Commercial Property Showing MAJOR LOSSES
Introduction and Overview
Mortgage delinquencies in the news. Also, commercial property is becoming an issue and we're talking to talk a little bit about staging your house and Willa Glenn House of the Week and Luxury House of the Week as well as 12th County Bay Area Real Estate Report. Let's get this moving really quick and this right here is old.
Mortgage Delinquencies Update
If you've been watching the news, if you've been watching Facebook or TikTok or whatever, we have a bunch of crash bros out there, right? They're saying, Oh, the market is crashing in some areas. Maybe they are, but not in Silicon Valley. This is across the United States.
And this is reporting the first quarter, of 2024 mortgage delinquency rates. It's low. It's nothing over here. this is 2008. Right here. This is too big to fail right here, right? This is everything that we're talking about. Could it be going up? It's going up a little bit, but it's not worth anything to talk about.
So I'm going to stop talking about it. And I'm telling you straight up, you hear these crash pros, don't look at the delinquency rates for mortgages for home mortgages as an indicator, because right now that's not an issue. It is not an issue for us to have to worry about that right now.
Commercial Property Concerns
Commercial Property Reporting MAJOR LOSSES
Commercial property, however, is like a stack of dominoes ready to fall. Here's what happens and I've explained it to a few people today or the last couple of weeks. Commercial real estate is not like residential real estate because you buy a commercial property based on the cash flow that it presents.
Then you go to the bank and say, this is the cash flow. And they say, okay, because of this, we say it's worth this, right? One of my real estate agents called me up for one of my rentals The other day he's based on cash flow it'll go for this. I'm like you're out of your freaking mind It's not worth that it's worth a whole lot more and I bought it for a whole lot more.
Why are you bothering me now? I just need to know because I'm like Call me when I can make Twice as much as what I bought it for. I hung up the phone.
That's how they look at it. They look at it as a commercial asset. A commercial asset is based on cash flow. What the value can pull from the bank, pull from the owner, and what the owner can pull from that building or from that commercial piece, whether it's a strip mall, an office building, apartments, what have you, right?
And it's all based on cash flow. And when times are good, cashflow is up and then you turn around and sell it to some sucker The way you get into this is you call up your buddies and say, Hey, I need a million dollars.
I need to get a real estate investment trust, right? And I need to get 20 percent down or sometimes 30 percent down for this property, which was purchased in 2019 for 23, let's just call it 24 million. I need a couple million dollars. So you go to all your friends, and you pull as much cash as you can.
Then you go to their friends, and you pull as much cash as they can. And you buy this property. And what they tell you, there's no RESPA. you have to be really careful when you buy stuff like this in commercials because people will cook the books. According to CoStar, the assets are 90 percent plus leased. Is it cash flowing the way it says it is? Because if you're saying it's cash flowing for say 6 a square foot, and in reality, it's 3 a square foot you're a freaking liar and you're bamboozling the buyer and you're going to get sued.
But at the same time, the buyer's losing that property because it's not cash-flowing. That's exactly what this is.
Effective Home Staging Tips
Property Staging: Prepping a House in a Hurry
Efficiently, efficient property staging, and property prepping. This obviously, isn't my article.
I did not write this, but look, common sense, right? Keeping it clean, keeping it organized. Notice no more than three things on any surface. One, two, three. It's almost as if they listen to me taking depersonalization seriously. I don't think that's a true thing. I think one or two family pictures tell a story that you created memories here and the next family is going to come in and make a picture of memories.
So I don't believe in that at all. Resisting the elements can damage your house, complicate stuff, share different residents, blah, blah, blah, display, and display live plants. It's actually true because it actually makes your house smell better. It picks up the nasty smells and it converts it into better air.
Have live plants in your house, but don't let it go out of the way, out of crazy. if you're going to sell a house, don't leave it, sell it empty. If you're going to stage a house don't stage 40 percent of the house.
You have to keep a bedroom. You got to keep an office. You got to keep a bathroom. If you have an empty room, they're not going to know what to do. And you can't take a picture of it. Look, staging is important because when you're attracting somebody, a buyer, you want to give depth and personality and a reason for that picture.
And in a room, you have to give it a reason as to why it exists. It could be a dining room, a living room, an office, or a bedroom, but you have to give the viewer a reason why you're looking at it. If it's a blank room, then it looks like, I don't know what the hell this is. So they're going to move on to the next one.
They're going to lose interest. So the idea of marketing is you give them reasons to continue to look and yeah, put some doilies on it, make some pictures on it. There's a lot to look at in, this picture. But if you look at a blank room, there's not much to look at. Yes, here we go. Open up the windows, open up your shades.
Open up your blinds. Take off the screens. I know nobody talks about taking off the screens of your windows. Take them off. Wash the windows, wash the tracks, make it look brand new, take the screen off, wash it, put it in the, wash the screen and put it in the garage.
Do you want to use your screen? Put it right next to the window, and pop it right back in. When you open that window, you want to let as much light into that room as possible. And when you do that, you let 5 percent more light into that room. So 5 percent makes a huge difference.
Yes. Here's the thing. You got a smoke smell. You got a fish smell. You have an odor smell. You have a stagnant air smell. You got your smell. I tell you your house smells most peculiar to the stranger that walks into your house, but you go away for a week. You come back and you're like, Holy crap, what the hell is wrong with my house?
But no, it's just, you got used to another smell and you came back and that, so a way to do it is mask it, but Don't do it with and all that chemical smell. Do it with something natural, like essential oils or lemon or, potpourri. That was big back in the eighties and nineties, but that's because it made the house smell better.
The last thing I want to tell you is to have a great mindset about this because. If you come at me and you're negative Nelly, Oh, I'll never sell. Guess what? It'll never sell. If you're like, this house is going to sell. I know it is. The house is going to sell because your mindset is allowing it to happen.
Home Inspection CHECKLIST HERE
Enough of that. And by the way, if you're thinking about selling, download this home inspection checklist and get your honey dues in order.
Willow Glenn House of the Week
Willa Glenn's house of the week. 1122 Brace Avenue. Not my listing. Three bedroom, one and a half bath, 1300 and 74 square feet built in 1920. This has been on the market for 104 days.
I'm sorry. 104 years old. It's been on the market for 48 days. Guys, this is a very well-priced house. I couldn't tell you why. Oh, it's not staged. See what I mean? The staging. Okay. Could that be an office? Yeah, that could be an office. See the house is in good shape. It looks like the floors could be redone.
It comes with the washer and dryer down in the cellar Okay. Guys, this one's right for the picking. If you're looking at buying a house, let's go take a look.
Luxury Home of the Week
Winding Way, luxury home of the week, 30 million, six-bedroom, eight and two half baths, 7, 900 square feet built in 1997 in the woods.
So anything on this side of the freeway, this is 280 by the way, anything on this side of the freeway, You're going to have a high fire rating, just so you know, that means some people, some insurance companies will not want to insure you because see where it's all green, you know what's happening right now, right?
Fire forest fires all over the place. This one's going to take a lot longer to sell because of where it is, but it's a beautiful home, with very mature trees and shrubbery everywhere, but it's just beautiful. Everything about it is screaming beautiful. Take a look at it. The link is in my blog.
Nothing super crazy outside of what I think is there are 44 homes.
Bay Area Real Estate Report
YTD SALES 12 Bay Area Counties
No, how many homes, how many closings do we have this week? We had 81 in Solano County. We had 81 closings and of that average 50%. I'm telling you something's wrong with their numbers right now. Something's wrong with their algorithm because that's just, that's an outlier.
It doesn't make sense. And I know that Solano and Contra Costa had the same problem last year. So don't look at that as, Anything indicative of that could just be the software that they're using the service, the MLS service that they're using. Couldn't tell you rapidly Tony, maybe. So Alameda and, Santa Clare topped tops outside of San Francisco.
The weirdest thing, San Francisco has been at 110 for the last two, or three months, a hundred percent. So something's going crazy here, right? Something's going really crazy in San Francisco. Either people are just short-selling the hell out of it and they're getting what they want. I don't know. San Mateo has the highest average sales price.
Santa Clara has the highest sales volume and the most listings and the most listings this week. And number in the contract and number. So there you go.
Conclusion and Final Thoughts
A lot of people are claiming that the sky's falling. I don't see it here in the Bay Area. I would say, be calm, be focused, and be purposeful. If you're selling your house. I'm Vito with Avatano. We'll see you out there.
Vito Scarnecchia Real Estate Broker, Veteran, Dad DRE#: 01407676 408-705-6817 Vito@abitano.com Website: abitano.com https://www.onereal.com/vito-scarnecchia-1 update your home value: https://hmbt.co/bT7qRJ RELOCATION@ABITANO.COM FREE DESKTOP APPRAISAL https://www.propertyrate.com/agent/vitoscarnecchia If you are moving ANYWHERE in the world - Let me know! I know a LOT of AMAZING Agents! Book appointments here: https://calendly.com/abitano/15min Home Buyers Course YT YouTube.com/SanJoseLiving IG https://www.instagram.com/abitanogroup/ FB https://www.facebook.com/vito.scarnecchia/ LI https://www.linkedin.com/in/vito-scarnecchia/ Blog http://blog.abitano.com/ POD https://spotifyanchor-web.app.link/e/oxdH1Hwfcvb Professional Photography by Kim E https://photosbykime.com / Local Real Estate Market and Home Value Report https://hmbt.co/bT7qRJ Financial Intelligence https://docs.google.com/forms/d/e/1FAIpQLSc0R5pjHIAPguZ5GDEB-fTbGJXKpWK3coK9Khymv_GTWkMnyQ/viewform?usp=send_form https://www.onereal.com/vito-scarnecchia-1 Willow Glen's five most expensive homes https://youtu.be/3A_E2ck0ePg
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