McKae Properties Real Estate Market Commentary

 We certainly do not have a rising tide; other than, interest rates.  The issue with the rising rates is that they have occurred in a quick like fashion that does not allow the market place to adjust.  The result the tide is going out.  As a result many of the rocks, debris and sunken ships are exposed.  This is especially the case when the rates rise without time to adjust. The issues of the past indicate the problems of the future.  Whenever the FED has found themself behind the curve the quick action to raise rates to catch up to inflation has created issues.  This goes back to the 70's and the eventual result of the end of the 70's with the numerous financial crisis that occurred.  The reoccurrence of the lowering tide has created issues in the past and they can be seen in the present. The issues are complicated by the various securities created by Wall Street and Banking.  Specifically: LDO...loan default obligations, and CDO....collateral debt obligations.  Insurance comp

Asset Dis-Inflation The FED has publicly stated that interest raises are being done to stop inflation.  If you paid close attention to FED Chairman Powell's last remarks, he stated he wants to lower "home prices" for all Americans.   Elon Musk stated in one of his posts that his view was the FED was looking at asset dis-inflation.  That to me also mean Stocks, Bonds, Investment vehicles of all color and types, and Real Estate What we have seen so far is that Real Estate prices are dropping across the United States; irrespective of location.  Luxury Home Sales Plunge Across the U.S. per a Wall Street Journal article dated September 23, 2022.  Locally the Luxury Market is defined by Atherton, Woodside and Portola Valley.  Prices in those markets come down by 7 digits in some cases.  One Woodside home was originally listed at $110 million with several price cuts it is now at $48 million.  Days on the Market are increasing and Sales Price to List Price have come down to a dis

Interest rates are going up and will go up further in the future.  The stock market most of Silicon Valley buys in taking a BEATING.  There are no vestal virgins in the temple the Visigoth's have taken them home. So where do you put your investment savings.  One area that has always held up is rental or income producing real estate.  From single family homes, multi-family and apartment buildings.  They offer cash flow and tax shelter with appreciation from the growth in income to the amortization of mortgages. I have a great You Tube visual for you to watch. If you've ever thought about buying an investment property, here's a  solid video from the "Meet Kevin" youtube channel .  Kevin definitely gives some solid "insider" tips in this video.  If you'd like to continue the conversation and start the process of finding a great local deal, feel free to reply to this email or text me @ 650-743-7249 anytime.  Gary McKae, gary.mckae@exprealty.com

  Mortgage rates jumped again this week, giving no relief to the price-weary homebuyers still in the market. The rate on the 30-year fixed mortgage increased to 5.66% from 5.55% the week prior, according to   Freddie Mac , and is up more than a half-point from two weeks ago. While lower than the 5.81% registered in June, the rate remains over 2 percentage points higher than the start of the year. Higher borrowing costs have left cash-strapped homebuyers at a divide. Some folks have opted to put off their purchase plans and wait for better market conditions, while those who remain are taking advantage of the dip in competition to strike a bargain with sellers. “The increase in mortgage rates is coming at a particularly vulnerable time for the housing market as sellers are recalibrating their pricing due to lower demand, likely resulting in continued price growth deceleration,” Sam Khater, Freddie Mac’s chief economist said in a news release Ronda Lee Wed, August 31, 2022, 7:31 AM · 3 mi