1.9 Million Household Formations; 1.4 Million New Homes Coming Online

In 2023, 1.9 million new households will be formed as young people leave college, leave their parents’ homes, get married, etc. But – only 1.4 million new homes will come online. This data was reported by Barry Habib last week, and it is one more HUGE reminder of why 2023 is so different from 2007 […]Read More

6 Reminders for Depressed Real Estate Agents

A prominent loan officer who has been meeting with multiple real estate agents recently told me that he has never seen so many “depressed real estate agents.” They are depressed he says because their business is way down; their phones aren’t ringing; the clients that they do have are apprehensive about buying; the easy deals […]Read More

Let’s Talk About The Great 2018 Housing Crash!

I remember 2018 all too well, as it was one of the worst years in the history of the housing market! Values crashed as much as 30% in some areas, and the entire U.S. economy was in a free fall. Oh wait… I don’t remember that because it never happened. It was just predicted over […]Read More

It’s The Inventory, Stupid! (Why Values Are Not Crashing)

Before I explain who I am calling “stupid,” I want to touch on numerous comments I received in regard to Monday’s Blog: Why Everyone Needs A House As An Inflation Hedge Now More Than Ever. All of the comments reminded me that it is NOT just the house that is the inflation hedge, but it […]Read More

The Housing Market Is Most Definitely NOT Frozen!

America’s housing market did not fully bottom out until 2012 – a full four years after the 2008 mortgage meltdown. But, here is what is interesting: even when the market was at its absolute slowest ever in 2012, there were still 8,000 transactions closing every month within about a 60+ mile radius from my office. […]Read More

Is Tech Taking Over Real Estate and Mortgages?

I have a very successful friend who owns a mortgage bank, and who still originates loans just to stay in the game. He spent six months pre-approving, educating and counseling a young millennial couple – only to see them leave for another lender offering an 1/8% lower rate after they got into contract. This was […]Read More

Rising Housing Payments – In Perspective!

The below chart was circulating on Twitter recently – and it of course made potential homebuyers unnecessarily apprehensive.   Yes, payments have surged, but I want to put this in perspective. Interest Rates: While rates have risen sharply from the lows we saw during the COVID crisis, they are only about 2% higher than where […]Read More

Zillow: Prices Down 0.1%! NOT. A. CRASH.

Good Gravy! “Good gravy” is what my South Dakota grandma used to say whenever she saw or heard something absurd – and she would be screaming that now if she saw all the headlines alluding to a “housing crash.” Zillow’s Latest Terrifying Report (Is Not Terrifying At All) The following is from this article from […]Read More

Foreclosures Up 440% Year Over Year! (Total Bullshit)

Black Knight is reporting that foreclosure starts were up 440% in June – year over year! They were up almost 27% month-over-month too! So – should we panic???? Is a foreclosure crisis upon us? Not even close. Foreclosure starts (the start of foreclosure proceedings) are through the roof, year-over-year, because there was a moratorium on […]Read More

Inflation Cools & Rates Plummet; More Inventory ≠ A Housing CRASH

CPI Inflation numbers came out surprisingly cool this morning – indicating it was flat month-over-month and down year-over-year (it was 9.1% in June but 8.5% in July). 8.5% inflation is still sky-high and probably under-reported too, but the bond market loved it and rates plummeted (because the reports were much lower than expected). Rates plummeted […]Read More

Why Bill Gates Is Buying Up ALL of America’s Farmland?

Bill Gates is now America’s largest owner of farmland, by far - alarming many people and making others simply wonder what the heck he is up to. I set out a few possibilities below, before delving into what I think the real reason is.Read More

Do Price Reductions Signal Depreciation?

Price reductions do not signal depreciation… yet.. and they won’t until we see people actually sell their homes for less than what they paid for them.Read More

Goldman Sachs Still Buying Homes; Rates Dropped The Most In 2 Years Last Week – Why?

Goldman Sachs-Backed Funds Bought Entire Housing Development I saw this recent New York Post article on Twitter yesterday and thought it would be another nice share for any potential buyers who might have cold feet. TLDR: Two Goldman-backed ventures just spent $45 million to buy up an entire housing development in Florida. The big funds […]Read More

Getting Rich From Dry Powder (Cash On Hand)

You don’t need to be a wealthy investor to take advantage of massive opportunities in a down market. You just need to make sure you have some dry powder (cash on hand) – and be ready to take the plunge when opportunities arise.Read More

The Cost of Waiting To Buy…

A pre-approved buyer of ours is devastated because he lost $75,000 of purchase power, despite getting a raise, and is now priced out of his desired market. This is a result of two things: (1) higher rates; and (2) waiting months to make offers.Read More

Is The Fed Trying to Tank The Housing Market – Or Just Slow It Down?

Agents in many of the markets we work in are telling us that they are now finally seeing a slowdown in the market. One agent who lists high-end homes in the Bay Area told me that he “used to tell sellers to remodel their kitchens, update flooring, repaint walls, and spruce up landscaping before listing […]Read More

How To Finance In-Law Units; Flight To Safety Again

CA recently passed a bill (SB9) that eases zoning restrictions and makes it far easier for homeowners to add extra units to their properties. These units are known as Accessory Dwelling Units (ADUs), Granny Units, or In-Law Units. Per the WSJ, there are some 2.5 million single-family homes in California that are eligible to have […]Read More

China’s Massive Housing Bubble? Will It Affect Us?

160 Million Units For Sale In China (vs. 3 Million In The U.S.) China has somewhere between 55 to 65 million unoccupied properties, depending on the source, and an additional 93 million units under construction. Famous financier, Hugh Hendry, was on this Rebel Capitalist Podcast in December discussing China’s extremely precarious property market – and […]Read More

Don’t Waive Contingencies For Condo Purchases – 12 Condo Considerations

We sometimes have very strong buyers waive contingencies when they make offers on condos. But, no matter how strong a buyer might be from a credit, asset, and income perspective, deals can still readily die if the condo or the Homeowners’ Associations don’t pass muster. For example, litigation, too much commercial use, ownership concentrations, and […]Read More

Housing Inventory Crisis! How Bad Is It?

Picture yourself walking into your local Whole Foods and seeing 2/3 of the shelves entirely empty. That is exactly the state of the single-family residential real estate market today, according to Jason Hartman, a true expert when it comes to residential real estate. Mr. Hartman was recently on the Rebel Capitalist YouTube show making this […]Read More

Zillow Exits iBuying & Proves ALL Is Right With the World

BETTING ON CANADA! In the 2010 Olympics, Canada played the U.S. for the gold medal in hockey – and I upset a hockey fan and friend by betting on Canada. My bet on Canada was really a bet on “efficient markets” because Canada’s team had a larger aggregate payroll in the NHL. So, efficient markets […]Read More

2 Reasons the Current Realtor/Agent Model Is Here to Stay (And Won’t Be Replaced by Tech)

BOUGHT CAR ON INTERNET IN MINUTES – IN 1999 (BUT NOT NOW) In 1999, I needed a new car and a friend of mine (a “car guy”) suggested I buy a Lexus GS400 – and he gave me all of the specs. I typed all of the specs into a car-buying website that was available […]Read More

The Real Reason Zillow Stopped Buying Homes & Why It’s Good For Housing

Zillow announced yesterday that they are no longer buying homes (through the end of the year). It was all over the headlines, and numerous people sent me links to the announcement. At first, I thought: “oh, no… I wonder if their algorithms are predicting a softer housing market…” But then I started to see links […]Read More

Conventional vs. Conforming vs. Government vs. Jumbo Loans; Bias For Action

CINNABON STORY – BIAS FOR ACTION I heard this story on a podcast a few months back and just had to share it. When Cinnabon first started, they could only afford to lease very small spaces that required them to place their ovens in front; as a result, passersby could easily smell the aroma when […]Read More

Real Estate Commissions; Antitrust; Follow The Money; OPEC; Why It’s A Moot Point

OPEC BRINGS AMERICA TO ITS KNEES! OPEC is probably the most famous “cartel” of all time b/c it effectively brought America to its knees in the 1970s with its oil embargo and price floors. OPEC or the Organization of Petroleum Exporting Countries was founded in 1960 and by the 1970s it had so much power, […]Read More

Housing Inventory Shortages – Is Help On The Way?

INVENTORY SHORTAGE – WILL THERE BE RELIEF? Homebuyers nationwide are facing severe housing inventory shortages while median home prices continue to rise. Pundits are weighing in on whether relief is on the way or not. Ken McElroy says relief is on the way. In this four-minute video, real estate guru Ken McElroy points out why […]Read More

Listing Agents Speak! (About Representing BOTH Buyers & Sellers/Dual Agency)

On Friday, I blogged about Buyers Working Directly with Listing Agents Instead of Using a Buyers Agent, and I received a surprising amount of feedback. What was even more surprising though was that most of the feedback was from listing agents as opposed to buyers agents – and all of them were opposed to dual […]Read More

Divorces Continue To Surge! How They Impact Mortgages And Real Estate

COVID changed everything – including marriage, as many couples realized they didn’t like each other when they had to actually spend time together. 😊 Even Bill Gates is getting a divorce, as we learned recently. I am sure being cooped up in a 66,000 square foot house with another person is enough to drive any […]Read More

The Other Reason Housing Inventory Is So Low (Not What You Think)

In the 1970s, when inflation was out of control, the press was always looking for scapegoats to blame like “middlemen” and “greedy businessmen” when the cause was really at the feet of Fed and Government policy. That is largely the situation today with respect to housing, as Fed and Government Policy – intended to help […]Read More

Owner Occupancy Requirements In A Post-COVID World; Second Home Rates Higher Now

“Owner-Occupied” is a big deal in the mortgage world for several reasons: Interest rates are more than a 1/2 percent lower than they are for investment properties because there is less risk lending to an owner-occupant who will take better care of the property and be much less likely to let it go into foreclosure. […]Read More

Low Rates Make Real Estate Investing And Airbnb More Viable

My wife Heejin is looking at an investment property in Plano, Texas that will sell for about $510,000. It also has a tenant in it who is paying $3,700 per month. With 25% down, the PITI is around $2,600 – assuming a no-points loan in the 3.25% range. Note that investors can put 20% down […]Read More

Getting The “Best Deal” Cost Client $300,000; It’s %’s; Putting Money Where Your Mouth Is

In 2010, we had a client shopping for homes in what was and still is one of the hottest markets in the entire country – “the Rockridge” neighborhood in Oakland, CA. He was well-qualified with ample cash and low debt ratios, but he was determined to get the best deal possible; he was convinced that […]Read More

“America’s Largest Landlord Adds $1 Billion For Its House Hunt” Why It Matters, And It Does!

The title of today’s blog was lifted directly from this WSJ article. I blogged last week about why inventory levels are so low. One of the reasons was investors buying up properties en masse, and today’s WSJ article is case and point. Per the WSJ: “Real-estate investors have a mountain of money looking for a […]Read More

Condos Not Always “Cheaper” Than Single-Family Residences; Condo Questions To Ask

I read recently that the median single-family home price in Marin County, California is almost $500,000 more than the median condo price. So, condos are way cheaper, right? Not always, and here’s why. HOA DUES HOA dues are significantly higher nowadays for a variety of reasons (more liabilities; more maintenance needs for older buildings; more […]Read More

Why Home Prices Did Not Crash With 15% Unemployment? Planet Money Explains

After the COVID-19 crisis was in full force, I wrote several blogs in March and April pointing out why I thought housing prices would not crash as a result of the crisis. In response, numerous agents emailed or called me to suggest that I was being too optimistic and potentially misleading people. So, was I […]Read More

Capital Gains Taxes On Real Estate

CAPITAL GAINS 101 The IRS and many states collect capital gains taxes on the difference between what someone pays for an asset (their “basis”) vs what they sell it for. This tax applies to most assets such as stocks, cars, boats and of course real estate. EXCLUSION AMOUNTS The IRS allows property-sellers to ignore capital […]Read More

What’s Up With Compass Real Estate? Hype vs. Reality?

NYU Professor, Scott Galloway, recently released a fascinating six-minute video about Compass Real Estate. Galloway was the one who recently illuminated WeWork’s glaring weaknesses, so he looked into other SoftBank investments to see if they had similar issues, and he focused on Compass. Because I have been utterly fascinated by Compass’ fast expansion, and because […]Read More

Condo Spot Approvals (again), Reserves, Time-Frames; Rate Volatility

RATE VOLATILITY On Monday, a top producing loan officer/friend told me over dinner how much he loves the lack of volatility in the current rate environment. He explained that it allows him to float (not lock in rates) for many of his borrowers until he has the time and capacity to process their loans. But […]Read More

Will a Recession Tank Housing Prices? Probably Not…

I know numerous people who are anxiously waiting for the next recession b/c they expect housing prices to tank. They can’t wait to swoop in and find bargains like the many that were available after the 2008 meltdown. BUT, according to Appraisal-Blogger-Extraordinaire, Ryan Lundquist, housing prices don’t always “correct” or decrease during recessions. Prices often […]Read More

Tenacity & Focus vs. Training, Seminars, Self-Help, Organizing, Inputting, & Fixing Your Business

Of all the agents we work with (over 800 and counting), one of the most successful, by far, is a buyer’s agent on a very successful team. She is successful via every major metric – units, total volume, and income. What makes her so successful though is simply her tenacity and focus. She does not […]Read More

Leverage Your Database Before Amazon Does; Amazon Teams Up With Realogy

Most readers have probably heard this already but Amazon is teaming up with Realogy to match homebuyers with real estate agents through a program called TurnKey. This is a huge deal b/c of the size of the partners. Amazon is the world’s largest retailer and Realogy, which owns NRT, Better Homes, Century 21, Coldwell Banker, […]Read More

New Condo Complexes/Phases Do NOT Have to Be Complete

Many loan officers and real estate agents mistakenly believe that condo projects and/or phases within a project must be complete before units within them are eligible for mortgage financing. We, however, have an investor that offers new construction condo financing as long as only the building containing the unit is complete. Again – neither the […]Read More

How Much Do HOA Dues Zap Purchasing Power?

We recently had a buyer who desperately wanted to qualify for a condo purchase but could not because the HOA dues were $800 per month! This prompted me to remind agents and buyers alike of just how much purchasing power HOA dues extract from buyers. In the above situation, $800 of HOA dues equates to […]Read More

House Flipping Back to 2006 Levels; Worried?

I get several calls or texts every week by someone offering to buy a condo we own in Scottsdale. What is particularly interesting to me is that the offers come from dialers at large call centers that house-flipping firms have set up to make nonstop calls. In other words, house flipping is a big business […]Read More

Don’t Deposit Gift Funds, Please! (Straight to Escrow)

It is well-known that buyers can use “gift funds” from a relative to help with the purchase of a home. But, we want to again remind buyers to not deposit gift funds into their personal accounts. Buyers should instead tell their “donors” (aka “gifters”) to hold on to their funds and to instead deposit all […]Read More

Too Busy for Big Houses! Too Old & Too Dated Too

I hike for five or six miles every weekend in the hills around one of the Bay Area’s most high-end housing developments. The homes are huge, stunning and fun to see, but the best part is the extremely elaborate backyards with vineyards, gazebos, massive pools, outdoor kitchens, terraces, fruit trees, playsets, sport courts, and immaculate […]Read More

Important Condo Considerations

Below are twelve things buyers and agents should consider if they plan to finance the purchase of a condo. I repeat these items from time to time b/c they are so important and b/c we continue to add so many people to our blog distribution list. Concentration Rule. No single entity/person can own over 20% […]Read More

Marketing & Lead Gen – “There Is No One Thing”

We work with a Keller Williams agent who closed 140 transactions last year (over $100 million in sales). When people ask her what she does to generate so much business, she always says: “There’s No One Thing.” Her comment always amuses me too b/c the namesake of her brokerage (Gary Keller) wrote a famous book […]Read More

Avoid Waiting To Buy A Home in California

The right time to buy a house is now! With rates continuing to rise and the California housing inventory that shrinks each day, the time to get into the market is now. Here are some reasons why buyers should consider buying now to avoid the cost of waiting. Rates have officially hit a 7-year high. […]Read More