Buying a Home in 2020 - Challenges and Solutions

06/20/20 • 7 min

If you're serious about buying a home in 2020, you will face 2 main challenges. Here is the one solutions to both:
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[00:00:00.240]Are you serious about buying a house or a condo in Winnipeg in the summer of 2020? You're up against two challenges. I'll talk about those and how to get to the head of the line right away.
[00:00:26.710] Hello again, everybody. It's Bo Kauffmann Remax Performance Realty. I'm a residential real estate agent in Winnipeg for the past 15 years and I enjoy working with buyers and sellers of houses and condos.
[00:00:37.420]If you're serious about buying a house or a condo in Winnipeg in the summer of 2020, you're up against two challenges. One is a super active market. And the others is Covid. I'll talk about both of those challenges right away and then give you a shortcut to get you to the head of the home shopping line. Please note I said if you're serious about buying a house or a condo in Winnipeg, I get a lot of calls from people saying, hey, I just want to see your listing.
[00:01:01.750]And when we talk about it a little bit further, they say, no, we're just starting to look or we're just curious. We just want to see it. So let me explain.
[00:01:10.180]When a seller hires a listing agent, that agent owes the homeowner a set of duties and responsibilities,.... responsibilities, which I take very seriously. Those responsibilities include not showing the home to anybody who is not pre-approved, not pre qualified, may or may not be able to afford it, and more importantly these days, to show the home only to those people who have been deemed to be covered free to the best of our ability.
[00:01:36.080]So if you're just browsing, just starting out, just looking, there are plenty of open houses still. You can go online, see virtual tours, even virtual open houses. Now, that's a great way to start, but don't call a listing agent to show you a house, because here is what's supposed to happen if you phone me. My first question to you is, are you pre-approved? Now, even that question has offended some callers, and I'm sorry for that.
[00:01:59.160]But as I said earlier, I owe the home seller, a responsibility that I'm not going to show the house to anybody who just makes a phone call. You've got to be pre-approved. My next question may be who are you pre-approved with? Because not all lenders are the same. I'm just now dealing with somebody who has gone through their third week of financing, continuing to get extensions on the financing condition. It's not acceptable. And these people were supposedly pre-approved.
[00:02:25.060]And another example, I met a young couple who came to me pre-approved by one of the smaller credit unions when it came time to make an offer. That credit union wanted a full week financing again in this active market, that's not sufficient. So not all lenders, not all mortgage lenders are the same, and some are definitely better than others. Another example may be that you need to sell your current home before you can buy one. There really is no point in looking at a house, especially these days, because when we make an appointment to get you into a house for a showing, that homeowner has to pack up and leave.
[00:02:58.120]That's under the COVID rules. The homeowner is not supposed to be in the house at the time. So we are really inconveniencing that seller to show the house to somebody who is not ready to buy. But

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Winnipeg Real Estate Market Update June 2020

Housing Market Report for Winnipeg on June 1st 2020
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[00:00:00.150]What's the real estate market on June 1st 2020 in Winnipeg? Coming up next.
[00:00:20.710]Well, it's time to take a close look at what the real estate market is doing and Winnipeg, this is at the beginning of June 2020. You know, I get phone calls just about every day.
[00:00:29.490]I got a call from a nice older lady saying, you know, right now with all this Covid stuff, this must be a terrible time to be selling your house? And really nothing could be further from the truth. You're going to see that in the last month, that's the month of May, sales have nearly doubled over April. Yet the numbers of available listings has not kept up. So you're going to see all the indicators are towards a much, much stronger seller market than normal.
[00:00:55.260]There is buyers are coming out, but they're just not finding the available homes. There's one thing I'm doing different this month, and that is that this is specifically for houses. I will do a separate podcast for condominiums because they really are a separate market all to their own. So let's take a look at some of the highlights. For the month of March, the most expensive house sold in the month of March was 1.5 million in tuxedo.
[00:01:17.880]And the most expensive condo was a brand new construction condo. F$488,000 in the S.St Vial area. In May 2019. We sold 758 houses. Now, compare that to the sales of April this year. They were 375 houses, but in May we bounced right back to 641 houses sold in Winnipeg. That's fast approaching the norm, which was kind of last year. So let's break that down a little bit further in the price ranges under two hundred and fifty thousand dollars on June 1st.
[00:01:51.450]Last year we had 444 homes available. In April, we had 285. And in May this year, we're down even further at 269. So the available homes in this price range keeps dropping. But buyers are coming out. So if you've got a house in that price range, now is the time to list that.
[00:02:10.220]Looking at the mid price range, these are homes between a quarter million and a half million dollars. Last year we had 778 available. At the end of April, we had 590. And at the end of May or June 1st, we only have 575. Again, the available number of homes has steadily drop and it's much below normal.
[00:02:31.390]And a slightly different picture in the luxury homes sections last year. These are homes of 500,000 dollars or more. Last year we had 413 at the end of April. This year we had 338.
[00:02:44.730]And on June 1st this year, the inventory bounced up a little bit to 368. So let's take a look at sales over the past month. So last year, during the month of May, we sold 187 entry level homes in May. This year we sold only 93. So that's about half. And now in May 2020, that jumped back up to 157. So almost on par with what it was. like mid-range homes, 250 to 500,000 dollars last year in May, we sold 487. April this year 247 again 1/2.
[00:03:18.630]And that bounced right back and made this year to 418 almost on level with what it was. Now, as far as luxury homes go, last year we sold 85 of those in the month of May.
[00:03:29.850]This year in April, that dropped down to 35. But this year in May, it went back up to 66 homes. As you can see, sales have nearly doubled over last month. But in most cases, inventory, the available number

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Right now, BUYING is cheaper than RENTING!

Still renting? Interest rates are super low, and there is even a way to buy without having 5% down. Let me show you how.
For more real estate info, check my blog at (https://blog.winnipeghomefinder.com)
Never miss an episode. Install our FREE Podcast App available on iOS and Android.
For your Apple Devices, click here to (https://apps.apple.com/us/app/winnipeg-real-estate-news/id1098802561)
For your Android Devices, click here to (https://play.google.com/store/apps/details?id=com.bokauffmann.android.winnipeg&hl=en)
[00:00:00.240]Are you currently renting and thinking you can't afford your own home? Let me dispelled that myth right now.
[00:00:22.680] So are you renting right now and wondering if or how you could afford a new home? Let me tell you what happened to a client of mine very recently. They called me at the end of May to tell me that they were they had been renting for about five years and everything was going okay until a noisy tenant moved in above them and they finally had it.
[00:00:40.720]So they were looking at alternatives, but they didn't initially think that they could afford it. I put them in touch with my mortgage specialist and this is what we came up with. So they were pre-approved for $300,000 and their initial plan was to find a stand-alone home. But in the south end of the city, St Vital, , Fort Richmond, Richmond West. Now there are neighborhoods in Winnipeg, where I can find you are really nice. home for 300,000 dollars or less. Standalone house. But St. Vital, , Fort Richmond, White Ridge. Those kind of areas are not among them. So after a few disappointing showings, we switched focus and we started looking at condos. Currently they lived in about an 800 square foot apartment, two bedrooms, one bath, outdoor parking, and they were paying 1,210 dollars a month. After looking about three or four condos. This is what we found them for $275,000 dollars.
[00:01:32.780]We got them a three level townhouse condo in Bridgewater. Here's what you've got on the main floor. You have a small office area plus closets and the laundry room, and that is the door to the attached garage. So they go from outdoor parking to a single attached indoor garage. On the second floor, we have a half bath, a really nice, open, modern kitchen with all the appliances, all stainless steel appliances included the patio door leading to the balcony and a large living room area.
[00:02:03.760]And the top floor features two good sized bedrooms, a main four piece bath and the large master bedroom with a full en-suite and lots of closet space. Now, as I said, their apartment was 800 square feet. This condo is 1,350 square feet. So let's take a look at how those costs compare. As I already said, they initially paid twelve hundred and ten dollars for rent plus hydro. So this condo, we got them for two hundred and seventy five thousand dollars.
[00:02:31.510]They put five percent down, but there's CMHC fees lumped into it, which is around four percent. So let's say that they had to mortgage a two hundred and seventy five thousand dollar mortgage and figure out what the interest is on that. So let's be generous and say they're paying 2.4% , which makes a monthly interest costs of 550 dollars. So, yes, the actual mortgage payment is going to be higher. But anything above the interest goes against their own mortgage payment. So that money is not lost. It's not an expense. It goes to pay down their own debt. The only real cost is the interest.
[00:03:06.670]After this, a property tax of 250 dollars per month and then a condo fee of 225 dollars a month. Now, hydro costs are going to be very similar as their rented space, as will insurance. The condo building insurance is actually included in the monthly condo fees.
[00:03:22.300]So all they have to do is add condo owners insurance, which is similar to renter's insurance. So add up all these costs and instead of 1,210 a...