Are we building enough new homes in Nova Scotia? Clinton and Todd discuss housing starts, and the Halifax market, focusing on trends in new builds, affordability concerns, and demographic shifts.
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Mortgage 101 – An Uptick in Halifax Real Estate, with James Dwyer
James Dwyer, of Engel & Volkers, joins Clinton Wilkins and Todd Veinotte to discuss the Halifax real estate market and why there may be a notable increase in listings and sale prices compared to last year. James gives an in depth insight on recent Halifax real estate purchasing habits, and suggests that the eventual decrease in interest rates could further strengthen consumer confidence.
Real estate market trends in Nova Scotia with a focus on entry-level properties.
Todd Veinotte
All right, welcome back to Mortgage 101, your guide to homeownership with myself Todd Veinotte and our mortgage guru Clinton Wilkins.
Clinton Wilkins
I certainly do love it.
Todd Veinotte
Well you know what else we love? We love having guests!
Clinton Wilkins
We love having guests on our show! And we do have one! We have James Dwyer on from Engel & Volkers. He’s a realtor. And he’s a fan of our show. Which is awesome!
Todd Veinotte
He has to say that or we won’t let him on.
Clinton Wilkins
Let’s really talk about the Spring market. And, you know, Spring is such an interesting time when it comes to real estate, Todd. And I’ve heard stats that the listings are up exponentially. So I want to hear from our realtor partner here, James to hear what he’s seeing down the on the ground.
James, do we have you?
James Dwyer
Yes, I’m here.
Clinton Wilkins
Give us a little rundown on what’s going on here this Spring market? I’ve heard there’s been a huge, huge uptick in listings.
James Dwyer
Compared to this time last year, we are up about 20% In listings right now. But at the same time, sales are up, median sale price is up. And what we’re seeing right now is basically marginal improvements over the last year, but at the same time increasing inventory. So January, February, March, sales and new listings were kind of steady, even together. In the last 30 days or so, listings are definitely coming on strong now.
Todd Veinotte
What parts of the community are perhaps hotter than others?
James Dwyer
Well, essentially, I mean, the entry level stuff, first time homebuyers. That stuff is still red hot. New construction seems to be seeing a big uptick lately,in sales and in new inventory. Also too, Nova Scotia, one of the leading provinces right now in homebuilding. So, I mean, that’s also a bonus. So, it’s definitely seeing some positive improvements over this time last year. Last year was a pretty flat year, but this year, definitely we see marginal improvement, for sure.
Clinton Wilkins
That’s really interesting. We’re certainly seeing it here on our end. Certainly, some first time homebuyers are getting agreements and people are just buying homes. It seems like the market is becoming more balanced. Would you agree? Are you still seeing the situation where there’s 20 offers on properties?
James Dwyer
Interesting point, actually, it’s a mixed bag when you kind of break it down by price points. So your entry level properties again, like I mentioned, red hot, filthy multiple offers nest; but the mid range stuff or the ones you would upgrade to, not as much, not as heavy with the competition in most cases. Single offers bargains opportunity to negotiate so I do see it as a good opportunity for those that do currently have starter homes, where they can net out a higher sale price and then having the luxury of being able to negotiate down, a little bit, on the next purchase. Interestingly enough, though, the higher end stuff is actually picking up quite well. That’s $750,000 to $1 million, seems pretty quiet at the moment. I do see a lot of that inventory coming online right now with the exception of like, areas like Bedford West, doing quite well Larry Uteck area doing quite well. The new construction stuff in Timberlea is starting to do really well. So, you know, it’s area dependent, and when it comes down to, what people are looking for and so forth – the entry level stuff is hot, mid range stuff seems pretty good. Higher end stuff is really starting to pick up now.
Todd Veinotte
Alright, when you talk entry level what price point are you talking here?
James Dwyer
I mean right now that entry level is sitting around that, you know, $399,000 to $450,000 range; pre pandemic, these were your semi detached houses, Timberlea, Cole Harbour, Eastern Passage. Interesting enough too, I’ve actually picked up on a couple of things over the last couple of months where, even though these properties are getting multiple offer situations, they’re not going substantially over asking. So that’s telling me that the buyer and the buyer’s agents are educating their clients and the buyers are paying attention to the market conditions. So, you know, the house is listed for $399,000. Guess what, with 10-15 offers, and it will still only sell for $430,000. Right? So, definitely seeing more of a conservative approach. And, that’s a good thing to see. Things kind of got really out of hand over the pandemic. And, you know, the the industry and the public have reacted accordingly.
Clinton Wilkins
I certainly agree! And I’m seeing a lot of offers that we’re getting in, at least from our clients, that have conditions. It was really like Ontario here, I think, probably, you know, the last couple of years, where people were just throwing caution to the wind, having no conditions at all. Now, I’m seeing inspections, I’m seeing financing conditions, and I think it’s better for everyone, you know, I think it’s better for the seller, and I think it’s honestly better for the buyer too.
James Dwyer
Agreed, A seller’s market is a very healthy thing. Because like you mentioned, the seller is getting an opportunity to net out a good return on that home. And the buyers are getting the opportunity to do their due diligence and to do the hard work in those first couple of weeks to really get an understanding of what they’re purchasing, so they can make an educated decision.
Todd Veinotte
Is there anything in the $300,000 to $350,000 range? Or do those not exist?
James Dwyer
Well, the condo markets kind of filled that gap over the last little bit, they seem to be in that kind of that area right now, for the two bedrooms, apartment style condos. You know, I haven’t really seen much of it on the entry level in HRM. Maybe if you’re looking a little further out, Windsor would be an area that would have that.
Clinton Wilkins
I think Windsor and Truro seem to be a hot kind of commodity right now, at least for first time homebuyers. We’re seeing people that are moving kind of further out of the city to get those price points. And it’s really interesting that you say about condos, because in other cities, those are typically the more affordable properties, like when you think about Toronto. And if you’re a first time homebuyers, chances are they’re probably buying a bachelor, one bedroom, two bedroom condo, but in Halifax, those condos are the same price as buying a single family home, but it’s not anymore.
James Dwyer
No, that’s right. And essentially, the market can work quite soft pre pandemic anyway. And you’re right! Why would you buy a condo when you can afford, you know, the beautiful home? That’s 20 minutes outside the city and near water, for the same price?
Clinton Wilkins
Maybe Location, location, location, right now, James, and I think maybe that’s what the buyers are looking for. And we’re seeing a lot of people that, are looking to buy a property, but they’d rather own a home than own a car. And I think maybe those are the ones that a condo might be right for? I don’t know,
James Dwyer
I’m also seeing to some creativity, that are starting to pop up now, especially with the younger demographics. I’ve seen young professional couples, partner up with another young professional couple, buy a two bedroom condo or a three bedroom condo, with the intention of a short-term ownership; just to build up that nest egg a little bit so that when they part ways in three to four or five years, they can go by those homes that they were having their eye on. So seeing that I’ve seen a little bit more of that, you know, grouping together of people, to combine, we’re starting to see some creativity in the marketplace, under the conditions that we have, which I think is quite interesting.
Clinton Wilkins
I think that was the trend in Ontario 10 years ago. And we always say things take a lot longer to come to Halifax and Nova Scotia than they do in Ontario. People had to figure it out a long time ago. And their affordability has been whacked for a long time. And still we’re very affordable compared to them. But I think they had it figured out that they needed multiple borrowers just to even qualify. So that’s interesting.
Todd Veinotte
Military Families. So what can you tell us about people transferring in and buying homes? And is that still a pretty big cohort?
James Dwyer
Yeah, it definitely is. You know, our Spring market kind of centers around that to kind of get the whole machine kind of moving forward. So you know, the industry conditions a lot of their summer clients to prepare for the spring market and to prepare for that wave of military families that do house hunting trips. We’re starting to see that trickle in and get a bit more busy. There are more consistent open houses, and they seem to be a lot busier this time, than what they were a month ago. The inquiries are definitely on the up and up. Definitely on the up from outside the province. And again, you know, military is a big factor in that. A lot of new Canadians kind of driving the market a little bit right now. And, you know it’s coming together.
Clinton Wilkins
Very interesting. It sounds like you have a positive outlook. I think that if we were talking three months ago, or six months ago, James, it might have been a different story. And we talk to so many Realtors every day. And you know, I think some people were really having more of a hard time. But it sounds like things have almost made a shift. Would you agree with that?
James Dwyer
Yeah, I think so. I mean, again, it’s not hard to beat the numbers from last year, if that makes any sense. Right. So, are we going to ever return to that level of volume that we’ve seen over the pandemic? Definitely not. I think when you’re looking at numbers, like 2019, like pre-pandemic volume numbers and stuff like that, it’s definitely in that realm. So it’s more of a return than normal business. And I think that’s a big sigh of relief for everybody in the industry, because, you know, it’s great to be busy, but at some point, you’re going to need a break from it all too. So things are a lot more manageable. And I think that’s a win win for the consumer!
Clinton Wilkins
I agree. I was so fortunate to be asked by your association, Nova Scotia Association of Realtors to sit on a panel here not that long ago, when you guys had your annual meeting at the overcenter. And I said to the crowd there, it feels like we’re back in 2019. And you know, what? I’m here for it. And it was it was so breakneck and 2020, 2021, 2022. 2019 was balanced, but busy. And, you know, I think that’s okay, for everyone. My real concern is we have so many people sitting on the sidelines that as soon as we hear this Bank of Canada, reduce the key overnight rate, chaos will ensue. I don’t know, the the clients that you’re working with, have you heard any of that action; where they’re kind of like sitting and waiting? Because that is certainly a concern on my end – that as soon as he’s rates soften, the activity is going to become out of control again.
James Dwyer
Well, yeah to take that a step further, I think that you’re right, it is kind of focused around that that interest rate announcement. And as well, it’s also a signal – thinking any bit of a softening on the interest rate side is strengthens confidence for the consumer need, more importantly, in the economy. So things like job security and the moving forward and making plans for the future start to become a bit more solidified. And so, I suspect that the second half of this year compared to the previous years’ second half, will be a pretty good one this this year.
Todd Veinotte
Okay, James, appreciate it very much good stuff, as always.
Clinton Wilkins
That was a really great info from James. I had a lot of questions around ‘what’s going on the real estate market?’ I’m sure our listeners do as well. You know, Spring is typically one of the busiest times of the year, and we can certainly see a positive uptick in the listings.
Todd Veinotte
I was under the impression that things would would have been a little more quiet based on interest rates.
Clinton Wilkins
I don’t think it’s holding people back though, Todd and I think the people that are getting these accepted offers, they’re getting them maybe at a price that is better than where the price is going to be once these interest rates decrease. Okay, we’ll be right back.