The seven months of 2010 have flown by, and the home results are in for Brentwood (94513) home sales. It is worth noting that most Brentwood homes sold at or ABOVE List Price, and the average days on market was 27! Here are the results for Detached Home Sales in Brentwood:
List Price Sold Price
High $1,7999,900 $1,350,000
Low $ 80,000 $ 60,000
Avg. $ 318,304 $ 320,644
Med. $ 299,900 $ 310,000
Looking at Condos/Townhomes, there were 27 Condos/Townhomes/Duets that sold in Brentwood, below are the stats for the Jan-July period:
List Price Sold Price
High $215,000 $208,900
Low $ 91,875 $ 93,000
Avg. $153,245 $157,721
Med. $159,900 $164,000
Included in the above numbers were 41 homes (detached and attached) that sold in Summerset (an active adult community in Brentwood). Most Summerset homes are selling near or slightly less than list price, and the average days on market was 49 day. Homes are moving if well-priced well and the buyer sees value in the home. (Click Here to see the Summerset Homes that SOLD – link not good past 30 days) Here is the breakdown of Summerset Homes SOLD:
List Price Sold Price
High $598,500 $550,000
Low $ 180,000 $ 182,000
Avg. $314,054 $309,802
Med. $274,500 $270,000
If you want additional information, please call me at (925)852-1659
Foreclosure Radar that tracks California foreclosure activity reports that NOD’s are down 43%, Notice of Trustee sale are down 36%, but cancellations are UP 142%. WOW!! The increase in cancellations could be that the banks want to work with owners to sell as a short sale.
BofA is now focusing heavily on working with the client for a successful short sale. They have hired over 800 agents to get more homes sold as a short sale, because they net more for a short sale then if it is left to become a foreclosure. The chance of vandalism is also lessened. If you are in distress and need to sell your home, please call or email me.
Only 600 homes in Contra Costa went back to the bank last month; 23% LESS than 2009. Here is a link to the complete report for all California Counties!
HAFA (Home Affordable Mortgage Alternative) launched on 4-5-10, is part of the HAMP (Home Affordable Mortgage Program). HAFA is overseen by the US Treasury. It is a program to promote foreclosure alternatives, including a short sale. If a short sale is to take place, there are standards in place to simplify the process. The government’s definition of “standards” is timelines, minimum proceeds decided for the lenders and a standardized process using standardized documentation.
Borrowers must be evaluated for HAFA, have acquired the loan BEFORE 2009,have the home as their principle residence, and occupy the home. (Unless they moved for a job relocation.) Jumbo Loans and Fannie Mae/Freddie Mac loans are NOT eligible for HAFA. (Fannie & Freddie will have their own program later, but no timeline has been set.) Borrowers in bankruptcy or already in an executed short sale contract are also not eligible.
The borrower is eligible for HAFA if they do not qualify for HAMP, do not successfully complete a HAMP trial period, are delinquent on a HAMP loan modification, or the borrower just wants to go direct to a short sale with HAMP consideration. A huge benefit of this program is that the homeowner‘s debt is DISOLVED and they receive a $3000 financial incentive at close of escrow !
It has statistically shown that a home foreclosed upon can decrease the value of the home’s neighbors by 9%! This is why the government so wants this program to work, and not let the home go to foreclosure. This saves the lenders money! In addition, there are financial incentives for servicers and investors.
Finally, the HAFA Program is for borrowers in hardship and not for those seeking a strategic default! If you want more information on short sales, please call me at 925-852-1659. I have a Certified Distressed Property designation (CDPE), having completed extensive training to work with homeowners in distress, with a particular emphasis on short sales.
Since it has been 3 years since the housing crash and home foreclosure numbers are falling, Fox Business News did an interview on March 12th to see if the market is turning around. I personally consider much of the news today as talking heads; however, the person they interviewed I know personally and is honest and very ethical. Bruce Norris is president of The Norris Group, a Riverside CA investment resource.
Please take 8 minutes and listen to this interview as Bruce mentions the problem of negative equity that cannot be solved by jobs, lenders taking back properties that sell for less than the neighbor owes on his house and strategic defaults. It will give you something to think about and make you realize that this market will be around for awhile.
Sixty Minutes did a segment in 2008 regarding the mortgage crisis. At that time, they stated that we were ½ way thru the bursting of the greatest asset bubble. This segment talks about the higher quality mortgages (other than subprime) that also have issues. I mention this video since this is the cycle that we are now experiencing.
The two mortgages causing our current mortgage problem are the Alt A’s and Option arms. Alt A’s had teaser rates, and homeowners are now seeing their $800 mortgage payment go to $1500. Defaults are incredibly high and no evidence that they are leveling off. You can look back at what was written in 2005-2007, it is predicable what will happen, and is now happening. Alt A’s & Option ARMs are just starting in 2010 and will reach their peak in 2011! This segment states that at least 50-70% will default because most are defaulting before the teaser rate even goes up. This news clip talks about Southern Florida, but these loans were sold all over the US; especially California.
The housing community that is featured, talks about its sales history. It was all about marketing and setting a “scene for these buyers to purchase”. Without Alt A’s & Option arms, these properties would never have sold, because buyers would not have qualified! Bankers and brokers got money up front in fees. They did not check documentation on buyers. The key assumption was that home prices would go up forever. History showed that homes had always gone up since the Depression!
Housing is an important part of economy, and to get us back on track, we need to clear out garbage in the system. It is expected to take another 2-5 years to work through these toxic loans. Sadly, in the end, eight million people are expected to lose their homes. 
Now if you listen to Neil Barofsky, the Special Inspector General of the Troubled Asset Relief Program, it may take longer! He believes that current government policy wants to keep home values as high as possible, to keep more people from bailing. Barofsky feels we may be in store for “The Great Crisis, Part 2” aka the second bubble.
Where does that leave you? If you have a loan coming due with a payment you cannot afford, you need to contact a CDPE to give you advice on your options. THE CDPE designation means a realtor has completed extensive training in foreclosure avoidance, with an emphasis on short sales. For more information call me at 925-852-1659 and I will help answer your questions.
Have you thought about buying Bank-Owned homes in bulk? I thought it was an interesting topic, and decided to hear the facts from four (4) investors who have actually purchased bulk bank-owned homes. Below are the main bullet points….
- Homes are available from brokers who hold this list. Finding out who owns the list is part of the mystery of the business. You need to do the leg-work with banks and lending institutions.
- Once you get that list, you must respond in 24 hours. Usually you CANNOT cherry-pick from the list that you are given. You do purchase them through a title company.
- You buy homes with pricing starting at $100,000 to over $1 million for a block of homes. This group basically bought homes in the $100,000 bulk range for an average of $6,000/house.
- Most of these homes have been on the market for a couple of years, so they are NOT your “Home & Gardens” variety. Some are burnt out, vacant lots, missing plumbing/walls/wiring.
- Many have liens on them from utility bills, water bills, tax bills etc. Not all of these liens can be found out in advance if you purchased from a state that sells tax liens. You need to expect liens on these properties.
- Most properties are in different states. These investors no longer buy in certain areas because of urban blight. Your homes will not be in California and NOT all in the same state.
- These homes are not easily insured and there are liability and insurance issues on these homes.
- There are different classes of bulk properties to buy. A – being most expensive. These investors bought mostly the C class.
- You cannot sell until you get the deed. This can take some time, even though you “technically” own the property. (It can take up to 2 years to unload one of these properties.)
- The exit strategy after buying these homes is to list them on the MLS or Craig’s List. The most common way to dispose of them is by SELLER FINANCING! (They hire a company to do the collections of the monthly mortgage and to send out notices.) They sell for 70% of property value since they are being sold in rough shape. They do mostly land contracts.
- They recommend you purchase out of your IRA and purchase in a LLC.
- Be prepared to have a staff of people to handle the phones and assist with the selling process. This process is NOT for the first time investor, nor faint of heart.
For more information regarding this and other investing questions contact the San Jose Real Estate Investment Association. They meet in Pleasanton the first Wednesday of each month at the Four Points Sheraton.
If you are interested in purchasing an investment property in East Contra Costa County, please give me a call at 925-852-1659.
What is happening in the real estate market? When will home prices increase? This is the mantra that most real estate agents in Contra Costa hear on a daily basis. Beacon Economics wrote an interesting report addressing these issues. Although it was presented in September 2009, the data is still relevant.
The East Bay benefitted more than other areas in the mortgage mark-up, and thus has been hit hardest. The author believes that now that affordability is being restored to Contra Costa, we will be able to intice workers back to buy homes.
This report states that the East Bay stopped creating jobs in August 2006! We are now at almost 11% unemployment. WOW! They expect another loss of 19,300 jobs by mid 2010, at which time it will reverse. Well, let’s hope so!!! However, this report does not mention in what sectors jobs will increase.
Beacon Economics predicts that the recovery will be on the way for the Bay Area by year end! HAPPY NEW YEAR! For a complete look at this report, click here and go to page 79 of page 175.
To look at the presentation that was given to the San Francisco Assoc. of Realtors, click this link. If you ever get a chance to hear Christopher Thornberg speak, don’t miss the chance. You will not regret it!
On October 2nd, I wrote a blog on SHADOW INVENTORY in the California market (see archives). An interesting update is a report conducted by First American CoreLogic . They found that there were 1.7-million-units now in pending supply of residential housing inventory. This is a national number; an increase from 1.1 million a year earlier! Pending supply is known as “shadow” inventor: REO’s by banks and mortgage companies and mortgages that are at least 90 days delinquent. Generally, shadow inventory is not included in measures of unsold inventory. At the current sales rate, the pending supply is 3.3 months, a rise from 2.4 months a year ago, according to the report. The months’ supply measures how quickly the inventory will deplete given the current sales rate. To view the complete report click the link above.
If you have been an FHA Buyer in the San Francisco East Bay, looking to purchase a property the past nine months, the process for buying a home has been very difficult. Most bank owned homes will not consider FHA offers; they are only selling to Conventional (20% down) or all cash/investor offers. WHY? Because they can!!! There is so much interest in the investment community to purchase entry level homes at 1999 prices. It is not uncommon to have 8-30 offers come in on a home. In addition, inventory is extremely low. (See Shadow Inventory blog below)
This blog will not offer a solution, but offering some humor. :) The below video, although some “tongue –in-cheek” does characterize the journey of an FHA Buyer…
http://www.youtube.com/watch?v=SM7oWKgCVo4&feature=email
Did you get into an interest-only payment and now cannot afford your home? Mark Goldman, a San Diego mortgage broker, mentioned in this story, signed his clients and himself up for these interest-only products. It was a typical scenario in 2003-2006. It was a “BUY NOW, PAY LATER” proposition that seemed good at the time. People were looking for a way to save money on their mortgage, but now the market changed! As the article states, people with interest only mortgages are now more likely to default because they now cannot afford their home and they cannot refinance because the home has decreased in value. What do you do?
1) You should go see a financial planner/accountant to assist you with financial, payment and tax advice. 2) Consult a tax attorney if bankruptcy, short sale or foreclosure are your options so you are aware of your legal liabilities of these choices. 3) If you decide to sell your home as a short sale, contact a realtor who has experience in this process. 4) If you have a hardship (loss of income on a short term) contact your lender to see if you can do a loan modification. (I understand that some lenders are contacting clients pro-actively to start this process.) 5) This last option just became available on Fannie Mae loans. You can now give your home back to the bank, and continue living in it by paying rent to the lender. This program allows the ex-homeowner to live in the property for up to 12 months as a tenant.
Again, you should seek both financial and legal counsel before making any major financial decisions regarding a home sale or purchase.
