Real Estate Inventory Down


Believe it or not, I spent most of the morning playing with technology, trying to get it to work, and every time I took a step forward, I took two steps back. For example, I'm trying to use my GoPro to use as a webcam instead of my Logitech one because I don't like the blurry background.

Now both of them aren't working, and now I'm using my webcam on my laptop to make it work. You just kinda learn how to have to learn how to roll with things. I didn't even get a chance to shave, so I apologize for looking so befuddled, but there's some exciting stuff coming down the road, and that's what we're talking about the market coming back.

Crazy days.

Are there buyers still in the Real Estate market? Yeah! Let's get into it real quick. Crazy days. I spent most of the morning putting in a listing, actively writing an offer, and sending out another counteroffer. Talking to some other clients for another offer that we, have or an offer that we have submitted about a counter.

So it's been crazy hectic, which is crazy because a majority of you that are out there are thinking about holding off. Let's, get into this real quick. I'm learning how to use the shift keys, so hang on. Let's see if this works. There you go. That looks great.

Talked about this earlier. Will the market crash or will the market not crash? Here in Silicon Valley, even if it does crash, if the economy kind of crashes and we go into World War II or what have you. I don't see this happening, in any kind of metropolitan area that has a good stable economy and multiple different types of industries pouring into it.

Real estate, technology, finance, biotech, construction, we have a very, healthy economy in Silicon Valley, even though some people are frightened that they might lose their jobs. There are still more jobs to be taken, right? What happens if the stock market crashes? The stock market goes up and the stock market goes down, and yes, people will lose some jobs.

And yes, that's a reason why you shouldn't buy it. If you fear that you're going to lose your job or that you're gonna lose all the money outta your equity. But I'll tell you, that's already happened. I've worked with people from, I've been working with people from Facebook and Netflix and all the tech giants around here, and their rates, their stocks went down and they're like, I'm out of the market.

I don't have my A down payment anymore. Yeah, you do. You have to work around it. But they were gonna come in with 30, 40% down to be able to afford it. But now you can come in with a 5% or an FHA, which is three points a half percent down and you don't have to pay overages, but here's what's happening.

Stubborn Sellers, Picky Buyers

But Vito, there are fewer houses being sold. That's true. Buyers are being pickier, but sellers are being stubborn. I'm working with this house right now over in Morgan Hill and we've been wanting to buy this house. It's in horrible condition. It needs a lot of work. Hor I. I'm surprised I, don't know why they wanna buy it, but they wanna buy it cuz they see the land and they can fix it up and all that.

I get it. But they went in $300,000 lower and the seller's no we'll wait. And then we came up a hundred thousand dollars and they're like, no, what? You know what? We're gonna be on vacation for a week. So we'll get back to you when we get back to you. And then today I ring up the listing agent and he says, we have two other offers on the table.

And they're both over, over list price. So all the news that you're hearing about the market crashing, about all this other, and this is a house that's ready to fall over. It should be burned down. And if you're an insurance investigator and that house happens to, burn down, it wasn't me. The whole idea though, guys, is houses are selling not the same clip, not at the massive overages, but also not at the same interest rate.

So people are freaking out because of the interest rate. But now, if you think about it is a good time to buy, will the market come down more? Probably. But when the market comes down more, more buyers will enter the market. Investors will enter the market. People are still buying houses. I know investors that are still buying houses.

Will the housing market crash?

Right now we're looking at buying some houses, right? We're looking at, we've targeted five different houses right now. I've targeted four or five other ones that are massaging right now to see if I can work with them. Buyers are still out there when the market comes crashing. If the market crashes, says right here, whatever reason it is that the crashes the market.

Probably not gonna happen here in Silicon Valley. If it does crash, it'll happen in Modesto, Stockton, Fresno, and Bakersfield in those areas all the way out to Las Vegas. Everybody knows that Las Vegas is the, canary in the coal mine once Vegas collapses as well as Austin. That's when you're gonna realize that the market is collapsing.

That's when it starts taking the, major inroads. I don't see that happening. Not for a while, mostly because over the last two years we bought houses at a huge clip and for over money over what they're paid. But every house that was bought has equity in it, right? At least 10, 15. And then they're at a 3% interest rate on average, so they would be foolish for them to let that go.

What would happen is they would probably rent that house out and go buy another house. So the inventory's gonna be lower but that's right here. We talked about inventory being low as the main reason why homes will. Not crash. The pricing will not crash. Volume has crashed by 50% as of last year, but if you look over the last five to 10 years, we're back to normal.

So all these reasons you, see here for reducing supply will keep the price solid. There's gonna be a lot fewer home buyers in the next coming years or in the next coming year unless there's a massive crash and the market completely implodes, right? There's like a 10% chance that the economy crashes for whatever reason, globally.

Or we go to World War three if you believe that's what's going on over there. Or we go into famine cuz we can't get eggs. Or whatever it is this week,, cuz it could be eggs, it could be meat, it could be cereal, it could be whatever, all sorts of reasons.

I don't see the market coming down. It could in other areas where they're supporting cities to major metropolitan areas. You're looking inside Austin, which is not doing super right now, but the inventory's kind of coming down. We're going to that in a minute. You see the market come down a little bit.

Inventory comes down a little bit, and the market stabilizes. Just like you saw the inflation, just like what inflation was. Finally got to the inflation part and we finally got to a point where, And inflation isn't coming down. Not to where we want it, obviously, but that's because everybody's saying that the recessions will happen in 2023.

We'll see about that. All right. Rates have gone down consistently over the last few months, right? I think we were at seven and.

When was it? Yeah, around here, October, and then we jumped up to 7.21. That really just slowed the market down, but now we're back. I just put a house on the market today. It's a listing brand spanking new, and not even an hour later I got a call to go. They want to see it at 1:30. They want to see this house because rates are down and it may go up next week. not to where they were last year.

RATES are not to where they were last year.

Two and a half, 3%. It's probably not gonna happen for another, I don't know. Hundred years, who knows? But I'm not gonna see it. We're not gonna see 2.3, and probably not gonna see four for a very long. Probably gonna see five, five, and a half. As a matter of fact.

As a matter of fact, somebody's inside my computer. I believe we're gonna see the rates go up next week on the 14th. I think the Feds testify. I think it's gonna go back up to close to seven, but then you're gonna see it trickle down in March, April timeframe. We're gonna see it five, five and a half percent, which is gonna ignite the market again, right?

House sales have slowed down, right? It says it right there. Existing home sales slumped nine, nine months in a row. It's actually good that we're doing that. We talked about gas. I didn't actually even look today, to be honest with you. I've just been crazy. 3.99 is the lowest. Wow. It actually went crazy.

It was below four. People are saying that the next six to nine months are gonna be the most difficult time for sellers to be able to move somewhere else. To be able to go somewhere and buy another house and sell their house at the same time is gonna be very difficult because the timing's very difficult.

All the houses that I'm looking at right now are homes where people I saw a stat saying 74% of the homes for sale, maybe it's 47% for sale right now are vacant. Meaning people just up and left. Whatever they did, they up and moved up. They up and moved down. They up and moved out of the, out of whatever they are.

Right? Why is that? Because they can afford to take that loan, pay that loan, and go get another house and rent it or buy another house somewhere else. And then if it doesn't sell or sell for what they want, they'll take it off the market and rent. Those are, that's what people are doing right now is they have the options because they're not freaking out like they did back in 2008 because they bought toxic loans.

There are no toxic loans, right? This is gonna be a fun one to look at. 10 best markets 2023. Let's take a quick look and see what this says here. Oh, lord, I did it wrong.

All right.

Buyers in these housing markets are more likely to take FHA and VA loans. I think it meant sellers, cuz buyers and buyers always want to use the VA and the FHA and U S D A loans. They're probably not gonna be lemme get rid of this nasty video. So I, in the, so FHA VA and U S D A have stigma because there's certain habitability things and when people get spoiled and they can sell a house as is, and they don't have to disclose anything, and they know that foundation has issues or you know that it has termites, they don't, they can disclose it, but they don't have to have inspections.

And then, When the market gets bad, then this buyer will turn around and sue the seller because they didn't disclose all this stuff, right? So that's why I always recommend that my buyer, and my sellers have inspections done. And if the seller's not providing it, I always make my buyers get an inspection because I need them to know what they're buying.

Cause I'd rather them spend $750 on an inspection and know what they're buying. Versus spending half a million to one and a half to $2 million and getting a house that's ready to fall over

Where are People moving to?

Hartford, Connecticut. The average price is $372,000. El Paso, Texas now. El Paso, I think is Wow. Wow. Louisville, Kentucky. A Sergeant Major when I knew him, he was the First Sergeant, but my sergeant major lives out in that way. That's a nice town. Worcester Massachusetts, Buffalo, New York, Augusta, Richmond, Georgia, and South Carolina.

I'll tell you what guys, that's a nice little area. It's really pretty out there. Grand Rapids. Columbia, South Carolina. That is an awesome little town. Columbia. When my kids were small, we went there. We had a blast. That's where they have the Liberty Bell in that state. Did you know that there is a Liberty Bell or a replica of a Liberty Bell in every state?

There you go. Chattanooga, Tennessee. I've been to Chattanooga. It's okay. And when they say Georgia, it's because it's the metropolitan area. There's Alabama, Georgia, and Tennessee, and a T in Chattanooga's in the Tennessee portion of it. Went fishing there with my brothers and my dad, in Toledo, Ohio.

Nobody wants to move to Ohio. Aaron, in case you're wondering.  Where people are moving right now are places that don't have income. The majority of the people that I speak with here in California, when they move outta state, they tend to move to Washington, Tennessee, and Texas.

There's Wyoming, there's a bunch of states, Florida, obviously, there's a bunch of states that don't have income tax because they can save on that, but you have to do a complete survey on everything. Cost of living, insurance, gas, roads. What other taxes how, much more expensive is property tax, so just understand that. Okay, let me see what else we have. Go into this, the numbers real quick. Remember I said that inventory's gonna come down, inventory come down by 50% of where we topped up. 688 is where we topped out, and now we're 3 21, so we're less than 50% of what we saw back in August.

When is the selling season?

That's inventory. People are pulling houses off the market. Houses are being sold. And also fewer people are putting houses on market now versus March, April, and May timeframe. I have a couple houses that we're gonna put up in that time, so that's the normal time. One pre covid used to be the, selling season for us was March, April, and May.

We would sell the majority of houses. Then that's when the big rush came because everybody was like getting ready to move. At that time, the school was gonna get out and they can move their kids for the summer and then get 'em all situated, and it would've been a good thing over covid. There was no stop turned into a firestorm.

We saw it just rates go up or prices go up. So we're seeing this come down. If you look back at the volume of houses sold within Santa Clara County, within some specific cities, you're gonna see that those houses were sold. And about that same volume. So I was going back to normal. The numbers that you saw outside there were outliers.

It was an outlier because where is it? You see right here? That was in 2000. That's one. Rates were 2%, two and a half percent. 3%, right? You couldn't afford to buy a house at all. All right. Last year we had 161 closes this week. Last year. This week we had 57. Way less than half on the average though we're about half of where we were before. Okay. And then last year, the average sales price was 1.55 and we've slipped down to 1.475. So not even a hundred grand depending on the area, right?

Because down here I saw, I've seen houses slip down about a hundred to 150, but you go over to Willow Glen, Almaden Valley, those areas, they haven't really lost a lot of value. There are still multiple offers on those homes. 

By the Numbers

This is what I look at every week. This is a new report I do every week. Let's see if I can bring it up so you can see it. 98 All right, so that was a list price, sales price ratio. 

That was, what was it, 98.

San Jose321346
Active home/SQMi1.81.9
Active home/1000People0.3170.341
Closes last week5737
Last year Closes Last week161107
Transactions up/down-35.40%-34.58%
AVR SP1,475,0591,394,078
Last year AVR SP$1,535,725$1,564,831
median price$1,365,000$1,360,000
LP/SP RATIO98.00%99.65%
Last year LP/SP109.00%107.00%
OLP/SP HI120.50%110.70%
OLP/SP LO79.70%80.00%
% over 100%LP29.73%
Last year DOM1616
List price DECREASED43.93%44.51%
List price DECREASED (Cumulative)141154

All right. Now if you look at the ratios versus last year on average, we're a hundred percent plus with a little bit of slip versus 108. Last year I was selling homes at 12 to 15% over the list price on average. That was my claim to fame. That was my negotiation standard. So again, 120 and then 80% and then, oh, I didn't even do that.

Let's see. We can do a quick look. Can. All right, I'll get that for you next week. That's a lie and we don't like to lie on this channel. 25 days on market on average versus last year's 16. Not that far apart guys, right? I don't know what it is in different areas. I'm just showing you the inventory. 

We had 54 houses going to contract last week, which is a lot better than it's been for, I don't know, month and a. That's probably because anticipation, people might be thinking that they want to buy houses now while the rates are low, they can get a contract lock in at 6.37, and I've actually seen it lower and now I'm hearing that people are buying loans, buying points to lower it down to five, five and a half.

So at least they have a cushion, right? 5.5 right here, right? That's with fees and points. 2,400 includes 0.75 points. Again, that depends on the type of loan. Your, credit, the reserves, all sorts of different things.

We had 31 houses pull out into the market last.

On average, we're having 33 houses fall out of contract, out of being active for sale. They're withdrawn, expired, canceled, or taken off the market. Okay, and last week it was the same thing. There were two cities that only an increased in, in inventory. It was Tampa last week and then Nashville last week. It wasn't a major tick, it was by one.

This week it went down and Tampa went down This week, coral went up and Jacksonville went. But again, by not much, right? 2303, that's the highest it's been in Jacksonville. 6 89 is definitely not the highest. Knoxville actually has shrunk in inventory quite a bit. Seven 60 I think was the max Phoenix.

Phoenix is gonna be one of those places. A lot of people moved out to Phoenix because it was the place to move. I've had a lot of friends move out there, and a lot of my clients moved out there. They like it, it's great. But Airbnb, I have videos on Airbnb. Why is that's gonna hurt areas like Phoenix and Las Vegas.

Las Vegas has been shrinking. 1, 2, 3, 4, 5, 6, 7 weeks in a row, just like Phoenix. So people are pulling houses off the market. It's the holiday season, right? Holiday season. The last thing you want to do is have people traipsing through your house, stealing your little ornaments off the Christmas tree or what have you.

It's the last thing people want to have happen, and it's not the best timing because if you wait until March, you can get stuff fixed and that's when the market really starts up. Chicago's coming down. Austin's coming down. So there you have it. Do my little shift one. So I'm learning how to do keyboard shortcuts.

now that I'm used to the stream yard, I'm getting back into it, and seeing if that works. I can't get it to work now. Shift one. Shift one. No, it's not. There. All right, so there you go. The market's doing okay. The market's stabilizing. Volume is down. When you see a housing crash, the housing market is crashing. It's because the volume of homes being sold has gone down considerably.

If you see news reports saying 2023 is going be a disaster, quite frankly, it could be. But that's telling the future. And we don't tell the future here. We just talk about the numbers and what's going on and talk about the deals that we're putting together. And make those analogies so that we can talk about it.

That's why I go to my office meetings every Tuesday, which are boring cuz people like tend to talk and I don't like to listen to them talk about their listings. But I do want to hear the stories of transactions and other people's points of view because nobody, and you know what, I heard it somewhere else.

People in real estate are liars, , I don't wanna be a liar. I honestly don't wanna be a liar. I don't tell you should buy. You need to buy right now. I think I tell people, if this makes sense for you to buy now. I'm busy, right? It makes sense for a lot of my clients to buy now. I tell 'em, if the market crashes, Now is the time to buy because there's less competition. However, every time we look at a house, it tends to have two or three house offers. Not 17, but that's just cuz the market's back. The market's back guys for a while. Maybe, I don't know, maybe like this, the end of December we'll see a crash. Or maybe next week after the Feds testify, we'll see it dwindle down and into nothing.

All right,

I'm gonna leave you with a really exciting video. So with that, Actually, is there anything else I wanna say? No. Nope. I gotta go shave. All right. Hey, We'll see you next week.


When it comes to home sales, real estate statistics are important. It doesn't matter if you're thinking about buying now or going to wait until the market crashes in 2023. Personally, I don't think we'll see a crash, because there isn't enough inventory to go around. and we're still seeing a majority of homes sell without contingencies and will multiple offers. But that's the Silicon Valley Real Estate Market. Not the rest of the US. That said, Inventory across the nation is down. but that's to be expected. It's normal for most of the nation to see fewer sales during the holiday months. and rates have come down quite a bit too. will the feds cut rate next week? Vito Scarnecchia your favorite real estate agent Realtor®, Broker, Veteran, Dad DRE#: 01407676 Website: UPDATE YOUR HOME VALUES HERE If you are moving ANYWHERE in the world - Let me know! I know a LOT of AMAZING Agents! Book appointments here: Home Buyers Course YT IG FB LI POD Professional Photography by Kim E Compass site: Post-production service for business marketers. $5 trial- Use Vito50 when you sign up… Video Marketing Course for Realtors