July 2024 Real Estate Market Insights & Preparing to get your First Mortgage

Introduction

Neil: Hello and a warm Welcome to "Getting Your Sh*t Together".. a podcast dedicated to helping you take control of your financial life, be it Investments, Mortgages, Insurance, Loans and more. I’m Neil, full-time mortgage professional with nearly five years of industry experience.

Jerome: And I’m Jerome, also a mortgage professional with over a decade of helping clients navigate the complex world of mortgages and real estate. Together, we’re here to guide you.

Neil: We know that managing your finances, securing the right mortgage, and making smart investment decisions can be confusing and overwhelming. That’s why we created this podcast – to break down these complex topics into simple, actionable steps.

Jerome: Each week, we’ll be diving into essential topics, from financial planning to real estate investments, and bringing in expert guests from various fields. Our guests may include real world practitioners, investors, realtors, financial planners, investment specialist, builders, developers, lawyers, trustees, etc. – all here to provide valuable insights and practical advice.

Neil: Our goal is to help you evaluate how you’re managing important aspects of your life, highlight common mistakes, and offer corrective actions to get you back on track.

Jerome: We’ll also be busting common myths, answering your questions, and providing real takeaways that you can implement immediately. This isn’t just another boring podcast – we’re here to make sure you’re engaged, informed, and entertained.

Neil: So, join us on this journey to get your sh*t together and make smarter financial decisions. Tune in for actionable advice, expert insights, and engaging discussions that will empower you to take control of your financial future.

Jerome: Thank you for tuning in to "Getting Your Sh*t Together." Let’s get started!

Current Topics for the Week

Topic 1: Housing Statistics for July/Aug 2024

Neil: TRREBB (or Toronto Regional Real Estate Board) released their report for the month of July and of the key highlights that you might find interesting are:

a. There are an increase in Real Estate Sales activity as compared to July 2023 (which is positive) and that is good sign. It means Homeowners and propective homeowners are finding opportunities to transact

b. The MLS Composite Benchmark Price Index (or in simpler terms a reflection of the price of an average property with standard features) came down by approx.. 5% as compared to July 2023. This is good news for prospective Home owners.

c. As an extension to that, the household income required to buy an average priced property (under $1,000,000) within the GTA dipped below $200,000, even with a minimum downpayment (<20%)

d. Prices increased in only 52 of 292 (18%) "Location & Property Type" combinations being tracked by TRREB

e. Sales to New Listings ratio is under 50% in almost all locations and therefore indicating a balanced or possibly buyer’s market in most locations and property types.

All in all it is looking like a good time for prospective home buyers. Maybe not good for existing homeowners who are looking to sell but I think it is good for the overall market.

Jerome: What do you think the causes of this were?

Neil: I believe it is a reflection of:

a. A soft economy. People are stretched or anticipate being in a financially tight environment and are being cautious

b. Interest rates are high and it is making qualification to purchase or refinance tougher.. though the situation is improving

c. Memories are still fresh and buyers do not want to repeat the mistakes of recent years

Jerome: So does that mean its more Affordable in certain areas of the tracked locations?.

Neil: Most definitely.. By my calculations, affordability has improved by up to 5% just comparing against June 2024 given the combination of decreasing prices and interest rates.

Jerome: This is very interesting, who do you think this will impact the most?

Neil: From my reading of the data, the improvement in affordability has been the highest in the Detached or Single Family Home segment. There is more buyers in the Townhouse and Condo segment (and so improvement in affordability is relatively lower).

Jerome: So here is our Episode 2 Audience Question for Topic 1: What do you think? Is this a good time to purchase your new home?

Topic 2: Guidance on Buying your First Home

Jerome: When you are ready to buy your first/next home, there are many decisions that need to be made to start the process, like what realtor to use, do you speak with your bank about the financing first or a Mortgage Broker, Real Estate lawyer and Home insurance person. What do you recommend Neil when looking for a realtor?

Neil: Responds. . . Realtors are. . . .

Jerome: Next, you’re going to need some documents to get started. Typical items like, Employment letter, Paystub and T4’s, but what other documents would be required to provide some options for financing?

Neil: If BFS, own a Corporation, Down payment, 3 months bank statements, lease agreements,

Jerome: Proof of who you say you are. . . ID

Neil: Also helpful is knowing what debts that a client currently has. Different methods of calculating a payment on each debt type like Loans, vs Credit Cards vs Lines of Credit. We can also advise the best way to restructure some debts to maximize the amount you would qualify for. Also provide any additional details that help to explain your unique situations better, like recent job changes or raises at work. Gifts from family members etc. . .

Neil: So, here is the Audience Question for this topic: If you are looking to buy a home, how far ahead of the purchase would you start preparing? Share your questions and comments and we will award a $50 Amazon gift card. The comment with the most likes wins.

For both the Audience Questions, we will make a draw during our next episode and announce the winner!

Closing

Jerome: That wraps up our second episode of "Getting Your Sh*t Together." We hope you found these updates and our discussion useful. Don’t forget to subscribe to the podcast, share your comments and follow us for more insights in upcoming episodes.

Neil: And if you have any questions or topics you’d like us to cover, reach out to us and we will ensure your questions get covered in our next episode of “Get your Shit together!

Thanks for listening and enjoy the summer!