Tag Archives: nevada county real estate

Scotts Flat Lake, picture taken from my deck. May 24,2009

Compared to the six-county region of Southern California, we’re not doing too bad here in Nevada County. Our median price in April was $279,500, compared to Southern California’s $247,000. In addition, their market dropped from $250,000 in March and 35.8 percent from $385,000 a year ago.

Southern California’s median last month was the lowest since 2002, and was 51.1 percent below the peak of $505,000, which was hit in spring and summer of 2007.

“The dip in median prices ran counter to recent reported buying frenzies that have had economists, analysts and Realtors saying the market was recovering. What could be skewing the median down is the lack of high-end coastal sales, which means higher sale prices are missing from the data, DataQuick officials said.”

“Last month’s Southland sales were the highest for that month since April 2006, when 27,114 homes sold, but were 18.2 percent below the average April sales total since 1988, when DataQuick’s statistics begin. Foreclosure resales made up a lot of those sales. In April, they accounted for 53.6 percent of all Southland resale’s last month. It was the seventh consecutive month in which post-foreclosure properties made up more than half of all resales.”

“John Walsh, MDA DataQuick president offered a word of caution for the market. Foreclosures could keep coming. The effect of mounting job losses could trigger more defaults, and a new wave of foreclosures on ‘option ARM’ loans and ’stated income’ loans used in mid- to high-end markets could also come, Walsh said.”

“‘If job cuts remain deep and foreclosures spike, then the past few months might later be viewed as nothing more than a brief calm before the next foreclosure storm,’ Walsh said.”

However, I have noticed a large increase in sales in Nevada County in May and I will have a full report on May’s sales in the first week of June. Our median price in Nevada County has risen to $299,000 in May.

Real Estate

Banks Finally Try to Make Short Sales Shorter

May 23, 2009 jd 6 Comments

short-sale-sign

There is sometimes nothing more frustrating than a short sale. Banks typically take 90 days to six months, accept other offers if they are a dollar higher in the meantime, therefore never knowing if the home your are trying to buy will become a reality. So the news is that Bank of America and Wells Fargo, say they are making it easier for delinquent borrowers to avoid foreclosure by selling their homes for less than they owe on them.

Their efforts dovetail with a strategy unveiled last week by the Obama administration to promote such short sales.

Demand for short sales has burgeoned because falling home prices have made it impossible for many homeowners to get high enough prices to repay their lenders if they run into financial trouble, such as a job loss.

A short sale has an advantage over foreclosure for the homeowner because it is less embarrassing and does less damage to his or her credit. And for the lender, it is less costly than having to repossess, market and maintain a vacant property. Avoiding a foreclosure means keeping a house occupied which helps preserve a neighborhood.

However, because of the complexity of such transactions — including the need for approval of a sales price by lenders, investors and mortgage insurers — the sales often fall apart. Real estate agents complain that by the time they get an answer from the bank on an offer, the potential buyer has lost interest.

At Bank of America, the nation’s largest mortgage servicer, more than 60 percent of approved short sales do not close, which is why the bank wants to streamline the process, said BofA Senior Vice President David Sunlin by telephone Thursday.

Sunlin, who manages short sales for the bank, said the “bank’s first goal still is to negotiate a mortgage modification that will let a borrower keep his home —during those negotiations the bank can simultaneously obtain the documentation needed to qualify the borrower for a short sale if the modification doesn’t work”

Banks typically do not begin the lengthy process of qualifying a borrower for a short sale until it has received a purchase offer.

To expedite short sales, Bank of America has enlarged and updated staff training and set up a phone line dedicated to short sales that borrowers and their agents can use.

Sunlin said, ” in 60 to 90 days the bank will roll out a Web program it will use to find and track the short sales of houses with mortgages that it services. The Web portal also will accept qualifying documentation from clients wishing to do short sales.”

It typically takes 45 to 60 days for the bank to tell a client if a short sale offer can be accepted and up to 90 days if an investor must approve , with the goal for the banks is to shorten this time line.

By doing this, we should see more private sales instead of more sales of bank-owned (houses),”

Sunlin said short sales will also benefit from an amendment to President Barack Obama’s Making Home Affordable program announced last week that will standardize short sale application and acceptance forms. It also provides monetary incentives to servicers and helps cover relocation expense for homeowners.

David Knight, senior vice president at Wells Fargo Home Mortgage, said in an interview that his bank has been working many months to reduce delays in the short sale process. He said the bank is working closely with borrowers’ agents to increase the likelihood that the listing prices on a short sale will be accepted.

The lending and real estate industries have been on a crash course to learn about short sales since the housing market bust, Knight said. “The big challenge is none of us really understood the process,”

By the way, as of May 22, 2009, in Nevada County, there are 103 active short sales on the market and 55 short sales with contingencies, for a total of 158 short sales.

Real Estate

We’re Getting Back to a “Real” Home Market at Last

May 17, 2009 jd

Housing affordability among first-time Californian home buyers in Q109 improved more than 20 percentage points from the year-ago period, according to survey results released Thursday by the California Association of Realtors (CAR). This is good news for us here in Nevada County. The more people who can afford to buy a home, the sooner home prices will stabilize.

Home prices became out of reach for over 86 percent of the people in California, when real estate was selling so fast and furious. The only reason home sales kept going was the easy lending practices. Buyers who really couldn’t afford a home were able to get home loans, resulting in the large number of foreclosures that we have at the present time. Now we are getting back to a “real” home market.

The data suggest the potential for a significant increase in first-time buyer presence on the market, although it’s unclear how many of these households will actually participate. The increased housing affordability indicates substantially lower home prices, likely affected by foreclosure sales in the state.

CAR found 69% of California households could afford to purchase an entry-level home in Q109, compared with only 46% in the same quarter last year.

The median entry-level price for a home in California was $213,040 in the first quarter, making the estimated monthly payment $1,270. A California household needs a minimum $38,090 yearly income to purchase under these circumstances, CAR said. These households typically purchase a home equal to 85% of the prevailing median price.

Californian households might enjoy some new affordability due to the state’s high foreclosure sales volumes. A monthly report released this week by ForeclosureRadar saw foreclosure notices ease by 18% in the state during April, while sales at auction rose 35% overall and a record number of properties sold at an average 28% below the estimated market value.

Areas like California with high volumes of so-called “distressed” sales — which traditionally fetch 20% less than non-foreclosures — also tend to show the first signs of recovery, National Association of Realtors economist Jed Smith tells HousingWire for the upcoming June magazine issue.

“We’ve seen some phenomenal strength in California, Arizona, Nevada and Florida recently, largely because prices in those markets got bid down to such a point that the first-time home buyer and probably many others have seen a real opportunity there…to come back into the market,” he says

Real Estate

New Financial Incentives and Uniform Process for Short Sales

May 16, 2009 jd 1 Comment

short-sale-house

The following is a press release which announces that the Obama Adminstration has setforth guidelines to make short sales a little easier and should help us in Nevada County in speeding up short sales. For anyone with economic problems regarding their home, this is welcome news. Banks tend to prolong a short sale because of their bureaucracy . This proposal will give banks financial incentives to speed up the process.

A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.

The NATIONAL ASSOCIATION OF REALTORS® (NAR) today announced that the Obama Administration has added new incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP), part of the administration’s Making Home Affordable plan.

Loan servicers may consider short sales or deeds-in-lieu of foreclosure for borrowers who do not qualify to have their loans modified on a permanent basis under the Making Home Affordable Loan Modification Program.

• Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program, but don’t qualify for a modification or do not successfully complete the three-month trial period. Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate.

• Incentives include: $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; $1,500 for borrowers/homeowners to help with relocation expenses; and up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).

• The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.

• Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.

• In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.

• The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.

• Servicers may not charge fees to borrowers/homeowners for participating in the FAP.

• The program is in effect through 2012.

• Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).

Printed by Permisson of:
Copyright © 2009 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

Real Estate

Real Estate Listing Prices Increasing in California

May 14, 2009 jd

There are further indications that we may have hit the bottom of the housing markets. Real estate sales continue to go up in Nevada County with pending sales in the 200’s range. At the beginning of the year, the pending sales were below the 150’s. Sacramento saw a decline in inventory for April which is unusual. According the Sacramento Bee, sine 1994, only four years, 1995, 2003, 2008 and 2009 have seen for sale inventory fall from March to April. It also appears to have happened nationally this year.

According to PR Web, listing prices are increasing in California:

“Listing prices rose at the fastest rate in the California markets with San Jose up 3.7%, Los Angeles up 3.2% and San Diego up 2.8% in April. Prices in 18 markets are now showing three months of sequential listing price increases. Asking prices fell at the fastest rate during April in Las Vegas followed by Salt Lake City – down 3.8% and 2.6% respectively.

“Broadly rising asking prices in this difficult economic environment demonstrate the powerful effect of seasonality in the housing industry,” said Stephen Bedikian, partner and research director for Real IQ. “We expect to see continued strength during the next few months of the spring selling season fueled by historically low mortgage rates. We won’t be able to call a bottoming of the market until we see stability continue into the seasonally weak fall and winter months.”

Inventory levels decreased in a majority of major markets with inventory falling in 15 of 26 markets. Across the 10-City Composite Index markets, inventory fell by 1.5% in April and was effectively unchanged during the most recent three-month period. Inventory grew by the largest amount in Boston up 6.3% followed by Austin up 4.9%. Inventory fell by the largest amount in Phoenix and San Francisco where it contracted by 11.0% and 7.1% respectively.”

So no one is predicting that we are at the bottom of the market. All I know is that sales in Nevada County are going up, and prices are starting to rise.

Real Estate

Hard Money Lending & Tom Hastert

May 9, 2009 jd 2 Comments

The term “hard-money” lending can be traced to the Great Depression when private individuals started lending money because of the banking crisis, said Leonard Rosen, whose La Jolla-based company, Pitbull Mortgage School, teaches mortgage brokers about hard-money loans.

“No one really knows the reason they used ‘hard money’ as a term. It could be that it was hard to get, hard to find or because it was hard cash,” Rosen said. “I’m not an advocate for hard-money lending. But it’s something that has its place as long as it’s done responsibly. There are some people who should not be in the lending business at all.”

Thomas Hastert, now a former attorney and real estate broker, certainly was one of those people that should not have been in the lending business at all. Hastert had the mortgage company Loan Sense, which was located in Grass Valley off of Brunswick Road.

As you may know by now, Hastert is in jail, having pleaded guilty to 59 felony counts of embezzlement, securities fraud and selling unregistered securities. However, Attorney General Brown had filed 73 criminal charges against Hastert, so by plea bargaining, it was dropped to 59 felony counts with a possible five year jail term instead of eleven years. Hastert is to be sentenced in June.

By the way, Hastert did not make $20 million; most of the money he received from customers he used to make loans with extreme poor judgment, ignoring the law and some obvious intent to commit fraud. Most of the investors’ monies were lost by loaning money with improper loan to value of property. This, along with improper funding of construction loans led to horrific losses to the customers who gave Hastert money to make hard money loans.

This man brazenly deceived investors and borrowers, promising high returns and easy loans, ripping off his customers for his own personal enrichment,” Attorney General Brown said. “Ultimately, this criminal scheme collapsed when many of these loans failed, costing hundreds of people more than $20 million.”

Hastert brokered over 270 hard-money loans in Nevada, Sacramento, Sutter, Butte, Placer, and Yolo Counties between September 2004 and September 2007 for real estate development projects. Hard-money loans typically provide high returns for private investors and are secured through collateral such as real estate.

In this case, Hastert secured $20 million from numerous investors, using the funds to broker hard-money loans to borrowers seeking to develop homes on real estate.

In the criminal complaint, Hastert is alleged to have:

“Misled investors. Hastert told investors that borrowers had excellent credit scores and were capable of repaying the loans. This proved to be untrue. Many borrowers had poor credit scores, did not make regular payments on the loans, and held properties that were in foreclosure.

The loans that Hastert brokered were required by law to be placed into a special trust account overseen by a third-party escrow firm. The firm had to verify whether funds being withdrawn by borrowers were being used for construction projects. Despite telling investors he had established such a trust account, Hastert never did, and the money was regularly withdrawn and misused by borrowers with no oversight.

Hastert told investors he would personally oversee the development of the land. In one instance, he was asked by investors to drive them to a particular property that was supposedly under development. Hastert could not locate the property.

Set up fake investors, known as “straw men,” to keep concerned investors at bay. Hastert filed documents with a county recorder’s office saying that his secretary owned a majority interest in the investment, despite the fact that she had never invested a single dollar. If a legitimate investor tried to initiate foreclosure proceedings, Hastert would contend that the supposed majority owner opposed the action.

Embezzled fees. Hastert was entitled to collect a 3% fee on loans he brokered. However, he took all his fees up-front as if the loan were fully funded. In fact, some loans never fully funded, and others took more than a year to fully fund.”

“Those who invest their money with hard-money lenders are taking on significant risk. That’s why they would expect a significant return relative to other investments,” said Stuart Gabriel, a UCLA finance professor and director of the university’s Ziman Center for Real Estate. “If they need to take the property back, there’s legal risk and marketing risk. There can be very significant losses.”

So if you are going to invest in hard money loans, with a promise of high returns, be careful. Give me a call or write if you want some guide lines prior to investing.

Real Estate

The Bargains in Real Estate are Going to be Gone

May 6, 2009 jd

inside-of-church

This is an interior picture of a listing for a three bedroom, two bath home which will save you travel time and gas for Sunday services.

Here in Nevada County, while there were almost the same amount of sales in April of this year compared to last year, the pending sales are way up. Potential buyers in areas that were hard hit by the housing downturn have read about bargains; only find it disappointing when they go shopping.

But in Southern California, housing is hopping:

According to an article in the Los Angeles Times:

“House hunters are trying to pounce on deals from sellers they expected to be frantic — if not curled in the fetal position. What they’re finding instead are bidding wars as low interest rates and pent-up demand in traditionally stable or chic areas have kept prices up — not as high as the market’s peak, but not nearly as low as they had hoped.

Bank-owned or not, the cheaper properties are dominating the sellers’ block in the notoriously expensive L.A. County real estate market. In March, 2,871 homes under $300,000 were sold compared with only 734 a year earlier, according to real estate information firm MDA DataQuick.

When the real estate bubble burst, it didn’t affect the mid-priced market, said real estate information firm MDA DataQuick. Instead, it created opportunities in troubled neighborhoods and slowed sales in the market of homes priced above $1 million. But in areas where most of the homes sell for $400,000 to $800,000, there are few discounts to be found.

Even the foreclosure market has slowed, says University of Southern California Professor of Real Estate Tracey Seslen. Seslen said lenders with foreclosures are supporting market stabilization and releasing only a few homes at a time to avoid flooding the markets.”

Like I said, if you wait to buy at the bottom of the real estate market, you’ll find that the bottom pasted you by a long time ago.

Nevada County Home & Land Statistics, Nevada County Information, Real Estate

Nevada County Residential & Land Sales, April 2009

May 4, 2009 jd

What the figures show for April of this year is that residential sales are about the same number as it was for April of last year. However, we’ve had a further decline in medium residential home prices of minus 23 percent. Here are the stats for sales in Nevada County.

There were 67 residential properties sold in April 2009 compared to 62 residential sales in April 2008. Total residential sales from January to the end of April 2009 were 191 sales compared to the same period last year of 203 sales.

The medium price for April 2009 was $299,000 compared to April 2008 of $387,500 a decline in market price of 23 percent. There were 1,165 residential properties listed for sale at the end of April, which based on the number of sales from January to April 2009 equals about 1.6 years supply of residential property for sale, assuming sales continue at the same rate.

There were 20 land sales from January to April in 2009 with a 45 month supply of land at the end of April. Last year there were 45 land sales with a 49 month supply of land.

I’ve noticed a pickup in pending sales, which I post on this website daily for those that are interested, and it seems that the pending sales are up. They have been hovering in the 200 pending sales starting within the last month. However, this is for all sales, not just residential sales.

Where are we with future sales? It’s anyone’s guess, Fannie Mae and Freddie Mac asked lenders to forestall any more foreclosures until March 6, 2009. What they are doing now that the agreement date has expired? Some circles say we are in for a tsunami of foreclosures. The following banks had agreed to the government’s request and their expiration dates of the agreement.

JP Morgan Chase – New Owner-Occupied residential loans that are owned and serviced by JPMorgan Chase. As with Fannie Mae, the moratorium of foreclosures end date, March 6th.

Citigroup – All Citi-owned first mortgage loans that are principal residence and on loans for which understandings with investors have been reached. Moratorium end date – March 12th.

Bank of America (also Countrywide now renamed Bank of America Home Loans) – Delay foreclosures sales on owner occupied properties whose mortgage loans are owned and serviced by B of A or Countrywide – Through March 6th.

Wells Fargo (also Wachovia) – For Loans it holds. The moratorium is expected to remain in place until the government’s foreclosure prevention plan is announced. The majority of Wells Fargo’s mortgage loans are serviced by it and owned by other investors.

Real Estate

Have We Hit the Bottom of the Housing Market?

April 16, 2009 jd 3 Comments

Another indicator that we may be nearing the bottom of the housing market is builder confidence in April made its most dramatic increase in nearly seven years, according to an industry report.

According to CNN Money

“The Housing Market Index, a survey-based measurement of sales, as well as sales expectations, rose by more than 50% in April, according to the National Association of Home Builders, which compiles the index with Wells Fargo.

The index rose to 14 from its prior level of 9, which was the biggest increase since May 2003

“After a very long period of extreme distress, it’s given the builders some sense of reaching a bottom,” said David Crowe, chief economist for the association”

This is just one of several indicators that we may be bottoming out. Sales in Nevada County have been increasing in April to a point where we have 199 pending sales on the Nevada County Multiple Listing Service (MLS) as of yesterday.

There are large home price changes occurring, some as much as minus $600,000 or more. These large price reductions are in all probability, based on sellers setting their own price based either because of emotional reasons or basing their price on what houses sold for a few years ago. In a declining market, it is very important to list your home a little below the market.

You should have a good market analysis of your home made by your real estate agent and base your listing price based on facts, not emotional reasons, how much money you need to get out of your home, or what you think your house is worth. (I know, sometimes that is hard to do) It’s an un-fortunate fact of life that the market sets what a house sells for and not what we want to sell our house for, No?

Oh, to answer if we have hit the bottom of the housing market, I don’t know and I doubt if anyone else does either. But it sure looks close to the bottom.

Real Estate

Signs of Life in the Real Estate Market

April 8, 2009 jd

signsoflife

I keep track of the number of pending real estate sales in Nevada County daily and have noticed a healthy increase in pending sales lately. Although many of the sales are short sales and foreclosures, other properties are moving as well. With real estate market values depressed to its present level, buyers are coming back to the market. This includes first time home buyers and investors sensing a buying opportunity of a life time.

According to Rismeida:

“A run of encouraging economic reports that have recently been released may mean the worst, panic-inducing stage of the economic downturn is over. Emphasis on the word may. “I think there are signs of economic life,” Mark Zandi, chief economist at Moody’s Economy.com in West Chester, PA, said. “The downturn is no longer intensifying, and the clearest evidence of this can be found in the retail sector as retail sales have turned since the beginning of the year,” Zandi said.

New-home sales in February jumped 4.7% to an annual pace of 337,000 from a record low in January. February marked the first increase in sales since the summer, and the report added to a string of “better-than-expected” housing data, according to Wachovia Bank economist Adam G. York.”

I believe foreclosures will continue into the next year, as the Alt-A loans come due for readjustment. Some figures indicate that there may be as much as $600 billion in foreclosures still to come from the Alt-A mortgage loans made in the 2006-2007 years. Alt-A loans were the love child of lending institutions and Wall Street when subprime loans were getting a bad name. The subprime loans were repackaged as Alt-A mortgage, bundled and sold to investors. A majority of these bundled loans are now toxic and due to fail.