Real estate in Colchester County
What potential home buyers should expect
TRURO — At a time when real estate in Colchester is in great demand, realtors and homebuyers alike say there just aren’t enough houses on the market.
For some, this will mean settling on a house that doesn’t meet all their preferences. For others, it’ll mean putting the dream of home ownership away for another few years or moving outside the county.
For those that do decide to buy, this could also mean paying more for less.
Real estate agent Patrycja Budzynska with Remax Fairline Realty spoke to Saltwire Network about the market in Colchester and across Nova Scotia.
“Generally, across Canada, the prices are down about 20 per cent,” said Budzynska. “Here in Nova Scotia, we’re going up three per cent.
“We are finally catching up to the rest of the country. There are more people coming, more business— we’re a growing province, and Truro is a part of that.”
She explained there was a big push for purchasing homes when mortgage rates fell to a drastically low amount during COVID. This led to an increase in demand. It’s only now that mortgage rates are beginning to return to normal, said Budzynska.
According to statistics from the Bank of Canada, conventional mortgage rates during COVID slightly decreased just under 5 per cent; however, discounted mortgage rates plummeted from over 3.5 per cent to nearly 1.5 per cent.
As of January 2023, the conventional rate has risen to a peak of 6.5 per cent. The discounted rate increased to just under five per cent, peaking at just over five per cent in mid-to-late 2022.
These peaks are the highest mortgage rates have been in over 10 years, according to data from the Bank of Canada.
The high demand in Colchester County, in particular, is due in part to its proximity to Halifax, said Budzynska. While prices continue to increase and supply falls in the city, potential home buyers begin to look outside of Halifax for housing.
“We have a housing crisis in the city,” said Budzynska. “There’s a problem with rentals. There (are) not enough buildings. That’s why we’re seeing all these pressures.
“More people are coming to work, to do what needs to be done, and that’s why we’re seeing the prices increase.”
According to statistics from the Canadian Real Estate Association (CREA), the average residential price steadily increased in 2019, crossing over the $250,000 range.
The summer of 2020 onward saw this average soar, with its highest being $450,000 in April 2022. In February 2023, this average has fallen to $400,000.
Budzynska said the most competition for home buying in Colchester is within the $300,000 range — a twoto-three-bedroom house with a yard attached. She said that a lack of housing being built is just increasing the level of demand amidst the provincewide shortage.
CREA statistics show the number of listed Nova Scotian homes in January has fallen below the five-year average (17.1 per cent below) and the 10-year average (31.8 per cent below) within recent years, with a small bump in January 2023 of 2.1 per cent.
The Canadian Mortgage and Housing Corporation reported that in the last quarter of 2022, there were 226 housing units under construction in Truro, with 26 having been completed in that time frame.
“I don’t see it slowing down for the next couple of years,” said Budzynska regarding the demand for housing. “It’s not something that can be resolved in a day.”
ADVICE TO POTENTIAL BUYERS
For Budzynska, she believes it’s better to think ahead when buying a house rather than ponder on what’s in front of you. In a competitive market, buyers are unlikely to get everything they want, but she believes it’s better than nothing.
“It’s not always about finding four walls,” said Budzynska. “There are some people who are super picky — all the details need to be right — but it’s not always about those four walls. It’s about the vision you have for your life.
“As long as people are determined, and they have their resources, they’re getting there. Sometimes you just have to crunch your numbers a bit and you have to start not where you want to be, but people are getting what they want."
Due to the competition and supply shortage, she encourages potential buyers to get in early.
“We don’t have enough homes on the market, it’s still competitive. If you’re thinking about getting into home ownership, just from my experience and the numbers we are seeing, I would suggest just to jump into it.”
Buying your first home is an investment opportunity, as it’s unlikely people will settle down for good in the first home they buy, according to Budzynska.
“It’s a mistake to assume the first home you’re going to get is the home you’re going to live in for the rest of your life,” said Budzynska. “People are moving from location to location more often. Homeownership, unfortunately, has to be seen as a form of investment.”
Programs such as Housing Nova Scotia’s Down Payment Assistance Program (DPAP) makes this easier for first-time homebuyers, lending them up to $25,000 to help with a down payment.
THE HOME-BUYING EXP ERIENCE
While Budzynska encouraged those financially able to make the jump, homeowner Craig Smith urged caution.
Smith bought a house on Pictou Road, Bible Hill in October 2021. Though he admitted that he is better off than most, with no urgent need for housing, he still found the process exhausting.
“The first place I was interested in was recently renovated out in Debert, and it looked great,” said Smith. “I put in an offer, and it was accepted.”
However, Smith was curious as to why the house was on the market way longer than most. It turned out to have serious septic issues, failing a water test during the home inspection. Smith decided to back out of that deal.
“I probably looked at five or more houses, put a few offers in,” said Smith. “But they were going for 10 to 20 per cent over asking every single time, and I wasn’t willing to pay that.”
Smith ended up settling on a house from a private seller. He stopped by a house one day that was being renovated and struck up a conversation with the owner.
The owner of the house planned to rent out the property once renovations were complete, but Smith asked if he’d be willing to sell.
Sure enough, the owner agreed
“I got really lucky,” said Smith. Smith said the house he bought was originally purchased by the previous owner for about $80,000. After doing four months of renovations, he sold the property to Smith for double his money.
“The prices inflated so fast that it seemed like there was a panic — where it felt like the door was closing behind you if you didn’t get in now. I think a lot of people were feeling that, and they were way overpaying for houses because interest rates were so incredibly low.
“I hope the people who bought in have a fixed rate for five years, or I’m sure they’re panicking right now.”
While buying privately worked out in Smith’s case, he certainly felt the urge from his realtor to buy now rather than later.
“It felt like the ball was rolling and it was going faster and faster,” Smith commented.
Though he doesn’t see himself staying in his new home if he decides to start a family, he considers himself lucky to lock-in a low-interest rate, though he’s certain this isn’t the same for others in his situation.
“I got off pretty good compared to most.”
The one tip that Smith would offer potential home buyers is to be careful of what documents they sign.
When he placed an offer on the house in Debert, he signed a buyer’s brokerage agreement with a stipulation stating that he could only work with that one realtor, said Smith.
When he bought his home privately, without the help of a realtor, he still had to pay them 2.5 per cent of the sale price.
“You’re likely not going to get the house that you put your first offer on, in today’s day and age,” said Smith. “If somebody is new to the buying process, which I was, then I suggest signing a buyer’s brokerage agreement that only covers the current house that you’re looking at.”