Good morning. Good morning today. Started really early around four o'clock, just kinda lad around, and then jumped out of bed and drank my cup of coffee. I, usually have a Bialetti stovetop espresso maker, which I've become very accustomed to, and today. Yesterday I broke it out and washed it, but today I broke out the French press and it is so much stronger than I'm used to and it's a nice chilly day.
And when I went to the gym today, like just didn't feel like working out. So we worked out, but not really when you get older you have to do the strength training so you don't get hurt. Am I falling?
Best Areas for FIRST-TIME BUYERS Santa Clara
So I hope I don't ever get to that. Today we're talking about Bay Area first-time buyers. Best place for ho for first-time buyers to buy. Scared consumers. What's going on with the banks and what's going on with the housing market crash and volume. I know it's like how the market crashed... in volume.
Let's take a look. Okay. First, let's just talk about what's going on. The consumers are scared right now. I, totally understand that. I totally understand. Consumers are afraid. I just made a couple major investments in my business. Because this is the time for me to do it. I, it's just part of the plan.
And I'm not discounting plans, but layoffs are happening. Buyers are deciding whether or not they should stick around or hold off and find out what's going on. And I understand that the stock market is going down, and banks are crashing. , but there are places for people. If you're in the market, certain areas actually are better for you to look at as a first-time buyer.
I think we went through this once before, so let's take a look real quick here. If you're looking just in San Jose, there are a bunch of different areas. There are 11 areas. The best price. Alum Rock and that's East side, followed by South San Jose, and then Central San Jose. So if we took a look next time we'll bring a map out.
So you know, Elm Rock is east side and then Central San Jose is really downtown, but it's south downtown. And then, There's Allen south San Jose, which is next to us. It's 95,111 next to Silver Creek, Blossom Valley, San Santa Teresa, and then Evergreen. So it just floats around there. Those are, cost-wise the best areas.
I'm telling you that Blossom Valley and Santa Teresa are the best buys. Mostly because of the value of what you get. Yes, they're a little more expensive, but it's always that reach, right? If you're a bargain basement hunter, then absolutely, let's go look at Alum Rock and, South San Jose. But if you want a better bang for your buck, not as expensive.
Very decent schools still, the proximity to high paying jobs is a little further than. Cambrian, Willow, Glen, Almaden, Los Gato, Saratoga, Cupertino, right? Santa Teresa Blossom Valley is the place to be. It happens to be where I live. I think it's some great, value. Some amazing homes. There are some not-so-great homes either as well that's just due to lack of maintenance and vision.
And sometimes they're renters or what have you. If you're looking outside of. San Jose, which we talk about a lot, Morgan Hill is actually the best value for you. Now look at Blossom Valley compared to Santa Teresa, compared to Morgan Hill Gilroy, and San Martin, Morgan Hill is a full 20 minutes on a good day.
From here, from where I. In South San Jose, in not south, in Blossom Valley,, right? I call South San Jose. This is just bl bottom border of the area. Let me see if I can show you real quick. On a map. Map, right? So this whole area I consider. South San Jose, this is Santa Teresa, this is Blossom Valley.
This is that's El Rock. This is South San Jose right here. And then Evergreen, and then Alma Almaden, Cambrian, all that area. So that's why I'm saying that Santa Teresa and Blossom Valley are actually better buying than Morgan Hill and Gil. San Martin. I love Morgan Hill. I love going down there. It's an amazing town, with great people, great homes, and lots of stuff to do.
It was a little more expensive. Just is. So that's why I'm saying if you're looking outside of. San Jose, your best buys are because San Jose's a little bit lower than the rest of the areas. Campbell and Santa Clara are your best buys. And yes, they're more expensive. I totally understand that. $2 million on the average for a home I get it, but the better bang for the buck.
Right now, if you're going to San Jose, you can always go. Or is it Willow Glen where it's 2.1 and where's Almaden, which is the top 2.3? On average. So that's why I'm saying Campbell and Santa Clara are a better buy because on average, Campbell and Santa Clara, smaller towns, better-run towns.
Santa Clara has their own electricity grid, so the cost of electricity is a lot lower than pg and e. Campbell's a sweet little town. That's one of the first, that's the first place I lived when I moved to South County or South, south Bay. I moved here from Canada and lived in Oakland for a few years. I think it's five or seven years, and then we moved down as KI Kids.
It's an amazing place to grow up. Amazing place to live. Lots of stuff to do nearly everything. And yes, you can get to Santa Tomas Lawrence, 17,280 really, easily. So if you're a first-time buyer, let's have that conversation. Okay. Back to scary consumers. Yeah, it's a scary time. I totally understand it.
I, see what's going on. I see businesses shrinking. I see layoffs coming. I see the stock market and all this other stuff. A lot of stuff. We're trying to prop up the economy. They're doing what they can. The problem is that inflation is killing everybody. I hate to say that They're killing.
It's hurting everybody. And that's going to be a larger problem in the times to come. We're seeing we're, I've been saying this for a long time, over the last few months, I've been telling you that we will see rates come down below 6%, I think five, five and a half percent in that price range. Right now they're at six and a half.
6.15 for jumbo. I think in the next month we will see that come down. Our biggest problem though, supply and demand is a lack of inventory, right? I added a new row so I could show you what the actual active MLS listings are for San Jose. Remember I told you that was just a baseline and I stuck with it and we grew with it.
That's because these numbers come from real realtor dots. And everything else, it's not exactly accurate where my MLS numbers are spot on, super accurate, real-time. Whereas these numbers, even though I asked for everything in the border of San Jose, you won't get everything in the border of San Jose or what have you.
So just take that with a grain of sand. These are basically baselines. So we can chart and graph over time.
The things that are scaring me right now. There are only four cities that I'm tracking right now that have an increase in inventory, but take a look at those. The ones in black, a measly 32 new homes. Okay. 60 or, yeah, about 60. And then this one. Less than 10, 12, sorry, 12. And then this one is just a few it, these numbers supply is starting to dwindle.
The assumption is people are still holding out, waiting for the rates to come up, or they're preparing their house, or they're. Checking things out, but also houses are selling, right? Yesterday we talked about houses selling. We had 67, 54, and the week before 55. So we're seeing the numbers, the closes jump.
Housing Market CRASH In Volume
We're seeing spending go up a little bit. Where's pending, right? So they're pretty much on par with what we're seeing here. But if you look back to last year, And this is why I'm saying the market's crashing. It's not really crashing, right? We're seeing a hundred 75 to a hundred closes every week, and we're seeing 75 to a hundred pending every week on average, right?
So do I think the market will crash? I think we've seen the damage we've done. I think we're normalizing the market. There are going to be houses that sell really quickly. Right now we're seeing that number where is that number? 62% on average. It's 42% for the first part of the year is homes that sell for over list price.
That's because buyers are being picky. , they know they don't have to put $200,000 over 400, or $500,000 over the list price. There are not 25 buyers for every listing. There are 25 listings for every buyer. So buyers are becoming chewier and deals are being had. What happens if the market crashes? We can go to this thing again, right?
Where is it? Where's my little thing? I have a better one here, somewhere there where we talk about it. There's less competition right now, right? Even right here. E even if the market goes down just a little bit right now, there's less competition when it goes down, people are going to jump into the market, right?
That's just human nature. So if we're at a plateau and we go down just a little bit, Pl, more competition will happen, right? And then there will be a feeding frenzy. And over here there will be a ton of competition. And once the market goes up, there's going to be competition. And once we start seeing the peak, everybody's saying the sky is starting to fall, the sky's gotten to starting to fall.
It's just like I've been telling people over the last six months since April, so even longer than that, 10 months. We're on a long plateau. It's dwindling down in a downward fashion, but it is what it is. We're not seeing the torment downfall that everybody's saying here, but we're seeing it.
All right. That's it for now.
If you're thinking about buying, My suggestion is to get your ducks in a row and be ready. Start looking, get active, and know what's out there. Now, if the market does crash a little bit in this scenario, I can see where banks would tighten up everything and make it really hard to lend. So that's something that I had to deal with a lot from 2008 to 2012, where we had to work with a lot of banks and had.
Deal with it and say, Hey, I'm representing this buyer and the bank is closing on it. We're just waiting on the bank. They're, taking extra time. And then listing agents would blame me for not doing my job. And I had to say it's, the bank. I'm involving you in all the communication, you're seeing what's going on.
That's taking time for the bank to respond because they're a little timid right now. And that's going to happen in the next couple of months if there's a crash. So hopefully it doesn't, and hopefully, everything's good. All right.
I'm Vito Scarnecchia, we'll see you out there.
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