79: Using Data to Micro-Analyze the Market and Create Opportunities with Century 21's Dean Desrosiers

0:00 Welcome back to the Clone Real Estate Podcast. I'm your mortgage broker mortgage broker host, Taylor Atkinson. And I'm your real estate agent host, Matt Glenn. What's shaking today, Taylor? Ah, some exciting things, man. Big time. First, I want to give a bit of a plug real quick to spot on mobile detailing. I hired these two kids, like twin brothers, wicked, wicked energy, came over to the house, cleaned Emily and Maya's car, and like, you got kids and a dog? It was unreal, man. So I wanted to give yeah, them a special They you thanks. got kids and like, a It was dog. So yeah, unreal, I man. wanted to give them a special thanks. They're like young kids just hustling entrepreneurs. Yeah, you've been talking about them. I love it. Yeah. And then in addition to that, speaking about opportunities, young people, first time homebuyers, CMHC, Canadian government has come out with some really awesome news, actually. So they initially came out with some of this news, actually.

0:41 So they initially came out with some of this news about five months ago that we spoke about. It was kind of a nothing burger because, yeah, it was basically, you know, giving the benefit to first time homebuyers that were only buying a new home. So the two changes they've made are insured mortgages up to $1.5 million purchase price, where currently we're capped at a million. That's good. But the one that I think is most impactful is switching from a 25-year amortization that's insured to a 30-year amortization. And that's for first-time homebuyers and then all buyers on new builds. So both of these should be implemented in December. Yeah, what do you think, Matt? Any thoughts on that? I think it's gonna help a lot of people. I've been hearing I've been hearing pushback, like this is a supply side measure.

1:24 It's just going to put people into more debt. But I disagree with that. I think it does do that a bit, but this is going to help a lot of people get into the market, right? Like just qualification and then being able to service this debt. How much is it? Like how much are we talking about extra costs here? Like extra interest in the first five years? I agree. So I think the 25 year M we'll focus on that 25 to 30 year M that is going to be the most impactful. Again, I've heard some pushback on that as well, which I do not agree with. Basically people just saying, well, you know, you're tacking on X amount more interest. So we'll just break it down quick on a 25 year amortization with a hundred thousand dollar household income. That'd be a $400,000 mortgage approval. Okay. So the monthly payment on that is going to be $2,300. And the interest that you would pay over that five-year term is $87,000.

2:05 If we take that exact same mortgage amount, but we put it on a 30-year amortization, the monthly payment is so $2,100, a cost savings of $200 a month. And the interest difference, so you'll now pay $88,000 on that interest. So that's only an additional $1,450 over five years. It's really nothing. Where the naysayers are jumping on is this would add $62,000 of interest over the 30-year period. But who is keeping this mortgage for 30 years? Yeah. Mortgages only last seven seven years, right? Or something like that? Yeah. Statistically, 60% of people break their mortgage within three years. Yeah. It can be a refi.

2:46 Yeah. People move, people refinance, like consolidation. They can turn into a rental. But the point being is we're trying to get first-time homebuyers who cannot be approved for a mortgage to help them with that approval to get into it. Now, in addition to that, once they're approved, they could always elect prepayments and add that $200 a month into their mortgage. Good point. Good point. And then you're paying out of the principal at the same rate, but it's optional. $200 a month is optional at the end. Exactly. Yeah. And it's for the right Yeah. And it's for the right people, right? Yeah. So the only other thing I'll So the only other thing I'll add on that is essentially moving from a 25-year to a 30-year AM, your income on a 25-year AM had to be a hundred thousand dollars.

3:32 Now it has to be $93,000 for the same mortgage. So we're helping people with, you know, a lower income, help it be approved. The only things we don't really know about this right now are like, what are the default insurance rates going to be on that calculation with the extra $1.5 million purchase price inclusion as of now, like default insurance is, you insurance is upwards of $30,000 if you use in the minimum down payment. So it's pretty expensive. With that $1.5 million purchase price, what are the down payment increments going to be? Right now it's 5% on the first 500, 10% on the second 500. So we're not exactly sure how that last 500 looks, but you know, to be qualified for a jumbo mortgage, like a $1.5 million purchase with 10% down, you need like a household income of $300,000 with no other debt.

4:12 I think that part of this, you know, 1.5 million doesn't affect really anyone. The amortization does. One note with the 1.5 million is we get better rates with insurable mortgages. So less than a million dollar owner occupied 25 year am. Now this is yet to be seen, but if insurable mortgages, meaning you don't actually have to pay for the insurance, but technically you could get it if you wanted. If that goes up to 1.5 million, that's awesome for everyone. Now we can, as brokers provide better rates because that purchase price, which in Kelowna, it makes sense. And then, okay. So okay. So interesting. So if we get better rates, will that mean you'd be able to qualify at better rates then too? Exactly.

4:57 Yeah. I'm assuming that they're going to classify these as insurable because why would you not? It's going to help the average Kelowna person who is buying a $1.1 million house. It's going to get them a better rate. It's going to get them better monthly payment. It's going to help them qualify for that. So there is that kind of in the background that hasn't really been discussed, but I think that's a really important piece to this. And then the Fed, US cut rates by 50 points. by 50 Yeah. Jeez. Was that expected? I thought that was more than expected. I don't think it was in the last few months. Like they've been, you Yeah. Jeez. you know, kind of going the other direction there. But really good sign for us as Canadians. And then our inflation report came out at 2%, which is But bang on target.

5:37 And without shelter costs, it's closer to 0%. So we can expect now for Bank of Canada to come out with some very aggressive rate cuts in the near future. Do you think in the short think in the short term, I think the next rate announcement is end of October, October 20th or something. In the short term, can we expect the fixed rates to come down because of the Fed? Yeah, fixed rates have still been dropping pretty consistently. I'd say every week, every lender kind of cuts it a little bit. They've mostly been on the five-year insured for those less than 20% down. And they've also now been starting to come with like the four-year and the three-year, which kind of indicates all these larger lenders are trying to lock people in to something over the next few years because they know that the variable rate's going to be dropping and they'll lose money on that.

6:19 So we haven't seen a lot of rate cuts on the fixed for like the non-insured or rental properties, stuff like that. But I think it will be coming in the next few months for sure. Interesting. So yeah, some really good news in the market. Yeah. But the thing is like you got to keep in mind, though, is that when interest rates come, it's usually because the economy is not humming along. So there's kind of like a double-edged sword there, right? Absolutely. Yeah. I think, though, everyone's been feeling this pain for the last year and a half, two years, and the economy's been quietly struggling. Especially the people Especially the people like me who have been like directly affected with just high mortgage costs, right? Like finally some relief on that. So like what a difference that would make.

7:01 So yeah, I know it'll directly help a lot of people, but yeah, things are looking good for sure. All right. And then on today's show, we have Dean DeRossier, who is a broker, owner, partner at Century 21 Assurance Realty, shares his thoughts about the market where we're at some interesting take on pools which uh taylor and i go right into oh nice nice working on my pun game yeah he nice broke down a bunch of stats for us kind of what's been going on in the market and yeah he's got some wicked insight yeah it was a fun episode too like it was a good one yeah and this episode like every episode is sponsored by century 21 assurance realty today we've got dean on which talks about assurance but it really is the best brokerage in the okanagan and we're not only in the okanagan it was a fun episode too like it was a good one yeah and this episode like every episode is sponsored by century 21 assurance realty today we've got dean on which talks about assurance but it really is the best brokerage in the okanagan and we're not only in the okanagan now we're in kamloops fernan shuswap kootenays we're everywhere we're taking over the interior and we're here to stay it's an awesome brokerage great training if you're an agent looking for a new brokerage i would seriously consider talking to myself or dean or max about making the switch or if you're a buyer or a seller looking for an agent century 21 assurance realty has got an agent for you there's no doubt yeah enjoy the episode okay welcome back to the show two--time returning guest, Dean Grossier.

8:05 Yeah, I'm back again, eh? Yeah, it's been a long time. Thanks for coming, Dean. You guys are amazing, by the way. It's been great to see your podcast. Yeah, thanks. We get that a lot. Good for you. Yeah, thanks. We Mostly between Taylor and I telling each other that we're amazing. Yeah. Well, how we like to start our show, other than telling everyone we're amazing, is what's your Friday look like in terms of productivity? What gives you energy? And yeah, what makes Dean Dean? guys in Ontario don't work much on Fridays because they basically drive to the cottage, right? So like Friday in Toronto, in the summertime, the highway is crowded with people trying to get to cottage country, which is basically heading north mostly, right? And the highways are crazy.

8:47 So the more successful guys, like the presidents, vice presidents and stuff, they're out of the office by 10 or 11 to beat the rush. So I've always felt this Friday is kind of like a flex day. So for me, I cram most of my stuff into Monday to Thursday. So yeah, Friday would be the day I don't book a lot of stuff. I leave the mornings open for maybe new development stuff, like maybe a new meeting with somebody I don't know. That way I can prepare for it. If there's a social activity for a realtor, I'll go. This Friday, I'm going to go see Ann Wolf's open house.

9:30 And then I play pickleball from four to six with some old farts. And I don't think they'd listen to this podcast, but if they ever did, yeah, there are a bunch of old farts that are 10 to 12 years older than I am. So it's kind of fun to go see how good they are. Where do you play pickleball? most We play at Parkinson, which is sort of in the center of Kelowna and the courts that are sinking into the river. But yeah, it's fun. of Love the game. Is there indoor courts there or are they just outdoor? courts there or are they just outdoor? Because I see them. Just outdoor courts. Parkinson's has a gym and most gyms you can play pickleball inside, but it's not quite the same experience as being outside. Yes. Okay. That makes a lot of sense. Fastest growing game. All the young kids are playing pickleball. It's just a great game. Yeah, that's awesome. Speaking of a fastest growing game or fastest growing brokerage, we're expanding. What's happening there, Dean? Oh, we are. Super exciting. Yeah, we've grown, goodness, since last March. We're not quite double our roster since last March, but we've added, you know, 50, 60 agents in a very short period of time, which is really exciting.

10:13 And we have been given the rights to Kamloops, Vernon, North Okanagan area, as well as parts of the Kootenays to help out with recruiting, bringing more people into Century 21 Canada. So we're really excited about that. So it wasn't part of our business plan two years ago, but we know the industry is changing and we really focus as on the service level we have in Kelowna, expanding that out to other areas. And that's been kind of exciting. And we've been getting great feedback from the other markets and talking with the other agents with our team of four brokers is going quite well. So that's been super exciting. So yeah, we're on the move, looking for new agents all the time. And we do have a special brand of service, which there's a lot of great brokers in the Okanagan. But I think that, you know, to compete, we always have to be just a little bit better all the time. And I think that, you know, if I look at the other brokers that I look up to locally here at the other brokerages, you know, I think we do well, you know, I think we honor that.

11:01 I think maybe some ways we might be better in one area, maybe we're not as good in another. But for the right kind of agent, I think we've got a great mix of service and products and a network, which is in Canada right now, with Century 21, just under 13,000 members across the country with just under 300 offices. And, you know, when you're in an area like the Okanagan and the interior of BC, we do benefit because people move here. You know, more people move here than leave even though here, we've seen a lot of people You move,. more people know, move here than leave here, even though we'd seen a lot of people move, you know, back to Alberta or move to Alberta. But over time, you know, as a real estate agent here, there's an influx of people. So being in a network like Century 21 is tremendously advantageous because, you know, all it takes is, you know, some really good connections in different cities and getting out referral really is nice. So I just want to look around that point for a second.

11:41 around that point for a second. That is a great point because just the other day I was sitting in the office and these people came in from Ottawa. So from out of town, came in here and they want to buy a place at Big White. And they just walked right in to the Century 21 office because they knew it and were looking for an agent. And we ended up selling them place a week later. And I feel like the smaller boutique brokerages like have their place and they're awesome. But like, I just feel like that would probably not happen a lot. Yeah. I learned that at one of my other brokerages, I can't say their name, but it's a great brokerage in town and people have their experiences with their agents and the brands are always strong over time. You know, like I was always told, make sure you buy a brokerage at a major brand. Well, as an agent, you know, does the brand do anything for you? And yeah, you know, it's your business card, it's professionalism, and it's a lot of technology and training.

12:24 But we take a bit of a different approach to like our office, we base it on what we call a local office model. So the idea that there's a local office for the agents to meet clients at number one for safety. Number two, we know agents that have an office to go to tend to be more productive. So they do better on average. And number it's training three, and culture. You so we have these know, local offices. But I love to hear you people come in off the street and buy a house. that, know, In my it didn't career, happen a lot because I started after the big rush of 2003 to 2007. I used to hear these stories of people walking into the office and jumping into a realtor's car and going and buying a house and coming back. That seems wild. Honestly, that exact thing basically just happened to thing basically just happened to me this week. That was the story I told. Good for you. It still hasn't happened to me. So I'll teach you my conversion skills one time.

13:05 You know what? I'm always willing to I told. Good for you. It still hasn't happened to me. So to learn. That's the one thing about this business. You never wake up and say, I got it. Yeah. That's a good Yeah. That's a good point there. Yeah, definitely. Well, since you guys are kind of expanding and bringing in, you know, more people and having those conversations in other markets, we wanted to kind of dive in to a little bit today about stats, you know, mostly in the Okanagan, but kind of it can range around BC. You know, we hear a lot of things like, oh, the market's soft or or we're down a percentage in sales volume, etc. Can you kind of review where we're at now, where we were in the last kind of six months and where we're kind of going? Yeah, you know, stats are an interesting thing. You know, I got to set the table before we talk about statistics, right?

13:45 And I think one of the things that we try to do, and when we're talking with clients and consumers and teaching agents, they're statistics, the right? history, And I think one of the things that we try to do when we're talking with clients and consumers and teaching agents, statistics, they're the history, right? It's in the past, but they're definitely our trends, right? And so we live in a really neat community because we get snow, right? There's highways and, you know, there's patterns throughout the year. And so really as a consumer, if you really look at what your goals are, how can you use the statistics to kind of make sense of what you might want to do? And, you know, what happens when sales are down is generally the economic conditions are such that, you know, people are not excited about buying a house. But I can tell you, you know, in the last year, holy cow, like 266 people this year bought houses with pools in Kelowna. 266 people this year bought houses with pools in Kelowna.

14:29 You know, 266 families spent millions of dollars on real estate to live in the Okanagan with a pool this year. So as much as we may you say, know, that's crazy. When you start to look at it, that's a very large number. And our brains can't process that. That's a lot of cannonballs. It's amazing. Yeah. You know, and if it's the older pools, there is room in one end to dive in. Right. So I look at it like as a real estate professional, our job is to kind of help the client understand the moment that they're in. So statistics to me are what's the end value. There's a joke amongst statisticians called N equals one. And you'll hear somebody talk about how smart they are in their experience. And now they're a life coach and everything else. But the fact is, they don't have a lot of N value. N is the sample size. And if my N value is one, I'm pretty sure that what I saw was amazing. Those people wanted to spend $3 million on that one house.

15:10 But the reality is, as agents, we have to kind of look at these bigger samples. And yeah, there's been over 266 sales of single family homes with pools since January 1st this year in the central Okanagan. And you as much as we may you say, know, that's crazy. It's amazing. know, that's a lot bigger number than a lot of people realize, right? You You know, like people lamenting the market. That's a lot of sales. That's an agent on each side of that. So that's 500 sales right there. I think you actually did this a couple you actually did this a couple of years ago because Emily came back from one of your meetings and said, but do you know the value that a pool holds? Like if we're comparing single family homes, like a direct comparison, one has a pool, one doesn't high level.

15:50 I could tell you the value if you gave the value if you gave me more specific criteria. So for example, if there's enough of a sample size, so say if there's a hundred houses that are selling that are a similar size, dimension, and age, and 50 of them have pools and 50 of them don't, well, then I can give you that difference, right? But then I would also have to look at that difference based on maybe some of the other features in the house. So, you know, you really can't just pull it out and say, hey, that pool is worth, you know, $80,000. I can tell you that pools with houses at certain times of the year at certain prices sell quite quickly. And for 98, 99% of asking price, typically houses today, pools add value. In 2008, 9, 10, 11, people were filling their pools in with dirt. You couldn't give away a house with a pool. Nobody wanted the expense of a pool.

16:31 And pools need new liners and they cost money and everything else. But once you hit 2 million, if you don't have a pool, you might not sell your house. Right. So it's a little bit like this, you know, how big is the sample size? And, you know, is it a light switch feature or not? I call it light switch feature for me as a pool, a suite, a steep driveway. And I think a pool is a light switch feature. And I think that you really can't compare the same house with a pool without because people want a pool, they're going to sacrifice something to get the pool. But yeah, I would say pools, statistically, we could probably prove that they add anywhere from 50 to 100, $110,000. I mean, and if you look at that, you know, a pool probably cost 100,000 right now. So but at the same time, some houses in some markets, if they don't have a pool probably costs a hundred thousand right now. So, but at the same time, some houses in some markets, if they don't have a pool, probably won't sell.

17:13 Yeah. It's hard to quantify like how long it's going to sit on the market for, I guess, too. Like what's the monetary value to you as a seller to how fast you can actually sell your house? Yeah. I mean, I live in a neighborhood where I have to have a pool in my I live in a neighborhood where I have to have a pool in my house, right? And it was funny. I fought My it. wife was like, I want a pool. I want a pool. I I go, don't have a pool in my house, right? And it was My it. wife was like, I want a pool. I want a pool. I I go, don't was funny, I fought it. Yes, you My do. wife was like, I want a pool, I want a pool.

17:54 I go, I don't want a pool, they're an expense and I got to clean it and I'm, you know, I got to hire a pool person and everything. And, you know, halfway through the build, I said, okay, yeah, you're absolutely right. If I statistically analyze this type of house that we're building, if it doesn't have a pool, it's not the same house. So, you know, and there are other houses, for example, you maybe it's a single where, family home know, in a doesn't have the same neighborhood, you and there are other house. So, for know, where, houses, example, you know, maybe it's a single family home in a neighborhood, doesn't have family or kids or anything. And it has a pool, maybe it's a three bedroom house, it's a rancher. And it's maybe for older people, but it has a pool and it's in a family neighborhood. Well, that's going to be an odd duck, right? So that's going to be a tougher house to sell with a pool because the target market for the pool is a family, right?

18:37 So yeah, it's an interesting thing having a pool, but it's a light switch feature. And I think in the Okanagan in the last six years, it's become almost a must have for any executive to have a house with a pool. And in fairness, the infrastructure, we've got a lot more pool service companies. We've got, you know, some great pool builders. There's, you know, you can get auto covers, you can get service, and there's a lot more services for for pools and it makes the experience of owning it actually quite enjoyable. I've really enjoyed having a pool. So that's fantastic. fantastic. Something over the last few months that we've kind of heard is like supply and demand. Is there really a shortage in the market of housing? Like, because there's so many listings, like, you know, why are we saying that we need more houses if there's so many listings? Can you kind of unpack that a little bit? Yeah, that's an interesting one. I think if you look at an overall housing strategy, what I see is a disconnect between what local and provincial governments want and what consumers want, right? So what ends up happening is, you know, the local government says, you know, we need more rentals. And, you know, they put in a lot of rentals and they give big companies a chance to build these rental properties. you And, they know, put in a lot of rentals and they give big companies a chance to build these rental properties. And, you know, a two bedroom, two bathroom condo downtown is great, but there's no parking. And what if you have family and you have kids, you know, we need maybe three bedroom, four bedroom rentals.

19:19 And so, you know, what do the different age groups want to live in? You know, do people want to live in condos? Do people want to live downtown in a high rise on the seventh floor in 600 square feet? Right.'m just not sure, how does the market develop through that? And Kelowna's having growing pains, for example. We have a lot of towers downtown, yet we don't have a shopping center downtown. We don't have transit to get people downtown to the shopping. you the shopping. local government So, know, we want we says, want hey, we want infill, that. this, But when you go to the walk score of a new townhome near the hospital, it's no better than a house out in Rutland, you know. And you so, know, you've got this infrastructure, you know, and yeah, we want to have bike lanes everywhere, but I'm not riding a bike in December, sorry, right? And I would ride a bike sometimes.

19:59 So, yeah, it's an interesting little thing. Like, are we going through a housing shortage? We know demographically we're going to. We know immigration has slowed down a little bit. But, you know, where do people want to live? Like, what kind of house does somebody want to live in? And I think that, you know, that's where maybe local government's a little bit disconnected and I'm not sure where we're going. I do know that, you know, the 5,000, 6,000, 7,000 square foot house, I mean, they're expensive. They're expensive to maintain. But in the Okanagan, where our lifestyle is really nice, I think there'll always be a market for that kind of house. My concern is, you know, we don't have those newer 2,500 square foot houses with double garages in neighborhoods for young families to own. I agree. It feels like the new houses are all like big luxury a It feels like the new houses are all like big luxury houses, like massive ones, and there's not, or condos like the middle it just seems like a single family house is kind of becoming a bit rare well and well and they're also removing them right with like land that's what i mean yeah yeah big time a nine hundred thousand dollar house we're just working on info projects to put up row houses or condo a lot of those houses are ancient though and they need that's what i though they to be torn yeah for sure all of them.

20:59 All of them, but like. There is a need in that. I mean, there is that rental base that we have to support. So then we can bring in trades people and professionals and then kind of build those houses. And I couldn't agree more. Like, I think we need to build affordable, smaller, more efficient houses and set expectations, you know, that, you know, maybe not everyone has three bay garage or a pool or something like that. I guess what restricts Kelowna maybe is like the land value is still so expensive. So if you're looking at buying a plot of land for $400,000, is it really worth to put a $700,000 house there? You know, then builders are like, well, my margin is so small. So how do we solve that? Because it doesn't seem like a lot of... We can solve that for We can solve that one. That's a tricky one, right? Yeah. Well, part of it is what are your expectations when you move to a community? You know, like I moved here in 2003 and I moved here because I knew that the area was underserviced demographically.

21:45 Housing was less expensive. I knew that the baby boomers were coming and, you know, we bought our house, a nice neighborhood. It was one of the best houses I ever bought at the time, even though it was on the Glenmore clay. But, you know, everything is about demographics, right? And in my mind, it's demographics and people will come and go and, you know, we're going to build these infill houses. We're going to have, you know, these little higher density neighborhoods develop and it will just sort of work itself out. And, you know, people will decide if they want to live here or not in those conditions. I think we do run the risk of becoming a little bit like a Manhattan where you have, you know, only people that live here kind of wealthy and we don't have people to sort of, you know, work in the Starbucks kind of situation. But I'm not sure if that's the case either. I know that, you know, the typical person that does come to the Okanagan wants to participate in activities in the Okanagan.

22:26 And I think the hardest part for the city to deal with is probably in the long run, the parking, it's going to be a parking slash infrastructure crisis. Because if you live downtown in a condo and you want to go for a hike in the mountains on the weekend, how do you get there? Yeah. Kelowna is a car city. It's a tough one. I should say a truck city because like there's hardly any parking anywhere you go. And it's also far away to get everywhere. Yeah. But you know, it's still a vibrant a tough one. I should it's still a vibrant community. The one thing that I love about being in Kelowna, you know, like culturally, we've got a lot of diversity. The university has just been amazing. And, you know, that'll bring in different people with different, you know, ways of wanting to live and, you know, community gardens are a big thing.

23:10 And it's certainly a lot more fun than it ever has been. I just wish that somehow solutions were easier than they are. So they're not though. Yeah. Yeah. We're not like giving the city of Kelowna a hard time. Yeah. Yeah. We're not like giving the city of Kelowna a hard time. They're doing amazing. People want to make money want to make money on real estate. Kelowna is a tough place, right? Like if somebody said to me, Hey, I want to make money on real estate. I'd be like, okay, well, as in a lot of times, you know, you look at other markets where, you know, you can make money in real estate where costs are lower and risks are lower and things like that. You know, I look at downtown and you're going to ask me, you know, what would I buy in the Okanagan in the next 12 months? And honestly, I kind of have an idea, but I'm not sure I want to take the risk. There's still no better place to live. So, you know, we'll continue to come here and they'll adapt.

23:51 And yeah, it'll still be fun. There'll still be lots of people to play pickleball with once I retire. Well, in terms of kind of what's happened over the summer, we've seen a lot of like subject for sale, deals kind of falling apart, that type of thing. Do you have anything like creative for agents or home sellers or buyers? Like where are the opportunities in this kind of market where it's like a little bit stagnant? Personally, I feel going into the spring of 2025, it's going to pick up pretty substantially with where kind of interest rates are headed. But yeah, I'd love to hear your kind of knowledge on, you know, where the opportunities are right now. You of know, every market presents an opportunity. And I think, you know, you just have to look for the opportunity. You have to kind of be brave a little bit too, right? And I think that what happens because, you know, we had these low interest rates and that expectation was that, hey, wow, this is great.

24:32 I can buy this and my costs are low. And now interest rates went up and then there's that shock and people are tied into things. And, but the reality is there's always a market. I know right now, you know, most of the people that I know that are living in town homes with kids, I would probably say to them, hey, you know, let's build a strategy for getting you into a house right now. Right. Cause we know townhomes typically do well in tougher markets, right? People do migrate to townhomes, townhome sales, if it's priced right, or generally within two to three weeks of listing them. Houses are slower. They're 60, 90 days, right? So, but it takes bravery to do that with kids, you know, to sell your townhome when you have kids living with you, and then maybe be homeless for a couple of months to buy another house. So people with kids are not as mobile, but I think that's a great play right now. If I had clients that had kids were living in a smaller situation, maybe you want a garage or bigger living bigger yard for the kids, a move up market is good. It's a good move up market because overall, when values drop 1015% on everything, well, you know, 15% on a million is $150,000.

25:13 And Taylor, you know, in our lifetimes, it takes a long time to pay off $150,000 in a mortgage, regardless of what interest rate you have. You know, if you're at five and a half percent, $150,000 less of a mortgage is still a good thing. I'm a big fan of move ups right now. I'm actually a big fan of somebody buying a house with a pool. You know, you might be able to snag somebody that doesn't want their pool anymore, right? And this time of year actually is not too bad of a time of year that people tend to sell their homes with bigger discounts in the fall when they have a pool for many different reasons. But one of them is, you know, it's harder to assess the pool systems, right? Because once you lock your pool down, there's risk for the new year. So, you know, somebody right now, if they have their house for sale, and there's a lot, there's 372 houses with pools for sale right now.

25:55 If I was looking for a house with a pool, I would go find the best one and do my best to try to secure it because in the next couple of weeks, pool's going to be shut down, right? You know, that risk for the seller and the buyer is while you buy the pool and next year you open it up and, you know, the motor doesn't work and the liner's broken and, you know, there's these extra costs. So that's kind of comes to mind first. I also think people may be looking for condos. If they want to purchase a condo and live in a condo, there is more for sale, the absorption rates have been pretty good on it, but condos are good too. So what's interesting, though, is when you microanalyze a market, that's where you see the opportunity. So I would be sitting down with my real estate agent, and I'd say, Okay, here's what I'm selling, here's what I want to buy, you know, here's what I'm looking for.

26:36 This is the features I'm looking for. And really microanalyze it and look at what is days on market? You know, how long does it take to sell? How much inventory is there? And what are the list to sale price ratios? Like, what is it really? And I think those are the things that agents need to sit down with their clients and talk about because there are always opportunities. Goodness, there was, I got a phone call from a client the other day and I don't do a lot of sales ever anymore. And they just said, hey, what do you think of this house? And I looked at it and I went, Oh, even a dumb broker like me knows it was underpriced and it sold on the first day. And so is that a seller's market or a buyer's market? Well, for those sellers, that was a seller's market, right?

27:16 Yeah. I mean, you said absorption report. I think, yeah, the three of us all know, but can you kind of communicate it to the listener who's looking to buy and what that translates? And also where is it trending? Like, is it just cyclical through the seasons in Kelowna? Or, you know, are we kind of at a trend where the absorption rate is now into a buyer's market, you know, across the board or just on high end luxury? Yeah, I had some friends many years ago, and they moved out of the US really smart people. And they always bought and sold in the fall. And they said, we don't like to compete with other people. So we do our real estate in the fall where the selection's a little bit less, but then there's also less buyers. And so I remember buying and selling for them in the fall. And they were really cool to work with because they were kind of like, well, we're going to list our house. If we don't get any offers right away, we got to drop our price because we want to get it done before it snows.

27:58 You so they were very realistic about the sales process. know, And they were very realistic about how when they went to purchase, having their house already sold was a big deal. That was one of the seasonal trends that they knew. But when we're looking at absorption rates, absorption rates are very interesting because they don't tell the whole story, but you have to really know what they are. And they're expressed generally in two different ways. In the past, we never expressed absorption rates in percentages. But in the last few years, people have been throwing out percentages. And so the absorption rate is basically how much of the inventory that's in place right now, let's just say there's 400 listings on the market. In the last 30 days, how many houses have sold? And there's 400 listings on the market. And we project that 30 days forward. And so let's say there was 40 sales in the last 30 days, we would say that the absorption rate is 10%. So there's 400 listings on the market and then 40 sold.

28:38 So that would be a 10% absorption rate. But the more accurate way to say it is how many months of inventory are there? Because if you look at it, seasonalization, for example, August might be 40 sales, but September traditionally with that many listings might be 50 sales and October might be 55 and then November might be 35. So when we look at months of absorption, that's also considered absorption rate. And typically months of inventory is what I look at. So for example, we go back to the pool scenario, there's 372 houses with pools for sale in September in the Okanagan. Now, we also know that by October 15, 372 of those pools will be winterized. Well, I just said that from January till now, 266 homes sold with pools. So right now with 372, we have well over a year's worth of inventory if suddenly pools started to sell. But the reality is we're not going to sell 40 houses with pools in September and October. It's not going to happen. I mean, the highest month was July, which was 46 sold, right?

29:21 Of those 266. So there's probably a year and a half worth of pools on the market right now. Wow. But when I told you guys, 266 families spent millions of dollars on pools before that sounded really exciting. But now when I say there's more than a year and a half supply of pools on the market right now, you're like, Oh, wow. Well, yeah. So if you're the seller and you hear this, you're thinking, okay, if I want to sell this in the next month, I need a huge price reduction. Not so much. What you have to look at is what is the activity on your listing? Does the activity show that it's going to sell or not? Because that's something that we have to show them as a realtor. There's a lot of activity that we have access to on the Internet that can pretty much tell people, hey, you've got the right activity to sell. And your agent with experience can help you with that. But in some markets, you know, you might drop the price an awful lot and still not get an offer because there just might not be the absorption to absorb your inventory.

30:04 But at the end of the day, it always is price. I mean, a good price is always going to help. But I wouldn't be pulling the good price out of my pocket in September. I would have been doing that in June, right? Now that's that seasonalization part. If it was me, I would probably wouldn't list my house for sale in September if I had a pool. If I had a very competitive house, I would probably, you know, take really nice photos next week and get it all looking really nice in the moonlight and everything else. And I'd probably relist in January, February. Now, risk of that would be if the market picks up, I might sell my house in a hot market, but then I also might be buying in a hot market too, right? When the market's going you want to sell, Yeah.

30:52 down, then wait, then When buy. the market's going you up, kind of want to buy first and then wait to wait, then When buy. the market's going you up, kind of want to buy first and then wait to sell. You want to time the first and then wait to sell. You want to the market, right? Yeah. Yeah. You know, the one thing I would do is I'd say, okay, what's my budget for a pool? What's my budget for a house? And ask myself, you know, if I look at that house right now, could I rebuild that house for cost? So could I buy the lot? Could I build the house? And right almost every now, house that's for cost? So could I buy the lot?

31:34 Could I build the house? And right now, almost every house that's out there on the market, you can probably, if it's a resale house, you're going to get that house significantly less expensive than you would if you had to build it right now. Yes. So on a resale Yes. So on a on a resale perspective, most houses are really good values. Most houses are selling under their assessed value. That really doesn't mean a lot in the grand scheme of life. But I look at it, what would it cost to replace that house? In many situations, there's a lot of really good houses that you could buy for much less than you could ever pay to build them. Yeah. And it is funny. We don't use that approach for residential appraisals generally, right? It's what the comparables are and what's selling. That's the funny place we're in right now in the market is like a house that's 10 years old.

32:14 You're never going to replace it for the cost you you could build it that, for. know, And there are times when it makes sense to you a number So, of right. years ago, build. And, know, realtor and I were sitting down and I said, would you build right now? And he was very experienced broker and he just started laughing. He goes, don't Oh, be stupid. And I went, Oh, okay. And shook my head. And I kind of got my head around and went, Oh yeah, wait a minute. I can go buy that used house, which is five years old and I can put a pool in it. But if I build a house, I'm going to be underwater the minute I move in. And you know, probably the last time. Nice pool pun. pun. Literally, you got that right. Raises a good question though. Why are people building? I mean, we're not building very much right now, but why would someone build their own house? That's the own house? That's the one thing when I was selling real estate, you know, I realized don't get in the way of somebody wanting to do something.

32:59 You know, I mean, houses are personal to people. And this is a good point, honestly. If somebody has the money and they can afford it, then let them build a really good house. You know, it might not be something where you're going to make lots of money and financially it may not be a great decision, but if you can afford it and you want to build your house and you want to have a relationship with those builders and create something, I'll get behind you on it. The challenge comes when you call the realtor up and you want to sell it within a year. And unfortunately, the market is not going to support that. And those are the hardest conversations. And I would say, you know, if you look at the number of houses that are newer that are being sold right now, those are tougher conversations with sellers that realtors are having. And those are difficult conversations, but they're really important to have. So, and sometimes, you know, telling a client and a friend or a family member or somebody you want to work with something that they don't want to hear, that's like the hardest part of a real estate agent's job. And no one takes any delight in it, but if you don't get the honest answer, it's a tough one. And sometimes we don't know. I'm the first one to say, you know, you might not know what the exact price is, but if we've had it listed for three weeks and we don't have any showings and the internet activity is dead, then our price is just not doing it.

33:45 Generally it's price. Yeah. Yeah. It's If It's funny. That's an interesting point though, that like real estate is more than just like dollars here and there. Like these are people's lives. Like some people do time the market when they want to sell or when they buy, but like a lot of people just buy a house because they have another kid or because their parent is moving away or someone passes away or like life just keeps on going. Right. So like they don't care what the market is doing. They want to buy a house because it works for them in their life right now. So it's like building a house. If you're going to live there for five, 10, 30 years, you don't care if you overpay for the house right now, because in 30 years, you're going to look back and pat yourself on the back of how good of a deal it is now. Yeah. I had a client client in 2010 look at me at the house it was a brand new house the I had a client client in 2010 look at me at the house it was a brand new house the builder had kind of lost the house and another builder picked it up and was trying to finish it off and so we bought it and it was 2009 and a half yeah and the market was definitely going down and the buyer looks he says you know what do you think this house is going to be worth in a year and i said oh it's probably 50 grand less than what you're paying for it now what and he looked at me all shocked and he goes what, what do you mean? I go, well, if we look at the trajectory of the statistics, there was lots of at lots of end values, right? I mean, prices were dropping, right? And I said, but you don't have a house to live in 30 days.

34:56 This fits within your budget. This is the same amount that you were paying before. And you stayed in the same rental for 21 years yeah what's the your chances of you not making your rent in this house in the next 21 years and he goes oh goodness well no we're not going anywhere we'll be stuck here and they did funny part was he called me five years later and laughingly said you told me that it would not be worth what i paid for it in six months and that probably three to four years later it would you know be worth you know quite a bit more than what i bought it and i said i just got my tax assessment, I made $50,000 in equity. Yeah, Yeah, you you know, it's what he called what he called me. Probably like 100% equity in that, right? It's probably like double the like double the value. And now if you do the math from like that purchase in 09 to today, it's not even close. You know, the house needs maintenance over time, right? And so, you know, you got to keep them up and everything else, you know, houses are not always, hey, I'm just going to put my $50,000 down and make my mortgage payments.

35:41 And, you know, part of the thing that I see as a challenge for first time buyers and for people in Kelowna is that, you know, I'd love there to be a lot of affordable townhomes because one of the worst things you can do as a real estate agent is sell, you know, a first time buyer, a used buy level home. They take a lot of money to repair.. And you know, when you're 26, 27, 28 years old, and you have a good job, you will not have any time or any spare cash on the weekends, if you buy a used house, right? So now your lifestyle gets hampered. And I mean, I suffered that through those years where man, I call it $200 to death at Home Depot, you know, like, I know how to do things I wish I never knew how the knew how to do, like, you know, fix plumbing and repairs and electrical junk, because I just had to when we bought our fixer uppers, you know? That's a great point, Matt. Why did you let me buy this house? Money well spent. I wanted to keep the economy bumping, dude.

36:22 That's all. Yeah. You probably thought you were all. Yeah. You probably thought you were handy, not handsome. That's probably what it is. No, I was never under that illusion. But so, yeah. So, you know, to get back to your question, for example, if you microanalyze it, absorption rates, you know, there are some hot markets. Kamloops is almost 14% absorption, you know, and a buyer's market in some areas is 15% or higher, right? The central Okanagan is about 9% absorption. So we're a little bit low, right? But if you start going down on the price ranges, you know, if you go under 800,000, your absorption rates are significant, right? So if you're a first-time buyer in a lower price range where we know, you know, the sale price to list price ratios are higher, so 99, 98% of asking price, are you prepared to pay full price for the house that you're looking at in those price ranges? Because those absorption rates, they don't mean anything, you know, when you start looking at price, if you look at, you know, houses without pools over $2 million, okay, you probably got time to negotiate, right? You put that house on Abbott Street, you probably don't have time to negotiate anymore. Right? So I always look at let's micro analyze the numbers and really show people.

37:03 But yeah, I mean, if you look at houses under a million right now, there's some pretty good buys. I think there really is. I would agree with that. Even under 1.5. I mean, there was even, you know, some houses to sell three, four, five, six, seven million dollars. And you ask yourself, if it's such a bad market, how is somebody with four million dollars of money to spend on real estate? Why are they purchasing real estate? Yeah. Yeah. It's a great question. Something we briefly spoke about and I'll just bring up because we're talking about those million dollar houses is Brennan Ogdenson put a YouTube video actually, and his projection was in densely populated areas right now in BC, single family houses averaging a million dollars. By 2035, they should be at $1.5 million. If we can't solve this, you know, so-called housing crisis where we actually just start building more. So yeah, pretty interesting data. I do think there's some good buys right now in the Okanagan. Kind of heading into some of our wrap-up questions. If you could buy a property in the Okanagan in the next 12 months, investment, personal, anything, using kind of the data that we've been talking about, where would you put your money? It's It's interesting.

37:49 Cause if you ask me, like, what do people want to buy? Like if you sat a group of people down, you guys has aged my age, and then, you know, maybe some twenties and early thirties people who are living in the Okanagan and having a great lifestyle, what would they want to buy? I think you're going to find that that product is missing, right? I think you're going to find that that product is missing, right? I think you're going to find that that product is missing right now. I don't want to live in a two bedroom condo on the eighth floor downtown. And I'm 57 years old. And that's kind of the government. Everyone's telling me I got to do that. But I want a garage. I want to have an ATV. I want to have a motorcycle and a car in the same garage. But I don't want a big house, right? We want a place for kids and that kind of stuff. I think if I was going to buy something in the next while, I wish that there was the product that I want to buy, which is about 2,300 square feet, three to four bedrooms with a two and a half car garage, even multifamily.

38:38 Like it could even be on a lot, but a townhome that not multi-generational, but something that's just a little bit bigger than the 600 square feet on each floor scenario. You know, like I'm not ready for that, but at the same time, I don't want to be in a big house. I'm in a big house right now. And I quite like it. But I know that maybe that's not the future. So I mean, my kids are moving home, my mom's living with me now. And so we're kind of making this larger house work. But I don't think the product exists that a lot of people want to buy right now. And I think that, you know, the market doesn't respond to that because of zoning, pricing, costs, things like that. Like, I don't really want to live in a three level grain elevator, you know?

39:18 Yeah. I really like the ones down in Goochigan on the corner there, the new ones that had the elevators. Yeah. I really like those, you know, and I think that those are pretty cool because they had double garages and then they were wider and they went up, you know, the second and the third floor. And I think that kind of stuff is something that would really be interesting for me. I mean, I said to my wife, I want to build a really cool house downtown that has like a big garage and a pool on the roof and everything else. And then, I mean, that's probably the dumbest thing ever, but I'm looking for a larger town home that's detached or not detached, but that has garage space and it doesn't exist. So that's where I'm at. I like it. Or I'd buy something with you.

39:59 So yeah, if you can't go wrong with a view and wrong with a view and Neil Canogans, that's for sure. You know, know, if you go 1.2 and 1.7 right now, there's a lot of cool houses for sale. Yeah. Like, I don't know, like if you look at, there's so many cool houses to look at. I just think it's probably a full-time job just to look at all those houses. But if you look at the upper mission, West Kelowna, you know, the mission Hill, like if you start looking in that kind of price range, there's a lot of cool houses for sale. Yeah, West Kelowna has some huge value right now. I think like Lakeview, Rose Valley, awesome spots. Yeah. Yeah. All right, Dean, if you could give your 20 year old self any piece of advice, what would it be? I would say I wish I started real estate sooner.

40:44 You know, I'm glad I got to real estate when I did. I was 40. I'm glad I had experience in other businesses before I came into real estate. I think that's really good. I worked in biotech and did a lot of traveling internationally, worked with a lot of different people, went across Canada to work and got lots of accounting, business experience, sales experience. But yeah, I wish I'd started real estate a little bit sooner, but you know, everything happens in time. So I'm pretty happy with what my 20 year old self did because I met my wife and she's in time. So I'm pretty happy with what my 20-year-old self did because I met my wife and she's still around. So I'm pretty happy with that guy. He just threw it up. just Yeah, that's funny. Good for you. I always think about that, too. When I start real estate earlier, and I think I would like to have started real estate earlier. Yeah. Yeah. And you never know, right? Because part of who it, does you meet? Like, I was very lucky to have my mentors and people that I met early on.

41:25 Selling my house in Ontario has had a disproportionate impact on how I see myself as a realtor because they have limited dual agency there. And I sold through a very large team and, you know, I didn't have a good experience. And when I came to Kelowna, I was full of piss and vinegar about, you know, how I'm going to save the world. And when I did become a realtor, you know, a lot of those feelings as a consumer were in a lot of the things that I wanted to be as a realtor. And I didn't want my clients to feel that way. And, you know, none of us are perfect, but you know, if you have your values in the right place, I think you do come back to where you need to be at some point. So. Yeah. What's your favorite charity or how do you get back? First of all, I love Pathways. We have a Pathways gentleman that works here. Pathways is for disabled folks and it's a society that sort of supports the families and then they put placements and we have a gentleman that works here.

42:08 He's part of our team and his smile on his face just makes my day. And I'm really proud that we do that. Century 21 supports Eat Your Seals. That's another, it's part of the same thought process and I'm really supportive of that. We're one of the top companies in the entire Century 21 organization of over 600 offices. We placed seventh in North America last year for donating to Easterseals in Kelowna. That is incredible. Yeah. Yeah. And it's an organization wide thing. And we're raising money for the Texas Hold'em tournament, which is in three weeks. So we'll, you know, hit you guys up for that. But what my wife and I do, which is a lot of fun, is we support local musicians and we invite them to our house and we do house concerts. That's awesome. Our friends come and we invite like 300 people and 50 people show up and we all give the singer $20. And we've had everyone from Anna Jackson to Billy Wiseman to Nikki Martinez. And it's just local artists who are making their way with music. And it's just been a really neat thing.

42:49 We do three or four of those a year throughout the year. And that's probably the thing that fills our cup the most because what is it when you meet a musician, they're driving a $5,000 vehicle with $20,000 worth of equipment in it, you know, and then being a musician and playing the wineries, they don't make a lot of money. It's not a great lifestyle sometimes because it's evenings and weekends. And that's something that we've been doing for quite a few years now. So that's it, awesome. I love that one. Yeah. All right. How can Taylor or I or our listener help you? Well, we're growing. We're looking for mortgage brokers in Vernon and Kamloops and new agents and people that want to, you know, join Century 21, but moreover, join a local brokerage with local knowledge and support for agents that want to do the very best for their clients. That's kind of what we're searching for now, you know, and we do train, you know, we offer training for people that are maybe new to the industry or that have been for a while and, and want to reorient their career.

43:33 And we also offer a lot of systems. And Matt, I know you've experienced a lot of that personally and you as well. And so, you know, we like to think that we live up to our promises. It's the hardest profession in the world. It's got the lowest success rate, but we like to think that we live up to our promises it's the hardest profession in the world it's got the lowest success rate but we like to think that we break through that mold a bit so i appreciate you guys giving us a chance to you know talk about the changes in the industry and the company and share a little bit of wisdom today so thank you guys really appreciate it no it was great dean no it was great dean yeah thanks for coming on and uh yeah it's always fun chatting to you we'll look forward to the next one sorry i couldn't make the golf invite. I really appreciate that. But Emily's golfing again for the second day in a row.

44:14 Wow. So LPGA next or what? So LPGA That's pretty good. pretty good. You know, my wife does golf and it is fun. And, you know, she expects to hit every shot. Perfect. Yeah. So after a while, it's tough. That's your first mistake. She literally looked at me that day and said, what am I doing wrong? And I said, no, I'm out. I'm gone. Now I see why you've been married for tough. That's been married for so long. Learning the right lessons. Yeah. And pickleball is the same And pickleball is the same thing, right? You can't play with your spouse either. That's funny that she wants to hit every shot right. When I go golfing, I just want to hit like one shot right would be good for me. Oh, I've seen you golf. You can hit some shots right. So yeah. One or two a round. One out of 200 is pretty good. Yeah, exactly. It's a cruel Yeah. right? So One or two yeah. a One out round. of 200 is pretty exactly. good. Yeah, Yeah, it's a cruel game, that game, but most of them are.

44:57 But you know, it's nice to get out there. I mean, the weather right now is kind of perfect for golf. You know, the Okanagan is an amazing place. You know, the Septembers and early Octobers, this is where you, you know, there's no traffic and you kind of, weather's absolutely perfect. And yeah, this is kind of why we live here. Because if we were living anywhere Yeah. this is kind of why we live Yeah. else, here. Because if we were living anywhere else, it'd probably be snowing. Yeah. Seriously. Yeah. I love the fall. the fall. It's a good time here. time here. You too. too. You too. Thanks a lot. All right. Thanks a lot, Dean.