Hi! I'm Jon Schwartz - a house hacker, real estate investor, real estate agent, and creator of the Duplex Calculator:
duplexcalculator.com/
I mostly make videos about house hacking: how to house hack, how to use my house hack calculator, how to analyze house hacks, how to house hack as a first-time homebuyer, tax advantages of house hacking, and on and on.
But I also cover broader topics: how to buy a home in California, first-time homebuyer tips, smart home-buying strageties, and taking advantage of renovation loans.
I also cover the housing market, the housing bubble, the housing market crash, and how it all relates to the broader economy. Yes, I like to pick fights with crash bros. I know it's a waste of time, but I do it over and over again. I guess I'll never learn!
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*Its just getting started first Idaho, then Texas and Arizonia and now Floridia ..... here in upper NorCal inventory is up 87% YOY up 11% MOM* *Price reduction in our county make up 31% of the market......... not the time to buy* *Rates will remain closer to the 30-year average of 7.76% since 1971 and within that average rate we had never in this nation's history 30 year* *rates below 3%* *Las Vegas peaked back in August 2006 and bottomed around march 2012 nearly six years later for a decline of a full 62%*
Bro. This video was disgustingly good, well done.
Thanks so much! I really appreciate the validation -- truly!
It is so hard to buy a home in Los Angeles
Some smart strategies can help, but yeah, it takes a lot of money.
I live in LA and I'm just not seeing this. I can think of a number of Zip Codes that haven't even fully overtaken their 2022 insane peaks (though they are still close). In Corona for example, I'm now seeing houses go in the 6's (some in he 5's) when nothing went for under 700 at the insane peak of 2022. Similarly, in Riverside, you can can now find homes selling in the 4's, when they were definitely in the 5's at the 2022 peak. "Something" is inflating the median in my opinion, probably the mix-shift.
I don't thing Corona and Riverside are in the Los Angeles metro area as Redfin defines it. I believe Redfin is looking at the Los Angeles-Long Beach MSA, which is basically LA and Orange counties.
@@thejonschwartz Yes, that's most definitely not LA, but I remember the 90's when Palmdale and Lancaster became so cheap that everyone decided they could live with the commute and then prices sagged in LA proper for like six solid years. I think we're seeing a repeat of that forming on "the periphery" personally. And I can name a few areas of Long Beach, Carson, Wilmington where I know the prices being fetched are not up to where the mid 2022 peak was. They're not far, but they never ever overtook their peaks despite all the claims of new record after new record over the past two years. I'm certain the mix shift is throwing off the median data that gets reported.
@@CaptainCaveman1170 Well, I'm reporting a market-wide median. Obviously, some areas will be lower and some will be higher. I imagine for every neighborhood you point out that that's below-peak, I can point out a neighborhood that's well above peak.
@@thejonschwartz Fair enough. Though I'm not in real estate, I am in Construction and I've been looking at a lot neighborhoods for many years (decades in some cases). I haven't trusted the official numbers in forever because they lag so much and miss inflection points by an entire quarter and often more. I'm pretty good at sniffing out trends and the trend I've been seeing, on balance, is slight weakness, with more weakness the further you get away from LA/OC proper. Time will tell! Thanks for responding.
@CaptainCaveman1170 I agree: I’m also seeing slight weakness. I’m seeing it in the numbers!
I am someone who has given up on the LA housing market and look so forward to the day I put the final piece of furniture in the U-Haul and get the hell out of here. This place is only for the very rich. None of the older people (those above 60) who own homes in the neighborhood we rent in would ever be able to afford the homes they live in today if they had to do it all over again. We moved here 8 years ago for my wife's job which pays very well but it still isn't enough. We have managed to save enough to be able to purchase a home in the 800 to 900k range and there is nothing available for that price that we would feel comfortable or happy moving into. It's outrageous here and continues to get worse.
Is that purchase price based on the limits of your savings or the limits of your income? If you're savings-limited but have more borrowing power thanks to a high income, I'd suggest considering properties with an ADU that you can rent to offset your mortgage. If you have plenty of savings but are limited by income, I'd suggest buying a cosmetic fixer and quickly updating it before moving in; it's more affordable than you'd think. If you'd like to talk about some strategies, hit me up: www.househack.la
I’d be curious how this data changes when you separate homes above and below 2 or 3 million. For instance, are mansions or Beverly Hills/Hollywood Hills homes disproportionately pulling the charts up? Or are the starter homes following the same trend as the more expensive homes? Or are the starter homes disproportionately pushing charts up, while super expensive homes are a larger downward force?
That's a great question. We get that data on a state level monthly. I'm not sure if there's readily available city-level data by price point.
Studying how far apart the mean and median house prices are, over a multiyear period, should be telling. Most cities have a long tail on the upper end, but not the lower.
@dan-qe1tb I think that’s especially true in LA, where you have homes the sell for tens of millions of dollars.
Rich ppl pushing prices up. Eventually, prices will decline, and investors will pull prices down. Newsome keeps passing down payments assistance in an effort to obscure his lack of concern related to affordability. If he weren't a potential contender for the presidency, he likely wouldn't be concerned at all. If most Californians can't afford a house, it means the wealthy are the primary buyers, which includes foreign investors. It will go up in the short term and crash in the mid term.
What will cause inventory to spike and prices to crash?
@@thejonschwartz Eventually there will be housing affordability protests in CA from renters and low-income individuals seeing as how they are being squeezed financially. The legislature will pass very restrictive policies making it even more difficult for landlords to cash flow. Just a reminder, we did see the rate of inventory go up sharply in the 2nd half of 2022. I hope you are aware that buyers in CA are primarily cash heavy or already have assets they can leverage or sell to buy these houses. Once there is a change in that dynamic inventory will change as well. Unemployment can potentially have an impact on inventory. Also, migration will impact inventory. Unemployment is the more concerning metric to watch IMO. This process will not be overnight, but home prices remaining flat or going down is a real possibility. Also, the rate of price growth in CA has actually slowed despite what the headlines say about record high prices. Let's be clear, we'd would have already seen inventory and price reductions if the Fed didn't bail out the insolvent banks, gov didn't do record quantitative easing and stimulus checks, the overnight lending to banks, and down payment assistance. Many non-free market factors have help sustain the unsustainable across the U.S. and CA. Changes will come 3-5 years.
@@terrancescott781 3-5 years, gotcha! 🤣
@@thejonschwartz nice reply. 👌 keep pumping that FOMO to your viewers and clients. Great work. 😆
OVER
Over
Reventure Consulting was wrong? They've never been right.
Amen!
@@thejonschwartz At this point it's best for me to just avoid Nick's videos, rather than have my blood pressure and blood sugar rise every time I see one. In every one of them, he creates the impression that buyers are staying away in droves, and certain neighborhoods in the US are littered with for sale signs, and nothing's moving. Many of the followers aren't in reality, either, and I try not to get in it with them. I had personally run some zip codes recently in Orlando, and three more in Ft. Myers, and found out that the housing market there, is no worse than it is where I live. Anybody can do this just with Redfin and Rocket. A member of my family had bought a condo in 2010 in Orlando, now that was a bottom! I don't the buy the, "rising HOAs and insurance rates will lead to a collapse", argument, either. Millions of people have dealt with rising property taxes, rising HOAs, and rising insurance rates for some time. People who pay cash for houses, don't have to buy insurance, and take their chances with weather events. Or, improve the houses so they can withstand storms. Or, have new ones that are more storm proof. There's lines of storm proof windows that are meant for those areas.
prices aren't coming down in SoCal... there is too much cash on the sidelines ready to prop them up the moment any downward movement happens or interest rate relief comes....sellers have no incentive to sell at lower prices...volume will drop, but prices won't.. .
Doubt the front house would rent for $4k and maybe $2k for the back house. I live in del aire hawthorne in a 2/1 main house and rent out a 1/1 adu, very similar set up although I think my place is nicer. I rent the adu out furnished for $2500 and I expect front house to rent for mid $3000s unfurnished
6:54 And 11% median sale price YoY in San Diego! But agreed, it feels these price increases will soon come to an end.... well, until mortgage rates drop to 6%!
Damn good show Jon
*Its just getting started first Idaho, then Texas and Arizonia and now Floridia ..... here in upper NorCal inventory is up 87% YOY up 11% MOM* *Price reduction in our county make up 31% of the market......... not the time to buy* *Rates will remain closer to the 30-year average of 7.76% since 1971 and within that average rate we had never in this nation's history 30 year* *rates below 3%* *Las Vegas peaked back in August 2006 and bottomed around march 2012 nearly six years later for a decline of a full 62%*
If the trends continue, this is great news for buyers - a 15% increase in inventory, more price reductions, and lower listing prices! We're seeing something similar in NY as well.
He is all about selling his “revenue ap!” He was standing on a Buffalo, NY street talking about how affordable are the houses and hot market! I grew up on that street! Highest crime rate in the nation! This guy is a predatory opportunist click bait jerk! Thank you for exposing him!
Amen! I'm thinking about doing a review of his app, which is a pretty garbage collection of misleading data.
You are an idiot if you dont think there is going to be a housing market crash. You are the liar.
"Large closet"😂 California I guess. There are closets within closets in texas which are bigger than this large closet
You'll be needing those extra coat hangers in Texas.
Funny hearing LARGE yard and LARGE closets. LOL! Living in LA.
Yup! Well, most of LA was built in the 1920s, and back then, a person's wardrobe fit on a single rack. The yard's large only by comparison to other LA homes that cost under $1M, and the closet are large only in comparison to homes built around the same period.
You never mentioned the downsides, 100-year old home, Inglewood is still the ghetto, (anyone with kids would be raising a future thug in those abysmal schools, or paying $$$ private), and at today's rates, it's still a hard sell to recover a ~$7,000 monthly out of the 2x units. The ADU rents for what $2-2.5k, the main would really struggle to rent at $3.5-4k. Not bad though, and at least builds some equity. It's still very painful to live in LA at the these prices and rates. What triggered the prop 13 reassessment from $500 in yearly taxes to $11,000 - death of owner and poor estate planning to inheritors?
If you don't want to live in a 100-year-old home, good luck buying a home in Los Angeles! I'm renovating a 1926 home right now, and it's literally the newest LA home I've owned. Plus, the plumbing, electrical, and roof of this property are all five years old, and the foundation has been repaired and reinforced by the seller. Inglewood's a ghetto? Maybe below Manchester, but not above Florence. A travel two minutes north to View Heights, where this property is located, or two minutes to Windsor Hills, and you'll see one of the best investment opportunities going in LA right now. Schools? I agree that Inglewood's schools aren't great, but buddy, this is a 2/2 house with a 1/1 ADU. This isn't a forever home. And that tax reassessment you found was trigged by a sale, duh.
@@thejonschwartz My bad, but meant from 2018 to 2019, it went from $500 yearly taxes to $6300. Was it the ADU that triggered a reassessment? And looks like the 2021 buyer tried to house hack it and couldn't hack it, and instead sold (at a loss once you consider the RE fees).
@tonystark19631 That reassessment must have been because of the ADU. And the seller did house hack it! He lived for next to nothing while living in the ADU. Now he and his new fiancee are moving to OC, and they preferred to take out their equity than continue renting.
that's a good find! you mind sharing the numbers Jon?
Sure, though I'm embarrassed to admit that I was hyperbolic in the video. I'd expect the front house to rent for $4000 and the ADU to rent for $2200. The property sold for $995K. Assuming a 6.75% mortgage rate and 20% down payment, the mortgage would cost $5162/mo. So renting out the front house doesn't quite cover the mortgage, nor does renting out the ADU fully cover half of it. Plus -- and this is some semantic trickery that I'm not proud of -- I'm not including taxes and insurance in the mortgage payment calculated above. Those'll add about $1200/mo to the cost of ownership. I'll admit that I made this video on the fly and was loose with the numbers; I won't be doing that anymore. In fact, my next property tour, which drops Thursday, will go back to my old format: touring the property, then filling out my spreadsheet to really dig into the numbers in the video.
@@thejonschwartz ohh I see, still not bad great starter investment multi unit Thanks for sharing Jon, cheers!
Hello Jon! I subscribed and would like to hear more about Florida please. Ah, ignore us in the comments. Got it. See ya!
Ignore you! Bro, it's only been four days! Anyway, I'm LA-based and going to focus on LA properties for the next few months.
@@thejonschwartz That's cool LA is on the other side of the planet. I need Florida info! Got two properties here to deal with and need good accurate info on this side of the planet!
Here's the latest on Florida: www.housingwire.com/articles/amid-a-climate-crisis-some-good-news-for-floridas-housing-market/
What's the expected rent in the front house and in the ADU there?
Based on the median and 75th percentile rents at rentometer.com, I think the house would rent for $4000 and the ADU would rent for $2200.
this was refreshing, thank you! just a realistic data driven approach without the added fluff like most youtuber.
Thank you! I’ll be tracking the LA market’s twists and turns, so stay tuned!
Thank you for the videos great info!
av med sales prices means nothing where does one buy a home for $950000? , what was the cheapest home sold( a termite burned out house) and the highest ? $ 55,000,000 15000 sf mansion, real info should break down by price point or zip code
This is weekly data coming from Redfin, so because it's so timely, it's not broken down by price point or zip code. More granular data is published monthly by the California Associate of Realtors and covered by this channel, so stay tuned!
Hardly any risk! i guess you weren't paying attention these last 4 years when rates went up and the value of treasuries collapsed lol
Hardly any risk of not being paid the interest on the bond. That's why the 10-year treasury yield is referred to as "the riskless rate."
Hey just discovered your channel so don't know if you've talked about this before. You didn't mention the fact that LA's population is declining, and pretty quickly too. About 10k a month. If that continues then prices are guaranteed to come down
You're right in theory, but not in practice. LA has a huge housing shortage, which is why homes are so expensive and so many lower-income Angelinos are homeless. The metropolitan area has a population of 12M, so losing 10K residents per month is about a 1% reduction in population annually. We'd need to lose a lot more population than that for several years on end to see a meaningful impact on pricing.
Mumbai, California?
I think you're ringing that alarm bell a bit too hard.
@@thejonschwartznot sure if you’ve been in parts of Los Angeles, all these ADU’s are making those communities look like Mumbai.
@@Chewpa562 I work throughout all of LA! Name a community that looks like Mumbai because of ADUs.
@@thejonschwartz Everything South of the 10 Freeway North of the 105 freeway East of the 110 freeway & West of Alameda St
Except it costs so much to build in CA 😢
Thx for the update!
Tag line: House Hack Los Angeles. We help you buy better and sell smarter.
My main issue with this channel is you don't post more often!
Thank you! It was a struggle getting this one up -- crazy busy weekend. But I'll be back with a meatier update next weekend, and I have two videos in the can about house hacking in LA -- they'll be up soon!
Go to reventure consulting’s KZread channel and you will see a series of his doomsday videos about recession, housing market crash, 401k wiped out, etc. with his frozen facial expression in every thumbnail. The guy is a joke
THIS THE BEST DAMN VIDEO ON KZread!! 🙏🏾 THANK YOU
Thank you! Single mother here, considering house hacking and I'm having a hard time finding the REALISTIC cons
Happy to be helpful!
You destroyed that awesome pink bathroom
My apologies!
The most honest video watch! I dislike when most other videos for free! It takes money to make money nothing is FREE!!!! Love your video.
Thank you! Getting into real estate always has a cost - if not a meaningful amount of money, then a huge amount of time!
Oh man… this reventure consulting Nick guy… he is just a fear mongering KZreadr not to be taken seriously
A red arrow going up with percent , you will attract both the bulls and the bears . Good job
You seem to presume that there are an unlimited "wealthy" home buyers able to continually push housing prices up... while the other folks are stuck paying huge rent prices.. somehow that was same mistakes banks made in 2008...
@carlyaz3406, no. We don't need unlimited "wealthy" homebuyers because we don't have an unlimited supply of houses for sale. Supply is so constrained that we have more than enough "wealthy" homebuyers to keep prices high -- and we know this because, as of this month, median home prices are back at their June 2022 peak despite mortgage rates stubbornly staying north of 7% all year. And because of the huge construction deficit post-Great Recession, and because the median age of first-time homebuyers is rising, and because boomers are living longer -- this imbalance between supply and demand isn't going to subside for another 5-10 years. And FYI, the mistakes the banks made in 2008 were: 1) writing loans without checking that the recipients has the means to pay the loans back, then 2) securitizing the loans with a false sense of diversification to create phony credit ratings. That created a house of cards that eventually crumbled and took the global economy with it.
Yo! Subscribed! You’re helping my brother and his fiancée find a house in LA. I’m happy they’re working with you. I’m just getting into RE with one Airbnb in our hometown, Bloomington, IN. Cheers mate!
Bloomington -- great investment town! We're honing in on a great property for Ryan and Brandy...
Can you make a video on purchasing an LA multi-family house hack in this current market? Seems like almost nothing makes sense anymore with 7% rates. During COVID, it was easy to get to cash-flow within 3-5 years. I use the calculator now, and sometimes it says 29 😂
I kinda did here: kzread.info/dash/bejne/goKWx9aIp6u7f8o.html That video doesn't specifically address 7% rates, but it's made in today's climate. I emphasize buying a home you like -- because you might be living there for a number of years before moving out or selling makes sense. Moreover, the entire housing market has changed. During COVID, it was also possible to buy a 3/2 in Silverlake and have a mortgage payment under $5000. So house hacking looks different, but so does traditional ownership. The outcome if you house hack -- whether you stay in the property for 15 years or sell it when you move out in 3 -- is still much better than buying traditionally. But you're right. Very few deals pencil out to a 3-year breakeven anymore.
Nick loves to hear himself talk. He might be correct that housing is at extreme levels, but the gov invented “ mortgage forbearance “ and other market manipulations that prevent natural cycle dynamics. They think they’re heroes, but history books will one day paint them to be selfish villains. As for Nick, he’s just making the problem worse, sadly.
How does a once-a-century global pandemic fit into your “natural cycle dynamics” theory?
@@thejonschwartz Not worth my energy explaining this to you. Have a nice day.
🤣
We are in for rough times ahead, might want to hedge a little with physical gold and silver.
I’d have so much gold and silver right now if I’d heeded that advice all the times I’ve heard it since 2020!
A good old fashioned recession would go a long way toward making houses more affordable. Just saying.
Are you rooting for a recession?
@@thejonschwartz of course not. But listening to your analysis it occurred to me that you’re ignoring a very real possibility of a slowing economy and the effect it might have on prices.
@@RobPeel-sy4zx I'm not ignoring the possibility of a slowing economy. Right now, the problem is that the economy isn't slowing enough! If only we could enter a mild recession!
Let's face it, a lot of builders went under in 2008. It would need a big investment by the federal government. That is how things work in our economy. People may think it's a free market, but far from it. The gov always picks winners and losers. People owning homes or even getting housing just hasn't been high up on the agenda. All the homeowners (the majority of the country) love their high property values. And politicians love their votes. And richer people are also more likely to vote than the poor, so I wouldn't hold my breath.
Years ago I would have thought that you would see a decline in home prices with those rates. But it's not as if everyone is buying. Most can't. The lack of housing ensures that there are more than enough buyers. And all that printed money ended up in people's pockets. The question is if we should treat housing as a commodity or a human right.
Should we treat home ownership as a human right?
@@thejonschwartz Housing in general should be. But it's a fact that the people whose families owned first have the best land. The generations that follow have to buy further and further out. That's just a natural consequence of privatizing land. I think if the space is given home ownership should be made possible to as many people as possible. We are infinitely far away from that under current circumstances.
@@Jose-sy1je Even if land is given away for homeownership, wouldn't we have the same problem? That people whose families were given land first will have the best land?
@@thejonschwartz Exactly. You see those tiny lots they give away nowadays for homes. Ultimately space is finite and not all land is the same. This other consultant guy you refer to on your channel thinks even land on a peninsula is infinite. But since we have this system there is still plenty of land for homes. Whoever says we are full has never taken a road trip. We have 1/6 the population density of major European countries.
@@Jose-sy1je Right. And homes/parcels are more affordable where populations are less dense. Shouldn't lower-income households who wants to buy homes just move to less-dense areas?
you are the best. love the stats and all the information!
Thanks so much! Stay tuned!
Until this day I don't understand why all these economists in 2020 told us that we wouldn't see inflation as a result of massive money printing. Economic principles had changed they said. Now you have high interest rates and they don't even have an effect. People are loaded with money, mainly the asset holding class whose assets have massively gone up in value. Apparently these economic professors never learned that money printing leads to inflation.
Agree!