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5 Notable Real Estate Stats Of The Week

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on Thursday, 20 October 2022
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Check out these real estate statistics and data points…


$1.7M

That’s the price tag of a single public toilet being built in San Francisco. Construction is expected to take at least three years.


While on one hand it may signal that prime real estate is still demanding a high price tag, it is probably safe to bet that very, very little of this money will actually end up being spent on the toilet. Which could easily be built for 1% of that.


40 Years

One real estate company has made the headlines for their now notorious 40 year listing contract. Clearly not a great sign that they have any confidence in being able to sell the property.


In fact, customers have reported that they were lured in by as little as $900 in emergency cash to sign the listing, only to have their property end up in foreclosure, and owing thousands of dollars to the broker, despite losing their homes.


$870k

That’s how much of a financial loss singer Harry Styles took on his former LA home. He purchased it for $6.87M, then sold it for just $6M. It has now been relisted for an optimistic $8M.


98%

This is how many US based CEOs told the conference board that they are preparing for a recession over the next 12-18 months. That’s up to 99% for CEOs in Europe.


It’s unclear what the remaining 1-2% are basing their optimism on. The fear and reactions being made by these CEOs is almost certain to create a recession by itself. If they are only just beginning to prepare now, most of their businesses probably won’t survive.


The great news is that this is going to bring a lot of deals and negotiability for real estate investors.


50%

The latest data from Zillow shows that over 50% of home sales in SWFL are now completing for less than listing prices.


While prices still seem to be up by double digits over last year, values have peaked and fallen in all major markets in the region on a month over month basis.


It’s certainly time to make new offers and find better value deals than we’ve seen in a decade.

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Don’t Get Caught Out By Fake Real Estate Market Data

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on Thursday, 29 October 2020
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Just as there is plenty of fake news in the media around elections and celebrity gossip, there are plenty of misleading real estate market headlines too.


Falling for false market data may not only bankrupt you as a real estate investor, but can really hurt the local market and industry too. Here’s how to avoid that, and ensure you don’t get caught out.


The Danger Of Dead Weight

For wholesalers who are paying cash or using credit lines to buy properties with the hope of reselling, it only takes being stuck with one or two dead weight properties to really mess up your model and finances.


Instead of those deals being resold for lump sum profits in a couple of days, you may end up like all those crusty Craigslist ads that have been trying to sell the same properties for years.


During this time you’ll still be coming out of pocket for property taxes, insurance and have to risk further devaluation on a daily basis. This money has to come from your personal income or savings, or the profits on any other deals you do successfully wholesale. It can quickly eat away the profits on good deals you complete.


Looking at the bigger picture, if wholesalers have swamped a local market with tying up properties they don’t close on, or deadweight properties they are asking too much for, it can send signals to everyone else that the market has stalled. Days on market will appear very long, it could bring down values, and sellers will be more wary about who they contract with.


The Numbers Do Lie

Salespeople like to use numbers, because they appear factual and indisputable. In reality, the numbers lie all the time.


It’s not uncommon to see two contradicting new headlines on the direction on the market on the same day. Sometimes even from the same publication.


Numbers and statistics can be manipulated to tell just about any story the storyteller wants to spin.


Zillow was notorious for poor real estate data. It now appears they have stopped reporting on most statistics. Even the National Association of Realtors went back and restated several years of home sales data after the 2008 crisis became undeniable.


Realtors twist it all the time. With most preferring only to show the optimistic data, and hiding anything that may turn off their clients.


We’ve also recently seen a variety of big claims about new pending sales, home prices, and the traction in the housing market. Some of it may absolutely be true, in some places.


In other cases, few of those pending sales may actually close due to lenders changing their minds, tightening up and being too afraid to lend. While some properties may seem to sell fast, there may been many listings which have been on the market for 24 months or longer.


Perhaps most impactful, asking prices can be completely unrelated to actual closed sales prices and values. If you buy based on the crazy overpriced listings of a few people swinging for a lottery ticket sale, you might find the market thinks you are just as crazy.


How To Avoid A Glitch

The most obvious way to avoid this trap is to dig into the real data yourself. Know your market intimately.


Look at public records, know the neighbors who have actually sold, and have an appraiser you can pick up and call for questions 24/7. Look at how much properties are actually closing at, and any concessions which may impact the true net price and sold comps.


Having alternative exit strategies to avoid being stuck with a property is good. Like being able to offer it as a rent to own.


Savvy real estate wholesalers go even further by securing solid preorders and preselling deals before they even sign the buy side contract. Then they use transactional funding, so that they aren’t trying up any of their own capital in the deal.

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Gaps In Real Estate Data Creating Opportunities For Wholesalers

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on Thursday, 02 February 2017
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Are gaps in real estate statistics creating more opportunities for property wholesalers?

Being equipped with data is good. At least if the data is good. Billions have been spent on big data. Yet, especially in real estate, the numbers can be misleading. Those with access to good information and who know the market can benefit, while helping to educate others.

Real estate stats typically lag by a couple of months between collection and being published. Sometimes it’s three months or more. These numbers are also often revised backwards too. And we all know that even some of the biggest and best funded real estate data providers are horribly inaccurate. This can be compounded by the media who is able to twist and filter the information to make clickable stories.

Right we are experiencing a unique moment in the market. Things seemed to be cooling down and heading for a dip last year. People were pessimistic about the market. Now we are in a new environment which is rich in optimism. However, this lag in data, coupled with seasonal data glitches has some buyers waiting, hoping sellers will cut prices, and some sellers being told by their agents that they should cut prices.

We’ve recently seen the Dow Jones hit a new record of 20,000, Warren Buffett make a $12B investment, and mortgage lenders eagerly stepping up to fund more deals. With the exception of San Francisco, Zillow is still pretty bullish on its outlook, and that home prices will mostly keep rising in 2017. The latest Wells Fargo and National Association of Home Builders index shows confidence is now the highest it has been in at least a year.

So, bolder and more positive real estate data is likely to show up soon, to reflect current purchasing sprees. Then sellers and buyers will be more aggressive. However, this current gap may give wholesalers an opportunity to get in and pick up well-priced deals before that happens, and to flip houses in markets they want to exit.

What will you do?

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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