McKae Properties Real Estate Market Commentary

 When I read about the "bubble", the over pricing of real estate and "pandemic fears", I am reminded of an old Wall Street saying: "The Market Climbs a Wall of Worry". One thing for certain real estate is far different than the stock market.  No mater when or where, crisis or prosperity value can always be found in real estate.  It is just a matter of learning where to look.   The legislative end of the Eviction Moratorium will bring property on the market.  OPPORTUNITY! How many homes?  I can't tell you that.  I do know that there are certain statistics that are a telling indicator. There are approximately 1.7 million home is "Forbearance".  That means 1.7 million home owners have decided they will not pay their mortgage for one reason or another.  That number of 1.7 million is down from over 7 million during the peak of the Pandemic.  Of those 1.7 million who have not paid their mortgage from anywheres from 18 months or less, they are  or s

 Do you realize that not all the States have a FULL DISCLOSURE law in real estate transaction for residential properties?  That's right those documents, sellers are required to complete and provide to buyers and buyers are required to sign and initial, are not a standard in all states.  To those states who do not have the full disclosures the buyer is required to do their own research.  The seller is not required to inform the buyer if there is an issue with the property.   Take my first real estate transaction when I moved to Hawaii after graduation from college.  The house MLS listing stated "sewer", "yes".  Not all houses in Hawaii and in this case Kailua in Oahu had sewers, but septic systems.  Months after my purchase the toilet backed up.  I called the city and was told I was not connected to the sewers.  The prior owner did not pay for the hook up. How much...WOW, I just borrowed money from my widowed mother to buy this house to supplement my savings.   I

  Breakneck. That's the best way to describe the pace of the 2021 housing market. The bidding wars got so intense this year that  home price growth set an all-time record . The rush of buyers into the housing market during the pandemic absolutely crushed housing inventory—the number of homes on the market—with that figure falling for 12 consecutive months. By April, housing inventory was down a staggering 53% from a year earlier. There has been a change.  Ever so slightly, but a change indeed.  Well at least that is so in the Nation.  Here in Silicon Valley inventory has declined.   In February 2021 we started out with a 2-month inventory in Silicon Valley. Slowly it has dropped and leveled off at a 1-month inventory.  One would expect the law of supply and demand would keep prices moving upward.  Not so, in February 2021 the 6 city area average price went from $3,318,431 in February to $3,874,913 in June and dropped to $3,201,528 so far this month of August. What's the story? 

 While it's a shift of only 1-2 degrees, but the red-hot housing market is finally starting to cool. Despite the median home price hitting yet another record high in May the year-to-year date statewide home sales dipped by 2.7% in May.  They had been rising steadily since February.  But, for the first time in 2021, the median number of days that a single-family home was on the market did not drip, but rather held steady at seven, the same number recorded in April. John Graff, a Los a Angeles based broker and chief executive of Ashby & Graff said, "Buyers are getting fed up at this point with submitting as many as 8-12 offers and getting rejected."  "They're throwing up their hands at this point", said John. The median price of a single family home in California hit $818,260 in May, an uptick of 1/2 % from the previous month.  It's an acceleration with a foot off the gas.  In April the median hit $814,000 up 7% crossing $800,000 for the first time in

The prices of everything, everywhere, are going up.  A house in Phoenix is going up, a Ford F-150, a plane ticket to New York City, they are going up for as much as everything all over the country.   Well, maybe not San Francisco.  There the prices of homes are all down from 10-12%.  The only part of the country and the State of California that is not going up?  Down from 10-12% where the rest our metro areas are up over 12%.  For pseudo-scientist, aka Economists, it is a dismal picture!  They, along with the people that brought you the last recession, aka Wall Street Banks, say it is only temporary.  "A transitory event that will disappear."  Mark Zandi, the chef Economist at Moody's...yes Moody's the people that gave AAA ratings to bonds supported by mortgages that went into default and put us on the verge of economic collapse WORLD-WIDE...... “Inflation is one of the mysteries of economic study and thought. A difficult thing to gauge and forecast and get right. Tha

More than 17% of the homes in the U.S. are selling above list price.  Would-be homeowners are furious as they lose bidding wars. Many are looking back in time and thinking "Bubble".  Of course it doesn't help for the "Media" to promote Bubbles! Prices rise and fall for all assets for a number of reasons.  So what makes something a "Bubble"?  The likely reason is so many people have put so much attention in the price of homes, and their home in particular, that it didn't take to much for prices to rise; especially, when there is a low inventory of homes for sale. A sharp rise in an asset's price is not necessarily a "Bubble".  The fear comes from the fact it is in our homes, which are usually the last thing we think of.  The last thing, at least, until the newspapers need something to publish.  Millennials represent 37% of the buyer's today.  They are the driving force of our buying marketplace.  They passed the "Baby Boom&quo

GENERAL COMMENTARY If there's been one consistent theme during the recovery it has been analysts, strategists, economists, and forecasters of all stripes have been incorrect  in judging the resilience of the U.S. economy. The May Luxury Real Estate Report has almost all Luxury Market in Real Estate in the U.S. in a "Seller's Market". (see link at end of report).  The days on the market are short and the buyers outnumber the sellers. There are many reasons for these circumstances of events.  The Pandemic has allowed many to work from home, thus saving time and money.   The IPO market has been HOT!   New money creates pent up demand to overflow into buyer demand.  Supply in homes for sale is limited for a number of reasons:  a.Sellers do not want to venture out for fear they and their home will become infected.  b. Higher future property taxes. c. Capital gains taxes.  d. Questions of where to move.  e. Establishing new relationships with professionals. The California D