Getting deep into market conditions!! The change has arrived!
Season 2 Episode 1
The episode starts with an introduction to Fred’s new cohost Rene Perez Jr. and an outline of the new season. Rene, a fluent Spanish speaker, discusses his background growing up in San Diego, attending college in Santa Barbara, and traveling abroad to Russia. He majored in neuroscience in college, which helps him connect with the psycology of real estate. Eventually, Rene will be setting up a Spanish version of WFRE, and throughout the season, we will have different agents like Renchell and John as guests on the podcast.
Episode one investigates the recent slowdown that Arrivva has experienced with our listing. We currently have three houses listed, and traffic has slowed. Fred and Rene discuss the reasons behind the slowdown. In the last few weeks, there were two holidays, Father’s Day and the Fourth of July, and people are ready to take their masks off and celebrate with family and friends. Clients are not interested in attending open houses or looking at real estate. They are tired of quarantining.
Our friend from CNBC just put one article out, saying that the markets cooled off, you know, they work a little with generic numbers. And there was a nice slight drop in total transactions and an increase in listings.
Fred and Rene also explore the deceptive pricing techniques that the agents in Piedmont and El Cerrito use. Agents underprice homes hoping to attract the proper attention. Then when the house sells, they can say that they sold the house for 500k over asking.
Now here’s in contrast to the San Francisco market is the San Diego market. Your basic four-bedroom, two-and-a-half-bath suburban house with a pool in the backyard in a nice neighborhood and a nine school district still has a deadlock. It’s like the Tour de France week. It’s as if there are 100 people on a bike, and you’re trying to win the race, although the road gets thinner and thinner and thinner. So, in the end, only one bike can win the race. Only one person can be in position number one. And it’s just human carnage. It just has to be human carnage.
The market changes based on demand. One moment the market is “Show me the money,” and the next, the market is “Show me the value.” So when the market shifts, you have to adjust the price accordingly. It’s not about how much you want the house to sell for; it’s about what the buyer is willing to pay.
The opposite happens when we are representing a buyer, and the market is up. At that point, it’s not only “Show me the money” but make sure you are overly prepared to stay competitive. You need your pre-approval completed. Not just a pre-qualification for a mortgage but be fully approved with W2s, bank statements, and pay stubs submitted. Be ready to waive everything. Make sure that you have everything lined up and close in less than 30 days.
Alternatively, Fred and Rene talk about other parts of the world where people don’t own actual real estate. Or I should say they don’t own the real property. Fred is in the real property brokerage business; he is not in the real estate brokerage business because all real estate is the physical house, let’s say, on a piece of land. What real property is, is that real estate plus the land plus anything under the land and anything above the land, so it’s the property rights. Fred thinks there will come a time to do like they do in many parts of the world where we’ll start seeing people buying houses, just literally purchasing the real estate, but not purchasing the land. So people will retain the land and maybe get a fee. And It will end up being a lot cheaper for people to buy houses.