Latest / Connor with Honor: AI, Real Estate and Real Life / 113 Price reductions in less than 8 days in the Santa Clarita Valley real estate market

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113 Price reductions in less than 8 days in the Santa Clarita Valley real estate market · Connor with Honor: AI, Real Estate and Real Life

• 0:00
  SPEAKER_00: How many properties could possibly have been reduced in price over the last week?
• 0:05
  SPEAKER_00: That's since the 10th.
• 0:07
  SPEAKER_00: We're going to go ahead and call Sunday the original timestamp, and we're going to move it forward to today, which is July 18th, 2022.
• 0:14
  SPEAKER_00: Good day, everybody.
• 0:15
  SPEAKER_00: I am Connor with honor, Connor McIver, local real estate agent here in Santa Clarita Valley, serving, of course, most of Southern California, depends on the city, but I am definitely headquartered in the Santa Clarita Valley.
• 0:26
  SPEAKER_00: I think I've said that.
• 0:26
  SPEAKER_00: Sounds familiar.
• 0:27
  SPEAKER_00: Let's talk about price reductions.
• 0:29
  SPEAKER_00: The market's shifted a little bit and changed.
• 0:31
  SPEAKER_00: Where before we did have multiple offers on properties within moments after they came on the market.
• 0:37
  SPEAKER_00: We are still seeing that trend, but not as frequently as before, which almost everything up to about 1.5 million here in Santa Cruz Valley was exhibiting that very same, well, massive offers, very high offers, offers way exceeding the actual list price, even if the comparables weren't showing that the value was actually there.
• 1:02
  SPEAKER_00: So what happens is typically agents will go into the MLS system, multiple listing service, and they'll do their due diligence for their clients whenever they're clients, and then they go look at a property and the clients like it.
• 1:15
  SPEAKER_00: The agent will then go that next step.
• 1:17
  SPEAKER_00: If the clients want to move forward with an offer, and the agents will then look at the property and they will compare it with other properties that have closed in close proximity.
• 1:25
  SPEAKER_00: The rule of thumb is typically 180 days, and you don't want to go above that because that's usually the appraisal standard.
• 1:32
  SPEAKER_00: The closer you can get to 90 days in comparison is actually better.
• 1:36
  SPEAKER_00: And of course, apples to apples, you're not going to be comparing a mobile home with a single-family residence, and you're not going to be comparing a low-level entry-level single-family residence with an executive mansion that has Honduran mahogany and imported Italian marble throughout.
• 1:53
  SPEAKER_00: So you have to look at things that are the same.
• 1:55
  SPEAKER_00: In Santa Clita Valley, it's actually a little bit easier than maybe the San Fernando Valley Valley and other cities around Los Angeles because we do have a track system out here where you have uh typically the same builder per tract, and then within that uh that particular builder, they had different variables that they would use.
• 2:14
  SPEAKER_00: So they would call those elevations for the exterior, the way the exteriors of the homes look.
• 2:19
  SPEAKER_00: Uh there could be some that maybe are more Spanish influence, maybe Mediterranean influence, more traditional, modern, conceptual, whatever it may be.
• 2:27
  SPEAKER_00: They then built these homes, and of course, people would come and purchase them.
• 2:33
  SPEAKER_00: So those elevations, looking at apples to apples, same square footage if we could within the same area.
• 2:39
  SPEAKER_00: We want the six months, like I said, we want to try to make that comparison between the same square footage, same floor plan, and maybe different elevations, that's fine.
• 2:50
  SPEAKER_00: But at least three or four goods sold within a six-month period, and that really does a good job at helping us determine what today's value may be.
• 2:58
  SPEAKER_00: But you also have to consider the time frame.
• 3:00
  SPEAKER_00: Those that are six months old aren't going to be as highly priced as the ones that have sold more recently.
• 3:07
  SPEAKER_00: That's the trend of the market.
• 3:09
  SPEAKER_00: But we are seeing that trend starting to slow down, i.e., talking about this particular show today, and the price reductions all across Santa Crita Valley.
• 3:18
  SPEAKER_00: So what I did this morning is I ran all of the listings here in Santa Crita Valley, and I asked for price reductions within the last seven days or since the 10th, which would have been Sunday.
• 3:31
  SPEAKER_00: I do know that most price reductions happen at the end of the week.
• 3:35
  SPEAKER_00: It does depend on the activity on the property and depends on the relationship that the agent has with their seller as to what they're going to do as far as pricing strategy goes for the future showings.
• 3:48
  SPEAKER_00: A lot of people were under the presumption that that listing is going to be placed on the market.
• 3:52
  SPEAKER_00: It's going to move out relatively quickly.
• 3:54
  SPEAKER_00: This market has then shifted since those promises about a month, month and a half ago, where we saw the bank rate increase.
• 4:02
  SPEAKER_00: And I'm going to have a gentleman on the show this week actually talking about that.
• 4:06
  SPEAKER_00: What does that mean versus the origination loans out there or the new loans?
• 4:12
  SPEAKER_00: And that rate.
• 4:13
  SPEAKER_00: What is that rate?
• 4:14
  SPEAKER_00: What's that rate versus the bank rate?
• 4:16
  SPEAKER_00: Having them explain that, I think, will really help solve a lot of questions that people have with regard to real estate.
• 4:22
  SPEAKER_00: But now to the number, 113 listings have had their prices reduced with since the 10th of July in Santa Crita Valley, and today is, of course, July 18th.
• 4:33
  SPEAKER_00: So all of these listings have, and I can I'll publish the graphical data, but it's 113 out of 132.
• 4:43
  SPEAKER_00: So the other listings that are in there, the difference between those two numbers, they're either going to be static or they're going to have their prices, the prices have been increased.
• 4:52
  SPEAKER_00: A lot of times, uh the increase, you're going to ask, well, how how does that happen in the market?
• 4:57
  SPEAKER_00: It's sometimes what happens is you put a property on the market for a seller after you both have decided what that price is going to look like and what it's going to be.
• 5:05
  SPEAKER_00: Hopefully there was some kind of verification put into place and it wasn't just take it on the agent's word.
• 5:12
  SPEAKER_00: Hopefully they showed you exactly what they intended to do.
• 5:15
  SPEAKER_00: And then after that, after you as a consumer saw that, you say, okay, all right,$9.99 is a good price.
• 5:21
  SPEAKER_00: Let's go ahead and put it on the market for$9.99.
• 5:23
  SPEAKER_00: Because you have sold properties that compared apples to apples, and we also do that for sellers, and it looked very much like it, so it would appear that that's probably a good offering price.
• 5:34
  SPEAKER_00: And that also depends on strategy.
• 5:36
  SPEAKER_00: In some cases, that property is going to be put on the market at less than what that fair market value looks like in order to spear off multiple offers and try to get that competition between buyers to try to get the price even higher.
• 5:50
  SPEAKER_00: However, that market is a little dangerous to dwindle in now because of the flux that's going on in the current market.
• 5:57
  SPEAKER_00: Those games are, well, not games, but that strategy might be something that uh the ship sailed on.
• 6:05
  SPEAKER_00: So make sure that you get a full explanation from your agent before you let them talk you into underpricing or changing your pricing strategy for maybe what would be considered traditional to something a little more creative.
• 6:18
  SPEAKER_00: So watch out for that.
• 6:19
  SPEAKER_00: So of these listings, we have 113 that have those prices reduced.
• 6:22
  SPEAKER_00: And again, with those increases, maybe the sellers had a whole lot of activity, or they're talking to family and friends.
• 6:28
  SPEAKER_00: Oh my gosh, you priced your property there.
• 6:30
  SPEAKER_00: Oh, you should have put it more expensive.
• 6:32
  SPEAKER_00: They call their agent and say, hey, listen, Jack, I think we need to increase the price on this.
• 6:36
  SPEAKER_00: Looks like we're getting a whole bunch of activity.
• 6:38
  SPEAKER_00: We don't want to give our home away.
• 6:40
  SPEAKER_00: So then the agent, without being able to explain what that might entail, they go ahead and they say, sure, we'll go ahead and increase the price.
• 6:48
  SPEAKER_00: Now all of a sudden you have a property, and that's six of those, have their prices increased, versus 113 that have their prices decreased.
• 6:56
  SPEAKER_00: And it could have also been, here's the last thing, it could have also been a mistake of the agent in the multiple listing service, maybe transposing a couple numbers, puts it in, uh, lists all the information, puts that list price that he and the seller, they and the seller agreed on, and then all of a sudden you have, well, um, a mistake.
• 7:16
  SPEAKER_00: You can't go back in and change it.
• 7:19
  SPEAKER_00: Well, you can, you do go back in and change it, but you can't change it from reflecting that the price is now changed in some way, whether it be up or down.
• 7:27
  SPEAKER_00: And that mistake is a little costly, and maybe if they call the board, they might be able to get some relief.
• 7:33
  SPEAKER_00: But again, be wary and understand that if you see some price increases out there, it could have been just a very simple mistake at the very forefront when that listing was loaded into the MLS, it was published, and the agent didn't double check the work.
• 7:47
  SPEAKER_00: But it happens to all of us, mistakes are made.
• 7:49
  SPEAKER_00: But sometimes that expand that exp mistake is kind of expensive, so make sure you watch out and talk to your agent about that.
• 7:58
  SPEAKER_00: There's got to be some other workaround mechanism.
• 8:00
  SPEAKER_00: I haven't done that knock on wood, and I I hope I never do, but if I do, hopefully I'll be able to call the board and try to figure out how we might be able to wipe it out and start brand new because it was a mistake.
• 8:11
  SPEAKER_00: The market is this currently.
• 8:14
  SPEAKER_00: Of these listings of the 113 price reductions, I'll give you some big numbers here as far as what's going on in Santa Crita Valley.
• 8:22
  SPEAKER_00: But we have seen inventory almost double over the last several weeks.
• 8:26
  SPEAKER_00: Currently, we are at, dun, dun, dun, we're going to do results.
• 8:30
  SPEAKER_00: So I'm pulling condos townhomes, single family residences in all of Santa Clita Valley.
• 8:35
  SPEAKER_00: We're up to 557.
• 8:37
  SPEAKER_00: We were in the 520s, I think, last show last week.
• 8:40
  SPEAKER_00: So we are increasing.
• 8:41
  SPEAKER_00: If you track that back six to eight weeks, we were in the 200s, the low 200s.
• 8:46
  SPEAKER_00: So now we've or over doubled our listing inventory here.
• 8:50
  SPEAKER_00: So we're seeing that market shift.
• 8:52
  SPEAKER_00: Couple different changes out there.
• 8:54
  SPEAKER_00: We do have some interest rate changes.
• 8:56
  SPEAKER_00: People were very used to the threes and maybe three and a half and fours.
• 9:00
  SPEAKER_00: Now we're in the fives, potentially going to be in the sixes.
• 9:04
  SPEAKER_00: We do have the Fed that did meet not too long ago, and they did establish that the bank rate was going to be more expensive.
• 9:11
  SPEAKER_00: It's going to cost the banks more to borrow money.
• 9:13
  SPEAKER_00: They did this in an attempt to try to settle inflation down a bit.
• 9:17
  SPEAKER_00: And from what rumor has it, Fed's going to meet a couple more times before the end of the year and maybe attack that bank rate again.
• 9:24
  SPEAKER_00: That does have direct uh that that that could impact the origination rate where people are borrowing money for residences.
• 9:31
  SPEAKER_00: That's something to consider.
• 9:32
  SPEAKER_00: I also am seeing where sellers are being a little bit more flexible because they're not getting the offer volume that they had before or that they heard about kind of a legendary aspect.
• 9:42
  SPEAKER_00: Now there are they are willing to be more negotiable with regard to the pricing and also maybe paying some of the buyers' fees in the way of closing costs or giving credit.
• 9:54
  SPEAKER_00: We've also seen that sellers are a little bit more malleable as far as what they will accept on properties, and also buyers are asking for things they normally wouldn't.
• 10:04
  SPEAKER_00: If it says a refrigerator isn't included in the multiple listing service, we're going to see that as an agent, but we're seeing a lot of cases that uh the sellers are entertaining, maybe including that refrigerator with a good offer.
• 10:16
  SPEAKER_00: Same thing with washer and dryer.
• 10:18
  SPEAKER_00: It's not necessarily part of the sale, but they are things that are negotiable.
• 10:23
  SPEAKER_00: Everything in a listing happens to be negotiable, including the price you're paying for your agent to sell your house.
• 10:31
  SPEAKER_00: So make sure you're getting adequate deal, but great service and great connectivity with your agent before you select one.
• 10:39
  SPEAKER_00: Also, finally, in closing, we'll talk about some of the multiple listing service situations out there and also the syndication sites.
• 10:47
  SPEAKER_00: So in the multiple listing service, that's where the listings put in.
• 10:50
  SPEAKER_00: You might wonder, Zillow, Trulia, what are all these?
• 10:53
  SPEAKER_00: These are syndication systems.
• 10:55
  SPEAKER_00: So what happens is they syndicate, they republish the multiple listing service data, and they do so with a workaround through each individual brokerage.
• 11:05
  SPEAKER_00: That's where they're obtaining the listings from, because every listing really, at the end of the day, belongs to the brokerage, not so much the agent.
• 11:13
  SPEAKER_00: So taking those listings, they get permission from those brokerages to actually syndicate them.
• 11:21
  SPEAKER_00: And in with that, you're gonna see that when you pull up a property on one of these syndication sites, they're gonna do all sorts of neat things.
• 11:28
  SPEAKER_00: They're gonna give you potential rental value, what that property would look like if you did purchase it maybe as an investor, how much it would potentially rent for.
• 11:36
  SPEAKER_00: They're also gonna show value on the property as far as what they believe it's worth.
• 11:41
  SPEAKER_00: And then finally, they're gonna give you other indicators on the property, whether it's you know, price too high, price too low, and that kind of go along goes along with what it's worth, that what it's worth statement on those sites.
• 11:53
  SPEAKER_00: With that, you want to make sure you understand how the system works.
• 11:57
  SPEAKER_00: I've heard rumor and it seems to play in.
• 12:00
  SPEAKER_00: There are certain algorithms they put together, certain computer programs.
• 12:04
  SPEAKER_00: If you happen to have a history online of searching as a buyer, the price could be a little bit different for you when you're looking at those sites.
• 12:14
  SPEAKER_00: And then if you've been searching for a while as a seller online, what would indicate you're a seller, and there's gonna be a different price reflected there.
• 12:22
  SPEAKER_00: So sometimes these prices that you're seeing online, these estimates of value for real estate that are being advertised that are really for sale, those estimates of value are being modified in order to influence some kind of a decision on your behalf.
• 12:37
  SPEAKER_00: Whether you're gonna be wanting to buy a house or sell a house, they want to get your personal information so they can use that and sell that to the agents that are paying thousands of dollars a month to get leads from the syndication systems.
• 12:52
  SPEAKER_00: So be careful.
• 12:53
  SPEAKER_00: Understand that if your phone starts ringing off the hook or your email starts blowing up or you start getting these text messages, you don't know who they're from.
• 13:02
  SPEAKER_00: Typically that's going to be a local agent, maybe not so local, but an agent that has paid for your personal and private information.
• 13:10
  SPEAKER_00: Now you gave it up, so that's the way, but don't be tricked so easily, and please watch out for yourselves.
• 13:16
  SPEAKER_00: Also this weekend, if you're going to open houses, you can go to Santa Clarita Openhouses.com.
• 13:21
  SPEAKER_00: I do have a system that I put in place that'll allow you to be notified whenever open houses come up in a particular area you may be interested in.
• 13:29
  SPEAKER_00: I also have some tips and tricks with regard to open houses to share with you so you'll know how to do it safely and without having to uh have any of your personal information compromised or your privacy interrupted when you're trying to just relax and you have people hounding you to in order to use them to be your representatives.
• 13:49
  SPEAKER_00: I'm Connor with Honor, real estate agent here in local local real estate agent in Santa Crita Valley.
• 13:56
  SPEAKER_00: I appreciate you watching this week's broadcast.
• 13:58
  SPEAKER_00: Like I said, we're gonna have a great lender on here in the coming few days, and we're gonna discuss what this origination means and this interest rate and the bank rate and all that fancy stuff.
• 14:08
  SPEAKER_00: So we're gonna get into that, and I hope everybody has a fantastic week.
• 14:11
  SPEAKER_00: When you're ready, reach out to me.
• 14:13
  SPEAKER_00: Just Google me, Connor with Honor.
• 14:15
  SPEAKER_00: You'll run into my YouTube channel first and see the podcast radio shows that I've been doing.
• 14:19
  SPEAKER_00: And hopefully I'm a good fit for you and yours.
• 14:22
  SPEAKER_00: And if not, I wish you well.
• 14:24
  SPEAKER_00: And if so, give me a yell.
• 14:26
  SPEAKER_00: Talk to you soon.
• 14:27
  SPEAKER_00: I am Connor with Honor, over and out.