Why Sellers Need to Price Right as Inventory Rises Across the Market

And now live from our Smokehouse studio, it's time for Real Estate Jerky. All your real estate questions answered by our provocatively lean expert hosts, Edward Ed Parcaut, 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 Ed Parcaut, MBA veteran and president of Lending for Living. Broadcasting from our studio in Modesto with our producer Mike Murray, alongside me all hours, REMAX executive realtor Mike Kelly. Today on the show, we're going to talk about inventory, national numbers, and a few other things. So let's get moving. Mike, you ready to get going?

Yeah, let's go, mister. All right, so what's new? Well, tomorrow's Mother's Day, so if you don't know that, you better get out there right now and get something. And remember, your wife's not your mama. I don't care if you call her mother and stuff like that. She's just not your mom. Yeah, well, according She's your kids' mom. Yeah, but according to a TikTok I saw, this lady said, anyway, about something being in her, everybody raise your hand and everybody owes her a gift. Really? Well, make sure the kids get her something. Yeah, that was funny. Yeah, that was funny. No, I mean, I get it. I I, you know, I normally get Marsha something, but nothing major because again, it's like you said, it's she's not my mom, she's my wife, but she is the mom of my kids.

That is very true. All right, what do we always talk about in the opening block? We talk about real estate numbers, active listings, statewide, and national. And this week, our national numbers, inventory is up to 761,604. That is down 3,444 last week. Median list price is up by 38 bucks by $449,038. Numbers. National. What happened? Wow. Median days on the market did not change. It's still 56 and price reductions are up 0. 77% to 35. 83. We're almost going to be at 36 here before you know it. Yeah, 35. 83. Price it right from the beginning, people. You will make more money, a lot more money if you do that, but it's not as high as I want. Well, guess what? That's where the market is. What else?

So national single inventory is up 2. 3% year over year. I have to read this because it's so small. Absorbed listings where it's 17. 5% for the buyers are showing up. New pendings are up 10%. Median list price is down 2. 2%. Price cuts are, you know, average what I just said, averaging 36% basically. Yeah, all in all, a good time to buy around the nation. Yeah, yeah, it's all about the absorption rate. Remember if you have to what you have to sell to get, you know, once you list and what they have to come off and what's coming on, and I think our absorption rate here in California is pretty good in our area. Yeah. Yeah, in our area. True. True. And, you know, California numbers, we're saying Redfin saying we have 102,861 homes currently on the market in the state of California, which is about where we've been hanging out for the last few months.

So we're up probably about 8,000 from a month ago. Oh, really? Yeah. Yeah, and then, you know, that create huge land populous of Stanislaus County. We have 674 homes for sale. What's um is the average for median price for California is that like still around 905,000 or something like that? They're they're actually projecting it's going to be what's the actual number they were thinking? 9 905,000 that'll hit that by the year's end this year. I think we're currently in the 870s. 870s, wow. Yeah. That's still good numbers. Yeah, it's great numbers. I mean, California real estate is expensive in most places. I guess not in Crescent City though, right? Oh, we'll get into that later. That was just a little teaser I thought I'd throw out there.

You're talking about the the beach homes under 44,000 article we got from our producer. Our illustrious producer. We got stretches. We're only 4 minutes into this and we're already done with our news. He's probably sitting in the studio going like this. What are they doing so fast? What's going on? Uh any so local listings, you talked about that. So you said what are we what did we close last month? Yeah. 361 um which we're looking at this a little differently instead of averaging out the months where we've been in the 240s. We our actual numbers for April is 361. Which is probably better than last April and May, June, and July because I know the last number I showed which was 392 for March was better than all those and I'm pretty sure our numbers are going to be higher if you include off-market listings, the things that aren't on there.

Oh, definitely. Right. I would imagine that if you look at that statistic or that those numbers, it'll be in the fours. Four what? 400 400s, 400s. 400s for including off-market listings. Really? Yeah. Now remember off-market listings, you're never going to get market value for your property or very seldom do you. Why? Because they always want to save some money. Well, let's just take the 6% right off the top. Well, my agent was going to charge me five. Well, and that's, you know, again, everything's negotiable. Yep. You're listening to Real Estate Jerky. I'm Ed Parcaut, MBA veteran and mortgage advisor at Lending for Living alongside REMAX executive realtor Mike Kelly. All right, so is there anything else we need to go over um that's out there right now that you've seen regarding listings or anything else?

The only thing I can stress about listings is really listen to your your agent, your real estate agent, and um pay attention to the market. They're they're providing you numbers, they're providing you experience and expertise. Don't overlist your property unless you want to hang on the market for a while and have a bunch of price reductions before you sell it. So what what did most agents not I mean most sellers not do is listen to, you know, the ones that are sitting on the market and have price reductions are the ones that have not listened to their agent. Right, right because they they know their house is better. Um they they think it's better than the one down the street. They're going to be able to get more money for it.

The market's only going to bear what the market's going to bear. And I it's amazing how well our sales have done during this war that we had. Um I have no idea where it is today because I didn't check. It's a Saturday. I don't really look at stuff like sometimes like that, but I'm getting at is I mean because rates moved up because of the oil and the oil came down this week because of the things supposedly we're having the peace talks or whatever. The 14 points of peace talks. 14 points of light. Where was that from? I don't know. I remember it. George Bush's statement. Oh, was it? Yeah. Senior or uh Uh no, I don't remember. The little guy, the young one. I don't remember which one it was. I just yeah, why'd you have to like have me clarify?

Screw that up. Well, because it sounds like something that the the the ladder would say. Yeah. 1000 points of light. Yeah, he's the main he's the main decider. It was it was junior if I remember right. I'm sure our producer could tell us if we really care. Yeah. But I don't. But we don't. So um that's a big air space saver. Um never say I'm on the radio. What are you doing? That means you have no idea what you're talking about. It means I just lost my thought. Which is shocking. Happens because you know I am the older of the two. And did you know that investor owned properties are 31% of all listings right now? Yeah, did we talk kind of talk about that a couple weeks ago? Oh, so we can't talk about it now?

No, we can't, but I mean it's still hanging in the 30s. You got to remember every month, every week is new updated stuff about our market and even though those numbers stay the same on average, that's just what's going on out there. Uh foreclosures are uh are not really going through the roof like people thought they were going to. Yes, we're having more foreclosures. Somebody I saw someone says, you know, the 2008 is nothing compared to what 2027's going to be. Really? They can tell the future? Yes, well, they always can. You have a 50/50 chance when you say stuff. That being right or close to being right. Correct. Yeah. Um I don't see the same. I don't see a ton of foreclosures happening at this time.

Well, I think the so you have VA now and you have FH now that they've always had to with FHA, they've always had to work with you with your payment. So if you get behind on an FHA loan or a VA loan, they have to do this partial claim which means they have to put up the 12 months of missed mortgage payments into a separate loan that's attached to the house that you don't make payments on and then down the road when you sell or refinance, you pay it back. Pay those off. That's the big difference right there especially with VA. Conventional doesn't have that. So that's where most of the foreclosures could be. Now don't get me wrong, there's FHA foreclosures out there, but I think a lot of people don't realize that they can do that or they're just trying to leave and they bought the house and they didn't have enough equity after two to three years because they put 3% down.

Sorry, 3 and 1/2% and then when you add on the mortgage insurance on top of that. 3 and 1/2% down. You're almost at 100% financing. Yeah, you're at you're at 100 yeah, 101 or, you know, it's like and that's like USDA. You got to be really careful with a lot of those because you owe more on it. And that that gets brings up the refinance somebody wants to do. Right. Oh. Which I don't want to talk about right now. Get your real estate and mortgage questions answered by the experts at Real Estate Jerky. Contact us at radio@realestatejerky. com. You can call me Ed Parcaut 209-404-1915. Reach out to Mike Kelly at 209-968-5633. Talking about inventory in the first block and now I kind of want to get into where uh this last week mortgage applications uh the Mortgage Bankers Association, you think this is my first time talking on a mic, uh came in for last week and they showed that the actual 30-year fixed rate went from 6.

45% up to up from 6. 37%. Okay. That's still 40 basis point lower than a year ago at the same time. They looked at purchase applications. They were up 4% week over week but and then still up 5% year over year. Refinance applications were up 5% week over week and still up 29% year over year. What that's getting at is even though we're going through what we're going through, people are still buying and selling and refinancing because they have to. Yeah, life goes on, man. Just because this stuff's going on, I know a lot of people hold off and go I don't need to buy because of what's going on out there. Well, I hate to tell you this, but if if there's a new if you're buying right now, you can go get a new home so much cheaper than an existing home which is unusual.

It never it's hasn't been that way. I don't think it's ever happened before. So because they came out with some numbers this week and they were showing that, you know, if you go if you the new homes are 400 what do we say? 383,000 and then existing home sales was like 449 for the what the median price was. That means you can if you have a house across the street from a new track home, you can go get a new track and then also get it for that price and then they're going to buy your rate down on top of it. That's the problem and that you're dealing with with new construction against existing homes. Existing homes, yeah. And, you know, a lot of people don't think, oh yeah, but I got a backyard I have to plant.

I've got all these draperies are going to be put in. I got to do all this stuff. So when you're said and done and put the money into, you're probably the same. You're probably real close to the same. But again, it's how people look, you know, they don't look at it that way. They just look at the cost and everything they're doing because when they offer the $25,000 for you to buy the house, they say, oh, you can use this in the design center. They don't say, oh, by the way, we're going to use it all for your rate. Right. Yeah, the design center. That's what builds that price back up. Oh yeah, because the one I have going right now, they started at 550 and I keep having to give them a pre-approval and now I think we're at 594.

Oh, you're soon going to be in the sixes. For the design center and all this stuff they keep adding. Well, I like how that model looked with the stone countertops, not the formica that comes with that. Well, the thing is again, do you have to pay for the upgrades or do you get the cheapest stuff and then have someone come in and, you know, redo it. So basically you're going to pay more money no matter what. Yeah. Either way, baby. You know the thing that I just had one of these epiphanies, but you know, I grew up in a home for 13 years that my mom and dad purchased in 1959. And You know, we put in a backyard. I just saw two homes come on the market on the same street. Neither one had a backyard as far as planted.

It was still just weeds. How many years is that? That's 70 some odd years almost that nobody I'm going to get around to planting a backyard next year. So no one ever planted a backyard did that so they owned it for 70 years and never planted. Well, they probably haven't owned it for 70 years but Yeah, well somebody had to have like at one point put a backyard in and then they died. I would hope so. Cuz I mean I I when I married Marsha and moved into her place cuz she had one extra bedroom and then we rented Brady. Right. Uh she didn't have a backyard at all and they'd owned it for 5 years. Oh. Yeah. And you put a backyard in. Of course. Yeah, cuz I mean you needed a pool and you needed grass and you need concrete.

You needed all that stuff to enjoy. That was that but first we remodeled the inside. Um and that was the thing. It was only a 5-year-old house and we re-gutted, you know, the inside to make it so much nicer and bigger. And that's just you have to understand just cuz you buy new does not mean you're not going to remodel it. This is very very true. You like the floor plan but you don't like the stuff they put in it. Is that what it is? That happens. Well, I'm just saying people think if they buy new they don't have to do any costs, changes or anything else. So my Brady house when it was built in 1950 within 5 years they had already started remodeling it. And then they remodeled it and remodeled it and remodeled it and messed it up, messed it up, messed it up even more.

Uh and whoever remodeled it was the basically the homeowner because you can tell the mistakes that they made. Yeah. Right. Oh yeah. No permits? I don't know about that but it had to because they when I bought it I called the city and I wanted to know what they had done to it right and they sent me a list and I was like wow all this stuff was done? All this was added? Oh so they did get permits. That's good. Yeah, well cuz when they enclosed the back patio to make that the great room and then they added on a master bedroom then they added onto the master bedroom. You know, it's like and then they connected the kitchen to the garage and all the other stuff they did. I'm glad they did it cuz that'd be a lot of work for me to do.

It was bad enough remodeling all the bathrooms and kitchen. Well, you probably wouldn't have bought it if it were still the original square footage, right? I probably would have because it was I like the street. The street's not very nice, yeah. Yeah, because of where it's at. And yes, it could have more backyard but then that's just more for me to take care of. This is true. Not me personally but my gardener. Yeah. Yeah. Yeah, this is I like it the way it is. It's a nice little cul-de-sac and I mean not cul-de-sac but courtyard with the backyard. Nobody can see in and that kind of stuff. Thank God because if they did you know get some clothes on. You got to get a tan. That outdoor shower adds so much.

No, I don't use that. Really? My wife does. Okay, well. It's nice to be able to rinse off before you enter the pool and after you exit. You're listening to real estate jerky. I'm Ed Parco, NBA veteran and mortgage advisor lending for a living alongside Remax executive realtor Mike Kelly. Well, it's good for the pool if you do. It's like when you go to the the gym and you're going to get in the pool and they're like rinse off beforehand. There's nothing worse than people who have all this cologne on they jump in the pool and all they start swimming and you're like I can smell that in the water. Yeah. Yeah. Yeah, people don't think. No, they just don't care. Or they don't shower that often. They use the cologne to cover it up.

I am French but that's I remember my wife my wife my first wife's aunt. We were in an apartment and we were upstairs. I could smell her before she hit the steps to come up to our apartment when our windows were open. I'm like your aunt's coming. Wow. Yeah, how can you tell? Oh, I smell her. I smell that cologne or perfume. That's it. That's wearing a lot. That means she's nose blind. Or she I can't smell it so I keep putting on one more. Is that what it is or they just don't understand? No, I think they can't smell it so they keep adding. Okay, we'll go with that. Okay, I win I win finally. All right, what do you got? What do you got? Oh, I've got a I've got an idea. Um it says market trend says statewide home sales saw a slight increase of 2.

5%. Really? Yeah. We were so we were talking about mortgage applications and you were supposed to slide into the what are wealthy sellers doing but you get sidetracked. Oh, I got yeah I had a I had a We got to get you to write this down so you stay on track. I had a brain squeeze. Yeah. So they say so their article that was sent to us by our producer states that wealthy sellers are pulling out an old playbook seller financing. I don't know if that playbook went away. I think it's it's been there for certain properties for a while now. Well, you didn't need to use it for a very long time because people were able to afford the purchase. But land has always been to get a loan on it it's 50% down.

Most people don't have the 50% down so they do the 20% down owner carry. And they end up carrying a lot longer than they want to carry so be careful. Almost always seller financing. Yeah. That's very true because it's easy, it's nice, it's a it's a good loan. Um yeah, seller financing. The only thing I can tell the sellers is make sure you get enough money down to be able to afford to foreclose should the the buyer go belly up. It's not that so for me I would much rather take make it interest only and only get in get the interest payments for so long until they can refinance it. And then if they go belly up now you own the property plus you got all the interest payments while they were there.

Exactly. And if you own it outright then you there's no reason not to do it. You can't really do it when you have a loan on the property. Right. Well, the the risk you have if you own the property outright is the damage they do to the property, you know, and it you got insurance for some of that stuff. So. So why why does this matter to the pipeline? Why is this an issue? So so there was a Carlson Austin 1. 6 million Georgetown Texas home that sat on the month sat for months because 7% rates. Well, a lot of homes sat for that. 1. 6 million is a huge payment at 7%. I mean I've seen some other things at like 800 that were payments now on 800,000 that are like what payments used to be on a million something.

Right. Well, in seller financing is usually a little bit above market rates anyway so I mean how'd that help that person? Because it just I bet you they did 5% or 6% because that's still a good rate. Yeah. It's a yeah so what did so oh you know what they did? So what so he held the price but offered seller financing at below market rate. He results under contract in 2 days with 35% down, 6-year loan at 4%. No mortgage fees. Oh, not bad. 4% on 1. 6 million or what, you know, say a million is a good is a good number. Whatever they finance. Yeah. It is. And it's more than your money's going to make sitting in a bank. And then another client sold a 2. 9 million Austin home with a 3-year 5. 5 seller carried note.

Buyer had cash but wanted to keep capital invested elsewhere. That's one of the things we keep talking about is when a lot of these people who are selling their home and they're going to buy another house to do a reverse mortgage because if they're the age 62 or older because keep that money in the market or keep that money so you're not using the money in the market. And that makes so much sense. Seller financing isn't competition. It's a signal. Did you know that? It's a signal of the market that rates are still too high and things are sitting and so until this whole thing that we're going through right now Right. You mean with Iran and Well, the oil prices. Let's just go with oil prices. Until oil prices drop back below $67 a barrel we're going to be stuck here.

Yeah. And I know Warch hasn't taken over yet, right? Hasn't even been confirmed. Uh he's confirmed I believe. Powell spoke for the last time and he congratulated Warch on his ascension um to his new position so it must be confirmed. The reason I'm bringing that up because you know eventually we're have to see what he he had some ideas for things that were a little different than other people so we'll have to see how that all happens. That would be cool. That would be cool if he had ideas that worked. I'm sure. Anything's better than what we have. And I'm not saying the current guy was wrong but I think he was just worried about doing things wrong and you got you know you have sometimes you just have to take take a risk.

Yeah, to make some movement. You can get crazy sometimes. This is real estate jerky on Power Talk 1360 KFYE. I'm Mike Kelly, Remax executive realtor here in the Central Valley sitting right beside Ed Parco, NBA veteran, mortgage expert and president of Lending for a Living. And we were discussing, you know, some of the old playbooks that we used a long time ago like seller financing. Um we we've talked about assumable loans and most loans are assumable or some are. FHA and VA. No. There's only two loans that are assumable. FHA and VA. And um there That's why that whole thing didn't take off through the you know everyone's like oh we're going to start a whole company on doing assumability of people's loans and then it was like that's only FHA and VA and you And at least FHA and VA you you might not have a huge gap that you have to make up in cash.

Right. Only if it's the last couple years. Yeah. But if they bought anywhere what 2020 Anybody who's moving they were like they had the low interest rate and that's the one you wanted and that was back in the pandemic. They paid down, you know, a few you know you probably talking $30, $50,000 difference and to make that up it is a second mortgage or cash down and people didn't have it so it didn't work. Right. Uh I don't think we talked about Ted Turner died this week. Oh, that's sad. That's right. He was 87. Yeah, and the big thing so I read some of the stuff he you know besides he started CNN. Do you know when CNN started? I would think it'd have to be in the early '80s. It was actually June 1st, 1980.

Wow. Yeah. It was the first 24-hour news channel when the rest of the broadcast television was still dark at midnight. And they were selling and you could only have infomercials. Right. All right, he and this is pretty sad when he's like he also it was a he owned the American he he won the American Cup in '77. Okay, that was You mean he owned the boat that won the America's Cup? Yeah, that was like in like 40 you know that was a long time ago. Uh he owned the Braves, gave a billion dollars to UN Foundation and somehow ended up the world's largest private bison herd, 45,000 head of bison on 2 million acres of ranch land. Yeah. Wow. Wow. Yeah. He was a force to be reckoned with it seems. Well, he made a lot of money off of the CNN.

He was able to buy a bunch of land when it was cheap. Think about it. He's making good money back then and land was cheap back then so he could buy and buy and buy. How many acres? Uh he has 2 million acres of ranch land. Wow. That's a lot of ranch hand. You you can't ride across that in a day, can you? No. I'm going to go see the property. I'll be back in 2 weeks. Yeah, no kidding. Yeah, I got to camp out halfway through. Now and he his his other claim to fame was what? I don't know. I think that was it. Yeah, I mean well what more do you need? He built CNN. It's too sad it's sad that original CNN wasn't like it was the last few years and a lot of the you know it was straight news and everything else.

And that's what was great was when they reported the news. Unfortunately everything changed a few years ago and then all the channels didn't report the news. They reported their bias of the news. It's gone. Yeah, well It all started with some would say. No, I think that some is probably just you. Well, and that's why, you know, if if you ever travel and because when I did the Camino de Santiago the news channels they would just they were in like China you know different but you're in English and they just said this is what's going on. They weren't saying this is what's going on that we didn't like, you know, the way they did it and that's how we should go back to but it would never go back to that.

Yeah, that cat is out of the box or sack or Well, thank God cuz that was the worst thing. I can't believe you're putting cats in the bag. Uh we we talked about the last affordable beach town and we just kind of talked about it. We I it was a teaser in the first section. Okay. All right. So but we can talk about it now if you wish. There's that and the fact that California population dropped for the first time since pandemic happened. California population fell 54,000 as of January 1st to 39. 543 million residents. That's still a lot of people. That's pretty crazy. Marks the first time a population loss after 3 consecutive years of pandemic recovery growth. So we we grew. Los Angeles kind of of course Los Angeles County led the exodus losing 64,000 residents.

I wonder Why? Yeah. Yeah. City of LA is down almost 10%. Long Beach is 2% and Anaheim is down 1%. Reason why Anaheim's not down so much? Orange County. Yeah? Orange County more is more conservative. Yeah, LA is not. More conservative? Yeah. Sacramento's actually is up 1. 3%. Can you believe that? Why would Sac be up? Cuz Sacramento's not you think about it. If you want a nice little town that has everything but not everything you have in the Bay Area, the other issues, you would go to Sacramento. Right. That's true. And then you from Sacramento you could go up the 80 to, you know, any of those places along the way, which is a cuz I had buyers who were going to buy up in Sonora area. And if you're listening from Sonora, this is not talking bad about you, but up to Tuolumne County.

They looked at houses and he was he's a fire he worked for Cal Fire. And he's like, okay, these fire departments here are horrible. Okay. Okay. Mm. And that was when he goes, they need to be retrained, they need this and this and insurance and cuz insurance was very expensive. So they went up the 80 and and bought up in I can't remember where they bought it, Colfax. Okay. And found a great house on 5 acres and everything else and has a pond and all this stuff and it was in their price point and they bought it and they got it. What I'm getting at, it was just better for them up on that side because of access to everything they want to do. That if you go up Tuolumne County, the access to things are not there.

Right. And so you really have to look when you're looking to buy at certain places what you, you know, where look I think I guess I can't talk today, but like Calaveras County I like it and I like Tuolumne County. But if you if you're still working and doing stuff and plan on living there, those might not be the best places for you. Yeah, unless you're a home worker, right? And you have really good internet. Oh, and have Yeah, well, you can get up to the Sugar Pine. Is is Comcast still? And then above that isn't. Yeah. Mm. So that's what you really need to know. So you need an agent who really knows the area. Listening to Real Estate Jerky, I'm Ed Parcaut, MBA veteran and mortgage advisor and lending for living alongside RE/MAX Executive Realtor Mike Kelly.

And what services you'll be able to use? Well, I have somebody who's up there. I think he's from your office. He was saying that he has the Starlink. I'm like, I have too many trees. And he's like, oh, I cut one of mine down. And I'm like, great for you, but I have like 22 other ones around it that would block that signal. Yeah. Starlink? Yeah. Yeah, that's Jonathan. Yeah, and then my trees are all tall. If I cop I have one in the front that it possibly could do. I don't know who's going to climb up there and I don't know how long to get that cord. Yeah, and I think he I think he mounted his Starlink in one of the trees that he topped a little bit. Right, but it again, it depends on what how you face, where you face.

We're down the hill on this side, so we we don't face the right way for that. There are some places around that don't have all those and they can do that. I just use the AT&T hotspot. Right. Yeah. Oh. And that works for us. On your phone? No, I actually have one of those little devices. Oh, you have the device, okay. The problem is it's not unlimited and so eventually it just like, okay, you need to pay more or we're not going to not going to happen. Yeah, I don't want to pay more. I'm going to shut it off. All right, so we talked about the population losing California losing population. I think I saw a thing that we lost $778 billion in tax revenue of people who left the state who make a lot of money.

Yes. Wow. Wow. And are those the people that they were wanting to put that billionaire tax on? It's yeah, it's all those people. They're like, we're out of here. This is ridiculous. It's like New York's going to turn into a third world country here real soon. Well, not well, forget New York. Let's just talk about California. That's where we are. We have the same we're going to have that problem if we don't make changes, if people don't come out to vote this then the primary if they don't come out to vote in the next election. Stop complaining about stuff if you're not willing to go out and vote. Yeah, so what I didn't talk about is the people who are leaving California, where do you think they're going?

Yeah. Vote. Florida. Okay, where there's five places. 1 2 3 4 5. Texas, Arizona, Idaho. Uh-huh. Yes. Um that's four, right? You said Texas? Texas, Arizona, Florida, Idaho. Yes, one more. And It's real hot. Nevada? Yes. I don't want to take the whole show for you to answer that. Yeah. Yeah, it's real hot. Yeah, it gets hot there, huh? It also gets cold. Yeah. So. Well, it again, it depends on where you live. I mean, I I saw, you know, Courtney's doing really well there. He's been there forever. Yeah. Uh but there's like 3 months, our 3 months that it's like I couldn't, you know, it's bad enough here, but to go to Vegas and have 122 or whatever. No, you don't see people outside, do you? No, and they're and you see these properties that have amazing yards and then they have like bocce ball and then they have like cornhole.

I'm like, that's great for 6 months out of the year. Well, yeah. Yeah. But it's probably really nice weather in the '80s or something, you know? And you know, people say you get used to it. I I don't know. I don't think I want to, right? Yeah. All right, but so if you don't want that and you don't want to leave the state, I think it's time to move to the last affordable beach town. Exactly, and this would be an interesting place to purchase. I just didn't know that you're going to want to live there. I I haven't been there. Is it that bad? I haven't been there either, but I mean, you have a little bit more information than I have, but so they're they're selling beach front property, right, in the 300s?

Correct. Okay. You can get it under under 400k. Wow. Yeah, so the last affordable beach town this this came from San Francisco Chronicle. You can buy a three bedroom on a gorgeous lot, walking distance to the beach for under 400,000 in this place in Crescent City. So about 6 hours Yeah. Drumroll? Yes, I was. I thought you were going to do that. Less than 7,000 residents. Average price for the beach walkable home is 353,000. Listings down to 315. The catch, only two roads in and out. Frequent landslide closures. Median home value has tripled since 2000 putting out of reach for most local wage earners. Local I think one of the biggest problems also we heard is that it's not the nicest place to be at.

Meaning crime is probably pretty rampant? I I just think they have other things there that, you know, it's one of those towns. It's like I would say it's like a, you know, in a lot of places when you live by the river, it's taken really good care of and that's where people want to live. But for some reason in Stanislaus County, living by the river is where you put your meth labs. Or homeless people live there. The houses that are there are not always the best. You have the car junk places right next to it, you know, right there in Ceres that one that's right there. Yeah. Right. Yeah, exactly. And uh what In the Del Rio trailer park? That's yeah, but that's been remodeled, so that's even better.

Cuz out by Del Rio you got to do something with it. Yeah, something. Let me think what I can do with it. 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, feel free to email us at radio@realestatejerky. com. And the first block we talked about inventory. Inventory is down nationwide about 3,000 and something. Our local stuff's doing really well with sales right now. We are way over what we would normally do in the month of March and April. And that moreover meaning that even better than last year March, April, May, June, July and August. Not altogether, but each month better than that.

So that's telling us that we there's a pent-up demand for people to buy stuff. That also tells you there's not a ton of new homes in our area for sale and that's why existing home sales are doing so well. Yeah. Right. I believe that's the answer. Can you believe it? I believe it with all my heart. And then we got yeah, and we got into different areas to live in and how in California there's still a place you can buy buy the beach for between 3 to 400,000. You just have to be okay with no job there. You have to be able to You have to work from home and or I don't know what, open a bar. Or a trailer park. Yeah. And then how people are using if they own the home in outright, they're using seller financing to help through this.

We talked about this before. That's nothing new, but people have done it for a while. Uh what else did we talk about? California we did. All right, so now what we didn't talk about one of the articles that we were sent and it came into play for me this week that I didn't understand why it was so important. Cuz we kind of talked about it before. We had Vantage Score versus FICO score and the new difference that are coming. I ran a person's credit this week under FICO and their middle FICO score was 629. Under Vantage Score their middle was 690. Ooh. And you can work with a 690, can't you? Yes, but not on all. So what's happened is this is rolled out, but it's not rolled out to every lender out there.

We have it cuz I use UWM and I'm a broker and they're a wholesaler. And they they brought it out for conventional loans. It'll be out I think next week for VA, which is going to be good cuz I'll help a lot with VA. And then right out in a couple weeks they're going to have the FHA out, which could really make a difference. I had to refinance that if I had that Vantage Score, it probably would have been approved properly, not under a referrer. And I'm not going to get into all that. So with the big so bottom line people, what's the big difference? It's really on history where Vantage Score uses the last 30 days and FICO uses the you have to have 6 months of history for it to use it. Right. That's the difference.

And 6 months is a long time for some people to be very good. Well, I've had scores jump up when you do certain things within 30 days, but that's not, you know, some people you still go get a new secure credit card. That works over time, but adding getting added to somebody else's credits cards like your parents or somebody else who's had it for a very long, that's history helps you so much more. That's why you jump up so much more. But with Vantage Score they also have, you know, your rent in there, they have a bunch of other stuff in there. So and so that's going to help a lot. Gotcha. So with the rent in there as long as you don't have any derogatories. Long time. Yeah, long time rent. Yeah.

Yeah. What? You have to pay rent on time? Yeah, I mean, but then sometimes when you first start that doesn't work that way. Very true. Yeah, so I also want to talk about so we talked so about the FICO score is really important and how it's going to help the difference and that's why Vantage Scores come out to make it better. It's funny cuz I remember when I got in this industry and then credit was they were doing everything to make it to where credit scores were lower and not higher. We're now everything's trying to be done to where you get a higher FICO score. Are you following me? Got you. It's just different how they how things are being done. How they look at things. One of the things we talked about earlier this week in one of our other shows was about the veteran community and what they don't understand.

Which actually blew me away when you brought that up earlier this week. I was I was surprised. I would think that that would be a I'm exiting the military and they would give me all this information. But I guess not, huh? Yeah, no, it's not that way. So before we get into it, when they did a survey in 62 reason why veterans didn't buy, 62 site prices, 49 site upfront costs and 45 site that have no closing cost savings. 46 out of the veterans who left the service, 46% of them left with less than 10k in the bank. And 55% of veterans hold at least one VA loan misconception. And that is? The number one misconception is no PMI veterans buyers hundreds a month versus conventional. There's no mortgage insurance upfront.

Right. Yeah. Also they don't understand that the BAH which counts as qualifying income, a lot of lenders out there think it doesn't count and they don't know what they're doing. The biggest thing that I have saw is 1/3 of all veterans do not know you do not have any any down payment, which is the biggest shock. That's huge to me. I mean, I thought every veteran knew that they could get 100% financing. I guess not if that's what they're saying. Real Estate I guess not, exactly. Uh sorry, I'm reading the wrong thing there. You're you're listening to Real Estate Jerky. I'm Ed Parcaut, MBA veteran and mortgage advisor and lending for living alongside RE/MAX Executive Realtor Mike Kelly. If you have questions or comments for us, feel free to reach us at by emailing us at radio@realestatejerky.

com. Or you can call me at 209-404-1915. You can reach out to Mike Kelly at 209-968-5633. So what you need to do is we need to educate people and that's the one thing we I try to do with all the stuff I do is to educate people on buying homes and how easy it is. But if you have veterans who don't understand that at they can buy a home with no money down and or get some closing costs help from the seller. That's why they're not getting into homes. Right. Right. And what do we do? How do we How do we make sure that everybody in Stanislaus County and San Joaquin County and, you know, close to How about California? Well, California. I'm not I don't do um all of California. I refer I refer, but if I don't know an area very well, I'm not going to go act like I can sell a home over there and and do the the best job I can for the seller or the buyer.

But um we need to make sure people understand, veterans understand what they have there is a fantastic loan. Yeah, when but we also have to get real estate agents to understand the seller side, listing agents to understand what you have because I have people who I have agents who work with vets who get them into contract. I have other agents who don't always work with vets. They're doing one and it seems very difficult to get those people into contract. Right. They don't know how to educate the listing agent. Correct. Or they don't understand they don't understand it either very well. Right. Because they always say what what are non-allowables do we have to cover? None. Yeah. Yeah. And then I I had, you know, God, how long ago did that change?

A long time ago. Yeah. That changed a long time because the non-allowables were allowed were back when we could charge one origination. I haven't charged one origination probably for 15 years. Yeah. Wow. Yeah. Time flies when you're having fun. I don't know about that. So, if you know a veteran who's not owned a home or it's you, let them know that there is no down payment on the VA loan. That's what you have to do. We have to educate more people because even say you're not a veteran, how much do you have to have for a down payment, Mike, to buy a home? If I'm a not a veteran? Well, anywhere from 3 to 3 and 1/2% as a minimum. Yeah. Right. That's all you have to have. So, 3% conventional first-time homebuyers and 3 and 1/2% FHA.

Yeah. So, if you have a good FICO score, go conventional 3% down and and go from there. The one thing about FHA we all we talked about before and we probably haven't talked in a while is it goes that one goes by county limits, meaning the max the loan amount can be where like conventional goes off of the max conventional nationwide, $800 and some thousand. And VA goes off of the max like 2. 5 million. Right. Period. Yeah. To get your best interest rate at 3 and 3% down on a conventional, where should your FICO score be? 720 or higher. Okay. It's because it's the risk part with the 3% down. It's risk. Yeah. And because it's the mortgage insurance like it's I have had people who try to do it at 680 and the mortgage insurance is like $300, yeah.

Sky high. Sky high. And that's $300 per month. A month, yeah. So, but I mean because on average, which people understand, I don't want to get into it because it's too much to do on the radio, but percentage-wise, it could be as low as like, you know, on an average home say 400,000, $16 to, you know, up. So, you know, for mortgage insurance on a monthly basis. On average, I see it is like $66 or so because when people go, well, I need to get rid of the mortgage insurance. I want to put down 20%. I go, well, you know that mortgage insurance is only like let me run the numbers, 56 bucks and you want to slap down $80,000? Yeah, how long is it going to take to recover that at 56 bucks? That is correct.

And and by the way, it's a wrap. Uh-oh. Already? Yes. Well, already. It just seems like today took a lot longer to get here for me. Yeah. I want to thank you for being here today. We really appreciate you. If you like what we do here, subscribe to our podcast to keep up with us. If you have questions or comments for us, you can find us via web, social media, or shoot us an email at radio@realestatejerky. com. You can give me a call, Ed Parco, at 209-404-1915. Reach out to Mike Kelly at 209-968-5633. If you missed any of the show, don't worry. You can catch up via podcast wherever you find your favorite podcast at. We're proud to live in a country you can still build personal wealth through home ownership.

Join us here on Real Estate Jerky. We always give you something to chew on every Saturdays at 12:00 noon and Sundays at 3:00 p. m. on Power Talk 1360 KKFIV. Mike, thanks for being on the show. My pleasure, Ed. Thank you. Thanks for tuning in Real Estate Jerky. We'll talk to you next week. Cuz we got small towns and farmland, folks who still make a living with their hands. Where I come from, a man is still a man. That's my California.