Category Archives: Real Estate

Real Estate

Want to Sell Your Home, Lower the Price

Home sellers learned a painful lesson in June: if you want to sell right now, lower the price.

June marked the second month with no more $8,000 tax credit for home buyers, and some 24% of all listings that were on the market as of July 1 had experienced at least one price reduction, up from 9% of all listings one month earlier, according to real-estate website Trulia.com.

The average price drop—at 10%—was unchanged from one month earlier.  But more markets saw bigger price reductions, led by Minneapolis, where 40% of listings had been reduced in price since listing. One third of all homes in Phoenix and Tucson, Ariz., have had their prices cut.

So when does it make sense to lower the price? Trulia’s Tara Nelson offers the following five tips:

  • Multiple listing agents have recommended listing the home at a lower price.
  • Feedback from the buyers’ agents suggests the home is overpriced.
  • The home isn’t getting any showings, even though it’s marketed well.
  • The home has sat on the market far longer than other homes in the area.
  • There’s been multiple offers, but they’ve all been significantly under the list price.

I notice it appears that sales of residential homes is starting to fall in Nevada County. The impact of the expiration of the $8,000 tax credit seems to be hurting our local market.

John J. O’Dell
Real Estate Broker
Call 530-263-1091

Real Estate

Making Sense of The Reform Bill as it Relates to Real Estate

The Senate passed the financial regulation bill today, which will impact home buyers and lending guidelines.  Chief among the changes impacting consumers is the creation a consumer bureau at the Federal Reserve and the requirement that lenders ensure a borrower is able to repay a home loan by verifying income, employment, and credit history.

  • Under the financial regulation bill, at least two categories of mortgages likely will see a dramatic decrease in their availability: interest-only loans and stated-income loans.  Both loan types likely would fall short of the government’s definition of “qualified” mortgages and therefore be avoided by many in the lending community.
  • Many real estate analysts credit interest-only loans and stated-income loans as contributing factors to the decline of the housing market.  With interest-only loans, borrowers pay none of the loan principal for a fixed period, typically 10 years, after which time they must make higher payments for the remaining 20 years of the loan.  Unlike other loan products, stated-income loans do not require borrowers to verify their actual income.  Only a few lenders continue to offer these loans, and typically only to borrowers with deep cash reserves and large down payments.
  • The bill also severely limits the industry practice known as “yield spread premiums,” which in many cases incentivized mortgage brokers and loan officers to sell higher-interest loans to borrowers.  The reform bill will no longer allow commissions earned by mortgage brokers and loan officers to be linked to the interest rate, but rather the loan amount. (a great change )  Once the bill takes effect, the total commission and additional fees charged by lenders and others in the mortgage process will be limited to a maximum of 3 percent of the loan amount, not including the real estate commission.  My comments on this change is good. Some mortgage brokers received a greater commission by playing the consumer against the interest rate.

Read the full story New York Times

Bits & Pieces, Real Estate

Rush Limbaugh Sells New York Upper East Side Apartment for $11.5 Million

Rush Limbaugh railed against proposed New York tax hikes last year, and vowed to leave the city for good. It took a little while, but Limbaugh has now unloaded his ritzy Manhattan condo for about $11.5 million, the Wall Street Journal reports.

Although Limbaugh wanted $12.95 million for the Upper East Side apartment, he still comes out ahead on the deal. The conservative talker paid less than $5 million for the place in 1994.

Limbaugh hosts his top-rated radio show primarily out of Palm Beach, Fla., where he lives full time on a palatial beachfront estate. But Limbaugh occasionally treks to New York, where several of his staffers work. These days, Limbaugh’s fill-in hosts are more likely to use the New York studio.

“Basically I go to New York now for hurricane relief, whenever a hurricane hits,” Limbaugh said on his show in March 2009.  “No other reason to go there.  Well, sometimes I visit the overrated staff, but it would be cheaper to fly the staff down here to visit me than to pay these stupid tax increases!”

Even if Limbaugh traveled north only for hurricane relief and staff visits, he had a nice place to crash in the city. The Fifth Avenue spread includes four terraces, double living room, large media room and Central Park views, according to Corcoran’s real estate listing.

No word on whether or not Limbaugh will also make good on his threat to flee the country to Costa Rica for medical treatment  if the health care bill passes. It is said after he made the statement that he clarified saying he would go to Costa Rica for health care. I guess he may want to go there for the following reasons:

“Fact: Life expectancy in Costa Rica for men is 76 years and for women 79.8 years, both longer than in the USA. Also the infant mortality rate is a lot less in Costa Rica in comparison with the USA. The UN (United Nations) has ranked Costa Rica’s public health system within the top 20 worldwide and the number 1 in Latin America!

With a network sponsored by the government with 29 public hospitals and more than 250 medical clinics throughout Costa Rica, the Social Security System (CCSS) has the primary responsibility for providing health services at low costs to the Costa Rican population. Not just available for Costa Ricans, the CCSS also provides low cost medical service to any foreign resident or tourist. Foreigners who live in Costa Rica with a residence can join the CCSS by paying a small monthly fee or another option would be that they can buy an inexpensive health insurance from the Insurance Company (INS) which is owned by the State valid with over 200 affiliated doctors, hospitals and pharmacies.

The hospitals and doctors in Costa Rica have the latest equipment, and the laboratories are simply perfect. You can feel secure having most operations here in Costa Rica without having to return to the U.S. or Canada. Most operations, such as surgical procedures are a lot cheaper here! A quick example, a heart bypass costs about 1/3 of what you would pay in the USA and the professionalism is the same or better.”  Source: Century 21

You can draw your own conclusions as to why he wants to go there.

Real Estate

Asian Buyers Buying Homes After Avoiding Housing Bubble

A substantial number of Asians and Asian-Americans dodged the housing crunch, and now they’re taking advantage of low home prices and low mortgage rates in California, say local real estate agents and a survey from a Realtors group.

The proportion of California homebuyers who were ethnically Asian, a group whose heritage may be Asian Indian, Japanese, Chinese, Filipino, or a host of others, rose from 12 percent in 2007 to 15.8 percent in 2008 and 18.1 percent in 2009, according to the California Association of Realtors Annual Housing Market Survey.

Local real estate agents said they’ve seen the increase in Asian buyers in San Diego and Southwest Riverside counties. They said Asian buyers are typically financially conservative, and thus stayed away from the overpriced homes of the housing bubble in the mid-2000s. Now these buyers have the cash and credit to take advantage of reduced housing prices.

Leslie Appleton-Young, chief economist for the California Association of Realtors, said the change in the proportion over time was noteworthy.

“They’re buying in distressed markets and utilizing (government incentive) programs,” she said.

During the height of the boom, from 2003 through 2006, the proportion of Asian homebuyers never rose above 12 percent, according to the surveys.

Local real estate agents said many Asian buyers prefer to invest in their own small businesses, and many are uncomfortable taking on too much debt.

“Asians are very conservative when it comes to buying,” said Shonee Henry, a Realtor in Scripps Ranch and president of the San Diego chapter of the Asian Real Estate Association of America. “We don’t go out there and buy, and forget about what’s going to happen tomorrow. We tend to make sure we have enough money to support ourselves and everyday expenses.”

Henry opined that many Asian-Americans avoided buying during the peak of the boom partly also because homes were expensive.

“They might have had the down payment, but the monthly payments were too high,” she said.

Now, with the median home price down 35 percent from the 2006 peak, these buyers have cash to make purchases and put down sizable down payments.

The CAR survey said the median down payment on a house by Asian buyers was $90,000 in 2009, triple that of non-Asians. They also consistently paid 20 percent of the sales price as a down payment, whereas non-Asians put down 10 percent. Appleton-Young said Asians may be avoiding low-down-payment programs such as those offered by the Federal Housing Administration.

Source: North County Times

Real Estate

Men and Women Somewhat Agree in Home Must-Haves

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It’s true. Men aren’t looking for exactly the same things women are when they go home shopping.

A recently released survey by ZipRealty found men often seek luxurious bathrooms, guest bedrooms, dining rooms, and views in homes, whereas women most-often desire home offices when searching for a home to purchase.A recently released survey by ZipRealty found men often seek luxurious bathrooms, guest bedrooms, dining rooms, and views in homes, whereas women most-often desire home offices when searching for a home to purchase.

ZipRealty surveyed 1,000 home shoppers and concluded that while about an equal number of men and women sought green features – about 27 percent – and 35 percent of both sexes put a high priority on a home office, there is disparity in the desire for other features.

Both sexes did agree on the biggest turn-offs: structural damage, bad odors, a busy street, and an awkward floor plan.

Here are the top 10 features most desired by men:
1. Garage or designated parking space, 85.5 percent
2. Master suite, 79.8 percent
3. Ample storage space, 71.2 percent
4. Guest bedroom, 70.2 percent
5. Large closets, 64.2 percent
6. Outdoor entertainment area, 63.4 percent
7. Gourmet or updated kitchen, 59.1 percent
8. Breakfast room or eat-in kitchen, 55.2 percent
9. View, 44.5 percent
10. Large yard, 43 percent

Here are the top 10 features most desired by women:
1. Garage or designated parking, 87.7 percent
2. Master suite, 77.8 percent
3. Ample storage space, 72.7 percent
4. Large closets, 68.7 percent
5. Outdoor entertainment area, 64.2 percent
6. Guest bedroom, 63.9 percent
7. Gourmet or updated kitchen, 61.8 percent
8. Breakfast room or eat-in kitchen, 56.1 percent
9. Large yard, 43 percent
10. Wood floors, 40.9 percent

Source: ZipRealty.com (06/10/2010)

Real Estate

Nevada County Residential Sales, Dramatic Increase From June 10, 2008 to June 10, 2010

By John J. O’Dell

The number of residential sales  from June 8, 2008 to June 10, 2010 increased 77 percent, a dramatic increase in the last  two years.  In June of 2008, 64 residential properties sold. In June of this year, 113 residential properties sold. The average number of days for a residential property to sell in June 2008 was 88 days compared to June 2010 which was 113 days.

Comparing this year to last, in June 09, 2009, 95 residential units sold compared to June 10, 2010 of 113 units, an increase of 16 percent, indicating that overall, sales have increased in Nevada County for the last two years.

The median price dropped from two years ago, in June 2008, the median price was $339,500, and in June 2010 the median price was $280,000 a drop of 18 percent.

However, the median price for residential property in June 2009 was $278,900 and in June 2010 the median price was $280,000 a slight increase, indicating a positive trend, with sales up and an increase in the median price.

Inventory of residential properties have remained about the same, with a 15 month supply in June 2008 compared to a 14 month supply in June of 2010. Inventory of units for sale in June 2008 were 1,149 compared to 1,003 in June of 2010.

Overall, the market outlook seems positive, with increased sales and the median sales price appearing to have stabilized.  I like to look at things like the glass is half full rather than half empty. After all, if we have an unemployment rate of ten percent in California, there are still ninety percent of the people working.

Source of data: Clarus MarketMetric®

John J. O’Dell
Real Estate Broker
General Contractor
Call 530-263-1091

Real Estate

Home Buyer Credit Extension Signed by Obama



Congress passed a bill last week extending the deadline to close escrow and qualify for the federal home buyers tax credit.  President Obama signed the bill on July 2, 2010 according to reports.

The bill doesn’t help anyone currently shopping for a home. Buyers must have signed a contract by April 30 to qualify for the tax break. At issue is when the deal must be finalized. Qualified existing homeowners also have until Sept. 30 to close on new homes and receive a tax credit of up to $6,500.

Some details:

  • The bill extends the deadline to close escrow for home buyers who entered into a home purchase contract by the April 30 deadline.  First-time buyers may be eligible to receive up to $8,000 and qualified existing homeowners may receive up to $6,500 if the home buyer closes escrow by Sept. 30.
  • Home buyers entering into sales contracts May 1 or later are not eligible for the federal tax credit, but they may qualify for the California home buyer tax credit.
  • The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® worked closely with members of Congress to extend the deadline.  Estimates from NAR show nearly 180,000 home buyers nationwide would have missed out on the tax credit if the deadline was not extended, including nearly 17,700 home buyers in California.
  • Many of the home buyers who would have missed out on the tax credit are in the midst of purchasing a short sale or foreclosure, which generally take longer to close due to the amount of paperwork involved in the transaction.

Thinking of buying or selling

Call John J. O’Dell
Real Estate Broker
General Contractor
530-263-1091

Real Estate

Five Steps to Take Before Buying a Home

As the housing downturn has shown, homeownership is about more than buying a home – you have to make sure you can keep the home over the long term. If you’re thinking about buying a home, these five steps can help ensure you get the right house for you and the affordable financing that helps make homeownership a long-term success:

1.  Get Educated. A little mortgage know-how goes a long way toward ensuring you get an affordable mortgage

Before you hire an agent or find a lender, get educated on the loan process and key factors that make a loan affordable.  You’ll  want to know about loan types – fixed-rate mortgages, adjustable-rate mortgages, FHA and VA loans – and the full range of line items that contribute to the total cost of securing the loan, including discount points, appraisals, and real estate agent commissions.

If you would like more in-depth information, the Department of Housing and Urban Development (HUD) can put you in touch with the nearest housing counseling professional in your area. Visit www.HUD.gov for more information. You can also check with local government, neighborhood associations and neighborhood bank branch offices for information sessions on home buying as well as homebuyer-education programs.
Continue reading Five Steps to Take Before Buying a Home →

Real Estate

1 In 5 Default on Mortgages They Can Afford to Pay

A new report estimates that nearly one in five mortgage defaults through the first half of 2009 were “strategic,” where borrowers who appeared to have the capacity to pay their mortgages stopped doing so.

The research follows on an earlier report by Experian and Oliver Wyman that first aimed to quantify the share of mortgage defaults that are “strategic.” Strategic defaulters are defined as those who miss six straight mortgage payments without missing multiple payments on auto loans and other consumer debts for the six months after they first fell behind on mortgage payments.

The report finds that the share of borrowers who strategically defaulted through the first half of 2009 is unchanged from the end of 2008. Still, the absolute number of strategic defaults in the first half of 2009 increased 53% from the year ago period.

Government-sponsored mortgage purchaser Fannie Mae is trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from getting new loans for seven years.

Troubled borrowers who do not try in good faith to work out a deal, but have the capacity to pay, are targeted by the policy announced June 23, 2010.

“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting,” said Terence Edwards, executive vice president for credit portfolio management.

A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are “underwater,” or owe more than their houses are worth.

Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default. The company plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases to pursue for such judgments.

Real Estate

Wealthy Real Estate Investor Goes on Medicaid to Save Money

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Photo by Ward for News

Talk about trying to save money! A Brooklyn couple who are wealthy real estate investors, with seven bank accounts, including one which may have $2 million in it, canceled their health insurance.  They pretended they were poor so they could qualify for Medicaid. They managed to rack up $59,000 in Medicaid benefits over a four year period.

According to the NYDaily.com

“Ariel Soudry, 31, and his wife, Joyce, 28, live in a million-dollar home and send their children to private school.

They have rental and condominium developments in Brooklyn and New Jersey, an Audi and a Mercedes – and a real bad attitude.

“Lowlifes – get a real job,” Ariel sniped at photographers as he was taken into court to be arraigned on charges that include grand larceny and welfare fraud.

Prosecutors say that while the Soudrys were living royally, they canceled their own health insurance and pretended they were poor so they could qualify for Medicaid.

While the duo was taking taxpayer money, they were buying and selling real estate firms and converting a Brighton Beach condo complex, authorities said.

“Their seven bank accounts swelled to six digits each,” Hynes said. “One even reached $2 million.”

Joyce Soudry wore a gray Boss scarf when she appeared in court with her hubby, who had on a $200 Robert Graham shirt embroidered with the slogan, “Knowledge, wisdom, truth.”

The Midwood couple faces up to 15 years in prison if convicted. Both were released without bail.

“We deny all charges,” said their lawyer Solomon Anter. “We can’t wait for the truth to come out.”

Read more: NYDaily.com