Banking Crisis Helped by FED not over yet Realtors Fleeing the business. Apartment Rent Growth Set to slow
Banking Crisis Helped by FED not over yet Realtors Fleeing the business. Apartment Rent Growth Set t SLOW
It's the end of the month.
How's your month been other than wet and cold? Dude, I was so freaking freezing yesterday. It's crazy. I was cold all day. Okay. So you also saw, if you saw my videos or saw my photos, Lexi got, it. Was Lexi. Nicki, in case you're watching it, was Lexi. Okay. Lexi got her license yesterday.
We went down to Gilroy and we went down to Fifth Street Coffee and had some coffee and got there early. And she did her test and she's a great driver. She's an amazing driver for being 16, right? She's, doing great. So congratulations, baby. I'm proud of you, Angie. You're next. All right.
Three things you need to know about real estate
https://podcasters.spotify.com/pod/show/siliconvalleyliving/episodes/Banking-Crisis-Helped-by-FED-not-over-yet-Realtors-Fleeing-the-business--Apartment-Rent-Growth-Set-to-slow-e21due1
Lots to talk about. Three things too. Three things you need to know about real estate. We do all the research so you don't have to, that's awesome, right? You don't have to worry about what's going on in real estate because you can just see veto talk about this and Chuck Chop in for 15, to 20 minutes. You can listen to it on a podcast if you don't wanna listen.
Look at my face. Here we go. And by the way, I don't know if you could tell, but I feel a thousand times better than yesterday. And the day before over the last five, six days, my neck had gotten these cricks in him and I thought it was just, I thought it was viral. I don't know what it was. It was just something that just wouldn't go away.
Joel had to go up to see my son for a couple days and I was doing all the daddy daycare driving around stuff because Lexi hadn't had her gotten her license yet. I was just, I was like, I did nothing for five days. I did some little things here and there. I did the videos, et cetera. But I had zero tolerance for anything because I was in so much pain.
Yesterday I got to the gym. We actually did some back exercises, and all of a sudden it was just like everything just opened up and I felt so much better. And I just, and today, this morning I woke up and I, cracked my neck on accident and I haven't been able to do that in a long time. So just so glorious and so amazing.
banking crisis.
And anyway, enough of that. Today we're talking about the banking crisis. And how the Fed helped out and how that's going to hurt us. We're going to talk about realtors fleeing the business, and we're talking about rent growth is going to start slowing, continuing to grow slowly. All right, let's get into it. And also we're talking about the last, 40 days on market numbers.
So let's get into it. Let's see how I do this. There we go. I'm playing with this thing, by the way. , this melon is a whole, once you get them, the gist of it, it's like going from PC to Mac. It's just so much easier. It's just I don't know how else to explain it. So Mellon. Dot com. There's something in my own thing in my signature, down there below.
If you want to give it a try. I'm telling you, this is amazing stuff. All right, let's take a look real quick. I have to get over here to this monitor. I didn't check the W Oh, let me s let me see if I can find that real quick. Yeah, while we're talking. March 29th. Real quick. 165 days, 165 homes on. over 40 days.
There are 93 homes on market over 90 days. If you look, these numbers are starting to shrink, right? We're seeing a trend downwards. That's great. That's good news. We had a slight influx of new REOs or bank-owned properties, which we don't like to talk about, but we do. Again, it's not to, freak people out because out of 10 counties, there are only 30 REOs or Bank REOs are bank-owned properties.
They're foreclosed. It's like the evil snide whiplash that comes and takes the home from people that this is nothing compared to what it was, guys. So that's not an issue. This is what we're going to talk about. And look, inventory is. Just pathetically low. We're hoping that by this time, this year, by the end of March, we would see this up to four, 500, maybe even 600, but we just don't see the inventory coming in because people are saying, you know what?
I have my two-and-a-half percent interest. I'm not going anywhere. , or this is just San Jose, right? What I'm hearing from Sacramento is that all the people left the Silicon Valley South the, Bay Area, and moved to Sacramento because their, employers said, Hey, you can work from home indefinitely.
And now they're contracting that idea. They're, taking that away. And now people are going, Hey, you know what? I have to buy another house. Good for us. Bet for them. They made a decision. They have to live with it. They're trying to sell their houses. Those house values are dropping a lot faster than here, but do not talk to Ryan Lundquist.
You look at those numbers over there, they're not doing so bad, right? Because people are still moving. There's not enough inventory. Compared to tomorrow we're, we'll talk about inventory. , look at Cape Coral. Holy moly, those are all empty nesters saying, I'm done. I don't want to deal with hurricanes anymore.
Just say no to Florida... for now.
I'll tell you tomorrow why I'm deciding not to move to Florida. It has nothing to do with politics because I don't give a shit either way. I think they don't. Anyway, last year's closes we had 144 and one week. Just think about those port escrow companies that had to. Run around with their head chopped off, closing all these deals, how much this is last year.
That was the, we're right at the peak of our market. The very very, top April is where we started plateauing. We didn't know it, but this is really where we knew something was up. We knew that. If the firestorm had ended, there were still some smoldering embers everywhere and we see that the market is slowing down, but it was still, we're in the spring rush.
And then April comes and we'll see that tomorrow, next week as well. We'll see you in the next coming weeks. So we're down 50% last week, year to date, year on your, and then overall, we're 55% down year on. Last year's or this, our average list price is 1 53, 1 15, 33, or 1.533. The average sales price, which is 1.571, is still crazy.
Look at that. It's over the list price. On average, 42% or 42 out of the 70 sales were over less. Where is it? Where's that number? Where's that number? Oh, right here. 42 again, right? I went to this. I looked, and I think that's it. Oh, this is last year's. I'm going to revert that. Yeah. 70. And you see these numbers right here?
The ratio is closed by the original place right here. 42. 42 homes sold over the list price. All right, so that's 42. That's 60% of the houses sold right now. 60% of the houses right now are selling over the list price in San Jose, right? The high list price we saw yesterday is 1 32. The low as this guy right here. We can take a quick look at this one.
Yeah. Hope you know, what are you?. There it is. Now, remember yesterday harped on pricing as imperative. This is a microcosm right here, right? This one was priced just a little too high, just a little too high, and it sat on the market for 44 45 days, and then they dropped the price down below a million dollars, which is $200,000 less than what they expected.
And buyers came in and said, this is what we're willing to. , let's take a look real quick when I don't want to. I don't want to. Yeah, so originally it was on the market for, oh, so they dropped it down on December 15th. They listed at Active 1.8, 180 3, and then they did a list price adjustment to that after. almost a month, and then it's set on the market another month, and oh, five days, six days, seven days. So there you go. Okay. But see, when you price it under the house isn't going to sell.
I don't really know if there's hubris, right? There's ego. My house was worth $2 million in April of 2022. That was April of 2022. And we don't have, we don't have control of the. The politicians don't have control of the market the top 20 people that own this world decide how this is going to work.
So without getting into conspiracy days on market, it takes about 26 days to sell a house in San Jose, versus last year it was seven, right? On average is 20, 28 days now, and on average is 12. In fact, last year, to date, We have 60 pending, so we're still healthy. Look, we're still doing really, well as far as getting into contract.
Even with the housing market, rates going higher. People are still wanting to buy houses at the same, not at the same rate as last year, but 50%. That's not bad. Because last year was an anomaly, we've had money way too. 20%. Oh, 53% of the houses that are on market right now have decreased in price.
53 of the houses that are for sale right now, which is 264 or 20% of 'em are lost, which is actually a good n And then 11 tft or got outta contract for whatever reason. And then we had 12 cancellations over the last seven days. All right. Let's talk about, h? Couple of things about the bank.
Sorry.
Silicon Valley Bank, Signature Bank. Deutsche Bank is next.
There are a lot of people crying. Chicken little saying, if that falls, take all your money out of the stock market right away. I'm not Hector. Hey, Hector's on board. Hang on a second, Hector. Welcome. Heck, good morning. How are we doing? You can figure out your, can you hear me?
You figure out your life,
Oh, Lord. See, this is when two noobs come and do this. What happened? Can you hear me okay there? This is what I'm going to do. Are you there? I'm here. Can't hear you. Turn off your mute. So while he's figuring that out, let's talk about it. The banking crisis. I'm not a financial advisor. I can't give you financial advice.
I would never give you financial advice other than the fact that we're talking about investing money into real estate here in a few days, in a few white weeks. Nothing yet. That's why you get a pc a Mac instead of a pc. , I have a Mac, still can't hear you.
Yeah, I should be able to hear you, but, oh wait,
can you hear me now? I can hear you. Can you hear me now? Maybe it is me.
I can hear you. Can you hear me now? Oh, I can hear you now. Yes. Yeah, I can hear you now. I've been able to hear you the entire time. I know you can hear me because I'm talking, but it was me. I had it on the MacBook and the software was hooked to my microphone because my microphone has this little, anyway.
Anyway. Morning. Heck, what's going on? Heck, not much. How are you Ed D. Good? How's business? Super busy. I wanted to jp on, thanks for the heads up this morning, but I just wanna at least jp on and say hello, answering maybe any questions? How do I roll? Man, we are field, we are fielding a ton of calls with this new program.
Cal HFA
Obviously, that's been buzzing around real estate, the Cal HFA dream for all right, like realtors, clients, lenders, everyone's kind of talking about this. And so, made us extremely busy this week. They went live yesterday. And so, anyway, that's where I am. I'm going to be stepping away here in about 10 minutes.
But yeah, I wanted to chat with you for a sexy kind of what's going on in your world. , you know what, you're talking about, and, see if I can add anything of value. Today I just, I'm, today I'm just going through the 40 days on the market thing, all the numbers with real estate, what's going on in San Jose but I was really just going to start harping on the feds, saving the banks and how that's going to hurt us with more inflation.
And I know everybody understands that, but that's going to hurt us in the bank. It's going to hurt us in cash. It's going to hurt us. And the stock market. But where it's not going to hurt us is if you buy, of course, real estate, but gold metals and all that other stuff too, right? That's where the that, so I'm, hearing lots of reports where gold is almost $2,000 an ounce now.
Wow. Any, anytime. Anytime there's volatility in the markets, money's going to move. , and it's going to go to safer havens really. And so we're seeing, I mean there's a tremendous, I'm not an advisory either when it comes to, to crypto, but I see bit bitcoins. Doing extremely well. You have a lot of precious metals.
Money's moving around, right? And one another area where that benefits us also on the mortgage side, right? We're dictated heavily by treasuries and mortgage-backed securities, right? And so we've also been experiencing, like since let's say a bunch of the stuff happening with banks, mortgage rates have gotten better, right?
It's been a bit of a bumpy ride, but, in the end, we're, benefiting from it, right? So, and, and kind of to your point one of the still safest places to be is real estate, right? So, Yeah, really interesting kind of what's happening. , I do feel the government is, it's their place now too, to make sure that know, the consumer doesn't lose confidence in banks and for them to step in and, neutralize the situation.
So, I, I think at, this point, especially with, some of these, you know, banks, is important that they intervene, but, you know, as you alluded, it does kick the rock further down and continue to exacerbate the situation that we do have. What's, really aggravating, and I, it's happening like 2008 again, right?
It's almost like 1984, the dystopian story about our financial lives. In, 19 2008, the Fed government forced other banks to buy other banks, but there were massive bailouts, right? There's a bailout. Too sweet all over the place. It benefited from 2008. From two. The cool fact from 2008 to 2013, there were 414 banks that collapsed.
In 2020 there were four. From 2021 to 2023, there's been two so far. So just puts things into perspective. I think that but, you think that those numbers are legal. Go. Potentially. There, there, seem to be some banks that, are also experiencing some, liquidity issues, what have you.
, I mean, I think there's a sharp contrast, especially in the real estate industry to compare oh eight to now, right. , however, I think these are really big signs, that is a recession, that we're in a recession, right? And that we're going to see, some additional recessionary indicators. , are they calling it a recession though?
They're like we're, entering a market or recessionary market, but we're, we've been in a mar a recession since April. You just don't wanna call it that. Or even, sooner than that, so may last April, right? Yeah. Yeah. No, I, agree. Yeah. It's just, I guess it's, so technically yeah we, have been in a recession, but, not necessarily everyone's been affected in that,
Yeah. Here's the thing, guys. If you're out there thinking if you should buy a house or not I, and I harp on this all the time, right? If you think about it and you're struggling to get a house, last week, Hector and I talked about it. The H F A loan, right? Cal, f h a h f a, and that's zero down payment.
Now, there are some precarious issues that people are talking about, some issues that are negative about it. But if we are responsible, this could be a very, good possible opportunity for you to become a homeowner. Now is the time to become a homeowner, even if the market collapses, even if housing prices collapse.
See what we do. Back in 2008 to 2012 houses, housing prices went down. People bought and bought. They, if you buy now in 10 years, it won't matter. Won't matter. I know you're trying, you're like, oh, I want to catch the market. But if you don't have any money to enter the market, do the calf H FFA now before it's too late.
$300 million
because there's only what, 500 million? 300 million? So it's, a 300. It's the senate bill that was passed. And when those funds are U used, you know the program will be over. So, unfortunately, this one has. Just a lot of buzz. It, it, really has a lot, not a lot of down payments. It's going to help some people. It's going to help some people. Yeah. Anything else, we do have to plan accordingly, right? We need a mortgage plan for our clients. , affordability is still an issue with home prices and, monthly payments. So it's important that we still make sure that we are appropriately qualifying people and, obviously.
explaining the ins and outs of the program. But absolutely, I think it, it could definitely, it will definitely help some people get into their first home. Yep. Yep. , So if you have any questions, I'll get you. Just DM me and I'll introduce you to Hector and we can get you qualified as a first-time home buyer.
My, my, investment, my investor guru says, luxury's dead, move up is dead. First-time home buyers are where it is right now. This is a great segue because. We have a huge amount of people that are leaving the market the real estate agents, and I don't know what it is for lenders, but I'm, going to say it's about the same percentage.
Let me share this slide with you real quick if I can show it on stream there. , can you see that? Yep. I'm going to try to make it so you can actually see it now. In five months, we had 75, over 75,000 realtors leave the market. Wow. That's US-based. That's the entire United States, right? It's. It's normal to see this type of thing happen when the market slows down.
Look at 2000. Where am I? Where's my, cursor? That was 2012, 2008, right there. Look how many people left the market? We're not going anywhere, right? I know Hector's been around for 12 years, 11 years, 10 years, forever. I've been around so long that you've seen my hair turn gray.
my wife won't let me leave the business. But the point is, that there's going to be huge attrition. So get to know your realtors, get to know people, and understand where their mindset is. Where I'm, not going anywhere. Every year we have. I wanna say 20% of the realtors leave the market because they just can't handle it.
We have people that are retired, and we have people that move out. We have people that just get into it with dollar signs in their eyes and they're like, oh, I can do this. This is easy. Everybody can do it. And realize it's not that easy because you have to know the numbers. You have to know the market.
You have to have, to be able to weather bad times. I've been through quite a few and you've been through quite a few bad times and this is where it takes us to get together and work as a team and work with other people and understand the market and how to best navigate it. And if this is a good time, if you've been thinking about buying a house and you've been struggling to buy a house, this is an opportune time for you to do it simply because there is less competition in the.
And if you haven't seen this slide, cause I haven't put it out there a hundred thousand times,. Now is the time because there are fewer people in the market, right? I just showed you we had 60 closes or 70 closes this week in San Jose compared to 144 last week. Last year, the same week, right? We're down 50%.
This is the time to go and find houses and get great deals. I just showed you this house right here where this house listed a 1.83, 1.18, and sold for $1 million. , there are deals to be had guys,
right? Yeah. There's been a tremendous opportunity. We've definitely seen that over the last, you know, almost six to nine months, right? We're just, homes are sitting longer on the market, and for the first time in a long time, our virus has the opportunity, to negotiate, right? To negotiate their terms, and almost on every transaction.
Almost on every transaction in the last six months, we've got something, you know, something as part of the deal. Like, as seller credits or a reduction in price, or, just something favorable for our buyers. So that was really neat. It's been a really long time since buyers have been able to do that and, the few in the brave that.
Went out there in the cold and found a home. , how really reaping the benefits of that? Yeah. There's a long-term benefit, right? And we grew up with instant gratification and real estate. If you bought before and you had $200,000 to throw down, great. You were in the market and this is you're, reaping the benefits, right?
Apartment Rent Growth Set to Keep Slowing This Year
But if you're entering the market or thinking about entering the market, there's a lot of opportunity here for you guys lot. . , so the next thing is apartment rent growth set to keep slowing this year. Now, that's an important thing if you are an investor or you're thinking about being an investor, because what's going on with rent growth?
Growth, it means that most of the apartments are filled up, right? There's just not enough housing being built right now to do that, to fulfill the need of a growing population. There's that, but also sales are slowing, but also people are deciding to move back home. If you're going to get laid off and you happen to have a support system for where you are, you're going to go move back home and what have you.
So is this a good opportune time to buy into investment REITs or real estate investment trusts? I think so because we're still seeing people start major projects. We're still seeing companies start major developments within not just departments, but homes and duplexes and multi-unit buildings, whatever Help me here.
Multiunit properties. Yeah. Yeah. Multi-unit projects, and they're, increasing that, but it takes time. Now, I don't know if but. Almost every metropolitan area in the US right now has slowed down in inspections and permits and all that other stuff. Mostly because it's still, they're still playing catch up on hiring people back or bringing people back to be the inspectors, to be the permit people.
I don't know if but like on Snell and Los Santa Teresa, right down the street. We have that 7-Eleven that's being put in and it's been going on for almost 18 months now. It's on Coddle. Coddle in San. Yeah. Right down the street. I see it every day. Cause I go to the gym and I see it there every day and they're stalled.
Why
I know there's a lot that goes in with the kind of environmental regulations with, gas stations, and Yeah. , you know, but I mean, we have a house on cur. that's been in construction now. I understand the first part of it was waiting for the, in inspect the insurance companies to pay for it. The house burnt down, which happens, right?
Sucks for them, but it's been in a building mode for, I want to say two or three years, and that's just sitting there. Waiting for the inspectors to come by, and it's the same story over and over again. We're waiting for the inspectors. The contractors are waiting for the inspectors, and that's why we're having issues with that.
And it's not that they're not trying, it's just as hard to hire people through the city. It takes six to eight months to hire somebody. Oh, that's nuts. Just the way it is. Hey, Vido, I appreciate you having me on. I've got a break right now right before nine o'clock. Great, appreciate you coming on. Let's do this perhaps later this week.
Financial Intelligence
Let me know whenever you're ready. An opportunity. Thank you so much for having me. Have a great day all. Bye. See you. Bye. Get out, I'll kick you out. I'll kick you out. All right, so last thing. Financial intelligence. Now, financial intelligence is something that we don't grow up with, right? Unless you have Amer amazing parents and they teach you everything about home finance investing, buying real estate, understanding health insurance, understanding trusts, and understanding taxes, you just can't know.
You just can't you just don't. You can't know that, and I can't know all of that. I know little bits and pieces, just like why I bring Hector on. I bring trust people. I bring everybody next week. I'm trying to bring on somebody that does healthcare and he sells healthcare to companies so that you as an employee can have healthcare.
It's not to try to sell you anything. It's more to understand. What happens if, what ques, what questions should you be asking? What questions? How can I best arm myself and find the, find not the best insurance, but how can I work through the payment. You like to say, I had a broken arm and it cost me 5,000, $10,000.
Okay, great. How am I going to work through that? You, he's going to help you understand what you can do. There are certain things you can do. There are certain things that he can help you with or your person can do. , right? And we have other people that help with commercial lending and business banking and all sorts of stuff.
So sit tight. If you're interested in learning more about financial intelligence and becoming, a micro investor all the way to a major mogul, let me know. I'm Vito Scarnecchia with Abitano. We'll see you out there.
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