In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on…
In this episode of Mortgage 101 with Clinton Wilkins and Todd Veinotte, as heard on News 95.7, the guys talk about ways to alleviate the current real estate competition, Nova Scotia’s population increase, and conventional vs insured mortgages.
Mortgage 101 with Clinton Wilkins & Todd Veinotte – April 2021 – Part 1
Don’t feel like watching the video? Check out the transcript below.
Welcome back to Mortgage 101!
Todd Veinotte: [00:00:18:08] It is time for Mortgage 101 here on News 95.7 with Clinton Wilkins, the mortgage guru and myself, Todd Veinotte. Clinton, are you enjoying that AC/DC? Getting your juices flowing?
Clinton Wilkins: [00:00:31:06] I mean, I like AC/DC. Why not? Who doesn’t?
Todd Veinotte: [00:00:34:08] I don’t know. Some people might not.
Clinton Wilkins: [00:00:35:20] Well, hopefully our listeners do. I think people like to hear AC/DC on the weekend. I don’t know about you.
Todd Veinotte: [00:00:41:06] I think they like to hear it all the time.
Clinton Wilkins: [00:00:42:23] I mean, I’m sure you listen to it all the time.
Todd Veinotte: [00:00:44:26] I don’t know about all the time.
Clinton Wilkins: [00:00:46:09] Like you listen to it enough that you’re like, okay, I know which songs I want to hear.
Todd Veinotte: [00:00:50:02] It’s good drinking music.
Clinton Wilkins: [00:00:51:16] Well, I mean, it is Saturday morning or Sunday morning. I mean, we don’t know when you’re tuning in, but you could be listening any time here to us. And we really thank you for continuing to tune in. You know, we’re back.
Todd Veinotte: [00:01:04:20] We do thank you for continuing to tune in to Mortgage 101 right here on News 95.7 In which we educate people. We don’t. You educate people. And I guess in turn part of this is I learn and people learn along with me. That’s kind of what this is, isn’t it?
Clinton Wilkins: [00:01:22:11] It’s education. I think education is just so, so important. And I think it’s even more important now than it ever has been. I mean, there’s so many different nuances to homeownership and mortgage lending. I mean, rates are all over the place. The market here in Halifax and across Atlantic Canada has just been nuts lately. And I think we are just, you know, the first couple of weeks into spring and it’s just been crazy.
Real estate competition in 2021
Todd Veinotte: [00:01:44:23] Yeah, I was recently listening to, I think the CBC did a, did a whole thing, Matt Galloway in The Current, did a whole thing, they dedicated to real estate and the hot markets right across the country. But a lot of personal stories about people who are suffering, suffering might not be the right term, but who aren’t able to acquire the Canadian dream, as you put it, of homeownership. Right now, they’re shut out of the market because they can’t afford it. Be there’s no inventory and it’s stressful. So it’s, it’s not it’s great for your business and for realtors and for those who are succeeding. But for some, it’s, this is tough.
Clinton Wilkins: [00:02:22:03] You know, the people that I feel really sorry for the first time homebuyers, the people that, you know, need to get that foot in the door. For me and for you, you know, we’ve owned homes before. We can leverage, you know, our income and our assets and buy something. But for some people, we may be in a buy now or a buy never situation. Like I’m seeing young buyers every day. And, you know, we do the pre-approvals. You know, they can they can qualify for something. But can you make an offer and buy something that’s within your price point? I mean, that’s the challenge.
Todd Veinotte: [00:02:53:15] Ok, so compared to two or three years ago, how different is it now when it comes to competing out there for mortgages, or not for mortgages, but for properties?
Clinton Wilkins: [00:03:04:02] For properties, well, I’ve heard from some realtors that there’s some properties where there’s been 20 plus offers. And, you know, that’s really a symptom of the increased demand and the limited supply of listings. You know, going into the spring, we definitely saw a spike in the amount of listings that were happening. So I think that’s positive. But I can even speak with our business here. We are doing less purchases today than we were this time last year, which may surprise some of you, but there’s just less inventory out there than, you know, there has been. So I think if you’re considering buying a home or considering selling your existing home, now is probably a good time because, you know, I don’t know if it’s going to get any better anytime soon. But if you’re thinking about selling, I think now is a great time to get it listed, because I can tell you there’s hundreds and hundreds of buyers out there ready to make offers.
Todd Veinotte: [00:03:56:18] All right. For those who don’t know what you’re all about and there’d be some new people listening each and every Saturday and Sunday. Give everybody an overview of what you do.
Clinton Wilkins: [00:04:04:14] I’m a mortgage broker here in Dartmouth. I’ve been a mortgage broker actually for 15 years, and we funded over 3,500 transactions here. So no one knows mortgage lending better than we do. You know, we know about all of the nuances around income, assets and credit. And, you know, I think we can really put together the best solution for consumers. The market is so aggressive that we want to ensure that if someone comes in to see us for a pre-approval, it is a good, solid pre-approval and that they’re pre-approved. So when they make an offer, they can make an offer with confidence. Things are taking time, Todd. That’s reality. I think appraisals are taking longer. Approvals are taking longer. It’s just the nature of the amount of transactions that are happening. You know, I just mentioned that, you know, we haven’t seen as many purchases, which is true, but we’re seeing more and more mid-term refinances. We’re seeing a lot of early renewals. Rates are at an all time low, basically, and the real estate values have increased. So that’s really enabling existing homeowners to maybe reposition their mortgage or other debt. And, you know, we’re having conversations like that every day with our customers.
People want to live in Nova Scotia
Todd Veinotte: [00:05:15:05] All right. There’s a lot of speculation as to what’s really driving the market, and as I mentioned, this isn’t unique to Nova Scotia, it’s happening across the country. But I’m hearing that there are buyers coming from Toronto, Calgary, Ottawa, places like that, people who are selling their homes there and getting nice money for them and therefore they can come here and purchase. Is that part of what’s driving this?
Clinton Wilkins: [00:05:39:11] I would say that probably every third customer that we’re talking to for a pre-approval is from Ontario. Which is pretty staggering when you think about it. And, you know, homes here are selling for above the listing price. And I think that’s driven up, maybe, by some of the buyers from outside of Halifax and in Atlantic Canada, because they’re coming maybe with bigger down payments, you know, selling existing properties for a high price. But they’re used to paying more than the list price. You know, in Ontario, this is the norm. Everyone pays more than what it’s listed for. But it’s certainly a new situation here. And I think people are just getting used to that situation. And I think probably our real estate prices here were artificially low for a long time. We’ve never had a boom. The prices, you know, were really maybe going up one, two, three per cent per year. You know, we’ve never seen these double digit growths.
Conventional vs insured mortgages
Todd Veinotte: [00:06:34:04] What about circumventing CMHC because of having a higher, are you seeing more people not having to go through or not just CMHC, but any of these insurers?
Clinton Wilkins: [00:06:43:04] Yeah, I’m seeing a lot more conventional lending. One of the reasons are, you know, if it’s, you’re going to be really competitive on the price, yeah hopefully have a big down payment and you want to lower your amount of mortgage that you’re going to borrow. Now, you know, it’s always cheaper to do a conventional mortgage. It’s always cheaper to put down 20 per cent or more. Now, not every borrower is able to do that, Todd. Not everybody has the resources. But I think for the people that can put down 20 per cent, I think 20 per cent down is the right solution.
Todd Veinotte: [00:07:15:24] All right, I would think that for a lender, you want to ensure that if there’s a default and that happens from time to time, if something happens, that the lender can get their value out of it, the money that they’ve got into it, obviously.
Clinton Wilkins: [00:07:28:20] I would venture to say there’s probably less foreclosures today, Todd, than there have been. The reason is people can sell their homes really easily. Like if you have a decent piece of real estate, chances are you can sell that.
Will the housing market crash?
Todd Veinotte: [00:07:39:25] Ok, but that’s it for the here now. But let’s suggest that in two or three or five years, the landscape changes a bit, whatever things can happen. Is there any concern at all, do you think, that at some point that if this bubble or if there is a bubble and if there’s a bit of a crash, that perhaps people might have owe more than what the property’s valued at some point? Do you see any of that happening?
Clinton Wilkins: [00:08:04:00] I don’t see that happening in Halifax. And people are asking me the like, should I just wait for the prices to come down? And I don’t think the prices are going down, Todd. It’s a simple, you know, recipe of supply and demand. There are more buyers in the market than there is supply. And I don’t think the prices are going to come down until the market rebalances in a sense that it becomes a buyer’s market again. And I think that may be years and potentially decades away. And for Halifax, they’re projecting that the population in Halifax is going to grow, you know, $100,000 in the next five years. I heard a stat today that there were 20,0000 new residents in Halifax since this time last year. That’s pretty staggering.
Todd Veinotte: [00:08:47:14] 20,000?
Clinton Wilkins: [00:08:48:09] 20,000.
Todd Veinotte: [00:08:49:19] Wow.
Clinton Wilkins: [00:08:49:19] That’s pretty staggering when you’re thinking about it. We’re in the middle of a pandemic and our population grows by, I don’t know, five per cent. Huge.
“Get the shovels in the ground”
Todd Veinotte: [00:09:00:06] Ok, so what about the development and and having the ability to expand out because the real estate is what it is and you’ve got the coast is limited as to what can be done coastally. So what about that component to it?
Clinton Wilkins: [00:09:14:04] You know, I think the municipalities are going to play a part here. You know, I think, you know, any type of housing and a homeownership policy really starts with the federal government, which then rolls downhill to the provincial government. But I think the municipalities play a big piece of the pie here to get the shovels in the ground. You know, we need to cut the bureaucracy with getting building permits going. We need to get contractors doing new home starts, whether that single family, whether it’s multi-family. We need more construction in Halifax. You know, looking back, years ago, we had a moratorium on building. You know what? Is that serving us today? Probably not. We didn’t think we were going to be in a housing crisis and we didn’t think that our population was going to grow at this level. No one knew there was going to be a pandemic. But we need housing and we need housing now. You know, rentals are at a one, two per cent vacancy. And, you know, obviously we know what’s going on with the housing market in terms of the limited supply for buyers to buy. So, you know, I think the one big solution is definitely around construction. And we need to streamline and enable builders to start pumping out more inventory. Now, you know, that has a challenge too, Todd, and I think it really, really has to do with the amount of supplies that they’re able to get.
Todd Veinotte: [00:10:29:02] Ok, I want to talk to you about coastal development. That’s a story I saw the week, or in the news this week as well. But first, we need to break. We’ll be right back with Mortgage 101.
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.