Latest / Connor with Honor: AI, Real Estate and Real Life / The differences between the last real estate Foreclosure cycle in the Santa Clarita Valley California and now November 2, 2022

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The differences between the last real estate Foreclosure cycle in the Santa Clarita Valley California and now November 2, 2022 · Connor with Honor: AI, Real Estate and Real Life

• 0:00
  SPEAKER_00: I appreciate you watching.
• 0:02
  SPEAKER_00: I am known as Connor with Honor, local agent here in Santa Cruz, California.
• 0:06
  SPEAKER_00: This real estate update is going to be on the 2nd of November 2022.
• 0:10
  SPEAKER_00: A lot of people are talking about the future of real estate and that if the market's going to collapse and the next year we're going to have a recession.
• 0:16
  SPEAKER_00: All of these things could potentially be true, but there's a few things I'd like to point out so you can look at things a little bit more, well, uh maybe a little bit more real.
• 0:25
  SPEAKER_00: Right now, if you if you track back to 2007 and compare it to right now, back in 2007 and just previous to that fall of the real estate cycle, where we had the massive short sale index, the foreclosures, the bank-owned properties, the real estate-owned listings, we did notice that prior to that, loans, if you remember, were pretty much given to, well, whomever.
• 0:48
  SPEAKER_00: And there were people borrowing money for residential real estate that probably shouldn't have been borrowing in those amounts.
• 0:56
  SPEAKER_00: Now, what they did is there were a lot of also clever loans.
• 0:59
  SPEAKER_00: So your payment was a lot less than it was going to be a few years from the date that you got it.
• 1:04
  SPEAKER_00: And those were those extra, those seconds on the property.
• 1:07
  SPEAKER_00: So people didn't need any, well, skin in the game to really buy real estate instead of the 20% down, which when I bought my first home back in the 90s, early 90s, that was what was required.
• 1:19
  SPEAKER_00: When the last market before it fell, there were a lot of different loan programs out there that were questionable, but again, everybody was using them.
• 1:27
  SPEAKER_00: You had 100% financing, you had that split into an 80% loan, and then also the 20% loan, either by the same entity or a different entity.
• 1:36
  SPEAKER_00: But that 20% loan in some cases was required to be paid back pretty quick.
• 1:41
  SPEAKER_00: And I saw terms of one year, five years, and seven years on that particular loan.
• 1:47
  SPEAKER_00: When the market started to fold in on itself, and you had the large subprime bank, I believe it was March 2007, close its doors, claim bankruptcy.
• 1:56
  SPEAKER_00: Then we started to see the House of Cards start to collapse.
• 1:59
  SPEAKER_00: Compare that with today, a lot has changed.
• 2:01
  SPEAKER_00: We now have management companies over the appraisers.
• 2:04
  SPEAKER_00: We have a lot of different fail-safes in the system.
• 2:07
  SPEAKER_00: We have loans and lending, have very strict requirements now.
• 2:11
  SPEAKER_00: In fact, we are also watching as the loan and lending world, it's very difficult for people to get qualified.
• 2:17
  SPEAKER_00: So then you have those ultra-low interest rates back in the day.
• 2:20
  SPEAKER_00: The interest rates since then have been fluctuating.
• 2:23
  SPEAKER_00: They've gone as low as in the twos.
• 2:25
  SPEAKER_00: Now we're up to the sevens here in November of 2022.
• 2:30
  SPEAKER_00: One of the things to consider, and this is what's talked about all the time, if you're considering buying real estate right now, here at the end of 2022, and you're looking at that 7% interest rate, besides impacting what you can qualify for, because if you were able to qualify at 4% for$800,000, now you might only qualify in the 500s at 7%.
• 2:52
  SPEAKER_00: But let's say that number still fits for you.
• 2:54
  SPEAKER_00: You can still find what you want.
• 2:56
  SPEAKER_00: One of the things that they talk about in the entire real estate world is you want to marry your house, not your mortgage.
• 3:02
  SPEAKER_00: If you've heard that, that's fine.
• 3:04
  SPEAKER_00: But also understand going in that the problem could be that maybe interest rates will never get below seven.
• 3:13
  SPEAKER_00: So if you are going to buy now, make sure that you are good with your payment and not hinging your bet on anything in the future that's going to occur with interest rates.
• 3:23
  SPEAKER_00: And if you're not, then wait it out, see what happens.
• 3:26
  SPEAKER_00: At the end of the day, as long as you're renting, though, you are paying somebody else's mortgage and you're adding to the equity on the residence.
• 3:33
  SPEAKER_00: So that makes sense.
• 3:35
  SPEAKER_00: If you own your own real estate, you're paying into your own mortgage, adding that equity to resident your residence as long as the market stays, well, somewhat stable.
• 3:43
  SPEAKER_00: People are talking about prices changing here in the coming months.
• 3:46
  SPEAKER_00: That's true.
• 3:47
  SPEAKER_00: We are watching as price changes are occurring right now.
• 3:50
  SPEAKER_00: We're seeing that we have anywhere in the Santa Crita Valley here in California, anywhere from 30% to 40% of the listings that have been on the market more than 30 days have their prices reduced in an attempt to adjust to the current market standard.
• 4:06
  SPEAKER_00: Sellers are looking at real estate as it was based back in March, April, and May of this year.
• 4:12
  SPEAKER_00: After that, the market started to slow down quite a bit.
• 4:15
  SPEAKER_00: Interest rates started to creep up, and then we had inflation issues and these other things that were starting to cause prices and home prices not to be as much as they were selling for prior to.
• 4:26
  SPEAKER_00: We have more inventory now as well, about double the inventory that we saw back in those days, around 560 units for sale.
• 4:33
  SPEAKER_00: Back in the day, we're in the 250s, 220s, 300s, somewhere right around there.
• 4:37
  SPEAKER_00: And that was back March, April, May of 2022.
• 4:40
  SPEAKER_00: Now, fast forward to November, beginning of November 2022, we have double the inventory.
• 4:45
  SPEAKER_00: We have new housing building, but the new housing can't be built fast enough to be able to overcome the inventory now.
• 4:53
  SPEAKER_00: And we do have that extra inventory, as I talked about.
• 4:55
  SPEAKER_00: Interest rates are a little bit higher, so that's causing a dip in real estate prices, also.
• 5:00
  SPEAKER_00: But sellers are still stuck in the mindset of being able to sell their property for what their neighbors did a while back.
• 5:06
  SPEAKER_00: Here's a bitter pill that might need to be swallowed.
• 5:09
  SPEAKER_00: You probably missed that market.
• 5:11
  SPEAKER_00: But here's the saving grace.
• 5:13
  SPEAKER_00: The market that you're going to potentially be buying in is probably going to be even more depressed than the market that you're going to be selling in.
• 5:20
  SPEAKER_00: If you own something in Southern California, you'll call me to sell it for you.
• 5:23
  SPEAKER_00: And I'll be able to show you that if you're going from California to a less expensive market, pretty much anywhere else in the United States, of course, besides New York, Manhattan, uh some of the other cities, maybe Miami, but it's going to depend.
• 5:36
  SPEAKER_00: What's going to end up occurring is it's going to be a wash for you and still probably be a better benefit if you are going to vacate the state.
• 5:43
  SPEAKER_00: If you are leaving somewhere else to come into California, well, the problem's the opposite.
• 5:46
  SPEAKER_00: But again, you want to sit down, you want to work those numbers to see if it does make fiscal sense for you to purchase real estate or even sell real estate at the present time.
• 5:55
  SPEAKER_00: If you want more information, just contact me.
• 5:57
  SPEAKER_00: You can reach out via text, respond to this particular video here, whatever it may be.
• 6:01
  SPEAKER_00: I am Connor with Honor with Realty One Group Success here in Santa Clarita, California.
• 6:06
  SPEAKER_00: You want to see more about me, you want to listen to my podcast, watch my YouTube channel, all you have to do is Google Connor with Honor.
• 6:12
  SPEAKER_00: You'll find me everywhere, and just click on those links and you'll see the kind of content that I produce.
• 6:18
  SPEAKER_00: At the end of the day, my goal is not only to represent buyers, sellers, and investors with regard to real property and real estate, but to also give good factual information regarding the real estate market so you, the consumer, whether you're buying, selling, or investing in real estate, can make the best decisions possible.
• 6:37
  SPEAKER_00: I do appreciate you watching.
• 6:38
  SPEAKER_00: I am Connor with Honor, and we will talk to you soon.
• 6:41
  SPEAKER_00: I do appreciate this you watching the update.
• 6:44
  SPEAKER_00: If you know someone that can utilize my services, please share it and like it and subscribe, of course, if you're seeing it on YouTube and not getting it in my email, in your email, actually from my email.
• 6:55
  SPEAKER_00: I'm Connor with Honor, over and out.
• 6:59
  SPEAKER_00: It's so hard to find the stop.
• 7:01
  SPEAKER_00: I found it.
• 7:01
  SPEAKER_00: Take care.