San Jose Snapshot | By the numbers | #rewtf of the week 🦅 🌎 ⚓️
The SLUMP IS GONE-
12 Ways Your Neighbors Can Screw Up Your Home’s Sale https://www.bobvila.com/articles/neighbors-affect-home-sale/ Is Now the Time to Buy Rental Property? 10 Questions to Ask Yourself https://www.bobvila.com/articles/ready-to-buy-rental-property/ First posted Episode of FI! http://blog.abitano.com/2023/07/financial-intelligence-with-patrick.html Financial Intelligence https://bit.ly/AbitanoHomeValuation NAR.Realtor Stats. https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
Pod
Hoping this works. It does work. Okay, good Welcome back to three things you need to Know sponsored by Abitano real estate. Hey, I'm Beto Skarnick. Yeah, I know you don't care But today we're talking about three things. You need to know about buying living and investing in silicon valley the whole idea behind this is to help get you on the knowledge path So you can make your own decisions if buying or selling real estate is a smart thing.
That's what it is, right? And we also take a look at larger picture ideas because as much as my hubris would like to say that real estate is the do-all be-all of all things. It's not. It's a very small it's a very large cog in the GDP also affected by multiple, industries. So what we talk about today on three things you need to know is what the other industries are doing.
Other things you can do to help increase the value of your home, or if you're buying a house, et cetera, and as well as talking about something called financial intelligence. It's a great segue, huh? It's almost like I practiced this. Now, why am I telling you this? Because yesterday we did our first. Video interview with Patrick McAndrew who's a financial planner and we talked about all things life right and how different little strategies Help people right?
We're not trying to pitch you. We're not trying to sell you anything. We're just trying to get you Our experiences so that we can raise the boat of professional services. Now, professional services are anywhere from insurance, law practice, taxes, accounting, real estate, lending, and banking, right? All sorts of different things.
So we bring these things together so we can help you. As a professional on your own side, whether you're an engineer or a salesperson, or marketing or a CEO, we help level or raise the boat of financial intelligence. So I'm really excited about it. There's a link down below if you want to watch it.
I'd really love it if you would share it, please. Alright, the next thing, 12 things your neighbors can screw, 12 ways your neighbors can screw up your home sale. I love this. This is such a great article because it happens all the time. People don't think about it, right? Oh, Johnny, next door is moving.
That's good for him. I'm just going to keep my truck on the cinder blocks. Guys, don't do that. Look, here's the thing. I don't care if you're a renter or an owner. Look, take care of your yard, right? I had a home that I was selling. It was in Hollister and the seller, the owner next door refused to cut his lawn.
And I'm like, can we, can I, would you let me do it? It's no, don't step on my property. I want my long lawn. I'm like, why? Because I don't want anybody touching it. I go if, this will reflect on us selling the house next door, which means we're going to get a lower value, which is going to affect the value of your house.
Still don't want you to do it. All right, guy. I get it. Whatever. People have their little reasons, but that's it. Yes. Dude, here's the thing. Today is a little different than what it was back in 2008 to 2012, right? Back then the vultures would circle around foreclosed homes and you would not get a, it doesn't matter if you're on notice to default or you're completely foreclosed on or what have you, that house will not sell for as much as.
A standard cell just isn't because there's going to be a stigma behind it. So let's say you fall behind on your payments. And you're like, I need to sell this house. Okay, great. Guess what? A notice of default is filed by the bank as they're legally supposed to do. That means your house is worth less and you have to disclose everything, transparent, everything.
Material to the transaction. So you have to let the buyer know that you're in foreclosure or you're you've been serving notice of default It's on the prelim. Everybody's going to know anyway, that's going to reduce the value of your home So if you're thinking about selling and you're struggling with payments right now pull your head out of the sand Don't be that ostrich and sell your house now get rid of it Because it's better to sell now versus later.
Let's talk about that real quick. If the market crashes, it's better to sell now versus later, right? Okay, so let's go back to that. Noisy neighbors. Oh, I love that. So my children are older. They don't squeal with joy all the time, which I miss dearly. I, honestly, I love my children being outside and playing.
And I remember all those great times. The neighbors behind us and the neighbors next to us have trampolines. The guys behind us have a pool and they have young kids and they play and they squeal and they laugh with joy. And it's so amazing to listen to. Some people would be like, that's annoying.
And that's correct. As a matter of fact, the neighbors next to us right over here took our trampoline and gave it to them because we wanted them to play with it. They would come over to our house and play with it. And we want them to play. We want kids to play. Arguing is another thing, right?
Playing loud music is another thing, right? My neighbor, a couple of doors down smokes. Here's the thing. It's your house. I get it, but if your house is for sale next door, do yourself a favor and don't, smoke because you're just going to piss off a couple of neighbors here's the thing if you're looking at an open house and you go through and then you go outside and you smell smoky smell, you're like, Oh no.
Non starter. So you just push people away. So if you smoke next door, just wait until it goes try to do it at certain times, right? I get it. It's your house.
Semi is guilty. My dogs bark, but my dogs bark cause they want to play with you. I don't care if you're a human, a dog, or a cat, they just want to play, right? They understand that this thing is the way that is. And as annoying as it is for me as a. As embarrassing. Sometimes it is for me when they go up to other dogs, they bark.
That's just the way that's just a, I don't know how to bark. I'm not the greatest dog owner, but if you have dogs that are outside on a leash and they charge people all the time, that's just dumb. And two, you're not supposed to be having dogs do that. That's wrong. So pull your dogs inside.
Here's the thing you need to put, bring your trash cans in. We don't have that problem here. We have a problem with illegal dumping and that's, become a common problem. Did you know in San Jose, you can call people, you can call your recycling company and they will come and pick up large items. So there's no reason for you to dump a mattress on the side of the road.
Other than the fact that you're stupid and ignorant. And yes, I'm drawing the line there. I'm calling you stupid and ignorant learn yourself. Stop being an idiot and doing illegal things when there's no reason for you to dump a mattress on the side of the road in San Jose when you can pick this up yourself, call them up, say, Hey, Mr.
Recycle Company, I have a mattress or I have a refrigerator. Can you come by, pick it up, take care of it. The adults
Registered sex offenders, one thing, but other than that, your records are sealed, right? People do stupid stuff. I get it. I tell people that you have the right and obligation to look at the Megan's Law list and know where registered sex offenders are. And you should, especially if you're if you have young children, but understand that when you know that you have to disclose it.
I'll leave it there. Oh yeah. This goes back to the long grass, right? If you have curb appeal guys I've actually weeded neighbor's houses to make it my house, and my listing looks better. I've cleaned up around, I won't paint your house, but look, if your house is in disrepair and I'm moving into a million-dollar house, I'm going to choose another house, right?
And that's just going to hurt it. And you're just being lazy and cheap and taking care of your house because when you come to the point where let's say that you die or you decide to sell your house, you're going to have to take care of that. And if I look at a house like that, I'm going to make sure that there's no termite issues or there's no water damage or there's no problems and that's just going to wind up costing you more later.
So take care of it now.
Yeah, I have a lot of friends that have these. I had a neighbor that had one. and cause a lot of problems. If you have that RV, park it in your driveway. Period. I get it. If you have that, you should also invest in a parking lot or storage area down the street because that's you don't need to have that hanging out there.
I sold a house this year with something like any functioning adult. I sold a house this year and the lady refused to move her, a little political thing. And I'm like, look, you do what you do, right? I'm not saying not to do it. You have the freedom and right to do that, but you might turn some buyers off.
And I don't care what side of the aisle you are, but whatever, I don't care whatever it is. But if you do that, you're going to turn some buyers off. So good luck with it. Don't come back to me and say, it's my fault that your house isn't selling, or It's not selling where you think it is because whatever.
Ego will ruin the sale of a house. It's the number one reason why houses don't sell is hubris.
Yeah, I have a home-based business. This is my business, but okay, I get it. You have an indoor gym. A lot of the guys, I go to the gym all the time, and a lot of the trainers, they have home-based businesses. They have gyms in there. I have a gym, a small gym In my garage, it's not a business.
I do it because when we shut down for COVID, I started investing in buying equipment and I started doing it because whatever it is, that kind of stuff may or may not appease a certain type of buyer, right? Our job is to show you that you should. Open yourselves up and offer your house to as many types of buyers as possible.
And we have different types of buyers, demographics that we can talk about. When we go to sell your house, actually, we devise a story and an avatar as to who we're going to sell the house to. Not what kind of a person, right? That's discrimination. But who is going to buy your house?
Is it somebody that... It's going to love your house or is it going to be an investor that's going to come and fix your house? Who is your target demographic and how can we mark the best market for them?
Yeah, it's not the rude neighbor, but it's the guy that's telling you all the problems of the house next door five doors down, and cramps it I can't remember on Bewitched was that nosy neighbor that's always looking out the window Those guys are You know, they're good for a function because they take care of the neighborhood.
I get that. But there's also the point where I actually push my clients when I'm working with buyers, I go, Hey, there's a neighbor there. Maybe you should go talk to them, see if you like them because guess what? You're going to be stuck with them for five, 10, 15 years. So yeah, absolutely. Don't be overly neighborly.
Okay. I'm going to shut these down as we go through it 251 homes for sale in san jose.
It's not enough guys. We need to be upwards of 800 just in san jose Okay, let's see what this is here. It's now the time to buy a rental property
Yeah, probably I'm actually looking at buying property. My agents are looking at buying property Yeah. Are you financially capable? So here's the thing. When you buy a house, it doesn't matter if the market's good or bad or what, hot or cold or whatever. When it's time for you to buy a house for you, it shouldn't be an investment.
It should be your house because it makes sense financially for you to buy a house. Right when you're ready to invest after you buy your house or some would even say Grant Cardone or What's that Texan guy that's in trouble right now? He would say don't buy your own house Invest in a house first and that's house hacking You should absolutely consider that as an option right buy your investments first and then buy a house when you can have it pay for itself I don't know.
Lots of different options. But typically what I see is people want to move into their own homes, their tire paying rent. And they're ready to do that, right? Get your finances in order. Going back to financial intelligence, we have a home budgeting consultant that works with us and she'll walk you through the entire process of understanding where you are, where you want to be, and how to get there in a conservative way so that you you could still go buy Starbucks and go on vacations, but you're saving.
You're making choices. You're making conscientious choices toward buying your first house.
I always say, get a property manager, right? I think you being involved, you have ego inexperience, et cetera. Finding the right property manager is huge, but having somebody as an intermediary is also better. You can do it yourself. Absolutely. There's some property, but how do you, are you. Going to be willing to get up at night and take care of that hot water heater that just exploded.
Are you willing to collect rent? Are you willing to evict somebody? Or are you willing to pay a small portion of your proceeds to somebody that will do that for you? Totally up to you, right?
Condos, HOAs, and townhouses, all come with HO costs, but also restrictions. And you don't want to have a whole complex or development full of rentals. So HOAs sometimes put a restriction on how many renters you can have, rental units you can have, and it's typically 25%. And one is because of resale value, but two is because certain banks won't lend on houses.
Or townhouses or condos if there's a certain portion or overabundance ratio of rentals. Just so you know houses are great targets. Duplexes to fourplexes are great ways to get started. And they're safer because you still have income coming in. But you can buy four houses at the same time as you're going to look at a four-plex versus four houses.
It's virtually the same thing, right?
So we can go through that if you ever have any questions. So have you added up all the expenses I bought Six duplexes at one time and they didn't tell me that. Oh, by the way, there are Snow removal costs that I wasn't told about it wasn't disclosed and it's got a you got to think of all things And that's part of learning getting experienced.
Yeah. One of the reasons why I don't buy in California is because there's the tenant laws, landlord tenant laws favor the tenant. And it's very difficult if you have a bad tenant, am I going to sell this house? Probably not rent it, but who knows? You never know. With life. What are the expectations?
What are your, what's your ROI? Are you thinking outside of the box? Also, what's your exit plan? I don't know if this is in there yet or not, but we bought one house without an exit plan. We didn't know what to do with it. And our partners and I had a little tiff about it. Have you done your due diligence on location, Yeah, that's why you need an agent to help you understand that. They know the areas and they can't steer you, but they can absolutely tell you where the better areas are. If you're investing.
Talk to your insurance people, listen to our financial investment intelligence programs as a podcast video, which comes out once a week, listen to this, and learn about landlord insurance, which you can buy what you shouldn't buy. What you, is it a waste of time? Should you just get an umbrella policy? There are a lot of different things that you have to really consider when you're when you become an investor like that, buy or borrow, I guess it's cash or borrows.
Yeah, guys totally up to you. There are so many different ways to look at it, right? What's that guy's name? That texting guy that's in trouble. Now he's saying you should never put a loan on a. On a house. It's a million-dollar house. I don't have a million dollars to write. I'm sorry there are ways of leveraging and there's there are all sorts of different programs and processes that we can teach you and write you up on that.
It is risky. You might buy, a house and put a bad tenant in there and then two years later they destroyed the house and you've spent thousands of dollars having to evict them and you're paying cash out every month. I mean that those are the things, right? Those are the risks you have to be aware of.
Alright, enough of that.
HomeBot, do you want to know what the value of your house is? Pop that in. The link is down there. If you want information about financial intelligence, you want to get on an email list, we don't call you or bug you. It's not the point. The point is just to push that information toward you so you know what's going on.
All right. Let's see. Look at the numbers here. Look. The median home value is actually increased again. So when we peaked,, the median value peaked in July of last year for 16, right? Then it went down,
peaked right here, June for 13. Now it's actually four 20 and went down to four 16. Now it's fourth. They're always adjusting these numbers, right? And we got down to. 361. And now we're back up to 397, 400, 000 guys. The median sales price of a house in the United States is 400, 000. Crazy times. National home price index right here.
It's continuing to go up and up. These gray areas are where the. Recessions happened in 2008. I don't want to say it went all the way to 2012 what do I know? I'm, not an economist days to sell over time in Santa Clara county single-family homes is 17 days if you look at that number the lowest we had was six days on average six days and that was two years ago in 2021 Santa Clara county absorption rates months of inventory.
We have less than one-month point nine Months of inventory for single-family homes in Santa Clara County. The U S standard is three months right now. It doesn't mean that there are areas out there that are nine, 10, 12 months, anything over three, anything over six months is a buyer's market. When I say we need to have a balanced market, that's what a balanced market is about five to six months of inventory housing inventory listing count of 613 right here.
See right here. See how the inventory was really high rate. I wouldn't say really high. I would say that's a natural market, right? That's a natural normal market. 2017 2018. We actually saw a little slump in 2018. What's it called a recession? But our inventory is about half of where we need to be which is why you're seeing all these reports On why the market is tanking Sales are dwindling or slumping.
They're not let's go through this real quick. Let me show you why everything in green is from last year Everything in white and beige, beige is the automated ones, automated formulas for me so that I know not to butts around with these. So we have 174 houses. over 40 days on the market, which is, it's good.
We should have more. We have 251 for sale right now. That's on the realtor. And then the actual MLS fee shows three 34
closes last week. We had 74 closes last year, and last week was 73.
The average sales price last year is 1. 7. Average sales price this year is 1. 6. We're getting closer. We're at about 141, 000 difference.
The median sales price is 1. 6 million dollars. Our list price to sales price ratio this last week was 5% almost 106% on average last year's average was 101 that's guys July is when we saw the market starting to slow down. We saw the market starting to go Contract nobody listened you're full of shit blah blah blah.
No, this is where it shows You're going to see these numbers go down below 100% next couple of weeks, the next couple of months. When you're looking at the green ones, that's where I'm saying we're out of the slump right now. Now look,
we're either pulling out of the slump right here. We're pulling out of the slump right here. We're pulling out of the slump right here. We don't know where we are, right? I can't tell you where we are. These charts are great for looking forward from a backward perspective, but I can't tell you where we are right now other than we could be, in a slump, coming out of a slump right here, or we could be completely out of a slump right here, right?
I'd love to get this thing updated, but I only use this as an illustration. When the market increases, there's more competition. When the market increases, competition comes back, right? This is where you want to be to buy a house. That's perfect timing as an investor. But you can never, you know, right?
We could be, right here. You can say, Oh, this is the slump that I've been waiting for. I'm going to buy and then boom, crash. You just don't know. When the market's coming down, you see a lot of competition. When, the market's at its peak, more competition. And all of a sudden the market slows down.
These are the great times to buy it when we're sliding down. Okay. Let's see where we are. That's why I'm saying we're, we've passed the trough, right? We're, past that trough. Now this is the number of units for inventory. We're way away are our inventories this is several sales, right? These are the number of actual sales that are coming in.
I bring this down.
Okay,
so these are the number of sales It's not that the market is slowing down there. Some houses are still selling. I just proved that to you, right? We're having 175 closes and 50 clothes. This is because of the 4th of July week, right? So 74 is about normal.
So yeah, about a hundred to 75 houses sold per week, 85, 67. So the average is 58 closes on average. Last year was not a hundred. So it's because the inventory has nothing to do with volume, and has nothing to do with the confidence of the market. It has nothing to do with a lack of sales. Houses are still selling.
I can tell you that because it's taking 16 days to sell on average. Versus last year, 22. Now this year we were coming out of the slump. So that number on average will be a little bit higher, but we're, I think we're out of the slump because look, we've been inverted for the last couple of weeks. I think you're going to see these numbers grow as, normal, right?
So let's see if I can do that.
Oh no. You know what? I'll get to this next week. I'll show it to you next week. All right, there you go. 30 minutes of fun. I was hoping one of my other lender friends would come on and talk, but that's okay. I know we did a lot of three things you need to know, so I apologize for that. But here's the thing.
Those are going to be great little sound bites for, other content coming through. So tomorrow we're talking about inventory watch across the U. S. We'll have a lot of information there too. I'm Vito Scarnecchia with Abitano. We'll see you out there.
Comments
Post a Comment