Welcome to the Housing Radio broadcast. I have included some 2018 forecasts for the Santa Clarita real estate market. Reminder – this is a computer transcription from my radio show. There are bound to be a couple errors – including the computer spelling my name the way it sounds and not the way it’s written…
Funny – But the jokes still happen to date 🙂
Speaker 1: 00:00 Good Day everybody. I hope you’re doing wonderful Connor McGyver we just made it through the holidays and now here we are. The first week closing out actually the first week of January. So today’s Monday the 8th. So I thought I’d give some predictions for this year 2018 and real estate not only for the Santa creatively Greater Los Angeles areas but beyond those borders. We will talk a little bit about what’s going to potentially happen this year. That’s going to be of great information of course great cause for everybody out there listening now looking at SCV dot. That’s where we go to to find those actual real estate listings. And I see actual because there are a lot of Web sites that are realistically gaming you. They’re put together built solely to get your personal and private information. Once they obtain it once they get who you are what you’re searching for then that information is sold and traded to agents that are willing to pay for it.
Speaker 1: 00:57 Not a bad system there. They’re making gobs of money. Some people say that those systems are a little bit corrupt in nature. Not all but some because they put listings on there that appear to be active and currently for sale and which are not. Then maybe they just saw maybe they just closed maybe they’re not updating very often cleverly. Maybe it’s for a particular reason some is doing it or they just don’t have a great feed. But this is what people are into. So to avoid all that mass I have to go to SCVnest dot com SCV and he asked me that my sites and I have to worry about it because that site is for my clients only. You want to work with me. Great if you don’t. That’s
Speaker 2: 01:41 great to still use the system. I do not mind it is updated every several minutes and it works awesome. Eventually, the system, once you start to search for listings that will force you to register and once you do that all you gotta say, is you know Connor I am working with somebody else. No sweat. And then you can still use the system of course outside of your login.
Speaker 3: 02:02 I do not cut anybody out but hopefully we’ll see the value in working with us. How does a radio Dotcom is going to reroute you to our radio page? Show You Your Radio Player and it will have shows just like this where we talk about the real estate market.
Speaker 4: 02:16 I thought real estate inventory couldn’t get less than what we had seen a couple of months ago. In fact February of this year that was the four years low that we saw with regard to active and Torri here inside created Valley and center creating value is going to run very similarly to the greater Los Angeles area cities too. So you’re going to watch Santa creative Valley lacking in inventory. You’re also going to see those other Southern California cities also reducing Lahai and inventory. It’s not there’s not a lot of real estate being put up for sale. Not a lot of houses that are being put on the market. Why. Well, I’ll tell you a couple of reasons. You factor into where most people’s interest rates are somewhere in the mid-30s maybe even last. It’s
Speaker 1: 03:06 a difficult chasm for them to cross to jump into the four or four and a half interest rate where we are today four or four and a half is so wonderful wonderfully low historically with regard interest rates. So people are still out there buying. They maybe didn’t have a chance didn’t have it together maybe they were waiting. But there are a lot of buyers out there that we’re currently working with. There just isn’t that house the one that they want to buy. It’s just not there. So what we’ve done is we’ve put together a system that immediately e-mails our clients and that’s the SCV Nasscom. Once something comes available for sale within moments you’re going to get an email stating hey Jack and Jill this particular home did come up it’s in your price range in the area. You
Speaker 5: 03:55 like it does have the bedrooms and bathroom amounts. You’ve been looking for and it has the other amenities that you had been searching for. Here it is. There we can get a schedule take you out and look at it and have the further discussion as to the best way to get that property as a real estate buyer in today’s market. I’ll
Speaker 1: 04:14 give you a couple of tips. And your lender is going to be very important. Believe
Speaker 4: 04:19 it or not if they are well known to do a great job that’s going to be huge for those agents that have those listings. I know it is for us. With
Speaker 1: 04:30 regard to our sellers part of our presentation whenever we’re speaking with them we talk about us being able to connect with that lender on the other side of the transaction if we know they have done business with them and have they have a good reputation with not only us but other people that were members of networking groups with them hey we’re golden and we know that the transactions going to go through. There’s not going to be any messiness that typically occurs with molts sometimes as at the fault of the lender. More times though it’s lack of communication between all parties. So we want that lender to be good at communicating very important. Moving into the realm of real estate kind of giving a buyer an advantage besides the lender that qualification letter that’s written is also very important. In addition, the proof of funds is a complete offer being submitted for that real estate buyer is also wonderfully helpful and I’ll give you a tip that we have seen very very productive as of late especially with the Lacking inventory and I don’t know why more agents are doing with their clients but love letters.
Speaker 6: 05:41 Last couple of buyers we have we’re currently in escrow. With that came to us most recently one of the buyers got there first. And the other buyer got their second and they didn’t have the best financing. What made the deal come together for those sellers in those two instances. And these are the latest ones. The last couple of weeks was the letter that they had written that accompany the offer that we had written in there for the seller to please read prior to countering or accepting any offer be ours or someone else’s. That was very valuable in both those circumstances and what I’ll do where I pose this all puts the information as to what we would include in a love letter and what these buyers did because there are there are certain things to put in there of course you know when you are writing how much you love somebody’s house if you’re giving them anything less than the listing price you don’t want to overdo it and gush too much on the latter.
Speaker 7: 06:45 If you if you’re giving them less than the full price you would want to potentially have your agent kind of break it easy depending on where the value is. Now it’s easy to see of course if the property happens to be way overpriced and they’re they’re praying that the market’s going to come in and bring it in at that value that they haven’t been informed by their real estate agent and their agent hasn’t explained to them the way the appraisal works if in fact whoever’s going to be buying their house is going to be needing to utilize alone getting a loan like getting a mortgage for the house and they’re not cash. So it should be explained but often it’s not. And that’s sad because the ages too much of a hurry to get the listing right. Let’s get that contract signed we get back and start advertising instead of trying to explain how the process works.
Speaker 7: 07:36 When you are ready and you have that love letter and you get that put together the agent that you’re using should also, of course, submit everything at one time. You don’t want to piecemeal offer being set for the cent, for example, have you offer written so that sent the other items that need to go with is going to be that love letter that that gets sent maybe an hour later. And then after that maybe the proof of funds wasn’t ready because you didn’t have an agent that explain to you that’s going to be a necessary part of the equation which is proof of funds showing you have down payment somewhere for this property depending on the loan you’re going to be using. So now you have to get that together and maybe the other thing the approval letter maybe you’re not ready or you didn’t have that ready so now that gets sent over you know e-mail number four.
Speaker 8: 08:30 It’s difficult when it’s advantageous I should say when you have an agent that has everything together it’s all in one file. Everything can be seen nice and easy everything’s been scanned it’s legible. It’s high quality it’s and media format. You know one email for files or one e-mail one file everything together. It’s all good. It just depends on the agent and how they like it. Personally, I like to have those separate files within the same email and I like the titles to be appropriate. I would like the buyers the last name followed by proof of funds buyers the last name followed by the approval letter Byers the last name followed by offer and Byers the last name followed by a love letter.
Speaker 9: 09:21 That’s perfect that’s how we put it together for our clients so they can actually be seen by the listing agent and then be presented to the seller because the seller may not be you know wanting to look at everything that you send over. Maybe
Speaker 10: 09:39 taking their ages were for old pre-funded is on. But again at least it’s their stuff. I want to see that file. They don’t have to dig through one big one that has all four documents inside of its multiple pages, of course, they’ll only know they can just look at that specific document documents so that’s that’s very helpful. That’s good stuff and that’s the way this kind of market accepts offers. I think the best way possible looking at all Southern California cities to see this SC VNs that count 10000 740 real estate listings active as of right now the 8th of January 2018. That’s not much at all sort of creative 325. We spoke about. Now we’re talking about why a lacking of inventory now we’re going to see an uptick as we always do as we get into the end of February beginning of March.
Speaker 10: 10:25 That’s a good time to start contemplating selling if, in fact, you are if you’re going to be retiring leaving the state or if you’re going to downsize or upsized maybe you’re moving into California. Deciding on where to go what cities you know using was created for a lot of good things are a lot of things about Granada Hills overhead a lot of good things about Simi Valley. Talk to the consummate professional whoever is working in those areas and speak with them if you don’t have anybody call me and we’ll be able to sit down and discuss advantages to Simi Valley over Santa Clarita or vice versa advantages over Granada Hills versus some of the other areas in north Los Angeles whatever it may be we’ll sit down and we’ll discuss it and then we’ll also get a game plan together that will help you immensely when you do find something that you like and you are interested proceeding and writing and offer with the uptick of inventory you’re going to see it take a little bit of time that should slow the market down a bit.
Speaker 9: 11:28 But like I mentioned over the holidays we have a huge buyer demand and they’re still out there in force looking for listings so when the property comes on the market today it’s priced right. That probably didn’t last very long. We’re going to see that trend continue through the summer. I believe that in 2013 we’re not going to see it backing up of inventory.
Speaker 2: 11:48 We’re not going to see any of those issues come about even with particular changes in the law that have been put together regarding the new tax plan that was signed off on. There is a cap on how much mortgage interest can be can be written off. And I believe that comes down to personal households 750000 dollars. It was a million but the million dollar people that are still grandfathered in enlisting convey that particular property asked your tax person for more advice with regard to that piecemeal together. But I believe that’s the change and that’s not a super huge big deal just because we still see that so 150000 kids still buy quite a bit of real estate here. It’s creative. The closer you get to L.A., of course, the smaller the houses become in price per square foot the higher that goes up the closer you get to metro L.A. but the surrounding cities like Saqlain are still three-quarters of a million still do very very well.
Speaker 2: 12:44 When we do get those listings however so I do foresee that I still see a little bit of a sticking point with listings coming on the market for sale. A
Speaker 11: 12:53 lot of people if they have the wherewithal they’re holding onto those properties at those ultra-low interest rates turning those into rentals and then coming to us to get together an investment strategy so they can now determine OK so if we rent the house that we were going to sell we’ve been able to save a little bit of money now we have you know three and a half percent down from FHA loan. Let’s go out there and see if we can buy without holding on to that particular property and handling it as a rental. We do see a lot of that and I believe 2018 is going to be if people can’t afford it they’re going to try to do that and then they can hold onto that property.
Speaker 6: 13:33 Not only are they going to get their rental amount every month they’re going to get their mortgage paid by somebody else. Plus once the properties start going up even further in value which will see a pretty good uptick in 2013 maybe five to seven percent of all plans outright. That was as far as real estate values go. We’re going to then it’s going to be the circumstance where these properties are going to actually be worth more in the end and they’ll be able to sell for higher amounts. Somebody to consider for those of you that own real estate.
Speaker 1: 14:10 And finally interest rates are going to be going up in 2018. I
Speaker 6: 14:15 do believe they will but it’s not going to be shocking and it’s going to be just a little bit because that would hurt the home buying economy and that will also hurt all of those businesses that depend on real estate and rely on people buying real estate and houses. A lot of industries rely on real estate look at home depot. Look at Lowe’s look at the mortgage profession. Look at builders look at all of these different things they all impact in some way real estate impacts them. So it’s something to watch out for. That’s how I believe 2018 is going to pan out. It’s not going to be a super home run year.
Speaker 5: 14:57 I don’t see us ever getting back at least in 2018 back into a buyer’s market I still think the sellers are going to hold all of the cards just because of lacking inventory if we do have an increase. With
Speaker 9: 15:09 regard to inventory to a point where we have an increase days on markets a six-seven month the absorption rate is what that’s called. If we see that then that will change the market how many listings are we going to need to have that market start.
Speaker 10: 15:26 As far as switching from a seller’s market to a buyer’s market we would have to at least quintuple the current amount of logistics we’re talking out 345 you have to get up there somewhere around fifteen hundred to 2000. And I still think that might be difficult for the market to switch over just because of the high buyer demand for an of real estate. I’ve got a McGyver I hope you’ve enjoyed today’s radio show and housingradio.com It is always a pleasure. We
Speaker 6: 15:57 will post this up and also in addition as far as the love letter goes we’ll throw that tip into the show notes so you can get an idea what goes into something like that. So you can figure it out.
Speaker 3: 16:12 Let me go ahead and just punch the cereal quick SEVIS dotcom letter c.v. ness dot com for Slash love letter.
Speaker 12: 16:21 I don’t know how I put it together I didn’t do that with Sigo SCV. Common Love Letter Papago.
Speaker 6: 16:30 So if you go to punch this and go see V dot com forward slash love letter altogether go as CVRD dot com forward slash love letter altogether no spaces. You’ll see the article I had written regarding cell seller love letters from real estate buyers and this is how the article starts. Don’t you just love it love letters are not only appropriate for those who you want to date or have a relationship with? They
Speaker 9: 17:03 work on real estate sellers too. Even if the real estate seller is a corporation there’s always a human component. Reviewing the documents that are making the offers that have been received that Hillman may just have a soft spot in their heart for the love letter you have generated. And I’ll tell you with regard to that we have seen these love letters were bank owned foreclosures that have had multiple offers because there is still a human being on the bank’s side that is making that decision. And we saw a great advantage taken in that last foreclosure cycle and you will probably remember it well the market collapsed back in 0 7 late 06.
Speaker 2: 17:45 We saw a huge amount of real estate listings coming in Oreo’s and a lot of agents were trying to make money too quickly and their buyers were missing out on the advantage of the love letter regular standard sellers short sale sellers also have a soft spot for the real estate buyer who has taken the time to submit a love letter with the offer now. They talk about as the photograph. We want nice photographs, not sexy pictures. Those never work at least for long when it comes to trying to impress a real estate seller about how much you love their home and why they should choose your offer over others.
Speaker 3: 18:23 With regard to the format this is kind of how we put it together. Dear John and Frank My name is Haussmann and I’ve had a chance to look at the home yourself selling located at the corner walking to walk what you want to do is be specific with the address of the home you’re writing the love letter about.
Speaker 6: 18:40 Make sure it is specific. The reason being is you don’t want this to look at a template type letter as if you’ve written this for thousand houses that you’ve been looking at.
Speaker 5: 18:53 You want to make it specific to them. When I first entered your home I was actually able to visualize myself and my wife Mary raising our three children with its walls. Molly our eldest immediately ran upstairs and started screaming This is my room Zacher our middle child was excited about having enough room in the backyard to play catch with me. Dennis our youngest just cooed he’s only 10 months we’ve had a chance to look at a lot of homes and felt as comfortable and as inviting as yours. I felt as if Mary and Mary agreed. I felt as if your home was smiling at us and our family. For what it’s worth. We would appreciate you considering our offer on your home and we appreciate you taking the time to read this heartfelt letter Sillars sincerely Hal and Mary. All
Speaker 3: 19:40 right. So the next title Don’t Get Too in love. That’s OK to bring up personal sentiment about a seller’s home on the love letter. Just don’t overdo it especially don’t overdo it if you’re undercutting the price that it looks to a seller as if you’re making fun of them. So you’ve got a human component there and you know what maybe it won’t work.
Speaker 11: 20:00 Maybe you’re going to send a love Love Letter and the person inside of the House has always been unlucky in love and now you’re with family kids. Starting your life and so on.
Speaker 2: 20:13 You know maybe that will turn them off but I’ll tell you 90 percent of the time are greater. It does work out in a lot of times let’s say there’s somebody from the law enforcement possessions from professionals one of the purchasers a lot of times. That’s also beneficial to show that maybe the person purchasing was a veteran or as a veteran show that it’s OK.
Speaker 3: 20:37 And you can maybe put something you know we’re just relocating out here from Mexico maybe that would be a collection point with the sale. You never know. You never know. Just not too much not too deep but just right. That’s OK. Like I said I am on the price or pricing it. You want to be careful. Love Letter compositions important to bring up parts of the home and attach them to your human elements. I see myself coming home from our day at work and sitting in front of the cozy fireplace. Mary can visualize her self-doing her crafts in the downstairs office building my 7-year-old son looked at me straight in the eyes as we were in the back here and say Hey Dad this is a perfect place for you and me to play catch. We have two adorable poodles I’m sure the love the dog run have so carefully equipped your home with you gets the picture so, in your love letter, you want to connect yourselves personally with specific aspects of the settlers home condo or townhall.
Speaker 3: 21:35 Now it doesn’t matter if the properties of doublewide or mansion. Again you may want to address the safety of a mobile home is located.
Speaker 6: 21:42 Good community providing you safe voice wanted the same thing within a state home. You know maybe the Honduran mahogany is something that you’ve always wanted a house that that had or the custom granite that matches that cut from you know 15 slabs and so on.
Speaker 5: 22:02 These things really really help because it shows the seller you’re doing that one thing that those other buyers did not do. Now, of course, will guide you and advise you if you love letters too dramatic. Just week or just right.
Speaker 3: 22:14 And the bottom line about buyer love letters. A real estate seller all things being equal we’ll choose your offer to your love letter above others. However, if you’re offering a lesson prize as stated before and the other offers a love letter you may be the loser. You could, however, go out with a love letter. Being less than the other people being less in the mouth of the other people who wrote the offers because it does show a little bit more tenacity.
Speaker 13: 22:44 And it does show that you seem to be a little bit more caring if you will.
Speaker 11: 22:53 Now we’ve seen a love letter from the very beginning we got the business back in 1998. We’ve seen those help out immensely all through the tiny bit of real estate and you know what. Maybe it’ll help you. I’m Connor MacIvor with HousingRadio dot com.
Speaker 7: 23:06 Thank you so much for tuning in. And this is your 2018 forecast. I hope it reaches you well with a couple tips for buyers out there. And of, course sellers when you’re ready and buyers to give us a call we’ll take great care of you. Check out SCV CV nest dot com Mancala MacGuyver over now.