Real Estate Jerky Explains Why $70K Income No Longer Buys $500K Easily

And now live from our Smokehouse Studio, it's time for Real Estate Jerky. All your real estate questions answered by our provocatively mean expert host, Edward Ed Parco, MBA, veteran, and president of Lending for Living. We'll give you something to chew on. Real Estate Jerky is on now. Welcome to Real Estate Jerky. We always give you something to chew on. I'm your host, Ed Parco, MBA veteran and president of Lending for Living. Our studio is located right here in Modesto at Lending for Living with our producer, Mike Murray. And we're proud to bring you the latest updates and insights on the real estate market in our community. Thanks to our partnership with iHeartMedia and the station KFIV, you can tune in and never miss an episode by subscribing to our podcast.

Stay up to date by following us on social media. Joining me today again is Mike Kelly, a Remax executive realtor. I should say a real Remax executive realtor. Yeah, we will see what we will see what those changes become. Oh, there's there's everything's going to stay the same until it changes. Yeah, everything does. When When a company gets purchased, everything stays the same until they decide not to. Just be glad it's not that '80s when they were doing all the leverage buyouts. The, you know, blue horseshoe loves anaconda steel. Yeah. Wall Street people. Exactly. Yeah. Oh my goodness. Where they go in just, you know, they'd raid the companies and and the Shred them to bits. And well, that was all the retirements.

They would take that money, you know, and then the people would have no pension and no this. It was just horrible what they were doing. But the companies were worth more sold than they were together. That's the problem. Nasty. Yep. Got to have that poison pill ready to go. Uh-oh. Spaghetti-os. All right. So anything new this week besides I told you last week that it was a haha, we're going to mess with you. It's going to be nice and cool and then it's going to get really hot. And I was right. Well, yeah, you know, that's a typical Modesto summer. Well, we have Don't we have just two seasons? We get Well, three. Spring, summer, fake summer, and then spring again. No, it's spring, summer, fake fall, summer.

Yeah, I guess it is fake fall. Yeah, yeah. And remember, sometimes we don't even have spring. We have cold and then summer. Yeah, and you know, I was talking with some new clients up in the foothills that they're like, yeah, it's been a couple years since we've really had a lot of snow, you know. So the season, the buying season is increased and more decks are being repaired per capita in the the foothills than ever before because you can see them now. Really? Yeah. They're not covered with snow. Look at all that dry rot. Oh yeah, that's the best time not to buy a cabin. Yeah. Yeah. So what do you got? You got national numbers, right? You usually start out with the national numbers. Do you want to start out the national numbers, Ed?

Uh, is that what you want me to do or is there anything else you want me to I just had to reply back to somebody work wise. Yeah. Did you tell them that you locked? No, it's Saturday. Can't lock on Saturday. I know, but you got that alert to lock what, 17 times last week? This Yeah, because of oil went up because of the blowing up different tankers and stuff. Contankerous they were this week. Yep. And that's just messing with the straight again. And that's going to As oil goes up, so does the rates even though the government said, hey, we're going to be buying more bonds. And we're like, yay, but you're just going to offset the increasing price so we're going to kind of stay here and hopefully stay below seven.

Yep. And the thing I was talking to you about this week is I qualified a lot of people and they were all making about $6,500 a month and they're all looking at a $500,000 home. And I don't think they understand that what it takes to purchase a $500,000 home is a lot more than $70,000 a year in this in rate environment. The only time it was cheaper that was a single person, yes. That wasn't a family. And in one was married but didn't include the spouse because the her credit score was a Let me Let me make that decision if it's too low. And there's FHA out there for not perfect client, you know, perfect rate, rates, perfect credit score. There we go. But the positive thing these days though is we have two scores we can use.

We can use FICO T. I'm not going to break you down how it looks at everything. And then you have Vantage score. The thing about Vantage score is it it doesn't take history in an account as long as you have to under FICO. So it's things that So I've seen where somebody with a FICO is at 680 then with the Vantage score they're 720. Okay. Okay. Or I've seen, you know, that But I've also seen it the opposite way where uh the F the FICO is better than the Vantage score, but normally it's the other way. And so that's helped me get better rates for most a lot of people. So let me run the credit and figure it out. Don't make the decision yourself. That's my job to figure that out. In this market, you definitely need the income if you have another buyer.

Well, you need to in this We were saying before to buy a 400 I mean a 400,000 plus house, you need to make $110 to $120,000 a year because that payment's going to be 3,200. And I was like, what? Unless you're putting money down, you're you got Right. mortgage insurance, you got insurance, you got taxes. Taxes on a $400,000 home is going to be about $400 something a month. And that's without my calculator. And so if you add that plus insurance of let's say 100 bucks and then mortgage insurance, just those you're probably talking right about 600 bucks just with those fees, not counting what your mortgage is. Yeah. And so I mean it used to be back during the pandemic, yes, you could afford that house because rates were at 3%.

Well, we're double those now. So that means you got to make way more money. Is it a bad thing? No. No. That just means rates are uh values are are continuing to go up and they're going to continue to go up. And once this whole thing gets fixed, and we've been saying this about 5 years now, uh we've been in this war for 6 months, which is unbelievable. Uh they stated if, you know, what are they going to do if the I think it was uh uh not not the vice president but Marco Rubio or somebody about, hey, what's going to happen Secretary of State. Yeah, what's going to happen if uh with the midterms? And he's like, if we're still in this war during the midterms, uh we lost. Well, we That was then that was 3 months ago when he said that.

We got a couple months. We got a couple months. So you're saying there's a chance. Well, I know people keep still uh we still keep winning some primaries and some government governor uh roles. So So we might be okay. We might we might exist. So what did you say the national numbers were? Did you? I didn't We didn't get there yet. We've been talking about everything else. There's one more thing I have to do before we get into You're listening to Real Estate Jerky. I'm Ed Parco, MBA veteran and mortgage advisor at Lending for Living alongside Remax executive realtor Mike Kelly. Oh, so let's you want me to get into the real numbers? Yeah, you do the real ones. No, I'm just saying it's been a while.

So let's see here. So we inventory end of last week went up to 883,673. We're always behind. We get the numbers on Monday. You're going. I know it's Saturday. Well, that was two Fridays ago. Well, sorry, we get them on Monday. Uh and that's up 3,909. Yeah. Right. Median list price is down $100. That's 439,900. Days on market is still at 70 days on market, which is up compared I mean it's not up this week. It's the same as last week. Uh price I mean last week I talked about it last Saturday. Price cuts are at 42. 14%. So that's only up about 4/10 of a percent. Right. 4/10 or 4/100. That's 4/100 of a percent. So they didn't go up much. Okay. But that just tells you that for every 10 homes, four of them can have a price reduction.

That's true. That's just that's what's telling. And And what should they what should those uh sellers do to not have to have a price reduction? Price it correctly to begin with. Listen to your realtor. Or realtor, don't be so excited about getting a listing that you take it at any price. That's a big problem. That's a big problem. Well, you Right, because you need to explain to the list But here's the thing is these a lot of people think they know more than the real estate agent. And everybody's baby's not ugly, which isn't the case. Um I've seen some I've seen Seinfeld. Yes. Come see the baby. Anyway, so what happens is everyone thinks their house is worth more money than it is because it's their house.

It's their emotional attachment to that house. And you can tell this more than me. I just see it and that's The problem is when you go to sell your house, it is no longer your house or home. It is a house. It's back to being a house. And the market is going to tell you what the value is, not what you think it is. Well, I just redid the kitchen and spent $100,000 on it. Uh did you do it yourself? No, I hired somebody. Well, how much of that was labor? Right. I mean does it all go across And that's And labor these days is not cheap. Yeah. No, and you never get dollar for dollar what you spend to what you can sell. It It helps you sell the house faster. And you will get a little bit dollars, but But on limited lists that they do Oh no, there's an equation there.

I've seen the show and they get They've seen it. They put $100,000 in or $200,000 in and the value goes up more than that. I've seen that. But aren't they in Canada? No, they're not in Canada. But they No, they're all over here. The difference is they are not paying their labor to put that. So that you follow me? That's that's the show covering the labor. So what they're putting in is actual structural stuff so they can get more bang for their buck than the other people. That's the difference. Get your real estate and questions, mortgage questions answered by the experts here at Real Estate Jerky. Contact us at radio@realestatejerky. com. You can call me Ed Parco directly at 209-404-1915 or reach out to Mike Kelly at 209-968-5633.

Tune in to Power Talk 1360 for our next segment. Mike's going to now jump into our local and regional here in California and Stanislaus County. I'm I'm jumping, jumping, jumping. Guess what? So it's so crazy. So you know, Red Did you Hold on. Before you get into that, did you watch Ted Lasso this week? State numbers. Yes. Jump, jump. If you didn't watch Ted Lasso, I'm not going to explain that. I I watched it last night. Yeah, but I'm just saying the whole I yeah, but if somebody hasn't watched it yet, I don't want to ruin it for them. But I just wanted the whole jumping where, you know, the thing that happened. Okay. Remember? Yes, I do. Okay. All right. Move on. Because you said jump, so that's the first thing I thought about.

Jump, jump. So um we got a breakdown of 156,300 active listings in for sale in the state of California according to realtor. com. And according to the Federal Reserve, which this is the first time I've seen their numbers, they think it's only around 73,896. Um that's that's quite a big difference. Uh also wanted to break down our median. They're saying our median list price is hovering between 730 and 745, 745,000. And then our median uh days on the market, they've got a spread. This is like when I was first in real estate. Well, your home is worth either 100,000 or 150. I don't know. Um so the median days on the market spread between 26 to 52. So it might have to do with location. Um but That's all That's in California though.

That's in California. But because you know our local number. Yeah. California Association of Realtors says 730 median list price to 744. Realtor. com says 744. Zillow, never correct, is in there somewhere. Realtor. com thinks 52 days on the market. CAR thinks 26 days on the market. And we I'm sorry. Are you Do you have true numbers that they're never correct or is that your opinion? Those are my true That's their opinion and I'm sticking with it. That's your opinion. That's their opinion. And let's jump to Stanislaus because I can give you accurate information for Stanislaus from MetroList only reporting from MetroList. These are only things sold through the multiple listing service. So Stanislaus County, all of Stanislaus County currently has 801 active homes on the market.

We've got 376 pending sales. And for the month of September so far to date, 56 closed transactions. So that means 12 realtors have made some money this week. Abouts. Yeah, I want to bring up since you brought up we're talking local, I want to bring up the whole We talked about last week about San Francisco. when the million dollar over asking and all that stuff. I talked to somebody we know together that's uh and he has two homes over there. One's his dad, one's his his and he he wanted to sell them and I told him you need to keep those homes because they're going to go up in value. He's like yeah, my house is like worth like a few hundred thousand dollars more all of a sudden just because of that whole uh doc the not dot com but because of the FU money that they've gotten from NVIDIA and other play and all the different companies that recently went yeah, SpaceX that went IPO and all that stuff.

It's increased those costs of the homes and that's going to slowly start coming this way again too and that's what happens. They want certain homes, they have the money, they're just going to buy them and and gut them and then make and then the next people can't buy that area anymore so they go to the next area and do it to those people. Those people have to move out and that's how they have the whole Bay Area move out here and they're going to start seeing that happen this way. People are going to have to move this way to buy. Right. SpaceX. Right. Right. And it's going to happen again. And as that happens, prices will increase here again. Right. And so that's how we we see this happening and I because I was just checking with people over there to see if it's happening and it's happening.

So those agents are loving the fact that they're able to you know, hey, you want to buy this? Thank you. I got my commission. You're going to pay my commission? Sure, no problem. Yeah. Here. Here, let's tack on another two and a half percent or three percent of a million over. Well, don't yeah, well, if you're not if you're not going to write a million over, don't even write. Yeah. That's that's uh that's disheartening for some people. Well, I don't have an extra million to write over it. It's not disheartening for the people selling. That's true. No, it's very happy day. Except for the fact that they got to pay capital gains. Yeah. That's what's See, that would be for a principal residence, I'm a firm believer as I get older that there should be zero capital gains on a principal residence.

You work your fingers to the bone all your life to pay off your principal residence. It increases in value. Government, keep your fingers out of my equity. Yeah, but how are they going to pay for all their services for everybody else? Don't don't privatize it. Shed some of those shed some of those expenses. Don't keep adding expenses. But that's how you do it. You don't take anything away. You just keep adding. I need more money. I need more money. I need smaller government. Yeah, we do, but that's not going to happen here unless people get out and vote coming up uh But they won't do that. They can't be bothered. No, they will not. Not on the primary because uh in Stanislaus County only like 40% of people show up to vote because it's not important.

It's very important. It's some of the most importance. Yeah, especially some of these ridiculous things on the ballot. I'm sure that's going to be there. Yeah. What are they at? I have no idea. I just know they're going to The millionaire tax, SB40. We can't afford SB40. Yeah, but that's not we need that so that they can come after everybody. Well, that's what exactly what they're going to do is the millionaires will leave. Oh, they all left. We're going to have to tax everybody now. I think the same thing France that's the same thing France did. Didn't work. They got rid of it and guess who came back? The millionaires. The Millionaire Real Estate Jerky, I'm Pat Coe, NBA veteran and mortgage advisor and lending for a living alongside Remax executive realtor Mike Kelly.

The problem I had with France is no guns but oh, now we're just getting stabbed with knives. So we got to take knives away. No. Yes. We got to arm arm the public with machetes. Yeah, no. Machetes are going to be machetes are going to be taken. I don't know how. You cannot use machetes for landscaping anymore. Oh, dang it. Well, how am I going to take care of that front landscape? I don't know. Do you really need a machete? I do. I no, but it's my right to have one. I got a constitutional book over here. Should we pull it out? Do it. I don't want to mess with the green screen. That's behind it. Okay. All right, what do you want else you want to talk about? So we talked about all local stuff, local and we talked about regional.

Uh anything happening here in Modesto we need to know about? Any new building going on that I don't know about? Well, you know, not Modesto but Turlock. Um Turlock was under the uh under the threat of lawsuit from the state of California to force them to get their um their build their mandatory building under control and they just annexed 70 acres um for You mean the 52 sites? Yeah, the 52 sites, 70 acres for construction of new homes, which is nice. Now they're just waiting on the state to approve that. I thought that's what the whole problem was. Yeah. Turlock's housing plan was due December 2023. It didn't get a compliant version in. In July, Attorney General Bonta sued Turlock along with Costa Mesa, Half Moon Bay, Calexico, Ridgecrest Ridgecrest, that's in the middle of nowhere asking a court to force compliance within 120 days to suspend the city's power to issue non-residential permits until it did.

The city adopted the housing element in August. July 3rd letter said adopt the plan plus the rezoning changes and you're in compliance. Rezoning is the zoning changes. Now it's back to HCD. Who's HCD? The Housing Commission for something development yeah, for the final finding. What Turlock has planned for is 5,802 new units by 2032 under its regional housing needs allocation. 70 acres across 52 sites won't hold 5,800 homes but the sites are meant to carry the affordable income share the state was missing. Yeah. That's how easy it is when you just use Claude to sign it. Yeah, it is pretty easy. And they say the rezoned sites are located along Lander Avenue, Golden State Boulevard, Gear Road, West Main Street.

Wow. Yeah, but here's the thing. So the housing element and the building permit for the whole city without it the state can freeze commercial permits, pull grant money. So Turlock just turned the last page of the application to be done and so hopefully it will get done. It will get it done. If you own land or are tired of retail strip in Turlock, check whether your parcel is one of the 52. A rezoned to residential can change what the property is worth overnight. Wow. Think about that. So if you see if you're in one of those 52 areas and get it rezoned to residential. And guess what? HCD has a 60-day right to take to approve the the planned. 95% of California cities are now compliant per Bonta.

Turlock was in the 5% The lesson for every value city and council is the state isn't bluffing on this one so get it done. It's like they have nothing else to do. Well. Is this really going to fix everything? So when builders come in to build and the problem right now what's the problem with builders right now? They don't want to build. They want to build just enough to keep their people working because they're at like 38 and their their number for the building index. They need 50 plus to really start building and doing more. And then what's going to happen is the new builds are going to be cheaper than the current houses and what are you going to do? What are you going to do? I just don't really know.

Well, and the people don't take in a fact that I got to buy blinds, you know, nice ones. Nice ones going to cost three grand to five grand and then you got to put in a backyard and just grass and landscape, you know, all that stuff is expensive. Thousands of dollars. You're talking $30,000 probably easily. Yeah, at least. And then changing the flooring. You mean because you got the bare minimum. Because you got the bare minimum and you want to upgrade that. So all the money spent is kind of nice. Real Estate Jerky on Power Talk 1360 KFIV is always bringing you the latest information on the real estate industry. And if you have any questions or comments about our discussion today, please feel free to email us at radio@realestatejerky.

com. And we were discussing all the crazy stuff that the state of California does and doesn't do and how they can take all their sweet little time to approve the final approval part. I get a little fed up at times. It would nice to see government work effectively. Right. I want to get into something else besides what we're going to get into. So with the weather they had in Southern California, you saw how it messed up the coast and a ton of houses. But did you see what Nicolas Cage's driveway? It's a sinkhole. Nothing worse than being an actor who you're on the other side and you're not making what you used to make and then all of a sudden now your Malibu house is not going to be worth anything because it's falling into a sinkhole.

Yeah. Well, there's probably they could probably make a movie out of that. Was he Ghost Rider before? So maybe this is the devil taking him back because he fulfilled all his stuff. Is that what it is? Well, the question is okay, if there's a sinkhole there, can you dig it out and just now make it into a garage? You know, put concrete and make a garage, an underground garage with a driveway that lifts up and you can have one underneath there. Oh, yeah. Like a bat cave. Exactly. Well, that'd be kind of cool. Yeah. Per LA County fire, coastal erosion from the surf and high tides that tropical storm Marie pushed into the Southern California coast, the waves are now visibly washed in and out the structure.

I saw Carlsbad. Their beach is messed up too because of this. It's like they used to have so with Carlsbad beach was a lot of rock and stuff and now it's just it's all cut back in. And that's the thing about living on the coast. Most of the people live on the coast are the people talking about climate change. Right. But they live on the they own a big house. Excuse my language. My big big house on the ocean. On the prairie. Yeah, on the ocean. If they were so worried about climate change, why don't they move outside of the road or up higher? Yeah. Yeah. Um what was it last year the Santa Cruz beach got kind of destroyed for a while but guess what happens with beaches? They come back. They come in with the tides.

Yeah, another issue is in Malibu, right? Malibu evacuation orders went out for 31 homes on Sea Level Drive. Seven are red tagged and 24 more expected to be because of the road is now too narrow for fire engine to reach them. Oh. So just evacuate them. Yeah. So the sad thing about Nicolas Cage is he bought that house in 2024 so it's only been two years. Reported at 10. 5 million neighbors told LA magazine sandbags are going up along the stretch for years and the shoreline had been receding. Nobody expected an eight-foot hole though to become a 30-foot one overnight. So they went from an eight-foot hole to 30-foot now. One thing about holes is sinkholes is they get bigger. Yeah. You know, Nicolas Cage is one hell of a guy though.

He made a batload of money. Oops, shouldn't say that but a lot of money. And then he had so many of the staff, the cameramen, you know, um bit actors, you know, smaller smaller side of the people, not the big stars that he paid a lot of money to keep them afloat during bad times, which I thought is a very nice thing for him to do. Not really philanthropic, just very very nice. But guess what? Now he doesn't have all his money. Well, no, but he'll come back again. Yeah. Well, that's just like when Bernie Madoff took all the stars money. That's why Kevin Bacon had to go start working again. That's what brought us tremors, right? Well, that's I'm just saying no, that wasn't tremors but I'm just saying that's why he started working in all the when he was didn't have to work.

Right. Yeah. All right, so what do you want to talk about next? You want to talk about realtor. com where prices are falling fastest in August or where do you want to talk about? Yeah, let's talk about the one lucky person in Point Reyes. What's that one person? You know, they're looking for one lucky person to come over and be live rent-free at the lighthouse. You just have to be the lighthouse caretaker. You have to give a 15-minute talk every 30 minutes to the visitors and you got to keep the visitation center open and you have to own your own car and buy your own groceries but you live there for free. So kind of like a storage unit where you have people who live there and they work free they work and then they get to live there.

Yeah. They get room and they don't yeah, room and board. Yeah, room and board that's living there. That would actually be kind of cool um you know. Which part? The storage unit or your lighthouse? The lighthouse. Taking care of the lighthouse. I think that'd be a lot of fun except that's a lot of steps. Yeah, so it would be fun if you're younger and you don't have knee problems or back problems. Have you visited this lighthouse? It's pretty cool. No, I haven't. Do they have an elevator? I don't think it I don't remember it having one. Of course, I was younger then and I think I just said I could walk those steps and I did. But you know, you should check into that. Not you personally but somebody that's young enough and would like to have an experience taking care of a lighthouse.

You do have to rove the area though from time to time. Yeah, well, I don't think people care. I mean if they're going to apply that's a free room and board. The question is though, but that's your job too. Right. So you can't do anything else. And I bet they don't pay well. I'm sure they don't. Probably just enough to get them groceries. Yeah. You have to have your own car so you got to buy gas and that's expensive in California. Yes, it is. So yeah, what was the realtor. com thing? Uh where prices are falling fastest in August. Oh, that's an interesting article. You should take lead on that. Why? Cuz you have nothing? I don't ever have anything. Realtor. com August lift the biggest year-over-year drops in median listing price top 10.

So this is again is a misleading article. Yes. Because it says median price. It doesn't say the price of homes are dropping. It just says median which means there's so many houses above this and so many houses below this and this is the medium. So that means lesser priced homes are selling and that's the median price. That does not mean that values are going down. Right. Right. But people think it is. You're listening to Real Estate Jerky. I'm Ed Parcaut, NBA veteran and mortgage advisor lending for a living alongside RE/MAX executive realtor Mike Kelly. So what so median again is not meaning that the value is going down. It just means that smaller priced homes are selling. So Austin, Texas yeah, Austin, Texas is 8.

1%. Median list is 450 450,000. I've seen some of those homes not in Austin but other places they show on Instagram. They look beautiful. Yeah. But then they don't talk about how you can't be outside for 4 months out of the year. True. Well, you can but you'll be very uncomfortable. Well, it's it's we you know, we didn't have a ton of over a hundred this year. No. And we were lucky. We had one this week or whatever and that you know, cuz we were teased about it. But okay, then they keep going. So Tampa down 5. 6%. I'm surprised that's all they're down for medium but they're at 391,940. I'm surprised at that median price. Well, that's probably St. Petersburg and Clearwater. Well, it's probably condos.

Yeah. Not homes. But they're probably those condos that need help. They all need retrofitting. Yeah. Then you got Memphis, Tennessee is at 41. 41% at 299,995. That's cheap to move there. You can sell your house and pay cash by two or three of them. Wow. This is what I'm shocked about the San Francisco one. So I think this is outdated because what we know now about San Francisco and the multi-million dollar houses that are being sold. San Francisco said it's down 3. 9%. It didn't actually say that. Yeah. And that's 908,700. Yeah. Yeah, and that's hard to believe that they wrote this article in August cuz that stuff was already happening. Right. Well, then when is it when this is what they fall in August.

Remember numbers are always backwards. Backwards? Yeah, backwards. San Antonio, Texas 3. 6% down. That's 324,450. I can see the pull you know, to some of these places for a smaller price mortgages and be able to move there and afford a house. But again, you have to be okay with living there. Some people get used to it. I I wouldn't I like our weather. I like the heat. I like the coolness at night. I just like that better. Yeah, the next one. That's just me though. Denver? Where my kids live, Denver, Aurora and Centennial. It just says Denver on my side. 3. 4% the median price there is 574,913. What's our median here in Modesto? Mike? Uh the last time I looked I think we were right at 403. So I thought it was higher than that.

I thought it was 455. Yeah, this was the last time I looked. Okay. That was like 10 years ago? No, it was like a week ago. Baltimore 3. 2%, 375,000. San Diego 2. 7%, 899,000. Hey, they're becoming affordable now. Yeah. I want to get right down there. You got to go get me two of those. I mean the more the mortgage payment on that. That's the thing. Yeah, I can imagine. But people are putting a ton of money down. You would think. Yeah, or paying cash. Yeah. Orlando 2. 6% down 417,000. Portland. Yeah, well I think I thought for sure that'd be even more because who wants to live there. Portland, Oregon 2. 4%, 595,000. You know what would be an interesting um uh demographic or number to bring up is like Chicago, you know, all that gun violence.

What are their values doing? They got to be dropping through the floor. Those are trigger people. Not gun violence. Trigger pullers. Yeah. Yeah, trigger pullers. We call them trigger pullers. You mean shooters? Shooter you mean gun violence peoples? Yeah, so the the pattern that we're seeing pandemic boom towns, Austin, San Antonio are the highest priced coastal towns. So Texas and Florida built their way to price cuts. California prices way there too. However, there's been a change since this article's come out. You wait till next month and then say uh the top what did they say the top where prices are increasing in September and it's going to say San Francisco. Exactly. Some people are grandparents in their 50s.

Think about that. I I was. Yeah, you still are. No, yeah. I'm just saying my first child was like grandson was my daughter was she was the oldest and she was 20 and we still had kids at the house. And it's like okay, and then our second one's 10 years later. Right. 10 years later. From our Blake and Devon. Yeah. Yeah. Yeah, we have our OG and then our second one was 11 years later and then Oh, what's that a bunch of them? Yeah, seven. A bunch of trigger pullers. A bunch of trigger pullers. Oh, that got me giggling. Real Estate Jerky on Power Talk 1360 KFBV is always bringing you the latest information on the real estate industry. And if you have any questions or comments about our discussion today, please feel free to email us at radio@realestatejerky.

com. All right, so in the first segment we talked about uh the inventory nationwide is up about 3,900 and days on the market is 70 and four out of every 10 homes has a price cut. Then we talked about California numbers and the inventory is going up also but not majorly going up. I heard somebody thinking that this is going to be 2008 again. I've been hearing that thing again. I'm like uh well tell them that if we get to 250,000 to 400,000 listings a week, we could be back to 2008. A week. Yeah. But we don't have that. We're still appreciating at 1. 6 to 1. 7% a year. It doesn't sound like a lot but that's nationwide. The fact that we are still appreciating and not dropping down and I know we talked about in the last segment about median prices of homes have dropped in areas.

That didn't mean your house value went down. That just means the smaller homes are selling because people can't afford the bigger houses like I talked about in the first segment. The payments on these things at the current interest rates people aren't making enough money to keep up with the this is the same problem we had 2 years ago, same problem we had 3 years ago and the problem we had last year and also earlier in this year. Right. The what you need to make to own a home now is a lot more. And there's an article that uh the Z thing put out um that there's 15 years to break even on buying versus renting. Yeah. And but they don't take into account appreciation of homes and appreciation. They're talking about nationwide.

So if it if you only appreciate 1% nationwide, yes, in some places you don't appreciate much. Right. Detroit's still cheap to get in because it's Detroit. You got to live there. And Michigan, I'm sorry, I went to that that state. It was not the greatest state. And Texas, God love it, you know, but it's not for me. I can but you could get a house there. The the problem with all these things is people moved to certain places because they were cheaper and they had better laws when it came to the pandemic and everything else. But it didn't mean it was a better place but they ruined it by going there because they raised the values and they raised all that stuff. So now it takes a lot longer to break even even on buying a house.

And I'll give you an example. My son bought a house 4 years ago in Washington State in Yelm. Well, the house is about worth the same. Well, at the time they were having problems. Well, they still have problems because Right. their politics. That's what kills certain areas. And you have to be okay understand that. So again, these are regional numbers we're going to get in this article and this is remember it's going to be by area. I'm just preferencing this so people don't think we're trying to be there. So eight I say what did our producer say? Eight and a half years to save 20k for a down payment. Right. Correct. But why are you saving 20k for a down payment when um you'd only need 3%. Right.

Uh conventionally our 3 and 1/2% FHA and VA nothing. VA nothing and most people aren't veterans. And we do appreciate our veterans and what they what they do. Is it just 1%? 1% About that. Oh, wow. Well, they do an amazing thing for just being 1%. Uh but Amanda What do we have in California? 43 million uh people? Right. Yeah, yeah. What about maybe we're down to 40 million people? Um there's 1. 5 million veterans in the state of California. Yeah. Oh, wow. Then see the difference? I do, I do. So Amanda Amanda from Zillow, the Z thing that you didn't want to talk about. I thought you were going to get into Mandy. No, I never like that song. Amanda Pendleton, there are two clocks that are ticking.

Um the first clock is how long it takes to save the down payment and our illustrious producer just talked about that. To us. Uh eight years to save the 20% down. And the second clock is how long you need to own before buying beats renting financially. I don't see where buying never beats renting financially. Well, do you know what I mean? Yeah, but here's the thing. So it used to be people bought to offset taxes. Right. But then they came out with the standard deductions are so high that it doesn't make sense to itemize. So unless you itemize it does it you that's not why you buy. You buy because long-term and I mean long-term you make money on your house and you do well. Uh and it could take 15 to 20 years for that to happen.

But where else can you put that money to have the same thing? You could get Grock and create some AI bots and have it trade for you. I've seen these people doing that making thousands and thousands of dollars. But most people can't do that. So same thing here. It's sometimes it's going to work and sometimes it's not. Right. Right. Sometimes it's not. And if again back to my son who's selling now, now if they held on that for another 4 years, probably go up in value a lot more. Plus it's buy a lake. It's a different things. You're listening to Real Estate Jerky. I'm Ed Parcaut, NBA veteran and mortgage advisor lending for a living alongside RE/MAX executive realtor Mike Kelly. If you have questions or comments for us, feel free to reach out by emailing us at radio@realestatejerky.

com. So there you go. I mean so this article is somewhat right and could be correct but things have changed. If you looked at during the pandemic we went up 66%. So you could have owned then and and this article wouldn't work but it does today. Right. Yeah. And but it kind of does. But where is it worse? That's the that's here's the big thing. So San Jose it takes you 49. 2 years. San Francisco 46. 9, San Diego 40. 4, Los Angeles 37. 7. Far the biggest long so those are the four longest are in California to to make that money up. Again, people are not moving there to make money on their house. They're living in the house. They're writing off certain things. They're doing differently. If you know again you have to look at your situation.

They're not whether or not to buy or rent. You have to look long-term at where you're going to be and what's the plan. If you're going to be there long-term then buy. If you're not, rent. Yeah. And but think about all those places you just named where it took so long. The equity positions you have on on those prices as they're increasing are crazy big. Right. But let's talk about this next month. Oh. After the after the increase after the fact that all these houses just got a ton of equity because these people are buying and paying a million over asking. And so what are these numbers going to be? Uh where San Jose and San Francisco is going to drop down to 22. 22 years to save that 20%. But the shortest Pittsburgh 11.

1, Detroit 11. 4 and Wait, wait, wait. Is that years or months? Years. Detroit. Oh, yeah, that's that's days. Yeah. Indianapolis again these are not going up in value. Right. And that's the thing you run into. Cincinnati is 12. 2. Uh they they add that renting in the 50 biggest metros fell 36 straight month in July. So what they're saying a starter home is renters they're save about $858 a month versus buying. That's over 10 grand a year. So what they're saying is the payment what I pay for rent versus what my payment is, that's a difference of about 800 some dollars. Oh. And and how much equity is that renter getting each month? None. How much am I getting as a homeowner? Uh a little bit. In California, they're saying right now uh 3.

4 to 4% for the year. Um that's still an equity increase, you know? So and the renter is still at zero. I understand that, but again that's why they say it takes time. And they're they're correct that it does take time. Time takes time. So this is Zillow 15 years is a stopwatch that doesn't start until you save $87,000. A VA buyer with zero down or an FHA buyer with 3. 5% starts the stopwatch today. Same house, same market, eight or seven or eight years head start. So don't save the 20% down. Put down 3%, 3 and 1/2% or buy whatever is VA. Well, look at my pipeline, everybody's VA. Yeah. Well, and that's what you prefer. Well, I just No, I just I know that I do a ton of business and that I just know how to do the VA loan really well.

If you can do a VA loan really well, you can do the other ones in your sleep. Because that's how But I mean what it's saying is you again the article skewed one way. This is just as how the newspapers were and everything else that this newspaper leans this way, this newspaper leans that way, and that one's straight up and down and that's why it's leans doesn't lean either way. And this negative article just sold a couple pages. Well, the whole thing it's it's was the company who put it out is the same company that got you to buy their leads and And they were your leads to begin with. Well, and made you pay for them and then asked the mortgage guy to help you and he said no and then you got really upset because he's like I'm not going to feed the the beast who's going to start a mortgage company and a real estate company.

Oh, I'm not going to do that. Oh yeah, right? Okay. And that's a wrap. Yay. I want to thank you for being here today. We really appreciate you. Um that's why we do it. Mike, thank you so much for being here. It's always a pleasure. Our Mike producer, thank you so much for helping us today. Illustrious producer. Yeah. Um don't hesitate to reach out to us with any questions or comments. You can find us on the web, social media, or shoot us an email at radio@realestatejerky. com. You can get me at Park Co. a call at 209-404-1915. Reach out to Mike Kelly at 209-968-5633. If you miss any of the show today, don't worry, you can catch up wherever you find your favorite podcast app or you can listen to us on Sundays at 3:00 p.

m. or Wednesdays, I think it's at 7:00 p. m. they're replaying it now, plus it's a podcast on Monday. Join us here on Real Estate Jerky. We always give you something to chew on every Saturday at noon and Sundays at 3:00 p. m. and right here on 1360 KFBK. Mike, thanks for being on the show today. Thanks for having me, Ed. Uh thanks for tuning in to Real Estate Jerky. We'll talk to you next week.