Real Estate Blog for Buyers & Sellers
Your Lower Mainland and BC REALTOR® for home, investment & life!
Michele Has Stats And Chats Mortgages with Jessica Oates
March 8, 2022 | Posted by: Michele Cummins
Warning! ;) This is a digitally automated transcript of the show so there will be mistakes throughout - including the spelling of Michele's name!
Curtis Pope:
it's time to check in with Michelle Cummins, our rockstar realtor and our host here of the show. And of course, my name is Curtis Pope. How are you doing Michelle?
Michele Cummins - PREC:
I love waking up early on Saturday mornings with you and all our listeners. It's a blast, especially when it's nice
Curtis Pope:
out. I don't know if I believe that for a second unless you maybe indulged in a Christmas coffee this morning.
Michele Cummins - PREC:
No, not yet. I've been really good not to have any for a while now because you know, it goes to the hip. I see it you know what I'm so I got to insure my motorcycle because number like the gas prices went from $1 80.4. No dollar 84. Something to $1.80 No, don't worry, too. Anyways,
Curtis Pope:
there's expensive no matter what I know what you're saying. high
Michele Cummins - PREC:
numbers. I'm telling me. And I think we you know, I don't know. Are we gonna get sun for a bit now? Now that it's March you think?
Curtis Pope:
I hope so. I mean, yeah, you're you've got your motorcycle insured. And I'm seriously considering buying one of those like, electric assist bikes, and just, you know, biking back and forth to work.
Michele Cummins - PREC:
Those are so fun. I, I have one I got one for my birthday last year. And I absolutely love it. It is so in fact, I dipped on it. You remember I on my electric bike rather than my motorcycle? Thank goodness. Right. But I was just like, what happened there? But yes, it was raining out. So okay, so I'm gonna get right into the show, because it is the first show of March, the first show of the month. And what does that mean, Curtis? Well, that
Curtis Pope:
means it's your favorite show. I know you love every weekend. But I know the stats show is just a little bit more of the favorite for you.
Michele Cummins - PREC:
Yes, and we've got it's always so interesting. There's always so much to it. And then to go with the real estate, statistics, prices, benchmark prices and all that. We have a guest on our show today, which we've been trying to have our first weekend of every month, a guest and we have in our second segment coming on Actually, she's here with us right now is Jessica, from Harmony mortgages. And so she's going to perfect timing with the interest rates that just went up March 1, and the foreseeable future, what's going to happen? And what uh, she has a lot of good information. And I know you have a couple of questions for her. Curtis, you were chatting to me earlier about?
Curtis Pope:
Absolutely. Hopefully, you know, I can remember them.
Michele Cummins - PREC:
You will wait. You got 11 minutes there.
Curtis Pope:
All right. I'll just you know, I'll think real hard. I'm sure I'll be able to, you know, come up with the good questions.
Michele Cummins - PREC:
Yes. Okay, so the headline on March 2 from the Fraser Valley Real Estate Board says that the Fraser Valley Real Estate Board posted a record volume of new listings in February. If you're in the market, if you're talking about the market, if you're thinking about playing in the market or buying or selling that is, you know, you probably have heard the same thing. mid February, it's there was an announcement of like, over 50% new, more listings that hit the system, which has caused a shift in the market. So further on with the news release from the Fraser Valley Real Estate Board says buyers, the Fraser Valley real estate had significantly more inventory to choose from last month due to the record breaking volume of new listings received from the month of February. And this is really interesting. So by month end, February total active listings available for purchase was 30 790. Listings. That's a decrease of 8% compared to the same month last year, however, 62.5% higher than what was available at the end of January. And it's the highest month over month increase in active listings in the Fraser Valley in over 20 years. So talking about stats, just think of that month over month is the highest new listings that hit the system for 20 years, so 62.5% Higher. So that's the shift that you're seeing slightly in the marketplace. However, when you look at the graph of Is it a seller's market is it a buyers market and what prices have done in the Fraser Valley overall, you can see it's still the highest prices ever. prices haven't really come down. It's just a slight shift in in anything over I've seen personally. Anything Oh For the average price of a property is now not really receiving the multiple offers as quickly and as plentiful as we were before in a lot of all these new listings. So further onto the release. Although the market is still far from balance, it is encouraging to see new listings increase again for the second month in a row. So that comment is from our real estate board president Larry Anderson. And he further goes on to say, we're hopeful that this trend will be sustained leading into the spring season, as more sellers come on stream to help soften the market and provide opportunities for the many buyers who have been sidelined over the past year and a half. And I have to say, I've seen a lot of what I call buyer fatigue in the marketplace in the last month or so I've had a couple clients of mine buyer clients that have said, Michelle, we want to wait because you know, we're just done with multiple offers six offers no Subject View, hugely over asking price, and we still don't get them, we're just tired. And we think the market will be better for us and a little bit. So I've seen that from a couple of my buyer clients. But on the flip side, I've seen that in my sellers, I've seen seller fatigue, seller fatigue has happened as well for certain type of properties in certain genres and areas. So they've seen it because Why have they seen it? Well, because if they're scared, they don't have a place to go to, and they don't want to rely on on something like moving the dates with 30 days notice there's some of the other there's a few options for sellers to make sure you seamlessly go from one property to another in this crazy seller's market. But there's still that what if they're still at unknown, so they just don't have that confidence in that comfortable level to sell before they buy. And they can't do subject to acquiring a property then you know what it sellers fatigue, because when they get an offer, and let's say they do get accepted and it's subject to this are the dates, they still have that old, they're gonna find the place so they're constantly changing their date. So you know what, it's just all over. I think people are fatigued about this, this marketplace. So I've seen that on both sides. Now in the Fraser Valley region. The average number of days to sell into an apartment in February was 12 days and 11 days for townhouses and then single family detached homes took an average 13 days to sell. The one year comparison is 35 days, 21 days and 21 days respectively. So that tells you how much quicker we're selling the property. So single family detached the benchmark price, we're going to go into that now this is for the overall Fraser Valley first and then we'll go into every municipality. So detached benchmark prices right now overall are at $1,670,800. So that's an increase of 6.5% Compared to last month, and an increase of 43.6% compared to February 2021 and townhouses are at 840,900. And that is an increase of 5.6% Compared to last month and an increase of 40.1% compared to February of previous year. Apartments are at 614,800. And that's a 7.1% increase compared to last month and an increase of 36.3% compared to February of 2021. Okay, municipality by municipality we're going to start off with of course, as always, our lovely Abbotsford, the detached benchmark prices are at $1,503,700. That's an increase year over year of 52.1%. And month over month, an increase of 9.3% townhouses are at 684,300. That's an annual increase of 36.3%. And a monthly increase of 3.5%. Apartments are at 494,500, an increase of 47.3% from last year and an increase of 8.2% from the month before. These are staggering numbers going through January to February. So mission detached benchmark prices $1,253,000 That's an increase of 52.4% from last year and an increase of 8.2%. From the month before, townhouses at $655,300 An increase of well 32.3% from last year and an increase of point 7% from the month before. But there's a lot of brand newer townhouses admission that's kind of skewing the average and median percentage differences from last year to this year. apartment at $475,000, an increase of 29.4% from last year and an increase of 3.7% from the month before and then we have Langley detached prices at 1,723,000, an increase of 42.3%. From last year and an increase of 5%. From the last month. townhouses, 831,200. And increase of 35.9% from last year and an increase of 4.8%. From the month before, and apartments are at $580,000.06 to $600. Sorry. And that's an increase of 39.7% from last year an increase of 8.6% for the month before, and then delta benchmark prices for detached at 1,537,000. And that's an increase of 43.9%. From last year and an increase of 5.4%. From the month before, townhouses at 852,300 and an increase of 45.6%. From last year and increase of 6.5%. From the month before and apartments at 507,900, an increase of 27.9% from last year and an increase of 5.8% for the month before. And then our last one is city of Surrey combined benchmark prices for detached at $1,773,100. An increase of 48.8% from last year and an increase of 5.9% for the month before and townhouses at 889,700 and increase of 42.5% from last year and an increase of 6.3% for the month before and apartments are at $955,000. That's an increase of 33.5% from last year and an increase of 6.5% from the month before. And there's our Fraser Valley real estate businesses. Wow, a lot of
Curtis Pope:
stats coming out is really fast. If people maybe miss some of those or want more information on the stats, I'm pretty sure there's a one stop shop they can go to.
Michele Cummins - PREC:
There is and it's Michelle coming. Alright, we're
Curtis Pope:
gonna take a real quick break we'll be back with more right after this. And it's always a treat when we have a guest on the show and even a bigger treat to have Michelle coming to one of her world famous introductions. Michelle, what have you got?
Michele Cummins - PREC:
I am excited to introduce Jessica Oates. I mentioned her in the beginning. If you know if you've been to my homepage, Michelle comes dossier. You'll see her on my friend page. I've got her link there. So you can instantly be approved for mortgage and she has agreed to come on to our show. And actually she was here for our first segment listening to me rattle off all the stats. I want to tell the audience a little bit about her before she comes on. And she's going to share a lot of good information with us. She is with harmony mortgages, Division of Dominion Lending, and she's a mortgage broker but she's also a mom of toddler twins they're so adorable and and working husband and she's always available it she's quick to answer. And so she can juggle a lot of things because she doesn't work typical banking hours either she works and she does what she has to do and she does what it takes to counsel her clients. And so appreciating the understanding your time is very valuable to Jessica and she knows that you have limited time to shop for mortgage and you you know it takes a lot you think it's gonna be a lot but she makes it simple and and straightforward. So instead of going to various in a whole bunch of different your bank and going in, she's just right there at your fingertips just give her a call and she could help me out so there's so many options to the market that may offer the best rate that she wants to give you there but you have to be careful because it may be hidden fees and unclear terms. And she wants to make sure she gets you the best rates, the most affordable rates and best contract to the signing. So as a mortgage broker for number one job is to find you that best rate and and she's helped many of my clients. And she specializes in first time homebuyers, and of course purchasing and refinancing and home equity loans and her promise she has is that she works for you and I've seen it hand in hand and I wanted to share cuz she has many five star Google reviews but I wanted to share one with Everyone. So this is from Jim Lyons. And he said, she's positive, she's professional. She's quality service. And she's responsive. And she has, the value is there, you don't pay for mortgage broker either. So don't be confused about that. So in July, this is what he says in July, we presented Jessica with a complex mortgage situation, not only did she solve the situation, but she went above and beyond and making sure everything went smoothly, Jessica was always available. And he says, I mean, always, to work through all the issues, we presented to her. And he's all Thank you. So through the seemingly endless request for paperwork, Jessica maintain a calm and positive demeanor. In the end, our mortgage was approved and our purchase went through, I do not know, we have been able to succeed without the efforts of Jessica. So that is such a nice review. And so Jessica, thank you so much for coming on and sharing your wisdom with all of us. Yes, thank you so much for having me. I, your introductions are amazing. And I'm blushing pretty much head to toe right now. I'm not gonna lie.
Curtis Pope:
Well, it's a mom of twins of toddlers that that is a full time gig in itself.
Michele Cummins - PREC:
They are alive, they're allowed to you know, they're just turned four in December. They go to school during the week, and we try and get inside as much as possible to burn up their energy. But yeah, definitely the minions I call them.
Curtis Pope:
Well, we should probably get right to the questions here. And Jessica is gonna ask you, like the Bank of Canada raise their overnight rate, how does this affect someone who owns a home or is looking to buy a home?
Michele Cummins - PREC:
Yes, they did raise it overnight, late on Tuesday, sorry, march 2 slot would have been Wednesday, maybe Kara raised their overnight rate from 0.25 to 0.5, which was expected. And unfortunately, it does affect our variable rate options for variable rate options based off of prime minus a plus a certain percentage to get our rate. So technically speaking prime prior to the raise of 2.45, and now prime to face up to 2.7. So technically, if you had prime minus one, previously, we're at 1.45. And now your payment is gonna be based off a rate of 1.7 due to the 2.7 primer on dealing with. But in most cases, but changing your payment is extremely small, only about $12. On every $100,000 a mortgage you have, which to put it into perspective on the $500,000 mortgage, your payments only going up by about $60 a month.
Curtis Pope:
Okay, so that that makes sense now, is a variable still a good option with the Bank of Canada rumored to be raising rates a few more times this year?
Michele Cummins - PREC:
Yes, so it is still a very good, very good option for most of our buyers, and even some of the community finance for a couple of reasons. One, even with the rise in prime when compared to our current extreme, we still better off by about one to one and a half percent. Currently, as fixed rates are also going up as well, we are seeing rises at least once a week for most of our standard lenders. And too, if you do write your mortgage inside a variable rate, you're only subject to three months contract penalty instead of a IRD penalty, which is an interest rate differential penalty, that can end up saving the borrower, you know, could be comparison of 10s of 1000s of dollars, depending on how much their mortgage is up like me breaking. The only time I don't recommend a variable rate for a client over a fixed rate is if a client has with an extremely fixed income where any fluctuations and payments could affect other parts of their budget, which is where we would have a discussion break down all of the costs and probably going for fixed rate payments. So okay, so let's talk about down payments now, because is a better option for someone looking to buy to have a 20% down payment, and what are the rules around the downpayment because I know certain price points, you have to have at least 20% down. Yeah, so we are seeing people coming in that you know are so proud of themselves for saving 20%. And unfortunately, they're being priced out of the market because they took extra time to say their downpayment. So don't be scared of having less than 20% down under a million dollar purchase. You don't need to have 20% down. So you can do a minimum of 5% down for any owner occupied home, let the home you're going to be living in under 500,000, which is extremely hard to find right now. But over 500,000 under a million you'll need 5% On the first 500,000 and then 10% of the difference. Once you do hit that million dollar mark and anything over you would then need a minimum of 20% down payment. The only thing to really keep in mind though is like if you do have that less than 20% Down payment is that you will have an insured mortgage which means that you will have a mortgage insurance premium added to mortgage amounts. And this is a way that I lead There's a technically protecting yourselves in case you are going to default, all of the mortgages are insured. The only other problem that potential homebuyers are running into, like I said, is that as they wait for that 20% down payment to be saved, now, they can't afford to buy anything. So you know, if you have less than 20% down, definitely talk to your mortgage broker your bank, find out your options, because you'd be surprised what comparing the two scenarios is either waiting, sending more, or, you know, saving under that 20%. And getting that insured mortgage would cost you. It's the thing of Don't, don't assume, don't wait and do this kind of thing. Because you think, Oh, this is best. It's almost like when you're prepared to, you're going to sell your house, but you do a whole bunch of stuff before you, you know, talk to your mortgage broker before you have your realtor come in and give you advice before you I think, look at have your professionals give you advice first, then prepare, because there's a lot of things you don't know when that you wouldn't think about such as that. So I wanted to ask if someone is looking to buy a home this spring, which is just around the corner, and we're feeling it so far this Saturday, what things should and shouldn't they be doing right now? Well, right away, I would say get pre approved, go to your bank, call your mortgage broker, call me. And let me get you pre approved. Right now we're holding pre approval rates up to 120 days, which is putting us right into actually the beginning of July, which is crazy to think about as its rates raising as quickly as they are, we want to make sure we're trying to save you the best rates. So you can shop without worry or fear about recalls and rising dramatically on you and you're not going to be able to know qualify the new the new higher rate, it also lets us tell them about their maximum purchase price. So they can shop properly within their budget. Because we don't want all the CD to find a home of your dreams. And then all of a sudden, you can't actually qualify for it. Because when we do qualification, we do base it on everything we do with income verification, we check all of your income documents, we do a credit check, which helps us pull and see what kind of debt load you have, which is huge too, because, unfortunately, people take on debt. And when we do a pre approval, one of the last things we tell you is don't take on any new debt until you buy a home have the keys and are standing in the front, you know the front entrance way. And you don't have to worry about the bank or the lender anymore. Because if you take on any new debt that control your entire application, the no new vehicle credit cards, lines of credit. You can't cosign any loans or mortgages for anyone else. Because if you do, and they default you're on the hook for them. So and technically speaking, we see a lot of people that do end up buying the vehicle when they come back to us and they wonder why they can't get the homes anymore. It's quite surprising. But remember that every $400 in car payments you have you lose out on approximately $100,000 in mortgage funds. And that can make a huge difference when you're right on the line of getting approved or not. And a lender repol your credit, they can report your credit, pretty much the day before closing it confirm you've not taken on more debt. And they can shut them to deal in the last minute because you weren't honest with them or you did buy a new vehicle you maxed out a credit card in the meantime.
Curtis Pope:
Very cool. Now, is there anything else that anyone should know about using a mortgage broker?
Michele Cummins - PREC:
Well, the main thing is and something Michelle already mentioned is there is normally no cost to you as a mortgage broker, we are compensated by the lender to complete the mortgages. For all standard lending, when we deal with alternative and private lenders voter is normally like a one to 2% fee based on the mortgage amount. So then they will be paying that directly to the lender. But for the most part and the most standard lenders for all of our big big mortgages, you're not going to be seeing any sort of fee or any sort of payment that the person is going to be, you know, paying to the mortgage broker or to the brokerage. Even if they don't end up moving ahead. It all kind of gets you know, skills and stops. I mean, there's not somebody may knock on your door looking for, you know, a handout payment later. We do also offer a wide range of wedding options. Like I stated, we've got standard alternative private and reverse mortgages, which gives our borrowers lots of access and options in trying to figure out what their best, best way partner is going to be. And the other bonus when you use a broker is the only have to fill in one application, submit one set of documents. And then the broker does all your shopping for you. We find different lender options, the best mortgage product which will help support all of your short and long term goals. Because really, there's a day we want to make sure that you have the best product to suit your life and what the next five years of your life is going to look like. Thank you so much, Jessica. That was so much information. It was wonderful. I think our listeners might want to read listen to this on our websites or on our podcast the next week when it comes out but it'll be on country one Oh 7.1 websites. Today probably or This weekend so first there and then our podcast on Tuesday but thank you so much, really appreciate it and well I want to jump into my new listings and and before before we leave our show today so the announcement of ledgeview parku rowhomes is out. We are now selling at their upscale row homes in East Abbotsford just gorgeous in between ledgeview trails and ledgeview tree farm and just steps away could lead you Golf and Country Club. They're beautiful two full story plus walkout finished basement roughed in for wetbar. Or in law kitchen. And gorgeous they start out at 1.3 million and call me today if you're interested because we've already sold a couple and they were just released two days ago and it's going fast. There's only nine of them in our first phase and then the second phase will come out probably in the fall time but yeah call me
Curtis Pope:
and people should remember to these are row homes right.
Michele Cummins - PREC:
Thank you. Yes. So that is freehold that is no strata strata rule.
Curtis Pope:
You have my attention you say no strata strata scares me.
Michele Cummins - PREC:
I know I know. And then and then you've got the luxury of the greenspace all around you and the convenience and the quality for the price. Amazing. As you can see you won't over 1.5 million for your average place in Abbotsford. So also coming is actually sorry new listing just hit the market three days ago is a townhouse in Promontory. And that started areas chillax. So it is an inside unit. It's got gorgeous views a front balcony, and then it also has a backyard off the main floor kitchen which is so nice when you have kids and the three bedroom three bathrooms built in 2011. And it's almost 1400 square feet. And that beautiful townhome with the valley mountain views is on for 699. And then a new listing admission. And this is a 20,000 square foot lot and it's pretty beautiful. It's up on Cherry Avenue at 33543 Cherry Avenue, and it was just listed a few days ago and it has this cute character home that is built 1947 And it's 1600 square feet and it's clearly gated high privacy fence gate is in the front. Really nice and often you can do so much there with that property and its overall community plan is for smaller lots. So you've got that investment and the potential to subdivide. And that's price only it was 1,499,988 for a 20,000 square foot lot. And then coming soon I've got an ND unit townhouse in Cloverdale and a complex called the compass it's a three bedroom, two bathroom, extra large backyard because it wraps around the side it's got extra windows so extra bright and that was coming in this week. So keep an eye on it as well and over 4.5 acre property in the drew area of mission and it's a basement entry home cute as a button. It has a detached carriage house above a double heated and fully insulated garage. And this is fully fenced completely private and gated property with a long winding driveway. So peaceful there love it so contact me for more information on that. And lastly a small lot with a cute two bedroom rancher coming up off Hazel Street in Chilliwack with the future overall community plan as multifamily. So a great investment and a cute little two bedroom rancher you can use in a single garage in the back only
price at 7:
50am.
Curtis Pope:
Very nice.
Michele Cummins - PREC:
Yes quote of the week. Today. It's from Mother Teresa. If we have no peace, it is because we have forgotten we belong to each other.
Curtis Pope:
Very nice and I think very topical in today's world very well done.
Michele Cummins - PREC:
human to human.
Curtis Pope:
Alright, people want more information about all your listings and things like that. Or maybe they want those stats. Where can they go? And they'll come in and join us again next week when we will talk real estate in order to unlock your real estate potential on the show real estate is maximized. Thanks for listening
If you missed last weeks episode where Michele and Curtis talk local trends and buying pre construction, please go back and take a listen - it's well worth it!