Welcome to Silicon Valley Living! This is a community-based blog focused on events, updates, and things that are happening in the Silicon Valley!
Abitano– is a community based real estate company that is involved, experts, and gives back in order to make all our lives better.
– Local Family owned business since 2003.
🔴[LIVE] 🚨 RATES at 7.81% !!! house sold 181.8% over List will NAR survive?
Wow, what a whirlwind week. You probably didn't notice that I was gone for a week. I went to Tennessee, Knoxville, Tennessee of all places. My parents live in Knoxville. They've lived there for the last five or six years, four or five years. And I brought the kids out to let them see their grandparents and we went to where Dollywood is.
We didn't go to Dollywood. We went to something called Gatelingburg. A friend of mine went to Gatlinburg right after I went there, which is cool. Did some go-kart racing and saw some really cheesy dinosaur thing Yeah, but here look at three things. You need to know about the real estate market right now in Silicon valley, it's crazy.
The Housing Market Is Stuck: Mortgage Rates, Inventory
It is such a crazy world right now. I don't know what's going on I don't I have no idea I have, how can I tell you what I want to show, except that rates are crazy high. We're almost at 8%. I know Hector's going to jump on and say, everything's good. Everything's here's the thing, 8 percent makes a million-dollar house, very unaffordable, right?
Houses are five times more expensive based on your income than it was back in the seventies and eighties. We saw hyperinflation, you were making 24, 30, 000 a year and the house costs you. 100, 000. Now it's a million dollars and you're still making on average. And typically us, I think it's 60, 000.
It's five times more expensive. It's Sometimes places like here, 10 times more expensive. It's crazy. So how do you how do you justify buying a house? I see people renting all the time. Here's the thing, right? When you rent, you have no control over where you live. You do, but you don't, right?
You might buy a house and then you might find out the landlord is a psycho. And then you might find out that the landlord is unwilling to do anything to do fix-ups or any kind of improvements or what have you. And they might evict you. They're going to increase their rent. They're going to, make it really difficult.
And then what happens if, Hey, I'm deciding to sell my house. You need to move in 60 days. It sucks and you have no control over that. And then on top of it, we get to this real quick here on top of that. When you buy a house, you become economically locked into that house, especially in California, because we have Proposition 13, and guys, again, that's coming up on the chopping block vote no on that Proposition 13 thing, whatever it is, it's bad news for everybody.
Okay. Proposition 13 promises us homeowners and renters and strip mall owners and, subway franchisees that your rent, that your property tax will only increase by 2 percent max every year. Out in Texas, it was going up 40 and 50 percent because the house that you bought back in the seventies for 150, 000 went up 200 now it's worth 400 and you have to pay taxes on that.
There's homestead laws, all sorts of stuff. Once you turn 55 or 65 depending on the state, I can't. advise you on that. But at the end of the day, that's one bastion for California is one positive thing for California. And yes, I know buying a million or 2 million house sucks, but think of it this way in 10, 15 years, it could possibly double, right?
It does sound like a crash or whatever. If you don't get away for the market to crash, great. Wait, then you can line up with everybody else and you can compete against 40 other buyers to buy that same house. Good luck with that. I know this sucks and it's a predicament. There's so much press being written about it right now.
Right here. We're going to talk about that in a second.
Low inventory rates high mortgage rates, and high prices have put a housing market into this state of unaffordability, right? It's true. It's unaffordable. unsustainable, yet we're still seeing houses sell for over list price, massively over list price, right? Now there's a strategy behind that. I understand that.
Let me see if I can get into this so that I can, so you can see my face a little bit more.
It's not going to get better. Yes, the market might crash and if the market crashes, the housing market might come down and come down. But how much? 20, 30%? Again, you're lining yourself up with everybody else. I have people that are wanting to buy right now and it's going to suck for the next couple of months or years.
I know I have a friend. Hector always talks about 321. I don't think that's the best thing. I'd love to have a debate about the 321 mortgage and talk about it because I don't think that's a safe bet right now. I think rates are going to stay high for a lot longer than 321 years, but don't listen to me.
I'm not the expert, right? Yes. Our equity climbs, right? I'm a homeowner. I have my house. This house right here is paid for. I am economically locked in. So I see my property taxes go up every year, but not crazy like it is in Texas Florida Missouri, or wherever. Investors are out of the market right now.
So guys, if you're thinking about it, I know it sucks, right? You're in a quandary. The market's going to crash. You might lose value on a house, but you also have the opportunity to buy a house at your command. Yeah, you're going to be paying seven or 8%, but you can come back to the bar, the seller, and say, Hey, Mr.
Seller, I want you to give me a couple of points to make this thing work and make it more equitable for me. Let's bring this thing down to five and a half percent so that I can afford it. You pay the points. We'll close this thing and keep it as smooth as possible. Strategies we've used and it works.
Exceptionally. The reason why I'm keeping this thing up right there, those are new homes, new home builders are doing amazing things right now. They're not hurting because they can give you concessions. They can give you upgrades. They can get it as long as you pay the price, and pay what they want. So that the other houses that they sold don't lose value.
They will not they can give you points towards closing costs. They can give you points towards your rate. They can give you upgrades for free or tuck it into the price. So you don't really see it. Some things you have to be careful with new home new home builders, and that's why you should always have an agent on your side to represent.
2023's Housing Correction Could Be The Largest Since
This one talks about a correction.
The volume of sales has gone down, not sales volume. Sales volume, the unit volume has gone down because nobody's moving. They're sitting in their place, right? I understand that. I want to talk about this one right here. Prices are now so high that banks are losing money on mortgages. Baloney. We'll talk more about that tomorrow.
RE/MAX Leaves National Association of Realtors
NAR, you probably have seen it in the news. NAR has been sued along with a lot of big corp franchises because the way we pitch commission was 6 percent and we split 50-50 with the buyer's agent. So when you come to say, Vito, come and sell my house, charge you 6 percent give you a little bit better of a deal, charge you 6%.
And then. I split that 50 50 with the buyer's agent and that's how it's always been. That's the lawsuit. They're saying it's illegal. You should never have done that. That's whatever, right? And that's what this whole lawsuit's about. And now, and they are, in case you haven't heard, the CEO was charged with sexual harassment multiple times, what do I know? That's still an allegation. It's not been convicted, so we can't put them, but it's given them a black eye and a lot of the brokerages are now leaving NAR, National Association of Realtors, because they want to create their own alliance or create their own form and get away from the handcuffs that's NAR.
I saw a TikTok today, this morning, a guy. Talking about how much the top brass at NAR was making and the CEO was getting paid two and a half million dollars and everybody underneath was just under a million, like 900, 900. I think the economist was making 650 or 700, maybe. I don't know. I can't remember, but that's a lot of money to go into a union.
So I popped in and said, maybe We should strike against the union because that's what NAR is really. It's a union. It keeps us alignment, gives us ethics, gives us codes of how to operate, but that's pretty much all they've ever done over the last couple of years. They've taken away a lot of our power and sold that to some other companies and it's just really made them a lot less useful.
Is NAR going to survive? I don't know. Remax, Century 21, Coal Banker, SoftB, and Corcoran all leave NAR. They're actually not leaving it. They're making it an option for their agents to be part of the union and allow themselves to call themselves Realtors. They own the trademark Realtor. NAR owns the trademark Realtor.
What does that mean? We have a code of ethics. Okay, the agents that have been around for a really long time. More than likely have a good code of ethics that they work along. So I don't know. Is that gonna happen? Is that gonna go away? I don't know. I don't know. I don't know what's gonna happen with the buyer's commission But the way it's always been and the way I'm still continuing to sell houses is you pay me to sell your house and then I split the split at 50-50 with the buyer's agent.
You can absolutely say, Vito, I'm not going to buy, I'm not going to pay the buyer's commission and that might hurt you, right? I can't tell you what the future is going to say because some things are happening, but I can tell you that if you're working with. For buyers and buyers that are going to buy houses in the next couple of years, it's going to hurt because they're going to further have to come out of pocket to have to pay the broke agent and the broker for their services to represent them.
And it doesn't matter which agent you use. If there's no commission being involved. The buyer is going to have to pay. We can ask the seller to pay. We can ask the listing agent to pay, but they're under no obligation to pay. That's what broker co-op means broker cooperation. So this lawsuit is going to come down.
We'll figure it out for the month. In the meantime, you're going to see some agents skirting around those listings that don't want to offer up the full commission or no commission at all, but also be prepared. To sign a buyer broker agreement and a buyer broker agreement basically says this is what I'm going to get paid Whether it's a flat fee or commission or whatever and if the seller does not pay it you Mr. and Mrs.
Buyer, you get to pay it. I know it sucks That's just when these class action lawsuits happen. The only people who make out are the lawyers just so you know I'm not a big fan of of lawsuits.
I was in Tennessee this week and I was paying, I paid three Oh nine for a gallon of gas and it's just culture shock.
It was culture. And here's the problem with this, right? A lot of the price that we pay for gas goes towards keeping the roads clean safe and maintained. We have some of the crappiest roads and I travel all across the United States. I have traveled to 35, 40 States, and I can tell you for a fact that California has some of the roughest roads on the freeways, and on the streets.
I just drove up to San Francisco yesterday. Cause my daughter had a battle of the bands, battle of the bands fleet week. It was awesome. Seeing all my Marines out there. We're talking, they had some bands playing and driving on San Francisco roads like a third-world nation. It's ridiculous. They have zero control of what's going on up there.
Same thing in a lot of these streets here in San Jose. San Jose is doing a good job trying to get it but, they're just doing what they can with what values they have. Gas right now 4. 99 a gallon. It's the lowest you're going to find. Yesterday I paid 5. 29. Safeway. I want it to San Francisco.
These weeks Hi's and Low's
THESE ARE NOT MY LISTINGS ML81941899, ML81942518, ML81939974, ML81928346
Yep, there you go. Okay, today's highs and lows. The most expensive house sold for 7. 1 million. That sold for,
191. 191%. No, that's not right.
I miss the math. This is a beautiful tutor. Look at that. That's a gorgeous house. Everything about that. It's just perfect. No house is perfect.
I have in my mind when I move to my next house, I'm going to build it. I'm going to put these windows all around the first floor.
That's my mind. I'm telling you this is a beautiful house. Okay. The lowest house that sold is in Gilroy church street, 131 years old. 123 years old. 936 square feet, no picture, but sold for 725, took zero. Oh look, you double-ended it. Let's go to full. Okay. The biggest list. Price to sales. Price ratio.
1.1 to $2 million. Two bedrooms, one bath. $2 million for. Two-bedroom house in Sunnyvale. That's crazy guys. Four days to sell. But what happened was this thing should have been listed around 1. 6, 1. 7, but it sold for, yeah, that one was 191%. So there you go. My numbers are a little bit off. Okay. And then Casablanca, Saratoga is the lowest list price to sales price ratio, which is this beautiful thing right here.
84 percent of the list price. Looks like they. Tore it down and build it back up. Everything looks brand spanking new, the lighting. So I can tell you that this was. More than likely a flip.
I have that pantry door.
You can see it's brand spanking new because these are like the new fashion. These are the new style lights. I'm not a fan of that drippy waterfall counter. A
a lot of living rooms there.
Alright, so there you go. But still sold for 3, 000, 000. Originally it was 000. I'm saying it's a flip because it sat on the market for 64 days. And once they finally lowered it. A smart buyer came in and bought it for 3. 5. This is in Saratoga. Let's see Really close to the freeway and you get the pleasure of listening to freeway noise.
That's awesome. So there you go All right. I made that as quick as possible 17 minutes I'm beato Today we talked about the mortgage rates going crazy.
The housing market is stuck. More brokerages are leaving and they are. And I don't know if we're going to have this correction. I just don't have a, I have a problem with that article.
I'm Beto with Avatano. We'll see out there. Thanks for watching.
real estate news, stock market, Silicon Valley real estate, real estate crash, Bond yields, Wealthion, AirbnbBlackstonene real estate,MLS listings,Zilloww, redfinSanta Clarara homes for saleMLSls listings saJoseseAirbnbnb property for sale, AirBnBust