Real Estate Market Update: The Sky is NOT FALLING!

The San Francisco Chronicle Headline Screams:

But in the article, it is .... not that at all.
"The slowing demand has yet to translate to notable declines in home prices in the Bay Area"

So, what does that mean? The article continues:

" There was a slight month-over-month decrease in typical home values from May to June for five out of the top 50 largest metro areas"

What is slight? How about 0.1%. And, not to get too technical, but it could be as low as 0.051% rounded up.......

And more important than a 0.1% change in either direction is whether that signals a trend. Well, if you look at the graph of changes over the last 5 years, you'll see that there have been several times, along the overall increase, where there was a small pause.

Further, the article mentions that the Bay Area metros declining are part of 5 metro areas out of 50 declining. So, are the rest flat? Are 5 of the other 45 increasing? 10 or more increasing and this is an exception? The article, curiously, does not give us that data.

So, is this trend in these 50 metros even indicative of the market as in whole. For example, may it be a big city issue? Or certain cities. For example, last week Starbucks announced it is closing stores in LA, other major West Coast cities

Starbucks plans to close six stores in the Los Angeles area and 10 locations in other major cities because of what it says are safety issues, including drug use and threatening behavior. So, is the decline in metro areas a sign of increased crime in metro areas, and NOT indicative of overall real estate trends? We don't know.

Every week as I do my research I do a Youtube search on the term "Real Estate Crash." This week we got over 74 MILLION hits on that search. Lots of sad faces, lots of scary thumbnails.

Yet, it does not seem we are headed there, yet. 

In order for there to be a real estate crash, there have to be more sellers than buyers for prices, not listing prices, but prices of houses to go down. And inventory remains at historic low levels.

A national study, released by Up for Growth, found that 47 states, the District of Columbia, and 169 out of 309 metropolitan areas have a housing deficit. Nationwide, the study found that housing underproduction has reached 3.79 million units – up from 1.65 million units in 2012.

And as long as there are not enough houses, there cannot be a crash. Period.

Another misleading headline this week was in CNBC: 

Again, this sounds scary, right?

But let's break it down.

The data they are reporting says that the cancellation rate went from 11% to 15%. This means that out of 100 escrows, 15 were canceled last month, from only 11 a few months ago. Yet, 85 still closed.

Is this number high? Well, it is the highest during COVID, but that was an unusual time. Despite the massive rise in rates and other social disruptions, the percentage of escrows that do close is higher than at any time OTHER than during COVID. So, again, just fear-mongering.

What to do?

Well, if you need to buy a home, there is a bit less competition than before, and let's make sure you get the best rate possible to limit your costs.

And if you need to sell a home, let's put together a plan and execute it rather than just "throw it on the market" and hope for the best.

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#probateattorney #probatesales #probaterealestate

I host two FREE Real Estate Zoom calls every week:

Real Estate Flipping / Investing Focused:
Tuesday 3PM Pacific Time
Link: https://www.eventbrite.com/e/so-cal-real-estate-investment-meetup-tickets-80900334077
Topic: So Cal Real Estate Investing Meetup
This group is for Landlords, Fix and Flip, Traditional and Non-traditional Real Estate Investing, as well as all Real Estate Service Providers (Agents, Title, Contractors, and more.),

Probate Focused:
Thursday 4PM Pacific Time
Link: https://www.eventbrite.com/e/how-to-get-your-first-sale-in-probate-real-estate-tickets-67396261031
Topic: How to Get a Sale NOW in Probate Real Estate

There are lots of programs that promise to help you sell a LOT of homes, but how do you get your 1st sale? As the baby boomer ages, the number of homes being passed on to heirs continues to increase. I'll share with you 11 different ways that I have generated a listing or buyer sale that do not cost you any money.