Finding the Real Estate Crash [PART 2]

people want to know if the real estate

market is crashing so we started in

Southern California now we're in

Northern California and soon we'll be

going to Salt Lake Texas Florida we'll

be going to different parts of the

country to figure it out today you're

going to see if the market is indeed

crashing in October of 2023 in Northern

California we're about halfway between

San Francisco and Sacramento let's

figure it out so how do I like to start

off my comparisons I'm going to start by

looking at a house that's on the market

that's sitting here's a property that

looks like it's got a newer roof it's

just been flippery modeled or at least

it looks that way it looks gorgeous

everything about it looks great you know

what doesn't look great is the fact that

it just had a $100,000 price cut now I'm

not interested in buying in this area

it's a little too expensive for me but I

want to know what different markets are

doing this is up between San Francisco

and Sack as we talked about this is

listed for $899,000 at5500 ft and it's a

4-2 let's now take a peak around the

market it's nice we don't see any people

parking on lawns or driveways every

house looks relatively well mained we

have a little bit of busy road noise

here but now let's go look at some comps

and understand what's going on with this

market so the first thing we're going to

do now is we're going to go look at a

June comp that's sold nearby and let's

see which one's better now this one's

not quite as oh my gosh it's a flip when

you walk up but when you look at the

pictures of this one you see it actually

doesn't look that bad and this one has

an edge to it it's actually next to this

gorgeous Park and doesn't have that

street noise so I would much prefer this

house at about 90 Square ft smaller

because I'm next to the park I mean this

is this is like an extended backyard for

your children this this actually a huge

Park this is beautiful this probably

adds $20,000 of value in in my opinion

anyway this property sold for $858,000

in June now the other one's listed for

$8.99 now the one at $899 isn't selling

at $8.99 it should be based on this comp

worth about

$879 but now now what I could say is if

the other one that flip looking one

sells for less than $879 which what I've

done is I've added 20K for this park

right uh and a little bit for the square

footage if that sells for less than $879

I know the Market's softening but I'm

not convinced that it's crashing yet I

need some pending sales let's go to

another one and we're going to write

that one down as a comp we're going to

track that $8.99 one if it sells for

more than $8.79 great no crash if I look

in 2 months and it sold for 800 got a

big problem now the one by the park

something else you got to know because

we're about to comp to this neighborhood

and I'm trying to understand 858 seemed

like a really good deal so I'm digging a

little deeper I'm like ah it's actually

a May sale even though it closed escrow

June 13th it went pending in May so that

tells me the appetite of the market in

May doesn't tell me much about the

market now unless we went up in the

summer and right back down and that

could be the feeling of a potential

crash so now I'm looking for evidence

that's more recent because I know we

have low numbers in the spring or lower

numbers in the spring I know we've got

somebody asking $ 8.99 so what am I

doing I'm bracketing right I know $8.99

for these three four bedroom 1500 is squ

foot homes is too high because it's not

selling I know that $799 was really low

then now I'm going to go to a pending

comp which is in this neighborhood but

this neighborhood's 15 years older you

could see we've got an older home here

here we got the power lines we got a

property that looks like maybe it was

flipped over here but the one we care

about is actually right here now this

property is pending it was listed for

$790 and I think to myself okay $ 790

that seems really low especially if the

other one just sold for

858 so older neighborhood about the same

size home otherwise 32500 Square ft it

went pending so I called the agent oh

790 we get close to list where are we

we're roughly around 825 to 830 on this

now that's interesting 825

830 15-year-old neighborhood older

neighborhood not next to that nice park

kind of aligns with the May pricing so

what's fascinating is I don't know

anything about this Market but I'm

already learning that my May pricing is

similar now to my October Market this

one's getting multiple offers because it

was listed low this is where people go

oh multiple offers everything

skyrocketing no it's actually aligning

with May sales but there were July sales

in the

900s okay well let's go look at the 900s

and see if they had like gold windows or

something like that let's go find out

now this neighborhood's pretty nice okay

this is a newer neighborhood from that

last one that we saw we don't have the

power lines what's crazy though is this

is a July sale and this July sale sold

for $938,000 with dated bathrooms now

it's nice on the inside but very similar

to that first 8.99 neighborhood or that

second one where we're by the park very

similar you the power lines it's a nice

neighborhood but sold for $930 $930,000

right now we're looking at comps of

maybe we're selling for 830 to 850

that's not good is there another comp

that's showing us we had a hot summer in

the July season let's go see another

1950s neighborhood here but we're closer

to some of the shopping we only about 2

minutes of a drive from the last house

where we were this house sold for

$98,000 in the summer now even if we

give this a massive adjustment for just

being a few streets closer to the

shopping center here what we're finding

is if current values for 324 tws right

around 1500 square ft couple streets

that way are sitting around 8830 840 850

like the one by the park and that one at

$8.99 isn't selling we're probably

seeing a variation from the summer here

of somewhere between 7 to 8% that's 7 to

8% decline just from the summer now that

could be selling season but let's put it

this way it doesn't look like prices are

dropping off a cliff yet the question

now is going to be what are those active

listings going to sell for we know we're

propped up by the pending sales we know

we're not $790 because we were getting

multiple offers at 790 pulling us into

that 825 to 830 region if we're closer

to these hey maybe that's going to push

us into the 880 because we're closer to

the shopping still not a 980 but it's

also not really anything more than a

seven to maybe as much of a 10%

correction going in through the season

we're not seeing a big giant drop off

the cliff yet we haven't seen it in

SoCal we're not seeing it now in this

part of NorCal now we're going to go to

some different markets and continue

evaluating

then what we're going to do is we're

going to keep tracking our tracker comps

and we'll see when some of these active

comps actually sell if they sell really

low and we're starting to get 15 20%

declines it's going to be a sign that

maybe we're starting to hit some real

pain and those are opportunities if you

want an opportunity to invest in HCK

remember our investing round ends for

2023 November 1st so go to house act.com

to learn more this is the kind of work

that we do when we do our due diligence

on properties find our wedge deals then

we buy renovate renovating properties

people can't otherwise live in we bring

them to the rental market we bring

supply to the market and then with our

mini funds we hope to create delicious

cash flow for our investors knock gun

wood no guarantees read the offering

circular and the solicitation at

house.com thanks for watching we'll see

you in the next location congratulations

man you have done so much people love

you people look up to you which I say

yes meet Kevin where does this mean we

are in the economic cycle should we be

thinking about buying real estate should

we be thinking about buying stocks I

have a background in real estate as a

real estate agent real estate broker

real estate investor a stock market

investor and fund manager why not

advertise these things that you told us

here we'll we'll try a little

advertising and see how it goes always

great to have you on Kevin PA there

financial analyst and YouTuber meet

Kevin