory is down basically at historic lows.”

Todd Veinotte: [00:00:00:02] All right, let’s talk about the housing market in Halifax and there’s something that you want to talk about? Just simply because inventory is down, is it?

Clinton Wilkins: [00:00:12:00] Yeah, inventory is down basically at historic lows.

Todd Veinotte: [00:00:16:16] Wow.

Clinton Wilkins: [00:00:18:07] So right now we have about a couple of hundred listings available in Halifax on this day pre-pandemic, 2019 and even looking back to 2018, we normally have about 2,000 active listings. So, you know, it’s a bit of a situation.

Todd Veinotte: [00:00:37:10] Yeah. You don’t say.

Clinton Wilkins: [00:00:38:23] I think if you’re first-time home buyer, it’s challenging to get into the market. I’m not so much concerned for you and me, Todd. Like we could sell our existing places by another place, whatever. So I’m not so concerned about us, but I’m concerned about first-time home buyers and obviously we’re seeing a lot of bidding wars.

You know, if you’re moving here from another market, you’re used to that, especially if it’s in Ontario. There are some properties that are getting multiple, multiple offers and you know, homes are selling for $100,00-$200,000 over the listing price. I think that’s a little bit of a symptom of maybe realtors pricing them a little bit too low. You know, the prices have gone up. So like maybe the listings maybe should start at a bit of a higher price point. So I think that’s a little bit of the symptom and maybe that’s why it’s getting so much activity because they are priced too low.

So, you know, I won’t hold realtors 100 per cent accountable for that. Obviously, the market is very, very hot. And obviously, we have more demand in the market than we have the supply. And this is going to continue going on. Some of you who are listening are going to sell your home. I don’t know that if the Bank of Canada increase is going to maybe spur people to sell their homes,

Should I sell my home right now?

Clinton Wilkins: [00:01:53:22] but you know, if rates continue to increase, maybe more and more people will sell them. I think the consumers that were in financial hardship kind of pre-pandemic, some of those people who own homes have already sold. And I think that, you know, if you’re still in a financial hardship type position today, selling your home is not a terrible idea. I’ll be 100 per cent honest with you.

You know, if you’re a retiree who’s potentially thinking about, you know, moving into an apartment or into maybe a senior’s living type situation, selling your home is basically opening the door to a first-time home buyer. And there’s nothing, you know, shameful of selling your home. You’re basically getting the next generation into homeownership. In many households, the home is the biggest asset.

And you know, you buy your home when you’re a young person and you’re going to work for the next 25, 30 plus years and you’re going to pay down that mortgage and every month that goes by, you’re going to have the mortgage pay down and hopefully the values continue to increase. Some people are asking us, Well, maybe we’ll just wait until you know, the prices come back down. I don’t think come down is in our future. I’ll be honest with you.

Will the housing prices go down?

Todd Veinotte: [00:03:08:23] Not that much. They might drop a little bit, but nothing like that.

Todd Veinotte: [00:03:11:20] I don’t even think they’re going to drop at all, Todd. I think we’ve right sized our pricing. I think our homes were probably undervalued before.

Todd Veinotte: [00:03:21:17] But ultimately the market will determine the value.

Clinton Wilkins: [00:03:23:12] The market will determine it and it’s going to take a long time for us to increase the supply to the levels that it needs to be. You know, we are seeing that it could be five, 10, 15, 20 years to get enough supply on line to meet the levels of demand. People are moving here. You know, we the federal government has said that they’re going to increase the amount of immigrants and refugees that they’re going to take to Canada. And you know what percentage of those people will move to Halifax? Yeah, it is a desirable place to live.

Immigration and migration to Nova Scotia

People are moving to B.C. and they’re moving to Atlantic Canada. You know, people want to live by the ocean. Nothing wrong with Ontario for our friends who are listening there or nothing wrong with the prairies. But there’s nothing like being able to access the ocean. You know, I’m able to walk outside the door of my office tower and I can see the Atlantic Ocean. You know, in the Halifax Harbour, but I’m able to see it every day and that is special. And the thing is that even though Halifax is a small city, we still have a lot of resources, which I think is pretty cool.

You know, we have new restaurants opening here are like every couple of weeks, it seems. And you know, things are really, I think, booming and starting to open up. We’re going through our reopening plan and things are going to be reopening on really March 21st. We’re basically going to be, you know, living with COVID and getting back to more of a normal situation.

I think that’s happening in Ontario as well. So I’m going to be curious to see kind of what happens are the people migrating to Halifax and Atlantic Canada going to increase when things start opening up in other markets?

Housing prices: Atlantic Canada vs other parts of Canada

Clinton Wilkins: [00:05:12:11] I’m not sure. The one thing I do know is if the average house price is still around $500,000, you can’t buy a one bedroom condo in Toronto for that. And you know, we have a good quality of life, and I think a lot of people are going to continue working at home or working remotely. And, you know, I think Halifax in some ways is a bit of the promised land.

I was on a call this week with the regulators in Nova Scotia and in New Brunswick. It was a group of us through Mortgage Professionals Canada. And one thing that we kind of talked about that kind of struck home with me. You know, Nova Scotia, New Brunswick, P.E.I., Newfoundland, it’s kind of the last frontier of affordable housing. And it might not be in downtown Halifax, but there still is affordable housing in the province of Nova Scotia. You may just have to buy outside of the core. But I think that’s what’s kind of cool about Nova Scotia, right?

You know, if you can’t afford the $500,000 house, maybe you can buy the $400,000 home or the $300,000 home, or maybe the $200,00 home. There are still homes available in these price points. And you know, we have a diverse coastline. We have a diverse topography in Nova Scotia. And, you know, I think it is a special place. You know, I was born here, so maybe I’m a little bit biased, but I think it’s a good place to do business as well.

Is new construction risky right now?

Todd Veinotte: [00:06:33:29] New construction that you talk with housing inventory and being a key part of dealing with that, what can you tell us about new construction?

Clinton Wilkins: [00:06:40:08] You know, there are some challenges. As you know, there was an article that came out this week that there was a builder in Halifax that had four new construction homes that are nowhere near ready to be delivered to the people that they made the offers from. And we’re going back now two years. These homes in the article that reported that the homes are now worth approximately $300,000 more than they were two years ago.

We’re seeing this a lot with builders and doing new construction. Obviously, the cost of materials is up, the supply is down and things are taking longer. You know, we’re seeing some new construction get renegotiated kind of before closing. Some builders are coming and asking for price increases to cover some of their losses. In some cases, builders will go bankrupt and they’re going to lose their shirt because if they made agreements, you know, before, you know, materials went up before other costs went up, in some cases they’re delivering homes at a loss, which is problematic. And I understand there’s contracts we feel for both sides.

Obviously, I’m most concerned about my client. I’ll be honest with you, but I feel their pain. Buying a resale home, although very competitive right now in some ways, is a lot safer. You’re knowing what you’re getting. You can get it. It’s delivered on time and you know, there’s more certainty. And sometimes people think, you know, buying a new construction home is safer because it’s brand new. But there certainly can be problems with new construction as well. So I think a little bit of buyer beware and, you know, ask the right questions.

See you for our April show!

Todd Veinotte: [00:08:13:02] All right. So we covered a lot of territory as we always do. And if people have more questions about any of this stuff or they want to know more about you and what you do, how do they get a hold of you? What are the best ways?

Clinton Wilkins: [00:08:22:17] I think the first step is to check us out online at teamclinton.ca/radio. Lots of information on there. We have over 500 blog posts, on a variety, of different topics and lots of contact information. You can surf to our social media pages right from our website. So teamclinton/radio. Lots of great info. Thanks for tuning in.

Todd Veinotte: [00:08:42:26] And if people are living in Ottawa and they want to move to Halifax, get a hold of you.

Clinton Wilkins: [00:08:46:12] Oh, 100 per cent get a hold of us. You know, we love helping people that want to do any mortgage lending, obviously here in the province of Nova Scotia.

Todd Veinotte: [00:08:54:11] All right, it’s Mortgage 101: Your Guide to Homeownership with Clinton Wilkins and myself, Todd Veinotte, and we appreciate you taking the time to listen. We’ll be back next month.

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.