Category Archives: Real Estate

Real Estate

Home Price Reductions Level Off

By John J. O’Dell

Are we finally be nearing the bottom of the market? I understand in talking to some real estate agents that inventory in some areas of Placer County are starting to get thin. Accoridng to Trulia.com, price reductions of homes on the market declined 21 percent as of February 1.

This is a significant decrease compared to November 2009, when 26 percent of homes had at least one price reduction

The total dollar amount cut from home prices dropped to $22.6 billion as of Feb. 1, down from $28.1 billion in November, a 19 percent decrease.

The average discount for price-reduced homes is holding steady at 11 percent off the original listing price.

Here are the cities with the largest decrease in listings with price reductions between last November and this month, according to Trulia.
• San Francisco, -46
• Oakland, Calif., -43
• Sacramento, -42
• San Jose, -40
• Indianapolis, -39
• Seattle, -37
• San Diego, -33
• New York, -33

John J. O’Dell
Real Estate Broker
General Contractor
Civil Engineer
Here to help you buy or sell real estate
Contact me at e-mail jodell@nevadacounty.com

Real Estate

FBI Cracks Down On Mortgage Fraud

By John J. O’Dell

The FBI is spending a lot of time investigating real estate fraud cases. In the hay day of the housing boom, with loose standards and banks wanting to make as many loans as possible, supposedly sophisticated people got greedy and tried to get rich quick. Now the boom is coming down on these people as in this case successfully brought to trial in San Francisco by the FBI.

According to Thaindian.com

“A mortgage broker and real estate developer on Friday were charged in San Francisco, California with conspiracy to commit a $19.6 million bank fraud, fraud, and money laundering, prosecutors said.
According to the indictment, Michael Ohayon, 41, and David Papera, 47, allegedly recruited thirteen straw buyers who used their good credit scores to nab $19.6 million in fraudulent mortgage loans from Washington Mutual Bank, with no intention of making either down payments or mortgage payments on the properties.

The indictment further alleges that Ohayon, with Papera’s knowledge, told the straw buyers that an entity controlled by Ohayon and Papera would use the loan proceeds to make the down payments and mortgage payments. Ohayon and Papera created and submitted to Washington Mutual Bank loan applications with numerous misstatements as to the straw buyers’ income and assets.
The maximum penalty for each count of conspiracy to commit bank fraud and bank fraud is 30 years in prison, a $1,000,000.00 fine, and restitution. The maximum penalty for each count of money laundering is 10 years in prison, a $250,000 fine, and restitution.”

I seem to read a case like this almost every day. It’ll be interesting to see when this if finally over. What do you think?

John J. O’Dell
Real Estate Broker
General Contractor
Civil Engineer
Here to help you with buying or selling real estate
Contact me!

Real Estate

Fannie Mae Announces 3.5 Percent Seller Assistance on HomePath® Properties

Incentive Part of Ongoing Effort to Stabilize Neighborhoods

Fannie Mae (FNM/NYSE) announced that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.

“Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover. Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help,” said Terry Edwards, Executive Vice President of Credit Portfolio Management. “Homebuyers have the option to choose between financial assistance toward closing costs or new appliances for their home.”

Properties eligible for this incentive are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing which offers homebuyers an opportunity to purchase with as little as 3 percent down.

Source: Fannie Mae

Real Estate

Nevada County Home Sales January 2009 Compared to January 2010

By John J. O’Dell

The median sales price for homes in Nevada County dropped 25 percent from January 2009 compared to January 2010. Median price in January of homes sold was $320,000. In January of this year, the median price was $240,000.

Inventory dropped this January to 968 homes compared to 1,094 in January 2009. Interesting is the fact that the median price for new listings in January of this year was $329,000, indicating that perhaps some listings are being put on the market at a listing price that is too high.

Number of homes sold this January were 55 compared to 47 last January.

The median price of expired listings was $349,000 last January, maybe indicating that the listing price were too high also.  However, the homes under contract in January 2010 have a median price of $291,250.

Housing inventory dropped in January of this year compared to January 2009.  Last year we had 15.6 months of housing inventory. This year in January 2010 we had a 12.9 month inventory of homes which is an improvement.

Where’s the market going from here? Buyers are still coming into the market. Remember, although we may have an unemployment rate of around 10 percent that means that 90 percent of the people are still working.  Prices are so low in the housing market that many more people can afford to buy a house.

Data source  BrokerMetrica®

John J. O’Dell
Real Estate Broker
General Contractor
Here to help you buy or sell real estate

Real Estate

Why It’s a Great Time to Buy a Home

By John J. O’Dell

You hear from real estate agents that this is the housing buying opportunity of a lifetime.  I’m not sure if it’s explained fully why it’s a buying opportunity.  Since I’m a real estate broker and a general contractor, I can offer my reasons why I think it’s a buy of a life time now.

To begin with land prices in Nevada County have not dropped in proportion to housing prices. A good building site is still in the upper $100,000’s.  In building a new home, you have to buy land, have plans drawn up and apply for a building permit.  The permit fees and mitigation fees can be  between $15 to $30 a square foot, depending if you are in the county or city limits. Then of course there are utilities hookup fees to pay for, the actual construction costs, and finally landscaping. When you are all through, with land, utilities, construction and landscaping you are at least $300 a square foot or more for construction of a new home.

Now houses are selling in the $75 to $150 a square foot price ranges. Houses are selling for less than you can reproduce them. Buying an existing home means you get land,  utilities are in, permits are paid for, in most cases landscaping is complete and you have no construction costs.

Having been in business for a long time, I remember well the saying (I think I made this one up), when times are good, people think it’s going to be good forever. When times are bad, people think it’s going to be bad forever. Times get bad and they get good.  Anyhow, that’s why I think it’s a great time to buy a home, investors think it’s a great time to buy a home, what do you think?

John J. O’Dell
Real Estate Broker
General Contractor
Here to help you to buy or sell real estate

Real Estate

Banks Short Sales Equals Very Long Sales

2 Comments

By John O’Dell

I wrote an article last year that the banks were trying to make short sales shorter.  That post was based on news at that time that banks were streamlining their short sale process. Well, I think that was propaganda that was just made to make people think the banks are acting responsibly. Nothing has changed since the banks press release.

You can wait six months and not hear anything from a bank on a short sale. They even put the property in foreclosure in the middle of a short sale! I can give you several recent examples that I had with short sales, none of them good.

A 5,000 square foot house in Nevada County was a short sale. Listed at over $800,000, than dropped to $599,000, than $499,000, than finally to $399,000. One of my clients made a full price offer, but was in a backup position.  The buyers in first position, that is they made the first offer. The bank listed the property at $399,000, but then started negotiating with the buyer. The bank said (verbally)  OK we’ll take $450,000, but once the buyers said OK, the bank changed their mind and said no we want $475,000 and got it!  So much for fair dealing. By the way, 60 percent of the  buyers in second position are the ones that get the home, since the buyer in first position gives up and buys somewhere else.

I have several offers in for my clients in second position and several months later, we have not heard anything. We have an offer in for another client on an REO (bank owned home) in San Jose and we are in the second week of finding out if our offer has been accepted. The response we get from the listing agent is that the bank’s asset manager is over whelmed. I can’t give you the offering price, but you know real estate in San Jose is not cheap, yet the bank is “over whelmed”.

So what has been your experience in dealing with your bank?

John J. O’Dell
Real Estate Broker
Here to help you with your buying or selling of real estate.

Real Estate

Banks Paying For Their Bad Loans

Countrywide ad before they had to be taken over by Bank of America
Countrywide ad before they had to be taken over by Bank of America

Banks are reaping what they sowed.  As you know, during the housing boom, all the banks wanted were more and more mortgage loans. They loosen the rules that  so low that credit scores did not seem to matter, as long as you were breathing and had a pen to sign mortgage documents. So now they have to buy back their bad loans!

According to the Wall Street Journal:

“The accountants at Fannie Mae and Freddie Mac are  auditing mortgage files to uncover loans with improper documentation about a borrower’s income, and then forcing banks and savings and loans to buy the loans back.

Freddie required lenders to buy back $2.7 billion of loans in the first nine months of 2009. Fannie Mae won’t disclose its figures, but the mortgage trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.”

Of course now, the banks are tightening up their underwriting for mortgage loans more carefully than they were just a year ago.  This results in a further slowing down of the lending process. Which is good and bad of course. But I think in the long run it will be better for all of us. What do you think?

Written by John J. O’Dell
Real Estate Broker
With a background in Civil Engineering
and General Contracting

Real Estate

90 Day FHA Anti-Home Flipping Rules Eased For One Year

During the recent housing boom, many peope were buying homes, putting a little money into them and then putting the homes back on the market, hoping to make a lot of money quickly.  This is known as flipping in the real estate world.  I saw some horrible examples of flipping, with people not knowing what they were doing.  It was amazing, but everything seem to sell. Of course the market crashed and that was the end of flipping.

That is until the market crashed so badly and prices dropped so low, that smart investors with cash started buying homes, fixing them up and flipping them. However, the Department of Housing and Urban Development (HUD) had banned flipping, fearing that people would not be able to sell the homes once they fixed them up. That is they would not insure a home that was resold within 90 days of purchasing a foreclosed home. This of course, limited the ability to sell the home to a new purchaser.

Now, in order to move foreclosed properties quickly, HUD has decided to eliminate the Federal Housing Administration (FHA) 90-day anti-flipping rule. Most experienced investors, buy a home, fix them up and resell them within 90 days in this market. (Surprise?  Yes the market is changing)

For full details you can read HUD’s press release.

Written by John J. O’Dell
Real Estate Broker

Real Estate

Real Estate Scams Continue to Roll

I’m still receiving letters at the rate of one to two letters a week from overseas scammers  wanting to give me a portion of millions of dollars or invest in real estate. Bad English in writing the letters, promises of giving you a cut of the millions they are supposedly wanting to feral out of the county are tips enough that all these people want is to take your money. Most of them wind up in my spam folder, but you know, I have to check my spam folder to see that a client’s e-mail hasn’t gone there by mistake, so I always open them up for a laugh.

Sad to say, they make millions every year from people in America.  Here’s a video from the today show that explains a common real estate scams.

httpv://www.youtube.com/watch?v=Q1e4CpSyCik

Real Estate

Michael Jackson’s Former Rental House Sells For $3.1 Million

A sprawling Las Vegas mansion, once rented by Michael Jackson, was sold for $3.1 million Thursday, the Nevada palace reportedly being the spot where the late King Of Pop met the physician, Dr. Conrad Murray, who has been investigated in the wake of his shocking death.

The house, which Jackson lived in from late 2006 to 2007, spans 15,461 square feet and has seven bedrooms, ten bathrooms, a tennis court, a basketball court and a 20-seat theater.

The mansion is the largest piece of real estate sold in Sin City in nearly a year’s span, no small feat considering that the sagging economy has depressed both the city and its’ real estate.

The sale of the 15,000-square-foot (1,400-square-meter) house was the city’s biggest in almost one year, according to an e-mailed statement today from Vegas Fine Estates, the broker on the deal. The buyer was a doctor-lawyer couple with property in California and Asia, the broker said without giving their names.

Jackson, who died June 25 from a drug overdose, paid $1 million to rent the seven-bedroom house for six months over 2006 and 2007 after returning from a self-imposed overseas exile, according to the statement. The luxury home includes tennis and basketball courts and a 20-seat theater.

Source:  Bloomberg.com