Latest / Connor with Honor: AI, Real Estate and Real Life / So. California Fires and Castaic, Hughes Fire and Palisades in 2025 what do you need to know about the current state of the insurance market

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So. California Fires and Castaic, Hughes Fire and Palisades in 2025 what do you need to know about the current state of the insurance market · Connor with Honor: AI, Real Estate and Real Life

• 0:00
  SPEAKER_00: Welcome to Saturday.
• 0:01
  SPEAKER_00: It's the 25th of January, 2025.
• 0:05
  SPEAKER_00: We're going to get into your real estate update, talk about the market, talk about those fires that are going on, which by the way are 90% contained.
• 0:13
  SPEAKER_00: Thank God and bless the firemen and firewomen out there working so hard and diligently to put these blazes to rest.
• 0:22
  SPEAKER_00: So that's very, very good.
• 0:24
  SPEAKER_00: We will have to watch as the year develops.
• 0:27
  SPEAKER_00: But right now I can tell you that insurance companies are going nuts trying to figure out the best way to compensate, be compensated, and to pay for the things that have been destroyed as the result of the Palisades fire.
• 0:41
  SPEAKER_00: And also don't forget, it wasn't just those super expensive homes, folks.
• 0:46
  SPEAKER_00: I know that it doesn't make the news cycle, but there's some mobile home parks there that were destroyed as well.
• 0:52
  SPEAKER_00: And those mobile home parks, if you put them on the entire sphere of cost or price per square foot, super expensive real estate as well, they were also destroyed.
• 1:03
  SPEAKER_00: And again, if you're living in a million-dollar house in Santa Clarita and you go live in the mobile home park near Pacific Palisades, it's probably going to be worth a little bit more than even the most expensive property or some of the most expensive properties in Santa Clarita, at least on average.
• 1:19
  SPEAKER_00: So don't forget that there was a lot of loss with this fire.
• 1:23
  SPEAKER_00: Things to look out for with regard to insurance.
• 1:25
  SPEAKER_00: Make sure you do your investigations early.
• 1:28
  SPEAKER_00: Currently, all across Santa Clarita Valley, 503 active listings total on the market for sale.
• 1:34
  SPEAKER_00: This is going to include all the cities out here.
• 1:36
  SPEAKER_00: Medium price,$844,000 with an average days on market of$64.
• 1:42
  SPEAKER_00: That's not unusual this time of year.
• 1:44
  SPEAKER_00: In a much faster-paced market, we will see that days on market time frame be considerably less.
• 1:50
  SPEAKER_00: It'll be maybe 20 to 30 total days on market.
• 1:54
  SPEAKER_00: And of course, that's going to be very dependent on financing.
• 1:57
  SPEAKER_00: If people are using cash to purchase real estate, in a lot of cases, they're waiving their appraisal contingency.
• 2:05
  SPEAKER_00: And sometimes when you are getting a loan on real estate, sometimes that appraisal actually takes a little while to get finished.
• 2:13
  SPEAKER_00: So that's going to be some of the delay in those types of loans.
• 2:17
  SPEAKER_00: In addition with cash buyers, they're able to really condense those time frames usually as well.
• 2:23
  SPEAKER_00: And that's the reason why they're using cash.
• 2:25
  SPEAKER_00: They want to get everything done quickly.
• 2:27
  SPEAKER_00: So sometimes they will approach a property, they'll write a contract, and they'll ask for a 10-day close or even less.
• 2:34
  SPEAKER_00: And depending on how nimble that seller is, the seller might be able to actually allow that to happen and have that property close quickly.
• 2:42
  SPEAKER_00: But with loans, there's a lot of other parts in that process, not just inspections, because I believe everybody should do an inspection, even in a super fast-paced market.
• 2:52
  SPEAKER_00: But the the problem in that type of market when it's super fast buyers, there will be one that will give up everything and not care about inspections, and usually that causes issues.
• 3:03
  SPEAKER_00: Of course, they're going to get the property for the most part, because they're not going to ask for anything.
• 3:07
  SPEAKER_00: And in fact, they write that offer based on them not even wanting to know what problems are with it.
• 3:14
  SPEAKER_00: That's an issue.
• 3:14
  SPEAKER_00: So make sure you get good guidance.
• 3:16
  SPEAKER_00: All right, so right now, that average 64 days on market, we're seeing that play out.
• 3:21
  SPEAKER_00: And again, in this market, we have cash.
• 3:24
  SPEAKER_00: Most of them are conventional financing.
• 3:26
  SPEAKER_00: We do have FHA and VA properties that are also being uh written on.
• 3:32
  SPEAKER_00: I'll give you those numbers in just a second.
• 3:34
  SPEAKER_00: But homes priced between 500 and 600 are averaging about 70 days, 78 days on market time frames.
• 3:41
  SPEAKER_00: Now, and then if you go to the higher ranges, the 1.3 to 1.4 million dollar range, around 52 days, and that's just current, the seven-day snapshot that I'm talking about.
• 3:51
  SPEAKER_00: Coming soon listings, 16 days are marked as coming soon.
• 3:55
  SPEAKER_00: You can get those, but you have to get them by email.
• 3:57
  SPEAKER_00: They're syndication sites that might try to tell you that they have access.
• 4:02
  SPEAKER_00: Unfortunately, they don't.
• 4:03
  SPEAKER_00: The access is going to come with your real estate agent.
• 4:07
  SPEAKER_00: So if you have an agent that you like, hit them up and say, hey, listen, I want to see these coming soon listings, and they'll be able to give those to you.
• 4:16
  SPEAKER_00: They're going to be for every city in Santa Crita Valley.
• 4:19
  SPEAKER_00: And it's not an overwhelming amount, like currently, as of morning on Saturday, 16 properties are slotted as coming soon.
• 4:26
  SPEAKER_00: So it's not going to be an overwhelming amount.
• 4:28
  SPEAKER_00: But if you want it to be made, this particular inquiry about coming soon to be made fitting your criteria, then that's great too.
• 4:36
  SPEAKER_00: I mean, if if there's no two or three bedroom is going to work for you and a four-bedroom is what you're looking for, then why not just look at everything that's four bedroom, right?
• 4:46
  SPEAKER_00: So I guess that does make sense.
• 4:47
  SPEAKER_00: But ask them to change it if you want them to.
• 4:50
  SPEAKER_00: And if you don't have access to that, you can go to Santa ClaritaOpenhouses.com forward slash coming soon.
• 4:57
  SPEAKER_00: Just put it all together, and I will be able to get you those coming soon listings when you want to see it.
• 5:02
  SPEAKER_00: All right, so of those, the median home price of the coming soon listing is eight coming soon listings are 839,925.
• 5:11
  SPEAKER_00: Sold properties, 27 sold this week for an average sale to list price ratio of 99%.
• 5:17
  SPEAKER_00: So that basically means what sellers are asking for their properties on the listing prices, they're getting almost all of it.
• 5:23
  SPEAKER_00: There's going to be anomalies and changes.
• 5:26
  SPEAKER_00: There's going to be some that are going to get more and some are less, but the median price does indicate that they're getting very, very close to what they're asking.
• 5:33
  SPEAKER_00: Average days on market for sold homes, 67 days all total, all in.
• 5:38
  SPEAKER_00: Homes in the$500,000 to$600,000 price range, sold with an average of 92 days on market.
• 5:43
  SPEAKER_00: Sales to list price ratio of 99.1.
• 5:46
  SPEAKER_00: So again, we're right there.
• 5:47
  SPEAKER_00: Pinning sales, 134.
• 5:49
  SPEAKER_00: These are properties that are currently in escrow.
• 5:52
  SPEAKER_00: And again, strong buyer drive happening here in Santa Clarita, even as fallout after the holidays, even with the fires that have been uh hopefully about to be put to rest, like I said earlier.
• 6:04
  SPEAKER_00: Median price for the pinnings homes are$857,000,$445,000 average 57 days on market.
• 6:12
  SPEAKER_00: Many properties are seeing price reductions.
• 6:14
  SPEAKER_00: I've been seeing this lately.
• 6:15
  SPEAKER_00: There's a couple different strategies with regard to reducing price.
• 6:19
  SPEAKER_00: Sometimes when you do that as a seller, if your property is not getting a lot of activity, it does spur off the syndication sites.
• 6:28
  SPEAKER_00: It will start them generating more information about your listing.
• 6:31
  SPEAKER_00: So more buyers out there in that in that price range are see it.
• 6:35
  SPEAKER_00: In addition, those buyers that have maybe seen your property before thought it was overpriced, it's going to come back around a second time and hit them in their email inbox or on whichever app they're using for these syndication sites, they will see it and then they'll be able to maybe say, oh my gosh, well, this is really something I've been looking forward to seeing.
• 6:52
  SPEAKER_00: And maybe then they'll get off the uh get off the field out there and have a look at it.
• 6:56
  SPEAKER_00: All right, with that, many of these price reductions, we're seeing a majority of those in homes that are listed over$700,000.
• 7:04
  SPEAKER_00: And again, sellers are trying to compete with each other.
• 7:07
  SPEAKER_00: As this inventory starts to increase in the next couple months, we're gonna see even more of that if their properties don't sell prior to.
• 7:16
  SPEAKER_00: Luxury markets in Santa Clarina, I've talked a little bit about the mobile home parks there.
• 7:20
  SPEAKER_00: When you have a beachfront mobile home, you can imagine the price point, right?
• 7:26
  SPEAKER_00: So out here, we're not beachfront, we're about 40-50 minutes from the beach, depending on which way you're gonna go, and depending on traffic.
• 7:33
  SPEAKER_00: But our luxury market out here, over$2 million, definitely slower moving, and that's indicative of most markets.
• 7:40
  SPEAKER_00: That's about 133 days on market.
• 7:43
  SPEAKER_00: Now I said that Castag fire 90% contained, and this has caused some buyer hesitation because now they're wondering where they're going to get insurance.
• 7:53
  SPEAKER_00: And when they're trying to do their due diligence at the beginning, asking these different insurance companies if they can insure them by giving them an address, any of the addresses in Santa Cruita Valley, the insurance companies are a little slow to respond because they're trying to find out what this is going to cost them.
• 8:11
  SPEAKER_00: And yes, insurance, they make money, right?
• 8:15
  SPEAKER_00: That's how they stay in business.
• 8:17
  SPEAKER_00: They pay out less than they take in.
• 8:20
  SPEAKER_00: Whatever that difference is, that's where the insurance company is probably going to base their financials on.
• 8:26
  SPEAKER_00: And when a particular market becomes too expensive because of some uh multiple natural disasters or issues like that, claims for insurance, then those insurance companies, of course, find it that it's not cost effective for them.
• 8:42
  SPEAKER_00: Then they start making decisions and they start saying, you know what, after we're done with your particular term, after your term has been completed, we're no longer going to insure properties in California or even properties like yours.
• 8:58
  SPEAKER_00: So that does create issues with, of course, sellers and property owners, not to mention home buyers, that now they have to try to find insurance.
• 9:08
  SPEAKER_00: It wasn't very long ago where it was very simple.
• 9:12
  SPEAKER_00: All we had to do is ask the seller, if I was representing a buyer, I would ask the seller's agent, hey, who does your seller have insurance with?
• 9:20
  SPEAKER_00: And they would say whatever it was, I would bring that back to the buyer, the buyer would make a phone call, and just like that, nice and easy, it happened.
• 9:28
  SPEAKER_00: Now that buyer makes the same phone call, and the insurance company says, sorry, we're not going to insure that house any longer.
• 9:36
  SPEAKER_00: And when you look at it, it doesn't seem to make sense because it's not like the property is in the middle of a forest, it's in the middle of a lot of other houses.
• 9:46
  SPEAKER_00: And again, that's how Pacific Palisades was, right?
• 9:48
  SPEAKER_00: You have houses in between the whole thing went, the exception of a very few.
• 9:53
  SPEAKER_00: We see that in Santa Cruz Valley.
• 9:56
  SPEAKER_00: But there was also water issues, other things that impacted that.
• 10:00
  SPEAKER_00: But again, insurance companies, there has to be a better solution, not better than insurance, but maybe a different solution.
• 10:06
  SPEAKER_00: But I'm sure that will be talked about because we do have the president out here visiting, and I'm sure he's getting along very well with the powers that be out here.
• 10:16
  SPEAKER_00: All right, so we st we do, we are watching uh for buyers, a couple tips out there for buyers' loan options, FHA and VA, very much being used.
• 10:26
  SPEAKER_00: Uh, this is what I was going to talk about earlier.
• 10:28
  SPEAKER_00: Over 60% of the homes sold in the$500,000,$700,000 range here in Santa Clarita were purchased using an FHA or VA loan.
• 10:37
  SPEAKER_00: Inspection periods, when you're looking at these properties from an standpoint, I know I've always talked about this.
• 10:44
  SPEAKER_00: If we have a property that's got a large backyard and some of the backyard, let's say hasn't been attended to, you'll see large brush, large bushes, tumbleweeds, that sort of thing.
• 10:56
  SPEAKER_00: That's something that you might want to talk about with the home seller as you're an escrow.
• 11:03
  SPEAKER_00: Even if you happen to have the foresight to have seen this prior to making your offer, maybe have something like that included in your offer that the seller to take care of or remedy the hillside, which is loaded with you know dead debris, dead brush, uh, dead plants, and these things, which would create a fire hazard.
• 11:24
  SPEAKER_00: I have written these things into contract.
• 11:26
  SPEAKER_00: And as far as strategy goes, whether you should ask for it in your offer because you've seen it, or ask for it after the inspection and maybe have the inspector have, you know, blame it on them.
• 11:37
  SPEAKER_00: Maybe they mentioned it, they'll probably end up mentioning it in some kind of a report, and then you have it, then asking the seller at that point, that's gonna depend a lot on what house you're buying, the competition rate, and these sorts of things.
• 11:51
  SPEAKER_00: So there are different strategies to implement if in fact you are gonna ask for things.
• 11:56
  SPEAKER_00: In some cases, some things are best asked for up front when you're going in, because those are things you're not gonna be able to budge on, whatever they may be.
• 12:05
  SPEAKER_00: But then after the fact stuff, after you get into escrow, those are more likely that you'll you'll basically take it yourself if the seller is to do it because you've already rolled the dice, you're already in escrow, and you understand that anything you ask for from the seller, they could actually say no.
• 12:25
  SPEAKER_00: That's one way that the agent should explain.
• 12:27
  SPEAKER_00: In fact, all agents should explain it.
• 12:29
  SPEAKER_00: Now, if they say no, then of course it goes back on them.
• 12:32
  SPEAKER_00: And if you decide you don't want to proceed with the property, then that seller has to now put their property back on the market.
• 12:38
  SPEAKER_00: And depending on the market and the time of year and the market dynamics out there is going to depend on when they're gonna get that second offer.
• 12:46
  SPEAKER_00: It all also could cause that particular seller to have issues selling again because now it shows that their property went from being active into escrow and then back active again.
• 13:00
  SPEAKER_00: People have a question.
• 13:01
  SPEAKER_00: Gee, I wonder what happened.
• 13:02
  SPEAKER_00: I wonder if there's a problem with the property that the buyer discovered.
• 13:06
  SPEAKER_00: And whatever the buyer discovers in these processes, you will be made aware of it when you come to write those offers on that property.
• 13:13
  SPEAKER_00: That's just part of it.
• 13:15
  SPEAKER_00: If in fact they discovered nothing, and a majority of the time we find that it really is something that happens on the buyer's end of it.
• 13:22
  SPEAKER_00: Typically, it's it's not any kind of a disagreement between the buyer and seller.
• 13:27
  SPEAKER_00: A lot of times buyer lose, buyers lose their ability to finance because they did something that they shouldn't have.
• 13:34
  SPEAKER_00: Maybe they went out and paid off a credit card.
• 13:36
  SPEAKER_00: And I know what you're gonna say.
• 13:38
  SPEAKER_00: Well, it doesn't sound like a big deal.
• 13:39
  SPEAKER_00: In some cases, you pay off a credit card, credit card company says, oh, he doesn't need this anymore.
• 13:45
  SPEAKER_00: So then they whack it off or they cut that particular amount of credit that happened to be on that card.
• 13:52
  SPEAKER_00: Let's say it's a$5,000 credit limit card and you pay it off to zero.
• 13:56
  SPEAKER_00: Maybe they say, well, you know what, we're gonna go ahead and cut it back to$1,000.
• 14:00
  SPEAKER_00: That could impact your FICO score.
• 14:02
  SPEAKER_00: Who would have thought?
• 14:03
  SPEAKER_00: So be careful.
• 14:04
  SPEAKER_00: Anything you do, any financial changes you make as a home buyer, make sure you bounce it off your lender to make sure it's not gonna impact your ability to purchase real estate, especially prior to writing that offer and definitely with an escrow.
• 14:21
  SPEAKER_00: Make sure.
• 14:22
  SPEAKER_00: So looking at properties from the vantage point of are they have areas around them that can burn?
• 14:28
  SPEAKER_00: Do they have overgrown plants?
• 14:30
  SPEAKER_00: Is there enough clearance?
• 14:32
  SPEAKER_00: And in addition, some of the things that are now being sold are these sprinkler systems that run on the roof with pipe, copper piping, and again, they're putting these on residences now.
• 14:44
  SPEAKER_00: That's going to be a big business that people are gonna start putting together.
• 14:48
  SPEAKER_00: And again, could that help?
• 14:49
  SPEAKER_00: Sure, it could, as long as there's water in the pipes to be able to make this happen.
• 14:54
  SPEAKER_00: And if you have a swimming pool, I mean it's it's easy.
• 14:57
  SPEAKER_00: All you need is on the swimming pool, and then of course, you can douse your house with umpteen thousands of gallons of water from the swimming pool.
• 15:06
  SPEAKER_00: I sold a property recently in Circle J Ranch that had that exact thing.
• 15:10
  SPEAKER_00: They didn't have any brush near the house, but he did have that pump right next to his pool and a fire hose ready, and he could have squirted the neighbor's houses, his house, and everybody's house.
• 15:21
  SPEAKER_00: Hello, Steve, with a bunch of water.
• 15:24
  SPEAKER_00: All right, so watching out for the market.
• 15:25
  SPEAKER_00: Please be careful.
• 15:27
  SPEAKER_00: Mortgage rates right now are holding steady at six and a half percent, low low vitality, low violentity, low motility.
• 15:36
  SPEAKER_00: You know what?
• 15:37
  SPEAKER_00: I I can't even uh can't even say that word.
• 15:41
  SPEAKER_00: I'll keep you updated as to upcoming projects that are gonna be happening in Santa Clarita as far as new housing.
• 15:47
  SPEAKER_00: If you go to Santa Clarita Openhouses.com forward slash new, you'll see access points to new housing.
• 15:55
  SPEAKER_00: There are going to be some projects coming up in Canyon Country and also Saugus, new housing developments.
• 16:01
  SPEAKER_00: They're on the they're on the ledger getting ready to be approved.
• 16:05
  SPEAKER_00: So that's going to add to our local inventory as well.
• 16:08
  SPEAKER_00: People often ask me about new housing and what their rights are.
• 16:13
  SPEAKER_00: When it comes to representation, most new home builders, not all, but most new home builders at this time will build in compensation to your agent at a cost of just theirs.
• 16:24
  SPEAKER_00: So you, as a home buyer with new housing, you won't be paying any of that.
• 16:28
  SPEAKER_00: They'll basically support the agents in the area because they know agents bring them buyers.
• 16:34
  SPEAKER_00: That's why they do this.
• 16:36
  SPEAKER_00: So a lot of the new home builders will offer your agent compensation to represent you, and that is actually good in the process because now you have an additional set of eyes representing you, focused on your purchase, able to ask that new home builder the right questions, questions from a vantage point of them having done it before.
• 16:57
  SPEAKER_00: So those are the right questions, knowledge, experience, and perfect questions that will help you make better decisions when it comes to purchasing new housing.
• 17:07
  SPEAKER_00: The only caveat is you need to make sure that your real estate agent is there with you the first time you visit new housing.
• 17:16
  SPEAKER_00: So if you want somebody to be on your side throughout the process, at no cost to you, make sure that you don't go it alone.
• 17:24
  SPEAKER_00: You have your agent take you to the new housing centers prior to you going alone.
• 17:29
  SPEAKER_00: All right, so we'll watch the real estate data here in this next week.
• 17:33
  SPEAKER_00: I know it's Saturday.
• 17:34
  SPEAKER_00: You can go to Santa Clarita Openhouses.com.
• 17:38
  SPEAKER_00: My book is Front and Center How to Buy and Sell Real Estate for 2025.
• 17:43
  SPEAKER_00: It is the Santa Clarita edition.
• 17:45
  SPEAKER_00: I'm Connor with honor.
• 17:46
  SPEAKER_00: We will see you in the next one over and out.