Episode 94 Transcript – Chai Time with Jessi Johnson

[Jessi, welcome back.] Namaste. [Namaste. You brushed up your Hindi, very impressive.] Happy Belated Vasakhi. [Well thank you! Did you celebrate Vasakhi?] A little bit. [Get out there at the parade.] More at home with the girlfriend. [You picked up the Banghra dancing just from the guys?] Apparently I’m a professional. [Of course you are! We'll check it out next time. How about that?] As long as I don’t have to do it on stage I’ll be OK. [More serious note, the recession. What are your personal thoughts on it?] The recession subject itself is a very touchy subject. Some families have been really affected by it, other families haven’t at all. Some families have had a percentage of their income cut back or they’ve had job loss. Other families haven’t been affected at all and they just get to take advantage of recession based pricing. The kicker here is there’s a lot of fear about the recession that isn’t necessary and don’t follow the media too much. Be careful what you listen to and you should be OK. [When it comes to real estate, particularly in Vancouver, how has recession affected that part?] There’s a number of ups and downs. The incident downside is property values have significantly decreased, upwards of 10, 15, 20 percent. My principal residence has come down a lot. That doesn’t really affect me because I’m not planning on selling the property. By the time I’m ready to actually sell the property, it will be many years down the road, and by then the property has come back up. I haven’t essentially lost anything. The upside is you’ve got record breaking low interest rates, you have property values that are significantly below market value in comparison with a year ago. You’ve got prices back from 2005 in comparison. Over the past five years we’ve had a sellers market, now it’s a buyers market. The key is to use what you have and take advantage of it. [The glass is half full. I guess that's the way to look at the situation.] Always. In any market there’s ups and downs. The trick is to do the right thing at the right time and you should be okay. [Now I heard you have some tricks that can help people to make them recession proof.] There’s a number of strategies you can do that are actually quite simple. First of all, if your family is concerned of either potential job loss or they already have had job loss there is a few strategies you might want to consider. Most importantly, the first thing you need to do is to revamp your budget. Take a look at the overall picture. What do you not need? Keep your necessities and take the rest out. Keep any extra spare cash inside. A number of suggestions are your cell phone, any bills of the house, your TV, do you really need all of those channels. Of course I do suggest watching as much Omni and Chai Time as possible. [That's right!] Twice a day. Only good for you. Things like this you want to revamp. Other things are services you can do yourself. For example maid cleaning, landscaping, yard work, power washing. These are things that you don’t necessarily need to pay out that you can do yourself. What I suggest is pay for the necessities, spend where it needs to be and keep the rest. By doing so you should be OK. A couple of things you have to keep in mind is you still need to continue to spend in the economy to keep the economic engine moving so I’m not saying don’t spend, don’t go buy anything just buy what’s necessary and you should do OK. Another very important suggestion, take a look at your higher interest debt. Credit card debt people are paying 18%. If you have a $20,000 balance you’re probably paying $300 to $400 a month in interest. This is a cost that you don’t necessarily need to do. Consider revamping your mortgage for instance. You can refinance at a record breaking low rate and lower your monthly payment. You can also consolidate your mortgage and all your other car payments, whatever, into one low payment. Maybe you can pull out some cash on the side. There’s a lot of simple alternatives and solutions you just have to ask the right person and make sure the right person is watching your portfolio. [How challenging has it been for you as a mortgage broker to sell mortgages during this time?] It’s a great question. For the past six months we’ve had a lot of the buyers being very hesitant. I don’t blame them knowing that the property values are going to continue to decline and which they have. They’ve kind of tapered off right now. We’re already seeing a change in the market. Sales wise it’s been harder and I’m definitely not going to push a client into purchasing a property unless I think it’s a good idea. Any market there’s always a good buy if you can find the right place. Refinancing has been huge. Half of my business lately has been through refinancing. So there’s been advantages and it has been a little bit slower. The last two weeks to three weeks I’ve had more business than I’ve had the entire year. Not that I’m saying I’m having a bad year but it’s been crazy. You’re actually seeing multiple offers again. [That's good to know.] I have multiple offers and people are actually selling houses for what their asking price is. This is something I haven’t seen in a year. [Things are heading in a positive direction hopefully and people can get in touch with you through your website which is flashing on the screen and as always it was a pleasure and a great amount of information. Thank you so much Jessi.] Anytime.