New home builders and market health - Santa Clarita real estate 2019-50

The Transcription for this week's Real Estate Radio show for Santa Clarita Valley 00:00 Good for everybody. Connor Macgyver, new home buyer confidence, and new home builders. That confidence is also very, very up. Just read a recent report. We'll talk about that in today's real estate radio show. Welcome to housing the longest running real estate broadcast here for the Santa Clarita Valley cities. I am Connor Macgyver, your host. Not to be confused with Connor Macleod of the clan Mcleod from the movie where the Highlanders existed and they have to cut each other's head off until there's only one and all of that, which awesome soundtrack by Queen. I'm going there but I'm going to stop right now. Real estate has been interesting in the last few weeks. We do see the market starting to pick up and I believe that this March, April, May, June are going to be a wonderful four months for real estate, both on the buyer and seller side because I think both are going to be offered things that they like. 00:58 Sellers are going to be able to get premiums for their homes depending on the influx of new inventory. That's going to be the critical key there. If in fact a lot of listings come on, it's going to flip the market from being a seller's market right now, kind of a flat market from a seller's market into a buyer's market. If in fact, we see that happen, sellers aren't going to be super happy. On the other end of it though, if in fact, we keep inventory modest where we are now, we will see a higher buyer drive coming March and April, May and June and we will start seeing prices start to inch up a little bit by a little bit. Now, here's the deal with that. If in fact, interest rates stay steady, increases that interest rate values are going to be modest. Even with a heightened buyer drive appraisers that are looking at real estate, they're not going overboard when they're evaluating properties that are looking at a standard. 02:02 They're looking at 180 days of value. Properties that have sold properties that are apples to apples in comparison and properties that are in very close proximity to the subject property, which would be the one that you're having that sells for you. That being the case as a buyer, even if prices start to creep up, they're not going to go crazy and you can also rest assured as a buyer, because of all the guidelines and review systems in place over appraisers, you don't have to worry about paying too much for anything. It all comes down to that. We've seen properties evaluated, evaluated by appraisers. They look at the value and they say, hey, it's not worth what the buyers wrote their offer for. It's not worth as much as the buyers have said. They would pay for that and got all parties to agree. Then what happens? 03:02 Well, at that particular point, it goes back to the seller. The seller's now notified all the appraisal came in, but it didn't come in at the amount you're going to sell your home for or you agreed to allow the buyer to buy your home for whatever that number is. Whatever the buyer needs a loan for, it's not there. So then the seller has some choices for me. Are they going to adjust their price? How is the market? What's the competition? So there are other things to consider. Also what's been their showing activity? Did they have multiple offers? Did they have that kind of a situation and where do those other buyers stand? What kind of loan program is the buyer who is in contract with the seller? What type are they using? If they're a VA buyer using a veteran's administration alone, it could very well be that another loan program might value the house differently maybe, but it's going to really depend. 04:04 The appraisers that go out from VA, they just don't do Va. That's something that a lot of agents don't mention, whether they're having this talk with their sellers if, in fact, it happens to come up. The appraisers are trained, VA certified by VA, but they do other appraisers to appraisals also. They go out there and they appraise for Fha. They appraise for conventional and they're also qualified to do VA. Those types of appraisers go out and evaluate the property added. More than likely they're going to be very, very close to the same values given. Now when an appraisal comes back or appraiser comes back with their appraisal and it's different than what all parties agreed on within contract than discussions have to happen across the board. If the buyer really, really likes that house and wants to proceed, it could be the case where they could pay the difference if the buyer doesn't want to pay the difference or if that's not a good move for them financially. 05:12 And this is very cased by case dependent folks dependent because I'm not going to be one to tell my buyer or you have to pay more than the property's worth. Case in point though, a few years ago when the market was hopping quicker than it is now, we had a client in Burbank that had a property that we represented them with and the appraisal came back $10,000 less than all parties agreed and the seller said, no, we've had lots of showings. I know there are other people that we had interviewed and seen offers from, cause my agent's already had done their due diligence. I know that they would step up and pay that extra 10,000 out of pocket above and where the bank's gonna loan on that property. And that is legal, by the way. It is okay for a person to pay more for the property above and beyond what the appraisal says the property's worth. 06:10 And the guy hinged his bet said, you know what, I'm going to pay that extra $10,000 this is our buyer. And now he's got, Dee did very well. They had some new homes pop up in the neighborhood's selling your premiums, increasing his value. They had a couple different strip malls that opened up in close proximity as well. Not too close, but close enough to also affect value in a positive way. So in some cases, it might be worth it, but at the end of the day, don't panic if it doesn't come in. Because again, on a case by case basis, the seller could also reduce their price. They could come down and say, well, the appraiser said that it was worth this amount. The seller could say, okay, that's what we'll go with and the buyer, no need to panic, but they could also meet halfway. They could say, well, we're not going to go the 10 we'll give him five if the buyer wants to step forward or five on their own, then we'll make the deal work. 07:16 Very, very important to understand how these processes work and of course whenever I'm evaluating a property, looking at property for my buyers and also my sellers, we'd cover all this. This is part of the discussion that comes up when we start talking about appraisals and appraisers and what they're looking at when they're evaluating the property, putting values on them. You think I'm evaluating, evaluating when they're evaluating properties, they're looking at those values and they are figuring out what properties are worth. We do the same sort of thing, not as detailed but close enough to give our sellers and buyers an idea where these properties are and what where they should be either pricing their properties for or what they should be paying for real estate. That's the buyer drive and I was talking about new homes, Scv new Dotcom as CV. Any will get you to a site that we had put together that shows where the new homes are being built. 08:22 If you were to take a drive, probably the largest new housing community out here now it's going to be sky crest and excuse me Skyview Croix I Skype rest is totally something else. Skyview is going to be located off of Plum Canyon, so if you take golden valley up and over or you take new hall ranch road up and over, get on Plug Canyon and you head into this community. There is a lot of bulldozing going on, a lot of flattening, a lot of lots have been put together. It's a massive community and you'll see several different developments in there. One of the things to watch out for there are Mello Roos, so you're going to want to find out what those amounts are. These are questions that we ask when we represent our new home clients. If you were to reach out, we would be able to meet you and set you up with a tour of all the new housing that fits your parameters in your criteria, including disclosure about Mello Roos, the special assessments, and those additional taxes that are at a majority of the new home areas out here. 09:32 So that can also be factored in because you have to qualify to be able to pay those extra amounts. Also, whenever you buy a new house, it's not just the mortgage need to be concerned about. He got to be concerned about the other stuff. $250 a month Hoa for one. It's some of these different areas. Knowing that before you go out and get your hopes up or get lured by the beautiful model homes with all the upgrades, it's probably smarter to know what you're getting into before even making that trip. With our new home tour, that's what we do. So I sit down and I explained at these different areas, these are what the incentives are currently. These are the incentives we've been able to get for our clients. These are the discounts we've been able to receive on our client's behalf and other things. 10:24 Giving you an idea of where a good starting point would be because it is negotiable. Everything is negotiable. Even new homes, so when I go in, sometimes my clients don't pay sticker, they're not paying the price that's on the sheet. They're paying less. We had a couple of clients not too long ago with a home big home builder out here able to get homes below where they were selling for to the tune of 30 and $40,000. So basically waiving some of the lot premiums in place and also cost of the home. These are very, very good things for people because they're getting properties less than if they were to try to do it alone. I know the questions to ask. I know what to say. I know how to interact with the builder's representative and we do it pretty well. It's a good time. I love showing new houses. 11:20 When you're ready. Yes. It'd be new dot SCV now, finally, let's talk about a couple of things. Whenever we look at the market, it's a good indication of what's going on to see what's going on within the new housing. Rome as stated before, when you have new home builder confidence soaring, breaking ground building and building and building, the market is robust in nature because they know that the time is right to build. When you see new home builders started to close their doors and shut down with land and we saw this six to eight months prior to the last fall of the cycle back in 2007 new home builders closed their doors and laugh. They had vacant plots of land that are now being relived inbuilt on, but back in the day, it was almost as if they had pre-knowledge of what was going to happen to the real estate market. 12:22 Now they're building, now they're the opposite. They're flowing very strongly and they are building a lot of residences and the confidence is high. They're also selling those residents. They're not just sitting and that includes what the Mello Roos and the Hoa these residences are selling and why? Well, because we have that lacking inventory. I talked about in the show earlier. We have 542 units for sale in the active category and these properties are being scooped up within two-three weeks if they're price correctly within hours, if the seller is going to not mind signing off on it before having it more time on the market. Some sellers want to wait, some sellers put the property on the market on a Wednesday and then when to give it over the weekend before they look or review any offer. Is that legal? Well, it's up to them. They are the seller, but those contracts have timelines and deadlines in them to protect the buyers out there, but they do what they will. 13:27 Sometimes they say, well, we're sick. We're not feeling good. We're going to give it over the weekend. We have relatives in, we don't have time. You understand the drill as a real estate buyer, not a lot of control you have except when you go out there with your chosen professional realtor, do your best. Make sure you know the cops. Make sure you looked at the house. Make sure you know what infrastructure is around in the community. If schools are important. That's a good question to ask and find out what school is going to be involved with your children if you have them and if nod if you're maybe an entertainer, how's that going to fit in with your lifestyle? If you're going to have people over, how's that parking going to look? What's going to happen if they'd come over as they're going to be in place for them to put their vehicles? 14:17 Are you going to have to hire her valet company and having them park three miles away? These are great questions to ask and finally, I'll leave you with this tip. We have buyers that are buying real estate often through myself and my team. One of the parts of that process is I make sure that I discuss with them to go to the neighbors, find out who the neighbors are actually physically knocked on the neighbor's door to see who answers and carry a conversation with them. Hi, my name's Macgyver, my wife and I Astella here. We want to buy this residence next door to you. How do you like the neighborhood and they will open up, they will start to answer questions and usually if you find the chatty Cathy, no offense to Kathy's out there, but if you find the chatty Cathy they will tell you a lot more than you could have possibly found out anywhere else. I've caught her macgyver. Thanks so much for listening to housing, when you are ready, reach out and I will be here for you. Have a fantastic rest of your day and week and we will talk to you soon. Please share the show. It would be very meaningful to me to have new listeners as well as we get all the time, but when we have people referred to us via housing, and saw on it really makes me happy. Everybody be safe. I am Connor with honor over and out.