Mortgage 101 – Spring Into Homeownership

Dan Ahlstrand and Clinton Wilkins discuss the upcoming spring housing market, noting it as the busiest time of year.

Dan Ahlstrand
Hello and welcome to this, the March edition of Mortgage 101. I’m Dan Alstrand, and as always, in the studio with me today, our mortgage guru, Clinton Wilkins. Clinton, can you believe it? We’re into March already.

Clinton Wilkins
And I can’t even believe that spring is around the corner. It doesn’t feel like spring out there. I don’t know, this week.

Dan Ahlstrand
This weather. It’s been weird. It started really cold, and then we had a little bit of a wwarm-up and it looks like, and I don’t want to jinx anything. But what do they call March? The heartbreaker month.

Clinton Wilkins
Okay, it’s a Heartbreak Hotel over here today. I mean, maybe this should have been February. Let’s we need to rewind the clock. We were just talking about Valentine’s Day, and last month we were talking about love your home. And we actually had, we had a family law lawyer in here, which I thought was really, really interesting.

Dan Ahlstrand
And I learned something every talked about it a couple of times on on the radio show that, there’s some valuable things there and things you don’t really think about when you when you’re getting into into a new relationship, when you’re getting into a new marriage, and when you’re getting into a new house, everything’s bliss, and there’s hearts and flowers. It would be a good thing to protect yourself. Should something happen?

Clinton Wilkins
And it really does. It happens all the time, right? I mean, we’ve all been through breakups in our lives. You want to protect what you’ve worked hard for, and you want to know, like, what a healthy and good way to exit looks like. Breaking up is hard to do. That’s what they say. We’re doing a lot of music references, not a music show. Maybe that’s a little nod to Todd as well, right? We love having the music here on the show, but what? I think we make i,t we make it, and it’s all about the advice. And this mon,th we’re talking about spring and home ownership. I know it’s not spring just yet, Dan, but spring is really around the corner.

Dan Ahlstrand
The busiest time of the year is when people get off the coach, they’ve been hibernating all winter, and now it’s time to make that decision, to either get into the housing market or to upgrade, or maybe even downsize.

Clinton Wilkins
Well, we did about 1500 transactions last year. That’s purchases, refinances, renewals, stuff like that. And typically, spring is the busiest market for us, for purchases. People are getting preapprovals, then they start coming into the real estate market. Typically, we see by like, week three in March, basically, by the time spring hits, something I think clicks with buyers, and they’re like, Okay, it’s a good time to buy a home, or it’s a good time to sell. And typically, we see more inventory, and there’s certainly more movement in the marketplace. That’s a normal time. But the last five, six years, I’m not sure, have been normal. I don’t think it seems a little bit of a blur to me. I was joking that this is probably one of the longest relationships in my life. Is this show, right? And we love doing it, and we love the advice. But like coming back to spring, I don’t know what it is about spring that makes iit sucha great time to do real estate transactions, but I can tell you, we see a lot of purchases, and we have a ton of folks already pre-approved out there in the marketplace. And I think, Dan, some people were kind of on the fence, and they were not making purchases maybe the last couple of years because the rates were high. We’re in a more stable rate environment right now, and I think it’s a lot easier for people to make plans and know what they’re going to do around where they want to live when they know what the cost of borrowing is going to look like.

Dan Ahlstrand
And they can crawl around the properties too, right when you’re in the heart of wintertime, and there’s snow banks, and it’s cold, and you just don’t want to be outside, you can’t go around and check the properties out. Now you get a chance to see what the lawn looks like and see if the roof is leaking.

Clinton Wilkins
And you can see, some things get hidden by that snow, right? I think even from like a landscaping perspective, you don’t really know what’s under the snow until the snow goes away, right? And in the next few weeks, the flowers are going to be blooming, and the grass is going to be growing. I know it’s hard to believe, the weather that we had this week. I know it’s hard to believe that Spring is almost here, but it’s right around the corner. And, from our pricing perspective, a lot of people have been talking about pricing, and I kind of joked on our last show that you’re dating the mortgage rate, because rates change, but you marry the home. So now that we’re getting into spring, I think it’s time. It’s a great time to put down roots. So to say, things are starting to grow. And, I think it’s a great time to do a real estate transaction. From a price perspective, though, Dan, we’re seeing some changes in the pricing. We’re gonna be talking about the Bank of Canada later this month. But from a fixed rate perspective, I’ve been watching the bond yields, and I would not be surprised if we start seeing fixed rates start edging up a bit. We joke in your Joking in the news that we’re talking about what’s going on politically. We’re talking about wars, and all that stuff does impact what, what’s going on in the in these in the interest rate environment.

Dan Ahlstrand
What’s the market like, Clinton? We hear these stories from out west and in Ontario about lots of stuff coming on to the market and sticking around for a long time because the value of homes is dropping. Is that the case here in Nova Scotia?

Clinton Wilkins
I can tell you, it’s not the case. I think people were waiting for that, Dan, like they were waiting for everything to go on sale, but it certainly hasn’t gone on sale here. Yes, maybe the inventory is sitting on the market a little bit longer. But one outlet that I saw stats from was the average home price here in Atlantic Canada, which increased about 3% last year. Where we’re looking at places like BC and Ontario, some of those areas have seen price reductions as much as 20%.

Dan Ahlstrand
So is it that we’re behind? Do you expect that sort of reduction to find its way? To the East Coast?

Clinton Wilkins
I think it’s a lack of inventory. We have more, and it’s a supply and demand game. We still have more demand in the marketplace, and we do supply, and that’s why the price is continuing to increase. And, we never really had that big boom. Our average home price is somewhere around $600,000 it’s much less than some of these other areas. People are only making so much money, and they were used to the double-digit price growth, and they were basically using some of these homes as ATMs. We didn’t have that luxury so much here.

Dan Ahlstrand
You mentioned Bank of Canada, Clinton, we know the they’re going to change the rates, or at least take a look at the rates in a couple of weeks. Here in March, what are you expecting from the bank? What are you expecting the Bank of Canada to do this time? Itwas on hold last time. Do you expect it to be a hold? This time?

Clinton Wilkins
I think it’ll be a hold. I think that they tease some of this. Oh, we might see the rates increase, even if GDP is down, even if the job numbers are down, even if inflation’s down, we could still increase. At some point, they’re going to want to spur spending here in Canada. Luckily, inflation has been relatively under control. I’m watching GDP, and I’m watching the job numbers. I think, once we start getting some more of this data in this month, I think we’ll have a better idea what’s going to happen with the Bank of Canada. I wouldn’t be surprised if ttheyhold so much uncertainty, right? Just think it’s, we’re not in World War III, but it sometimes feels like it from what’s going on in the US to what’s going on overseas, just so much on the go. , to me, almost like the bank, cannabis is an afterthought right now, and I’m in this every single day. For me, I think we’re in a plateau, and a plateau is okay. We can make plans around what’s happening with a plateau.

Dan Ahlstrand
Local events we saw a week or so ago, we saw a provincial budget, and that budget was a pretty tough one for several people. The public service is looking at a staffing reduction. We saw a lot of grants and organizations that lost their funding or had it completely cut off. Does that impact the market? Do you think Clinton as we move into the spring and a little bit further into the summer?

Clinton Wilkins
Let’s even just talk about jobs. About jobs. Some folks, probably, because of this provincial budget, will lose their jobs. That’s just reality. Those people are typically not buying a house if they’ve just lost their job. Like, let’s be real, the one that I kind of saw, and it was most prevalent to me, maybe because I’m involved in some of these organizations. And, I’m watching even from the outside, it’s like around the arts. And, we do a lot of sponsorship around the arts, like we do Neptune, we sponsor the Winter Warmers with Rankin McGuinness at the marquee all winter long. And there are some other things that we do, like with the progress club we sponsored, Crave. These organizations really do depend on this government funding. And this government has been spending like a government has not spent before, essentially. And, eventually, you have to pay. And the one thing that I think really rang true to me when I knew, hey, we’re in a bit of a challenge here in Nova Scotia, is when the credit rating for the province went down, and you’re like, Okay, what does that really mean to you and me? Well, maybe not nothing on a day-to-day operation. But what happens when a big organization like a province their credit rating decreased, its cost of borrowing then goes up, or maybe its access to liquidity and borrowing is reduced, and that is a symptom of the finances not being as good as they had been previously. So, there could be other implications. Even down the road, I’m not just saying this year, there could be implications for years now, down the road, that are going to ripple from that credit rating being decreased here on the problem.

Dan Ahlstrand
One of the things you and I talked about a couple of times was marriage; we were talking about it, and we were talking about getting your head in order, and the problems in Nova Scotia.

Clinton Wilkins
And you’ve had the premier on your show, and the finance minister this week, and it’s, it’s, it’s interesting that that No. Nova Scotians are now starting to wake up to what a deficit spending in a budget cost a deficit cannot go on forever, right? And it gets put onto the debt.

Dan Ahlstrand
The debts of $277 billion are costing Nova Scotia a billion dollars a year just to address the debt.

Clinton Wilkins
Interest, right? Can you imagine if that were your fiscal responsibility as a homeowner, as an individual, that would keep you up at night, right? I’m not sure the politicians are being kept up at night. Maybe they are right now. I think they certainly got a lot of heat. And, as some of these organizations that are getting their resources cut off, they need to see if it’s still going to be viable to offer the services that they were previously offering to us Nova Scotians.

Dan Ahlstrand
Enough politics, we’ll get into the ins and outs of the real estate markets, mortgage 101, just starting. We’ll introduce that guest when we come back, we’re going to take our first break, and we’ll see you in just a couple of minutes.