Latest / Connor with Honor: AI, Real Estate and Real Life / Santa Clarita interest rates for homes and real estate by those who need financing could be rising this next week, as they have again.

Transcript

Santa Clarita interest rates for homes and real estate by those who need financing could be rising this next week, as they have again. · Connor with Honor: AI, Real Estate and Real Life

• 0:04
  SPEAKER_00: Hey everybody, it is Connor with Honor.
• 0:07
  SPEAKER_00: Real estate this week here in Santa Cruz Valley.
• 0:09
  SPEAKER_00: Nothing much has changed except we do see interest rates creeping up over the fives.
• 0:14
  SPEAKER_00: And a lot of people are getting a little bit irritated and nervous that that's happening.
• 0:19
  SPEAKER_00: I think we might see sixes before the end of the year, but time will tell.
• 0:23
  SPEAKER_00: The other thing to look at is that's going to cut into a buyer's ability to purchase real estate.
• 0:28
  SPEAKER_00: The questions that are most prevalent in the market, at least from sellers, is that going to be enough to push the market back a little bit and cause some more dramatic discounts on real estate, or are properties still going to be listed as high as they are, even go out higher when people are buying, even with the higher interest rates?
• 0:43
  SPEAKER_00: Well, that question can be answered by knowing the amount of buyers that are out in the market that aren't tapped out at their particular search levels and have a little bit more give with regard to their qualification amount.
• 0:55
  SPEAKER_00: So maybe they are in fact higher, have been searching$100,000 or$200,000 less than what they qualify for.
• 1:01
  SPEAKER_00: Now, when interest rates go up, they'll probably be close to their maximum now.
• 1:05
  SPEAKER_00: As far as financing, maybe they're good with that.
• 1:08
  SPEAKER_00: Don't forget, whenever you purchase real estate, you got to talk to your CPA, of course, but there is still a mortgage interest deduction that's allowed.
• 1:14
  SPEAKER_00: And for the first few years of a mortgage, most of that payment is going to be interest.
• 1:19
  SPEAKER_00: Very little to principal, but it still exists in the equation.
• 1:22
  SPEAKER_00: The further you have that mortgage, the more money over time goes to principal.
• 1:26
  SPEAKER_00: But again, you get to write off that interest.
• 1:28
  SPEAKER_00: Maybe having that higher interest rate isn't going to impact too much.
• 1:33
  SPEAKER_00: So what I do is I'll send people to the CPA and I'll say, hey, you know, ask your CPA what's this going to look like?
• 1:40
  SPEAKER_00: If in fact, instead of a 2.9, you're getting a 5.9% interest rate, because that's, you know, that goes up considerably.
• 1:48
  SPEAKER_00: And uh three points is a lot as far as what you can qualify for.
• 1:52
  SPEAKER_00: It does cut into that quite a bit.
• 1:53
  SPEAKER_00: That's where that market is.
• 1:55
  SPEAKER_00: So those questions do exist out there.
• 1:56
  SPEAKER_00: A lot of people want to know.
• 1:58
  SPEAKER_00: They're also curious as far as the multiple offer situation because of the interest rate increase.
• 2:03
  SPEAKER_00: Has that slowed down?
• 2:04
  SPEAKER_00: A little bit, not too much.
• 2:06
  SPEAKER_00: I would say we're probably getting half or three-quarters of what we used to with regard to offers on properties whenever I list a property.
• 2:13
  SPEAKER_00: Uh and it also depends on the sweet spot and the type of property as well.
• 2:17
  SPEAKER_00: If it's going to be a single family residence priced anywhere from six to eight, it's going to still go out with quite a few offers.
• 2:24
  SPEAKER_00: And that sweet spot carries into the$1.1,$1.2 million range.
• 2:29
  SPEAKER_00: Once you get above that in Santa Clarita, you don't see all of the multiple offers, but they still are persistent and consistent.
• 2:35
  SPEAKER_00: They still do come in.
• 2:37
  SPEAKER_00: Watch out for that.
• 2:38
  SPEAKER_00: As a buyer, make sure if you haven't checked with your lender lately, make sure you're touching basis with him to find out where you are actually qualified for what that amount looks like and see if that interest rate increase did change things.
• 2:51
  SPEAKER_00: I know a lot of the buyers are kind of walking around kicking the tires, a little bit unsure of the market, because you don't know if you're going to be buying at the top of some real estate cycle only to have the whole thing collapse and then drop equity like we saw happen to a lot of people back in 07.
• 3:05
  SPEAKER_00: In fact, that market declined, what's 7 to 8, 9, 10, 11, four years?
• 3:10
  SPEAKER_00: Uh almost four, almost five years.
• 3:13
  SPEAKER_00: That was the declination from being the hype part of the market all the way to where it bottomed out, at least in Santa Cruz Valley Cities proper.
• 3:21
  SPEAKER_00: And that end, uh the bottom-out point would have been the end of 2011, beginning of 2012.
• 3:27
  SPEAKER_00: That would have been the lowest amount people were paying for properties then, and then they started to go up from there.
• 3:32
  SPEAKER_00: If another foreclosure cycle hits, and all the experts say we're overdue, but the issue with that is we're so tight in the financial aspect.
• 3:41
  SPEAKER_00: And the last time, really, it was a subprime failing that claimed bankruptcy, a subprime lender, a big one.
• 3:46
  SPEAKER_00: So it really wasn't on the individual scale, but they did it, I guess, for a reason because they had a lot of defaults on the loans that they had given to people.
• 3:55
  SPEAKER_00: So that part of the process, at least the lending part, people are verified several times within escrow.
• 4:01
  SPEAKER_00: Even before that, to get qualified, there's a lot more action taken when it comes to approving somebody.
• 4:07
  SPEAKER_00: And I know that every house we show to a buyer, they're asking for pre-approval letters.
• 4:12
  SPEAKER_00: Some of them are asking for underwriter approvals.
• 4:14
  SPEAKER_00: Not very common, but it is there.
• 4:16
  SPEAKER_00: Also, they want to see this proof of funds.
• 4:19
  SPEAKER_00: So basically, the money that the buyer's going to bring to the table, they want to see those amounts and they want to make sure that is liquid in some kind of account that the buyer has access to.
• 4:29
  SPEAKER_00: So if they do write an offer, they can still have that money accessible to be able to put into escrow, whatever it may be.
• 4:37
  SPEAKER_00: Typically, that's not asked to look at the property, but a lot of agents are still asking for that pre-approval letter to let people look at properties, period.
• 4:45
  SPEAKER_00: Is it enforceable?
• 4:47
  SPEAKER_00: You know, if everybody's doing it, it's gonna be really hard to get an appointment if you're not willing.
• 4:52
  SPEAKER_00: Just something to consider.
• 4:53
  SPEAKER_00: So that's how that market's going.
• 4:54
  SPEAKER_00: As far as buyers out there, the the MLS is still being populated with new listings.
• 5:00
  SPEAKER_00: The typical trend is this for you sellers that are possibly thinking about selling.
• 5:05
  SPEAKER_00: Usually your Monday is gonna go on.
• 5:07
  SPEAKER_00: Your Monday, your property is gonna be listed on a Monday.
• 5:09
  SPEAKER_00: This is good information for buyers.
• 5:11
  SPEAKER_00: Usually it's listed coming soon.
• 5:13
  SPEAKER_00: It could take a week or two weeks until they actually start the viewings of that property.
• 5:17
  SPEAKER_00: But let's say the Monday it's listed, virtual tour, photographs are all taken within that week.
• 5:22
  SPEAKER_00: And then Friday, it's typically released active during open houses for Friday, Saturday, and Sunday.
• 5:28
  SPEAKER_00: It just depends on the agent, what kind of activity they have, where the house is located, and how the open house history has paid off for those areas as far as people actually looking and writing offers.
• 5:38
  SPEAKER_00: That's usually the time that the agents will go look at houses as well, or if they're really swamped or busy, they'll send their clients, our clients will come look at the open house and then call their agent back, hey, loved it, loved it, let's write an offer, blah, blah, blah.
• 5:50
  SPEAKER_00: It's difficult for the agent to really write that offer, though, because every property I write an offer on, I have to see it.
• 5:55
  SPEAKER_00: I have to walk in it, I got to smell it, I got to use all my senses when I get there.
• 5:59
  SPEAKER_00: And then I'm able to take that property and gauge it as far as value goes, because, you know, my clients, we need a game plan, right?
• 6:06
  SPEAKER_00: If I'm representing a buyer, we need to know where we're gonna go with this thing.
• 6:10
  SPEAKER_00: Got to know the value, got to know potentially what I think it's gonna go for.
• 6:14
  SPEAKER_00: And then, of course, after looking at the value in the other ones that sold in the neighborhood, you can also figure that out for yourself.
• 6:19
  SPEAKER_00: So it's not just Connor with great advice, it's Connor doing that research so you can see the research, and then we can have a game plan together.
• 6:27
  SPEAKER_00: And then we write the offer and we get it submitted with all the fancies that they want, the approval funds, pre-approval letter, all that fancy stuff.
• 6:34
  SPEAKER_00: Get that submitted and then we wait to hear.
• 6:36
  SPEAKER_00: So usually that response is going to go into the next week.
• 6:39
  SPEAKER_00: So typically, agents with listings such as me, we're gonna be reviewing anywhere Tuesday to Thursday with the sellers.
• 6:47
  SPEAKER_00: So we'll present whatever offers were received and we'll sit down and talk about it.
• 6:52
  SPEAKER_00: Uh, what we're looking for is being a seller's agent, we want to make sure that the buyer truly is qualified.
• 6:57
  SPEAKER_00: If I have to make phone calls prior to the presentation to these lenders that the buyers got their pre-approval from, then I'll do that as well.
• 7:04
  SPEAKER_00: So I can go back and say, well, this person was run all the way through the system.
• 7:08
  SPEAKER_00: They have a complete underwriter approval on this particular property, at least for this amount.
• 7:13
  SPEAKER_00: And they're very happy typically.
• 7:16
  SPEAKER_00: These conversations could involve the agent, but it could only be a paper, uh paper review at that time without any of those other phone calls.
• 7:24
  SPEAKER_00: It just depends on the seller.
• 7:26
  SPEAKER_00: And then what we'll do is we'll look at all of them, make decisions as to if we're gonna respond to everybody, if we're gonna respond specifically to each one, or if we're just gonna respond to one, or just accept one.
• 7:38
  SPEAKER_00: You can do a lot of different things.
• 7:39
  SPEAKER_00: So buyers that have offers submitted on properties on their behalf, it's not always the case for you folks that you're gonna get a response, except sorry, the seller went with somebody else.
• 7:50
  SPEAKER_00: What's nice about this market, typically, for buyers at least, is they're seeing with their own eyes after they've got beaten out a couple times, maybe how much these properties are really selling for.
• 8:01
  SPEAKER_00: And a lot of times, if the listing agent's good, they'll respond in that manner.
• 8:05
  SPEAKER_00: They'll say, We had, you know, eight offers on this property.
• 8:08
  SPEAKER_00: The property went out for more than$80,000 higher than listing price.
• 8:12
  SPEAKER_00: Thank you so much for submitting.
• 8:14
  SPEAKER_00: Let us know if you'd like to be putting backup offer, something like that.
• 8:17
  SPEAKER_00: That being the case, depending on my buyer, typically we ask to be put in backup position just in case something falls.
• 8:24
  SPEAKER_00: We do see 20 to 30 percent of the listings actually fall out of escrow.
• 8:28
  SPEAKER_00: That's still a pretty good number, might be a little bit closer to 20% now, not 30, but the market is tight, so most of the buyers going in have typically failed more than once in getting the house that they wanted.
• 8:41
  SPEAKER_00: So once it comes to getting it, usually they don't ask for much, but that's just the nature of what's going on currently in this market.
• 8:48
  SPEAKER_00: As sellers out there, make sure you do hire smart, not as smart like the movie, but hire smart when you are looking for that listing agent to list your home.
• 8:58
  SPEAKER_00: Uh, of course, discounts are great, rebates are great, all that fancy stuff.
• 9:03
  SPEAKER_00: At the end of the day, somebody that really does a good job and is going to, well, be a superior negotiator and able to get you maybe more for your residence than you thought was possible.
• 9:14
  SPEAKER_00: That takes savvy, that takes smart, that takes in the business.
• 9:17
  SPEAKER_00: Been doing this since 1998.
• 9:19
  SPEAKER_00: Glad to be of service.
• 9:20
  SPEAKER_00: I am Connor with Honor.
• 9:21
  SPEAKER_00: That's your real estate update as we close out April.
• 9:25
  SPEAKER_00: And uh we're gonna be starting May here in a few days, so I'm excited about that.
• 9:28
  SPEAKER_00: This is 2022.
• 9:29
  SPEAKER_00: I am Connor with Honor.
• 9:31
  SPEAKER_00: Thanks for watching.
• 9:32
  SPEAKER_00: When you're ready, reach out uh online, ConnorWithHonor.com.
• 9:36
  SPEAKER_00: You'll see the website there.
• 9:38
  SPEAKER_00: There are some search platforms there for real estate, but realistically, the best way, give me a call, let's get your criteria, and I'll be able to get a search set up for you so I can get my eyeballs on it as well.
• 9:49
  SPEAKER_00: And make it as specific as you want.
• 9:51
  SPEAKER_00: If it is something you're asking for that might not be something required as to what an agent has to fill out in the multiple listing service, probably I'll tell you we won't put that field in just in case the agent didn't check it or did check it or whatever the case may be.
• 10:06
  SPEAKER_00: I don't want you to miss something that potentially might have what you're looking for, but the agent didn't denote it in the multiple listing service.
• 10:12
  SPEAKER_00: We cover that.
• 10:13
  SPEAKER_00: If you sellers out there want to get what your properties were, play online a little bit.
• 10:16
  SPEAKER_00: Just be wary.
• 10:17
  SPEAKER_00: I wouldn't give up any names or email addresses or anything.
• 10:20
  SPEAKER_00: I would keep it totally, you know, you're you're not who you say you are, and I would play mole all day long.
• 10:26
  SPEAKER_00: I would just go on there and see what they say, but you know, gather your information, just be careful, understand that those platforms are being used as lead generation devices by the owners and operators, and they're selling your personal information when you put your property in there to local agents, local lenders, local everybody that's willing to pay for it, so they can contact you and say, hey, you ready to hire the right agent?
• 10:48
  SPEAKER_00: Well, that's how that works.
• 10:50
  SPEAKER_00: So be well, that one ended abruptly because I had an alarm set to eat a protein shake.
• 10:55
  SPEAKER_00: So I'm gonna have to go do that, but I will let you go.
• 10:57
  SPEAKER_00: Thank you so much for watching.
• 10:58
  SPEAKER_00: I'm Connor with honor.
• 10:59
  SPEAKER_00: This has been your Santa Clarita real estate update.
• 11:02
  SPEAKER_00: If you're looking for real estate updates, other areas here in Southern California, we got them.
• 11:07
  SPEAKER_00: Uh see me, Los Angeles, anywhere in Ventura, just let me know.
• 11:12
  SPEAKER_00: I'll put something together really, really, really swell for you, and I'll get that sent over.
• 11:18
  SPEAKER_00: And I am Connor with honor.
• 11:20
  SPEAKER_00: If you haven't checked out my fat torching podcast, it's a lot of fun.
• 11:23
  SPEAKER_00: And uh I'll help you torch it if that's what you're looking to do.
• 11:27
  SPEAKER_00: Anyway, I'll real estate all the time.
• 11:31
  SPEAKER_00: That's clever.