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🔴 Santa Clara County TOPS US Home Prices | COMMERCIAL REAL ESTATE Loans Coming Due (Banks facing $160B in losses)

February 01, 202115 min read

Local Market Home Value Report  CRE Loans Coming Due in 2024 Balloon by 41%, to $929 Billion, as Loans that Matured in 2023 Weren’t Paid Off but Extended Santa Clara County TOPS US Home Prices What you get for $1MM Santa Clara County

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🔴 Santa Clara County TOPS US Home Prices | COMMERCIAL REAL ESTATE Loans Coming Due (Banks facing $160B in losses)

 Commercial real estate loans coming due. What does that mean to you? Why would you care? We'll talk about that. Also, Santa Clara County tops the median sales price in the U. S. And what you get for a million dollars in Santa Clara County 

Introduction

Commercial Real Estate Loans Due in 2024

CRE Loans Coming Due in 2024 Balloon by 41%, to $929 Billion, as Loans that Matured in 2023 Weren’t Paid Off but Extended

Commercial real estate loans coming due in 2024 balloon by 41%. Now balloon is a lending term. And then commercial loans, they typically have a five-year loan due payable in the fifth year. That's a balloon.

So it's kind of a catchy tune right there. Let me open it up for you. Oh, let me see if I can just. Make it bigger.


There you go. That makes a lot more sense. Yeah, so Almost a trillion dollars is in loans that matured but weren't paid off. We're trying to extend them Here's the problem if you're working out of your house and you're Your company has empty desks and cubicles, et cetera. 

Impact of Rising Rents on Businesses


That could be a problem for your company or because maybe the landlord was like, I want to raise rents because everything's costing more money.

Mr. Business owner, I need to raise the rent. And I'm like actually we're thinking about shortening or coming down in our lease or our square footage. And then on top of that, we have retail businesses going out of business. I send that out all the time on my Facebook. We have all sorts of stores, not just in San Francisco, but all over the place that are going out of business.

And, by the way, now you're paying 15, 20 for a meal, which used to be, that was a lot of money back then. Now it's right in the middle. We have a new restaurant right down the street. I went there, it was like 15, 20 bucks for a plate. It's because rent is so bloody expensive right now. So what's going to happen is a lot more businesses are going to fail.

Small business help

And I don't know if you noticed this or not, but franchise businesses like McDonald's and Burger King and Pizza Hut, all these different little franchise businesses, they're getting squeezed. They're getting squeezed from the lender. Sorry, the landlord, they're getting squeezed from the labor board commission.

They're being. They're being squeezed by the franchise or so those businesses are eventually going to start failing and mass. When I was a kid, I grew up in Cupertino to Monte Vista High School in De Anza when I was older than an adult and I worked as a kid at that McDonald's at the Burger King right there where Kmart used to be.

It's a Home Depot now in Saratoga Sunnyvale. That's now a FUD, right? Businesses are starting to churn and that's a scary thing. And when you see that there's a trillion dollars worth of debt coming due, a lot of them are going to refinance and roll them over to another year or another five years. term loan, which that's normal, but if they're losing value in that, it's going to make it a lot more difficult.

Why do you care? Glad you asked.

The Tipping Point of Our Economy

Local Market Home Value Report https://hmbt.co/bT7qRJ

You should care because it's one of the tipping points of our economy. It's one of the major points of our GDP. And if that is one of the sinking points of Our economy, it could topple the entire house of cards. Could it happen? It absolutely could. I'm not saying it will. It's just something to be aware of.

And I'm not saying chicken little, right? The sky's not falling. It's just, you need to be educated on where you should invest your money and be smart about it. And this little news tidbit might help save you money. Not telling you how to use it. I'm giving you directions to do more research. So everything that's out there right now, a trillion dollars in debt that has to churn one way or another and the next year.

So keep that in mind. Keep an eye on that. We'll be talking about that more. That said, out of, I don't know I think it's like 1600. 

Santa Clara County Tops the Median Sales Price

Santa Clara County TOPS US Home Prices

Counties in the United States, Santa Clara County is one of the top median-priced houses. So affordability, yes, but yeah, good for you, Santa Clara County. And if you click on this little button right here, you can see that there are only six counties in the U S 1, 2, 3, 4, 5 Teton in Wyoming, right?

1. 13 Alameda County, 1 million, Santa Clara County, 1. 583 Santa Cruz County, 1 million. And Marin County. So yeah, congratulations, is an order. I don't know. 

Housing Affordability Issues in Santa Clara

Or if you have housing affordability issues, maybe Santa Clara isn't a place to live. Maybe you have to commute, right? There's always Alameda County, Contra Costa.

There are places outside there. There's San Benito. Prices over there are going up. Monterey is a great place. And there are a lot of places where you can buy a house for four or five, 600, 000, but you have to commute. It's a choice, right? Either rent here or buy there and commute. And that's just. Fact of life.

All right. Good job, Santa Clara County. These flyover states. Look at this. Just blue like 150 300, 000 down here. I thought I don't know why that's popping up. Yeah, Monroe County I thought would be red, but it's not it's in the 700 range and the 0. 

Appreciation for Past and Future Clients

7. So there you go All right, so I don't want this to come off as bragging but I want to say thank you to everybody that has worked with me in the past and believed in me, in my process, in my service.

And this last year I took half of a year off and I still made 10%, the top 10%. I didn't take 10%, take the year off. I mentally wanted to slow down. I still produced really well. It was a fantastic year. The years before I got the same award. And it's not because of me is because you allow me to help you.

And every time I do that, I make my service better and I appreciate you. And thank you so very much for doing that. It really means a lot to me that you call me. I'm not a sales guy. I don't sell you. I don't pressure you. I develop a service and that's where we come from that. So again, if you've worked with me in the past if you're working with me now, I appreciate it.

And if you're working with me in the future, I appreciate you. Thanks a lot. 

What You Get for a Million Dollars in Santa Clara

What you get for $1MM Santa Clara County

Now, a couple, like over Christmas break, my daughters took me to go see Lord of the Rings, and I don't think it's the same thing, but Mordred, I had to open this up. I'm sorry. I saw Mordred. I think it's Mordred in Lord of the Rings, but I thought it would be fun to look at this real quick. Mordred, drive drive, Mordred drive.


Okay. Mordred. Look, we're humans. When we do stuff we're going to make mistakes, right? So nothing bad about that. This is a four bedroom, two bath, 1, 242 square foot built in 1959. And it's a little ranch house, a smaller lot. Let's take a look at it really quick. It looks like it was painted on the outside.

The landscaping is really crisp and clean. The kitchen's really nice. I want to see the bathroom. So the big key asset to me is what the backyard looks like, because, if the backyard is barren or not touched, then this looks like it could be a flip, right? You have to, all the new lights make it all nice and pretty.

So again, this house is priced right for the area staged up, priced right, and marketed. It looks beautiful inside. Unfortunately, I don't think we're going to, Oh, maybe well. So in the backyard, it's not so bad. Oh, wait, look, there are some dirt clumps there. Looks like you have a squirrel problem. We have solar.

Five Biggest Buyer Turn-offs

Yay. I have a video on solar whether you should lease or buy. And if you add value to your house. So just keep that in mind when you do that, there's I'll add the link down below. I didn't really mean to talk about that, but there you go. Where this is East foothills. Warren Springs area. So it's just north of Alum Rock. I have a house coming up over here in that area right there So yeah, it's a nice neighborhood. It's a little I think this thing's gonna go really quick only one day on the market I'll bet you dollars to donuts that this comes back At 1.

2. We'll see, right? We will know once we know. What do you get? Okay. 

Snapshot of Inventory Across the Nation


So real quick, just a snapshot of inventory. We're still really low, right? We need to be about, this is San Jose. We need to be about, I want to say four or 500 for San Jose, Santa Clara County. It needs to be about 16, 1700 to be San Jose.

An adequate market.

Huh? Hope I'm still recording. Anyway, everything is really low right now, except for Gilroy. Gilroy is bumping up and over its average. Everything else is way below their average. So there you go. Cape Coral's high, but that's because they, people are getting out because of all the hurricanes, right? And their insurance companies aren't paying for it.

And now you can't get her insurance. We also have videos on the insurance problem that's happening in California. So make sure you watch that. That's it today. 

Conclusion and Appreciation

Today we talked about why you should care about commercial real estate loans. The house cards in Santa Clara County just hit the meet-the-top median price again, as neck and neck with San Mateo.

Sometimes it's New York, but right now we're at. We're tops and what you get for a million dollars, guys, I appreciate everything. I appreciate you watching this and thank you for calling me to do business with you. I'm Vito with Abitano. You have a fantastic weekend and we'll see you out there.

https://blog.abitano.com/2024/02/santa-clara-county-tops-us-home-prices.html



Vito Scarnecchia

Real Estate Broker, Veteran, Dad DRE#: 01407676

408-705-6817 Vito@abitano.com

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