Does 'Measure E' Hinder Higher sales in San Jose?

 



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Introduction and Overview

Does 'Measure E' Hinder Higher Sales in San Jose?

Does measure E hinder higher sales in San Jose? We'll talk about that as well as today's rates and what you get for 2 million and what you get for 1 million as well as The 12 Bay area months of inventory check. Let's get moving here. this episode is brought to you by the home inspection checklist. If you're thinking about selling your house, download this home inspection checklist, it'll help you walk through every nook and cranny of your house and allow you to understand what inspectors will look for, but also what buyers could be looking for.

make sure you, Check that out. 

Current Mortgage Rates
Mortgage Rates went up a bit, I plugged in 2 million. Okay, let's do this real quick. 2 million, nine, five, one, two, five.

And good credit. And look, even when you're paying a point or a half a point here, you're at 6%, 6. 1. Everybody's saying you can get 5%. That's because they're not FHA or 15-year fix or 30-year VA. If you're a veteran, you can get it. So there you go. If you do a 15-year fix, I always say go with the bigger one here, go with a jumbo because 15 years is just really expensive.

Okay. 

What You Get for $2 Million
What'd you get for 2 million? There are 21 homes in the 2 million range in Santa Clara County, but I thought I'd choose one in 95, one, two, three because it's right at 2 million. It's right at the threshold. Right, where you're going to have to pay a little bit more if you go right over. Now it's been on the market for 15 days. It's not my listing. It's on Huckleberry Drive right here in Palmia. the agent needs to understand that. The first picture needs to be of the house, not of the inside of the house. It's just, that's dumb.
I think I know I've been in this house before, so that should have been the first picture. But anyway, there you go. That's what you're getting for 2 million in South San Jose. Nice big Palmia house. This one doesn't have an HOA. There are houses over here in this little area, the same kind of houses, maybe a little bit smaller, but, there's an HOA there.

the difference is you have an HOA you have a pool, but you also have access to the park. So there you go. Good luck selling this one. 

What You Get for $1 Million
What you get for a million dollars is nine, five, one, two, three. three bedrooms, two baths. Two and a half bath, 1200 square feet built in 1989.

Del Roble Elementary is right here and lucky and all that here. Then on the market for six days, this one's probably going to sell pretty quick.

Nice house for a million dollars. Look at that carpet that just shows up nothing but dirt on that. There you go. 
Understanding Measure E

Okay, let's go to this whole Measure E thing. First of all, what is Measure E? We voted for it on March 3rd, 2020. We approved it. it's been going out for a while and it's Basically what it says is anything sold in San Jose over 2 million, you get to pay more transfer tax this transfer tax was to go through all this.

You can go back to this in a minute. The link to my blog is down below. So you make sure you take a look at that, but you can come down and take a look at all this stuff right here and understand what it's supposed to do. It's supposed to be affordable housing and help homelessness.

So it's basically a tax for the rich to help the poor. Does it really help? I don't know. You can go back and take a look at this and let me know your thoughts I was never in favor of it. I think it hurts. San Jose residents from seeing houses get more expensive for sellers.

Santa Clara County buyer seller pays the county transfer taxes. Palo Alto is 3 per. 30 cents and Mountain View is 3 and 30 cents in San Jose up to 2, 000, 000 is 3 and 30 cents split 50-50.

I know. I think. Yeah. And then there's a dollar 10 in San Jose transfer tax. And then after that 2, 000, 000, it's set 0. 75%. And then $5 million to $10 million is 1%, and $10 million and above is 1.5% or $15 per thousand. 

Impact of Measure E on Home Sales

This really is hindering sales. And here's the reason why. I just looked at this Richmond right here.

They're trying to do the same thing in San Francisco. Look, everybody's taking hold of this. Now. That's not fun or fair. That's

Southern California. Okay, so there you go. If you have questions about it, please let me know.

Inventory And Supply Charts

I took these numbers. And just put it out there and try to figure out what the number of homes are selling for. And is it really affecting home sales? This is 2 million to 3 million as 594. We have a total of 2, 700 homes. And of that 7 percent 741 are over 2 million in San Jose. It's 26 percent of them.
But if you look at all of these ones right here, A lot of them are way over. this is a way of visualizing it. the blue one in San Jose, because they sell more homes than any other city combined, because there's the biggest city in Santa Clara County, but right when you get to the 2 million mark, it just collapses.
Mostly because there's not a whole lot of houses out here that are over 5 million. You go up to San Mateo County, houses and I talked about yesterday luxury properties for selling anything over 20 million. But if you look, a majority of these ones are over 2 million Campbell, Cupertino, Los Altos, Las Gatos, and all the areas on the West side of San Jose are selling for far higher, much more often than San Jose's are. 

I think it's making it more difficult for us to sell 2 million homes or 2 million plus homes. Is this a good thing? I don't know. My house is getting to the threshold. But I do believe that if we didn't have measure E in effect, my house would be well over 2 million, probably two and a quarter, maybe two and a half at this point.

Simply because this added tax, it's hindering the value of homes here. if I took my same house and put it in Campbell or Las Gadas, it would be worth two and a half, 3 million. Am I saying this because I'm throwing a tantrum? I'm not, I'm just talking about it. verbalizing it, communicating that with you.
So you understand San Jose isn't here to protect us.  this transfer tax, this measure E thing is helping us. I think it's hindering us. there you go. All right. Our sales are still doing really well. Our months of inventory are still doing really well.
Versus inventory versus active homes. We need to have far more homes for sale right now. We just don't have it. We're at 50 percent of where we need to be for a balanced market. So prices will continue to go up. Even if we see an economic crash, you'll see prices contract a little bit, but then it'll explode back forward.
This one right here is a little misleading because the numbers aren't completely in. We're not at the end of August yet. Disregard this, but just know that this is where we are. if you look at this, you'll see that this one right here has high months, a high amount of

supply compared to consumption. San Martin goes up and down. I think it was just a slow time, but everything else is far under the six-month mark, which determines our buyer's market versus seller's market. In a consistent fashion, like what we're seeing in LA Florida, and St.

Louis, we're seeing the market contract because there's more inventory than there are buyers. So again, there you go. 

Conclusion and Final Thoughts

The last thing I want to let you there, just to understand my feeling is that measure E does hinder home value prices after the 2 million mark. That's where I'm sitting with that one.

I think after the last couple of years we've seen houses in different cities increase in value a lot faster than we do in San Jose. Have a great weekend. I'm Vito with Abitano.

We'll see you out there.

Vito Scarnecchia Real Estate Broker, Veteran, Dad DRE#: 01407676 We’re Hiring! 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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