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Mortgage 101 – Heading Towards Balance | May 8th

Clinton and Todd discuss what’s going on in the Halifax housing market with real estate agent James Dwyer. They talk about the inventory issues in the market, why buyers are more conservative and why listings are sitting on the market. Clinton and Todd also chat about what to look for in a realtor, and the common challenges that can arise.

Todd Veinotte 00:00
And the guest is James Dwyer.

Clinton Wilkins 00:01
The guest is James Dwyer. I think he might be with us now.

James Dwyer 00:04
Yes, yes, I am.

Todd Veinotte 00:06
James Dwyer, tell us who you work for because I can never pronounce it properly.

James Dwyer 00:10
No worries. I work for Engel and Volkers here in Halifax.

Todd Veinotte 00:13
Right. So have you learned German since you started working for that company? Is it German?

James Dwyer 00:19
Yeah well, German, Google Translate has been a really good help as well. So yes, it’s been interesting, for sure.

Todd Veinotte 00:26
Excellent. I digress. Clinton has some questions for you.

Inventory issues in the market

Clinton Wilkins 00:29
Well we’re really curious about the Halifax market here and what’s going on in real estate. You know, we reported kind of on our last show that there was a couple Monday’s ago, we’re talking maybe a month ago or so, there were only about 30 or so new listings. But I’ve heard through the grapevine there have been more listings coming up on on on online here in Halifax, and maybe across the province the last few weeks.

James Dwyer 00:50
Yeah, it’s really kind of ramped up, I’d say about a week, two weeks ago. Essentially, once it kind of clicked over from April 1, April 2 things started picking up. I do say, though, from our current inventory levels, are still below 2019 numbers for like month over month increases. So inventory is leading the way as our number one issue right now.

Todd Veinotte 01:12
Why do you think that is?

James Dwyer 01:14
Well, I mean, we’ve got a bit of a population boom happening. On the new construction side, things are picking up steadily there. But you know, their cost of construction is has gone up quite quite a bit as well. So we’ve kind of got a bit of a, a lot of pressure on that entry level purchase price right now, with the inability to replace stock with new stock. So essentially, we’re just gonna be going through that resale market.

Buyers are taking on a conservative approach

Clinton Wilkins 01:39
I think that’s really interesting. And are you seeing first time homebuyers buying what we consider a starter home, there was kind of that trend the last couple years that first time homebuyers were buying kind of their dream home. But as we know, some people are kind of forced down and I mean, suppressed maybe a little bit by the cost of borrowing. So are expectations kind of being leveled out a little bit now?

James Dwyer 02:01
They’re starting to. I mean, you know, with with interest rates with where they are right now, and what we’re seeing with the buyers, I mean, they’re still getting a multiple offer situations, very reminiscent of last winter in the winter before, but this time around those sale prices, those over asking and such is much, much, much lower. So it’s definitely become a much more conservative approach from the buyers, as well to the really keen on identifying price drops in the marketplace, as that seems to pick up a lot of activity on those particular homes.

What and where are people buying in Halifax?

Todd Veinotte 02:31
As the homes go, are you seeing a lot of renos, what type of, I guess era homes are we talking? Are we talking circa 80’s style?

James Dwyer 02:41
Yeah, it’s a little bit of everything. Essentially, in the classic semi detached house, the 1960s style bungalows, the older style townhouses, that sort of stuff.

Clinton Wilkins 02:55

Todd Veinotte 02:56
What part of town are hotter than others?

James Dwyer 03:00
Right now, I would say you’re looking at pretty much all on the Dartmouth side is doing quite well right now. Timberlea is also doing really well. The peninsula in pockets is doing quite strong, like south end and particularly, you know, we’re not seeing, you know, crazy numbers there but it’s definitely holding really well. So I haven’t really seen or identified an area that seems to be underperforming at the moment.

A more balanced market is favouring sellers

Clinton Wilkins 03:25
That’s really interesting. So is what I’m hearing, it’s kind of like across the board. Are you feeling like the market is becoming more balanced? Like you said, maybe the offers are not going as much over asking and people are getting more excited about price drops, like do you think it’s becoming more of a balanced real estate market between buyers and sellers?

James Dwyer 03:41
I do to a certain extent. I mean, there’s been a lot of changes over the last year on the buying side, whether it’s interest rates, foreign buyer bans, and anti-flipping legislations or those sorts of things. So you know, the buying pool has shrunk considerably and I think it’s kind of in a good space where what you’re dealing with right now are buyers that are looking for homes, not investment properties. So it’s really addressing that housing side. On the selling side because of the increasing population you know, we’re not getting that turnover whether it’s from older demographics who seem to be you know, sticking it out in their houses longer. So that supply side is equally lowered and also to I do believe that what we see in last year, like we broke records on inventory numbers in that hot hot hot market. I think all that extra inventory that we would normally see in this year, was sold last year. So we’re kind of having that you know, peak in inventory and then now we’re gonna drop days before it starts kind of monetizing. Because of the lost inventory and because we do have less buyers, the market is behaving a little bit more of a balanced market favouring the sellers a little bit more but nothing like what it was over the last few years.

Todd Veinotte 04:46
How about all those buyers that were coming from Ontario, Quebec, all of that stuff. Is that dried up pretty much?

James Dwyer 04:52
Yeah, I mean, there’s you know, there’s always that standard kind of movement when it comes to like the military transfer program that we kind of had happen here in the spring. But yeah, what we’ve seen over the last two years, you know that the current production that’s out of Ontario. has kind of come to an end right now, and I’m curious to know now with, with the numbers, you know, how many are sticking around.

Why are listings sitting on the market?

Clinton Wilkins 05:15
Yeah, we’re hearing some reports that there are listings that are sitting, you know, 30, 60, 90, 120 days. What do you think’s going on with those? Like, you know, if there have been some prior price drops, and they’re not getting offers, do you think that there’s just, you know, buyers that are sitting on the sidelines? Or are there issues with the, you know, pricing of that listing do you think?

James Dwyer 05:38
Well, I mean, you know, on a broader scale, I would definitely look at it and say to you, like, I’m finding the kind of mid to upper mid range pricing, so think of it like your 600 to kinda like 800 or 900 range, that seems to be an overabundance of inventory at the moment. And initially, my thought process was that, you know, the first time homebuyer starting the family now have outgrown the starter home and are looking for that next piece, you know, you’d think that will put extra inventory into the into the space at the entry level stuff, but they’re just not making those moves. So the question then becomes, you know, is it affordability or, you know, uncertainty that we may be seeing, economically, that sort of stuff kind of moving forward. But I think overall, the sense in it right now seems to be, you know, a very localized market with a sprinkling of immigration in it.

Todd Veinotte 06:29
When it comes to new home construction, new home builds, which areas are, or I suppose it’s probably just pockets of that around the community?

James Dwyer 06:38
Yeah, essentially, what, you know, when it comes to new construction, now, the biggest setbacks on their side is, you know, just trying to get things approved and get things moving forward. We’re starting to see the city reacting in a positive way in that respect. But you know, you’ve got pockets I mean out in Spryfield, Bedford West, Lucasville. I just mentioned a couple of them to you, they’re doing quite well. But again, you know, they have a little bit of a supply issue on the pricing side for them. So that’s been a challenge. Over the last six months, I’ve seen a big shift in strategy from the builders. I’ve seen some builders do their own financing. I’ve seen, you know, cash incentives for purchasing, that sort of stuff. to make make the purchase a bit more lucrative for the buyers.

Todd Veinotte 07:22
Well, James, listen, we appreciate your time. We know you’re busy. Let’s have you back on Mortgage 101 soon.

James Dwyer 07:27
Thank you very much gentlemen.

Todd Veinotte 07:29
Okay pal, take care. That’s James Dwyer. And where is it? Who is it?

Clinton Wilkins 07:34
Engel and Volkers.

Todd Veinotte 07:36
Engel and Volkers.

Clinton Wilkins 07:36
Right here in Halifax.

Todd Veinotte 07:38
I call him Halifax real estate agent.

Clinton Wilkins 07:40
Well you know what, he’s a great guy. And I’ve actually done a lot of transactions with him. And, you know what, I have great feedback. And he’s so you know, generous to give his time to come on our show.

What to look for in a real estate agent

Todd Veinotte 07:50
I think when it comes to real estate agents, it’s got to be tough. It’s got to be tough for anybody when they’re new in any industry.

Clinton Wilkins 07:57
Let me tell you, it is a tough grind for realtors right now. I would not want to be a realator. You have to have very thick skin I think, to kind of weather the storm over the last, you know, three or four years let’s be honest. People thought it was very easy to be a realtor and it was not.

Todd Veinotte 08:10
They do. The impression is that they make all kinds of money. And in some cases they do. That’s all well and good. But they’re just cashing cheques. And it’s easy. It’s an easy job. It ain’t an easy job. It’s very difficult.

Clinton Wilkins 08:21
I’m going to tell you, it is a very, very tough job. And, you know, I think there’s a lot of really amazing realtors in our city. And you know what, there’s some ones that are not that great. And it’s I think it’s like that in every profession, though. You know what I mean? And I think but there is this misconception that realtors just go and open the door and they make a contract and then they get paid. No. These realtors are putting in like 40 plus hours on probably every single file that they’re working on. It is a grind.

Todd Veinotte 08:48
What should people look for when they’re when they’re looking for a realtor?

Clinton Wilkins 08:52
You know what I think it’s, you know, date a couple. You know, maybe it’s like, go for a coffee with two or three of them and and see if it’s going to be a good fit. When somebody asked me to give a realtor recommendation, we work with all kinds of realtors. I first kind of think about where are you looking to buy and does a realtor work and live in that area? I think that’s very, very important. I also think about fit, like, is it going to be like a similar age? Or are they looking for someone with more experience? Or are they looking for someone that’s going to be younger and hungrier? You know, not every realtor is for everyone. And you might have a really good experience with one realtor and a really terrible experience with another realtor. It doesn’t necessarily mean they’re good or bad. The fit is just really important. When I’m doing mortgage financing, I might spend one hour with my clients. I’m working on the file sometimes like five hours. You know, it’s it’s transactional in a way although we do think we have a very good relationship with our clients and we do and we you know, we’ve a lot of repeat and referral. But when you’re with a realtor, you’re spending some real serious time. So you better like them and you better think that they’re going to work for you because you know at the end of the day, this is your biggest purchase.

Todd Veinotte 10:00
Have you seen deals fall apart just simply because realtor did a bad job?

Clinton Wilkins 10:03
Oh, every day.

Todd Veinotte 10:05
Every day, is that right?

Clinton Wilkins 10:06
And every day, I’m not getting deals every day, but every month currently.

Common realtor mistakes

Todd Veinotte 10:09
Give me something typical that can break down because of a bad realtor. If you can.

Clinton Wilkins 10:14
I’ll just take a deep breath right now. That was me taking a deep breath and like Namaste. I see some really questionable things in the listing cut, you know.

Todd Veinotte 10:23
What’s the listing cut?

Clinton Wilkins 10:23
So that’s like the MLS listing cut. So they’ll have like things in description to be like “Hobby Farm”, this is a fixer upper or they’re like, you know, you know, things that are really kind of put red flags. I’m all about disclosure. So don’t get me wrong. But just because a property has a barn on it doesn’t mean it’s a hobby farm. Lenders don’t like financing farms. The end. I also see some real questionable things sometimes in the purchase and sale agreement. I’m not speaking for any realtors. I’m not speaking for the Nova Scotia real estate commission or association of realtors. But some of the clauses, I feel concerned for people. Like if you have a question about a clause, you should probably talk to your broker or talk to a lawyer to make sure it’s going to be legally binding. And sometimes

Todd Veinotte 11:07
What would a clause be, like a right of way or something like that?

Clinton Wilkins 11:10
Not not even things like that. It just likes some weird things end up into the agreement. And that may be by the recommendation of the client. Or it might be in the recommendation of the realtor, I would say you need to do some pushback, just don’t take what you’re given, like make sure that all the you know i’s are being dotted and all the t’s are being crossed. Because I sometimes find like, there can be some situations where there are some gray areas. And I’ve seen things in the agreement that ended up terminating the deal.

Todd Veinotte 11:40
But I think also you want to be reasonable as well. You don’t want to you don’t want to be confrontational just for the sake of confrontation. And there is a way to approach grievances in a civilized way.

Clinton Wilkins 11:51
There certainly are. And that’s why I think as a buyer, you always need to have your own representation. The seller is paying your realtor. Doing a double ended deal, I would never recommend that. I would never do it myself. And you know, I think you need to have representation for the biggest purchase. And it doesn’t matter if you bought one home or 20 homes. I think having a realtor that’s going to represent your interest, whether you’re a buyer or your interest as a seller, I think is really important.

Todd Veinotte 12:17
So if you showed up at somebody’s door and they were selling the listing, and you would suggest well I’m gonna come back but I’m gonna come back with a realtor though.

Clinton Wilkins 12:24
Yes. 100% and that realtor is going to be you know, bias to you and represent your best interest.

Todd Veinotte 12:30
Okay. We have lots more to talk about. We’ll be right back with Mortgage 101.