January 2021 Monthly Market Update

All right. Hello everybody. This is January, 2021. We made it yay. 35 monthly market update. We’ll be talking about the 2020 statistics, how it was for 2020 real estate versus the stock market and that rehab trends. Introducing Dean here. There’s this contact information you went to buy or sell your house.

Great time to sell. Does that sound happy? New year, buddy? Glad everyone made it through. Pretty exciting new years. I don’t know how the festivities were for you lean, but we saw quite a few areas as usual. Thankfully you weren’t in a beach or Waipahu, right? I think they, Oh yeah. So was like, It’s always a great shortage.

If you see those videos of people driving through, like on the freeway passing, when is the next Paki off like, Oh, I don’t keep up. Take your kids? Go on there for the next firework workshop. Why the ones here blew it away. Eight away starting off 2021. , as we always do talking about, August statistics for December, 2020, it was the same trend as we’ve had for the last, maybe nine months since the April, March of 2020, where we’ve seen Prices go up.

We’ve seen volume go up and we’ve seen days on market go down or signs of a strong, healthy market favorable for the sellers for the most part. So on the single family on the left, median single family prices at 870,000 increase of 6.1% from prior year. Or Same time in December, 2019 closed sales at 420.

It’s like almost a 36% increase from same time last year. And these are market in staying at 10 days for single family, which is as discussed before very low. And that’s from the point that the property is listed from the point it gets into contract. So on the condo townhouse side, we have 455,000 as a meeting conduct price increase of 7%, close sales 20% increase at 514 closed sales.

And these are markets still really low 19 days. That number is a little bit deceiving though, because I think overall yes, it is still a strong seller’s market, but it seems to be a way stronger on the single-family side. And part of it due to COVID. So now we look at closed sales, we see.

, I want to talk about just taking a look at the trends, right? So we talked about the five 14 and the four 24 single family. But if you see that trend going upwards, so we’re seeing, volume tending to go up and on the next slide side, we’ll see that the new listings are going down.

What’s that a S R E S next year name. What does that stand? Oh, yeah, that sounds for senior real estate specialist. Thank you for noticing that lane. Wow. You’re pretty. I so that’s why I don’t like that. Instead on the next slide The numbers we’ve talked about before is again, when you’re looking at the median sales price for single family, we’re looking at, it’s 70 years, the end of this year versus eight 20, was it in the last year? So that’s a 6% increase.

And for, condos, we see about a 7% increase, which is, really healthy considering all this current situation. So , when we look at that lane, What made me think, we talked about all the year and things and comparison. So , we talk about. Real estate versus other investment opportunities.

So I wanted to see how the stock markets did and how stocks did. So I pulled this off of a site and if you can see for the year 2020, SMP was up 16% and that’s pretty darn awesome. And it makes me think, Then, we’ve been proponents for real estate for a while.

And, we have our opinions about investing in real estate versus the stock. So I made me. Look into things a little more and just do a quick, not a really a case study, but I just wanted to put something up. So last night I pulled this stock market information and then the next slide you can see, I did it really quick just for SNG.

Just to take a look at, try to compare that to you. So I went onto the MLS and I looked at single family homes that closed on December 30, first, 2020. Just for fun. Again, just bear with me. So that’s 38 homes. I found right. So then what I did was I scrolled through the transactions and I tried to find one that was few years ago, not a flip.

So I came on as I was going through the details. I came up with this home. So on the next slide, and you’ll see this home hopefully none of our viewers homes, but this is public information. So anyway, at number 15 of 38, I stopped. So this is a single family home, a little more than 1500 square feet, three bedroom, two and a half bath sold for $800,000.

And was it days on market. Okay. Then I looked at its history. So if you’re going to next slide, we see. So yeah, again sold for 808 days on market listed for $50,000 less. So it was closed at $50,000 over asking price. That same property sold in about four years prior on February, 2017 for $690,000 even almost two months on market.

And it was listed, at a higher per click. It closed at a less than the listed price. Yeah. Slightly. So definitely a different market if three, four years ago. And simple math, you say, okay, that’s a 16% appreciation over four years. I’m like, Holy that’s. Still sound too good. We’re trying to pitch this and again, not as a replacement, as a way to, compliment your portfolio and then, but we’re saying, okay, on the slide few slides ago, I said, okay, but this P had a 16%, return right in 2020.

So they ha but then, I was thinking, Hey, , we forgot to consider leverage. So I then looked further to get more information on this property and as okay, let’s see if it was a leverage. So come to find out, this property was bought in 2017, it was purchased a hundred percent finance VA loan so that the buyer didn’t even pay any closing costs, anything, and all got rolled up, as you can see in that amount.

And that $110,000 of appreciation. , in theory that. Owner purchased with no money down $110,000 in appreciation, but no initial investments or nothing down. And he made a hundred, $10,000 in theory. So that to me, then validates. In my mind, why I’m also investing in real estate.

As well as in the stock market, because, when you take into the con the other benefits of real estate investing it does have its positives that you can’t just look at the 16% for S and P for one year versus the 16% in this appreciation for this home for four years.

So there’s a lot of things to take into account and also keep in mind that on the other end is, whenever you take into account, leverage it. Could be the dangerous you need to be leveraging. Smart. Yeah, because I think literally the first, I think this property might’ve actually went through a foreclosure process, but anyway, that’s beside the point, but, yeah, it’s a classic case of people just comparing rates or return.

But you got to leverage, so yeah. We didn’t even lever that appreciation of three, four X. We didn’t take into account the tax potential tax benefits. All that kind of stuff. Because when they sold that 110 K was P could potentially have been tax free for them as well difference.

Like the stocks is ordinary income and for people making over three, $400,000, you don’t want any of that. You want passive income. So again, yeah, I just did that for us in G last night as I was going to this. And yeah, one thing I wanted to talk through to end my section was my other day, I put the house bathroom trend studies for 2020.

And so how was, is a resource for homeowners to, that they provide information to . Help us know what the current trends are in terms of the home improvement activities going on throughout the States. So I pulled that and in doing so put some interesting data, if you want the report, just shoot me an email and I can send it to you.

But some interesting information we found for 2020, so average remodels Then on the next slide, you’ll see that the average remodels are in the realm of 8,000. So for the major remodels and upwards of, close to 20,000 and for the minor remodels where, below 5,000, but some interesting information, again, this is just trends.

So everyone has their. See, this is a way to see how you add up. But one thing was , 23% of renovations included bathtub removals. So I thought that was kinda interesting. And another, yeah that’s what we noticed on the apartments. People are optic for the really nice showers.

Getting rid of the Tufts or the other thing I was thinking of is , aging populations needing to age in place, or so they’re getting walk-in showers with, less chance of slipping as they step over the threshold. Yeah. Yeah. Yeah. Both. All right. And then, yeah, so I thought that was interesting.

And then another statistic per this study was that of everyone doing their innovations. They said that 41% use the bathroom to relax and rests or, ticket what it is. I don’t know if you count, like sitting on the throne and going number two or Sandy crutch. But I was thinking more along the lines of they’re having their tubs with their.

Either a jacuzzi tub or a soaking tub, which what’s the best time for that anymore. You got to get your shower, get the heck out this morning. Yeah. So the funny thing that you mentioned that too is because I’m working with buyers and sellers. And so , when I’m talking to every different buyer has their opinion.

So the I’m working with the , families , with young children and I’m like, Oh yeah, we need a tub because the child is going to love to play in it. Or the way they beat them. So the younger families need them. And then as we mentioned earlier the order.

Generations tend to not want one as much. Yeah. And it’s not as much of a necessary cause what else are you going to do besides that? Because it’s hard to soak in for, adults. Yeah. And then the other thing that came up was. This is on another deal in Texas. Like my partners are now in our Indian, so I was asking it’s a cultural thing.

Cause a lot of tenants are Indian. Okay. And they’re like, what do you guys do with your kids? Do you guys, do you bathe their kids and the sink or I don’t want me, yeah. What do you guys use? When my kids are young, Yeah. Yeah. When you’re a super small we bought like a little plastic support thing.

I was actually the designated beta. So we bought this plastic tub that they would sit in nicely with a nice padding and it would sit within the tub and it would hold them up. But I’ve seen people beat them in the sink too. Yeah. Yeah. My partner said, yeah, we just bathed them at the sink.

We don’t care. I guess no need for a tub, that’s true. Once they can stand up and say, okay, just take the shower head that comes off and you just. Should we shut them down time efficiencies. So a few other statistics guests I thought were very interesting vinyl flooring, although not very big had an increase.

So as you can see, on the left side, ceramic and porcelain still. Took the cake with 59% for, the flooring outside the showers, but the vinyl jumped up apparently 4% to 11, which is still relatively low for the flooring. With the luxury playing vinyl coming out with, so it’s waterproof.

It has, they have so much new styles coming out and so strong and reasonable. I thought that would have been up higher over the ceramic important, especially for the floor, and then little self selecting, people that are getting bathroom remodels or your affluent people. So that they’re getting that stuff.

LVT is more for like rental grade. That’s true. That’s a very good point. That’s a very good point. And then on the right side, we see four sinks. Whenever they’re upgrading sinks. Of course, the undermount sinks took the cake at 65% and then, the drop-in sinks were second and I was surprised vessel sinks.

We even made third place. Cause I thought those are a dated, but I think again, I’m not keeping up with the trends. So I know, what do you think about those vessels sinks that you see in the fancy bathrooms? So like the one where it’s like a bonsai pick a ball, it looks like a giant salad bowl.

Yeah. I’ll be honest, man. I don’t know what the weather undermount Drophead vessel. I don’t know until you said vessel and that I didn’t have call it. Who wants to get there for that one? Yeah. I just don’t care about that stuff. No you’re the pragmatic guy though.

So if we asked your wife, it might be different, right? Yeah. Yeah. She doesn’t know. But the last, just a slide I was going to talk to is I’m talking about premium features for toilets, showers and tub. So one thing I agreed with in this was the one-piece toilets. You can see, , 20%. Of renovations had one piece Torres.

I really liked those one piece toilets. It’s the one that the tank on top is, it’s one piece with the base so that it’s not screwed in. You don’t have to worry about any leaks in between. Sometimes if you lean back on the tank or you push it, that’s it creates a crack or the seal breaks and it starts leaking so simple easier to clean.

There’s no. Crevices and let at times the base of the one-piece toilets drop straight down. So there’s less dust to collect around the the edges. Something I didn’t care for so much that I not to say I disagreed, but the premium features for the shower, they talked about those rainfall shower heads, where it feels like it’s, it’s a big square and it’s like raining on you.

That was a 58%. Of installs had those as well as the dual showers, which are, I believe where the jets are right in front of you. And they’re shooting horizontally for me. I’ve used those at the hotels and I don’t really care for it. I’m old school. I like the high pressure to shoot the soap off of my hair and kind of feels weird when.

Something’s coming at me horizontally, but that’s just me. So give me one of those high efficiency things that you need to stay in the shower for 20 minutes you do something like, Oh yeah, those are super bad. Yeah. Then those, yeah. It’s like really mini sprees. We install them and all the apartments.

Oh yeah. Talk about money savers. That’s a great money saver from that standpoint. Yeah. It’d be being green, then that’s a different story though. Yeah. So , if you want a copy of the 20, 20 years how’s bathroom trends study, just shoot me an email and I can send it your way. So about 33 pages and I just tried to pull out what I thought was interesting.

So yeah, if you guys haven’t checked out my podcasts, we’ll pass the cashflow all about investing on the mainland for cashflow. But the free giveaway this month is a free buy and hold analyzer. And this thing called the bird calculator. I’m not a big fan of this burst stuff, which stands for buy rent, rehab, you finance.

But if you want to do it, I used to go in knowing your numbers. You can go download it simple past the castle.com/returns and download it there. But yeah, little teaching point. Paying off debt. I pulled up this check from 2011. We didn’t know each other back then. Did we? I don’t think so. Yeah, that was before BiggerPockets was around, right?

Yeah. So this is one of the checks where I would pay down my mortgage and then I realized what a mistake that was, and she saw. And I knew it didn’t make sense, but everything gets you taught right. Pay down debt, pay down that. But I will be one to tell you, that’s a tool use tools for the right job.

This might be the reason why I’ll ever be stocks is of 16% this year. If you look on the right side, that’s the amount of money that got pumped into the system the last five months. And. This is what’s surprising. Like you look at 2008, 2009, there was a lot of stimulus, but nothing compared to what it is in the last five months.

Yeah. That’s true. It’s being supported. Yep. So John Burns puts together these reports, different markets that he likes. And I think the real story is, yeah, I heard about it is the max Exodus out of San Francisco, New York. Expensive parts of California and going to more than the Midwest, South, Texas, and uncle bill Gates had a little predictor.

Some people don’t like them, but he had a phase, one health crisis. He got that one, we had 10 weeks of lockdown. He thought it was going to take 18 months to get a vaccine, took us what nine, nine or 10. Rented as it is it’s a fake vaccine, right? It’s an NRA or whatever they call it.

Wasn’t like the normal vaccines that we get. That’s cool. That’s pretty quick, right? It’s like super fast. Yeah. And then he also, I don’t know why the heck they’re asking bill Gates this stuff, but he also predicted that home buying. The market would take a very long time to recovery.

So he was completely wrong on that. We had just a nice bull run with prices going up and pretty much every single market due to low supply, billionaires got rich through COVID because they pivoted their business. Yeah, there’s always opportunity out there, people to capitalize on it. Jim Rickards.

Have you heard of that guy, but he’s a per repair. So I interviewed him last week or it might’ve been Monday. They just go by, but he’s right. He’s got this new book out, the new great depression. And I was expecting him again to let off a scuffle with him. Cause he’s like economists, I’m not to each big fan of economists because.

They’re like the weather man. They just make a bunch of predictions and change it when it doesn’t happen. And they’re never in the game, they never have money. They never have any investments. So they’re out of touch with reality, in my opinion, their academics. Yeah. Other academics that Howard Drake gets guys, right?

Like he’s the Hawaii guy, right? I’m like, I want to know what’s in his portfolio. I don’t want to hear his predictions. I want to know what he’s doing. Maybe he’s not doing it. I want to know his network. I want to know what’s under the hood, but yeah, Mr. Rickards said here that basically do not expect two, three, 5% GDP growth every year.

Like how we’ve been saying the last generations instead to expect maybe a zero to 2% increase every year. And I was like I’m cool with that. That’s fine with me. My expectations aren’t that high, and that he says, that’s the new great depression like a Japan in a way

pulled this one out. And if you heard about this project, a cool renovation of an older apartment, hi at the address and it’s somewhere downtown. But yeah, it’s cool to see these types of properties get rehabilitated,

but going back to the mainland stuff, if you are checking this out on the YouTube channel, we have a map of the United States. You see where a lot of the red is getting out of Seattle port plan Bay area, Los Angeles. And moving forward to places that are a lot less budget friendly and less crowded.

And one of the big headlines is of course, everybody is getting the heck out of California. If you watch any bit of YouTube, every single influencers, making a YouTube video on getting out of California, it’s such a big trend that just by having that in your video, it pulls a lot of things. Readers and viewers, because it is so popular.

Good to know. So if HP, they were the startups in the Bay area, and now they’re fleeing to Texas just like Tesla, just like many other companies out there because of put taxes out there. Effective rate for growth for multi-family. It was flat line this year, but that’s to be expected, right?

It’s a pandemic, have new single-family rental tenants coming from urban areas. And so 59% removing from urban locations, 41% moving from suburban locations. So this is a general trend of people getting out of the business court district. Going to a little bit more suburb type areas. Yeah. This is why ever beach in maca.

Kilo is single families are off the hook when you know that wasn’t the case before. Yeah. I don’t know. Th I think Hawaii is weird though. Like it’s, Hawaii is like the Island on that night. It’s just a long piece on the cause he gobbled up mountains, but like in a normal. It States ever say it grows outward like a web.

But I guess, yeah. People want to get away from the Seattle or maybe it’s just, they can’t afford it too. Yeah it’s the way they develop too. Because like you said, typically they talk about the urban sprawl where if it starts in Honolulu and starts to go out. But I think when they tried to do, a couple, a, the second city and Colina was that 20 years ago, it, they just said, okay, we’ll go all the way out there and just build, so that kind of.

Threw everything off and not in hindsight being 2020 the urban planners look at it and say, that may not have been the way to go, it is what it is, right? Yeah. People want to work, not really in the city unless they have to for connection, or, but I think people would rather just take a little shorter drive to the, the middle market.

Five story, high rise, like Milani has some of those, I think a small office building. I think so. Hopefully it has that. Yeah. So three big trends for multi-family and you could probably make the case for single families in 2021, a banner year for the transactions, because things are going to somewhat normalcy by mid to late 20, 21.

And just a lot of heads up transactional demand. People were frozen with the whole COVID-19 and also the election too, which came and went. The second thing was the crowding of the South East capital markets. So the, like it’s at the general trend to get out of those high price areas to more places that make more sense financially, economically.

And. A temporary boost for the suburbs that you just talking about on the last page with the remote worker cultural sort of sticking around and coupled with the desire to live in less than populated areas. Yeah. Should be interesting. And like you said, temporary, it should be interesting when people are starting to have to go back to work and now have to start fighting that traffic again.

And I call how We used to see, then that side we might, out in the suburbs might not be as appealing as it was earlier this year. Yeah. Yeah. But COVID accelerated a lot of trends, right? A lot of employers got confident. That’s true. Yeah. That is a very good point. My ordering from California pizza kitchen and some other restaurants.

It’s pretty sleek using those apps or stuff now. Oh yeah. Yeah. So $900 billion relief package. Got signed very recently. This is the latest round of stimulus. Everybody should have got their checks. You didn’t make too much, you got your checks. And a lot of this is somehow probably flows down to investors and the general public.

But I think that generally a lot of people are boarding this cash. They’re just paying down debt, keeping into savings accounts, very logical, but that’s not what the government wants. The government kind of needs it to get into the system spent yeah. Need to spend it. Yeah. Yeah. So we talked about stocks.

This is something I’m interested in investing in, like investing in websites and stuff like that because no. So like Blackstone, the big hedge fund, they’re buying ancestry.com, buying a website that has existing cashflow that they could do value add, or can improve the business. It’s like a digital asset that you can buy.

But I think , what I don’t like about stocks is like, you can appreciate the value that you can’t increase value just in Bibles. So high. I don’t think that builds like a C well, you can get lucky here and there and you can buy an option, but , real wealth comes to those who create value.

And you can do a plug for the mastermind this year. We’re not going to be able to do it in Hawaii. But we’re going to do it for Chile. We’re going to have almost a hundred people come into this. Wow. It might, you might help out. Yeah. Yeah. I had fun last year. That was the one we did last year.

They have to do it. Hi, I’m super bummed that we’re not having additional. Nope, no pick-up ball, no pickle. No. Knockout room. What does that room? Yeah. Yeah. They escape from escape rooms. They’re out of business now. I think that was a bummer, but that’s okay. How many days are this one for two days.

And I think it’s cool because look at then like already a, how many people registered, like so many other people are going to see the kind of people that we have in this school. So people want to register. You got another week simple, passive cashflow.com/bubble. And but yeah, if nobody has anything else to get any parting words, 13, what are you up to this month? This month? I am doing some refinances. I. Didn’t realize call me foolish, but I’m only doing my refinances now and that, in terms of some of my investment properties on the mainland, so China hit up a bunch of them all at one time.

And hopefully, bring down my debt servicing by a lot. I got a letter from my lender. It was a portfolio loan and they were calling my note due here in the next few months. And I was like, what did I do? But then it was a five-year note and they get you to five years already is a commercial.

And then, yeah. So you just got to refund it. It’s a little single family home, but Oh, that thing. So I don’t have to go through the trouble of refinancing then one of the last few ones you have. Yeah. Yeah. I should just fire. So bad thing. If somebody wants to buy up turnkey rental in Birmingham, No, but yeah, it’s been five years since I got that.

That one there. Oh yeah. I’ll hit you on. Maybe I’ll throw it into my solo 401k or something. I dunno. Cheap.

Yeah. I have something here, but all right guys, we’ll turn the recording off here and we’ll see you guys next week. Bye. See ya, Mike.

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