I keep a box at the backdoor
Spring is in the air! It is Spring, isn’t it? April has always been somewhat of a ‘bipolar’ month. One minute glorious or warm, and the next minute freezing rain, snow and cold. When it’s not going back and forth between Spring and Winter, we are all trying patiently to wait for the glorious rays of the sun and the flowers that indicate we are moving into Summer. Ah, Summer. Patience is such a virtue.
The housing market in Ottawa, ironically, is behaving the same way. Spring and the current Ottawa real estate market are both behaving a little inconsistently. Some areas of the city are seeing rising prices and multiple offers. In these areas, the properties are selling in a few short days, causing stress and frustration for the hopeful buyers. In other areas of the city, lovely little homes are sitting on the market, wishing for the same type of activity and interest. And like the weather, you wonder…what is wreaking all this havoc? And while I am not a weather forecaster, I do have some expertise with an explanation for the real estate market here in Ottawa.
My best guess is that many first-time homebuyers and buyers looking to move up a step are fighting for the same price and property types. There are only a certain number of properties in specific price points with certain common features coming onto the market. We have a lack of supply for the demand. The statistics from the Ottawa Real Estate board and other industry partners tell us this. When you add in the new qualifying rules (changes made under B20 which came into effect in January 2018), it seems like Winter is still here. It’s a bit chaotic and unpredictable. The new rules are causing would be sellers to keep their homes. Why you may ask? Quite simply, many potential buyers are questioning moving when affordability has you buying in the same price range you would be selling your home for. The new stress test has homebuyers with 5- 20% down payment qualifying for homeownership at a rate of 5.14%. Clients with a down payment of 20% or greater are now qualifying on contract rate + 2%! The average rate would be 5.49% causing a decrease of 30% in the purchase price. The result is becoming a common theme. Why sell if you can’t move up? And is your home really that bad? Do you want to leave your neighbours? Your child’s school district? Family that may live close by? Why not stay home and fix up your current home, make it your dream home? And here starts the ‘bipolar’ tale of Spring in the Ottawa real estate market. We are a pure episode of “Love It or List It”. And that show has always had me on pin and needles when I watch it.
This is what Klaus and I are choosing to do. New kitchen, windows and a coat of paint. With a little planning, some number crunching and an appraisal, making the home your in might be the right move. If you would like to discuss how we can make this plan work for you call me.
Bank of Canada – holds steady, no change to prime
Remember when they used to call him Sunny because he was always happy (or was it his financial outlook)? Where did those days go? For now, if you have variable rate mortgage, a line of credit or credit cards that fluctuate with Prime, there will be no change. Bank of Canada keeps interest rate steady at 1.25%, for now.
The Solvent Family
We are halfway through the fourth month of the year. Did you write down your financial goals? Were you able to find the cracks in the budget where the small amounts of money trickle out but add up at the end of the year? (example, daily coffee and a muffin) Were you honest with yourself?
Well, you are only human, and I am not here to beat you up. If you know me, I’m more likely to say, “You are not alone!” Sometimes its hard to start a new good habit. Sometimes its easier to stay as we are even if it means we are keeping ourselves from succeeding. I’m going to tell you; you are just like everyone else. Typically this is what happens; one thing goes wrong, then the next and then the next. The bad stuff comes in threes, you know. And by the time you’ve arrived at that third bump, your arms are in the air, and you’re saying, ‘What the heck!!” It’s in that moment that we start to stop caring so much about our financial restraint and that’s the moment where we stop being mindful. That’s the moment where we end up saying “I’m in debt this much, whats another $100.00.” and so it snowballs.
I’ve witnessed it time and time again and then your off to consolidation, refinancing, proposal and in some cases bankruptcy. Defeated! It happens to the best of us. After much practice, when I arrive at the bumps, I take a deep breath and remind myself this is just a moment. This is just a moment in time. Oh, I may still fuss and frown but I know it will mean nothing a year from now and I bring thoughts back to whats important. Try it. Three deep breaths, a little perspective and remind yourself, it’s only a moment in time. I try to remind myself that all the interest I pay to a lender could be going to ___________. I say we can’t afford __________. But, I am willing to pay interest to financial institutes and stores all the time.
I speak with clients sometimes that are more interested in their mortgage rate but will pay 29% in interest to a credit card. I find it helpful to breathe and remember what’s important and paying interest to myself is more important than interest to a financial institute.
Some of the small things that I have learned and have put into practice that help me become a saver. By saver, I mean someone who doesn’t buy. 🙂
I’m still working on saving for the fun of it. I bag my own lunch. Yep, it’s simple, and you already knew to do this, but we don’t. I make a little more at dinner and pack the lunches after dinner. The win, a more nutritious and tasty meal and it’s easy on my pocketbook. ($10 a day * 5 *50 weeks = $2500.00, just saying). Coffee/tea dates instead of lunch or dinner dates. The win, again, easier on my wallet and my diet.
I buy less – this is my big winner. I made the decision a couple of years ago to stop being a consumer. I ask myself, “do I need it or do I want it?” “How long until it ends up in the landfill?” “Does it have more than one use?” “If I had to pay cash, would I?” I still stumble from time to time. I get caught up in the “I WANT this!” The majority of the time, I will walk away. If it really nags at me, then I’ll go back and buy it, only if I truly need it.
I sell my stuff on Kijiji or Used Ottawa. You know the stuff. The stuff you bought on a whim. The stuff that doesn’t fit or was oh so cute you couldn’t resist. That stuff! Give it away, sell it and make a bit of money to help you pay for something you really need or want. Surround yourself with things you really LOVE, not just like.
Lastly, I keep a box at the back door, it’s convenient. If you want to learn about your spending habits, keep an empty box at the back door and put one thing you don’t want or need in the box every day. My backdoor is the garage and the laundry room. I keep the box there, and when it’s full, Klaus pops it in the car, and I take it to the charity shop or wherever it will do the most good. I have to say; not a week has gone by in the last year that I haven’t dropped off a box before I get the groceries. I’ve learned a lot about myself when I’m shopping and thinking, Do I need it? When will it end up in the charity shop box? Do I LOVE it? Who made it? Would I pay cash for it? ( I ask this because paying cash is a LOT harder than paying with a credit card)
To recap:
- Set your financial goals – e.g. a holiday every year, top off RRSP
- Look at six months of your spending habits
- Determine where the leaks are in your budget – Fix them
- How can you save or pay off the debt a little faster
- Do you need professional help or advice? Call me