Would you love to own a second home or condominium on the Central Coast but question whether you’ll use it enough to warrant the expense?  You may be interested in a condo hotel (also known as condotel.) What is a condo hotel or condotel?  Think of it as a hotel comprised of condominiums instead of a bedroom and bath.  It is operated as hotel or vacation rental but most or all the units are individually owned.  Most hotel guests never know that different individuals own each unit.  In some condotels all units are identical while others will allow the individual owners to personalize their units. (One of our Central Coast condotels allows each unit to be personalized).

Condotels make great second or vacation homes while giving you the benefit of someone helping you make the payment.  They are not sold as a primary residence due to the fact that the owner’s usage is normally limited because each unit is expected to be included in the hotel’s inventory of rentable units.  But one of the great benefits of this type of unit is that it is maintained and rented out for you, just like any other room in a hotel.  You don’t have to worry about advertising, collecting rent, cleaning or any of the stress that normally goes with having a vacation rental.  As owner, you’ll receive a percentage of the revenue that is generated, so you’ll want to do your research to determine what amount of income you can realistically expect.

Some of the advantages of this type of ownership:

a) Rental revenue to offset some of your ownership expenses (in some cases maybe all your expenses.)
b) A worry-free vacation home in a great location.
c) Hassle free ownership; no landlord issues.
d) Own instead of rent.

Some disadvantages:
a) Pets may not be allowed.
b) Your unit is subject to the same trends in the real estate market that affect hotels.
c) Your unit may not always be available on short notice (but most manager’s will try to work with you).

We are fortunate to have two hotel/condotels on the Central Coast.  And remember location, location, and location when purchasing this kind of unit.  We have one condotel that sits right on the sand in Pismo Beach and one that is only one block from the water in Oceano.

If you are interested in finding out more about condo hotels on the Central Coast, well be glad to answer your questions and help you explore your options.

Nancy Tucker, Realtor Associate
HomesCentralCoast.com Team
   

Posted: July 16th, 2008 under Foreclosures.

I continue to see below market pricing of foreclosure properties in the Santa Maria and Orcutt area resulting in a large number of offers which drive up the price.  Last week, a bank owned property came on the market in Old Orcutt which was listed at $189,900.  The previous owner bought the property for $469,500 in September 2004 and it was subsequently valued at $665,000 in December 2006, per a title search.  The property is over 2300 square feet on a 10,000+ square foot lot, has a swimming pool (in disrepair) and has a number of upgrades, including kitchen and bath.  It still needs a lot of work and is an ideal property for a contractor or handyman.  I showed it to several buyers and we had to wait in line for our turn.  There were multiple offers on the property and we won’t know the final price until it closes escrow, but I can assure you that it is going well over the asking price.

Posted: July 2nd, 2008 under Foreclosures.

The LA Times published an interesting article today featuring a Santa Maria family whose home is going into foreclosure. I think the article gives a good example of how many people ended up finding themselves in this situation. The article also notes the large number of homes in foreclosure in the Santa Maria area.

If you’d like to read it, here’s the link:
Santa Maria house bought with no money down goes into foreclosure

Posted: June 5th, 2008 under Foreclosures.

Congress may soon be passing a bill that will bring relief to struggling homeowners.  The current proposal will insure up to $300 billion in loans that will be refinanced in order to help some who are facing foreclosure.  One major criticism I’ve heard about this plan is whether or not borrowers who owe more than the value of their home deserve to have their loan reduced and to gain instant equity in their property.

I am in support of this bill and believe that it is good for the Santa Maria area, which currently has the most number of foreclosures and short sales on the Central Coast (and many more to come.)  There are many home owners who have shown responsible decision making regarding their finances and who were simply victims of bad timing when they purchased their home.  I believe these homeowners deserve to own a property at a value that someone else would pay if it were sold in today’s market. 

Making provisions that allow financially strained homeowners to keep their homes is good for our community and neighborhoods.  Most distressed properties are left vacant, leaving yards and other features without care.  Instead of turning Santa Maria neighborhoods into ghost towns, this bill could be the “second chance” that many need to help boast confidence and restore pride in home ownership.

Posted: May 20th, 2008 under Foreclosures.

On article in the Santa Maria Times today stated that in April, California had 64,683 properties facing foreclosure, the largest number in the nation.  This represents a 112% increase from April 2007.  Nationwide, the number of homes facing foreclosure is up 65% from the previous year.  The article states that it is expected that there will be more than 1 million foreclosures in 2008.

Looking at the statistics on the Central Coast Multiple Listing Service (MLS) - As of today, there were 961 total properties (for sale and in escrow) that were on the market in the Santa Maria/Orcutt area.  Of those, 685, or 71.2% were either pre-foreclosure or bank-owned properties. 

Posted: May 15th, 2008 under Foreclosures.

The Eddie Stanfield Team just listed another bank-owned property today in Orcutt.  The asking price is $264,900, which is $30,000 less than it was listed about a month ago, which is a sign of motivation.  It’s a three bedroom, two bath home with a large backyard and located on a cul-de-sac.  If you are interested in taking a look at it, give us a call at (805) 937-1764. 

Posted: May 10th, 2008 under Foreclosures.

For several months I have been warning Central Coast buyers about the challenges of pursuing pre-foreclosure properties, or short-sales.  There is an incorrect assumption that buyers can get a better deal on a property if they purchase it directly from the homeowner who is facing foreclosure.  Time after time, I’ve watched my clients face huge frustrations when trying to buy a home during this stage.  From a logical standpoint, you’d think that the short sale would be the preferred path.  The banks could cut their losses prior to foreclosing on a home and the homeowner can be spared the shame of foreclosure.  However, this scenerio has not played out as many thought it would

Too Many Cooks Spoil the Stew
An article in the April 17, 2008 Wall Street Journal clarified some of the reasons why you should think twice before buying a short sale home. Not only do the buyer and homeowner need to agree upon the sales price, but the mortgage-holder needs to be involved in that decision as well.  In addition, if the loan was “packaged into securities..the mortgage servicer must consider the interests of the investors who own the loan.  All of these “hoops” lead to long delays before a decision is reached.  The WSJ article indicates that, nationwide, short sale deals are difficult to close and that buyers end up walking away from the deals out of frustration. I am finding the same to be true in the Santa Maria and Orcutt area, where most of the foreclosure properties  I list are located. 

But the WSJ article did not mention something that I think gives even more reason to avoid short sales.  Buyers can save more money on properties that have already been through foreclosure.  Here is a perfect example: I recently sold a bank-owned home that had been through foreclosure.  Ironically, I was the listing agent for the same home several months earlier when the owner tried unsuccessfully to sell it as a short sale.  Prior to foreclosure, we received an offer that the bank rejected.  But the offer that the bank accepted AFTER foreclosure for the SAME home was LESS than the offer it had recieved while we were trying to sell the home as a short sale.  To me the moral of the story is clear:  it pays (in both time and money) to go after bank-owned foreclosures instead of short sales.

If you’re curious about how to buy a house in foreclosure, check out this article: http://www.homescentralcoast.com/tips_for_buying_foreclosures.html

Posted: May 2nd, 2008 under Foreclosures.

That is probably the question I am asked most these days. My personal opinion, after 20 years as a real estate agent, is that we seem to be approaching that point. Here’s why:

1. Over the last month, I have started to see a dramatic change in the way banks are treating their bank-owned properties (REOs). Just a few months ago, some of the banks with which I work were listing their foreclosures at prices higher than recommended. Now they are starting to list them for sale at prices under market value.
2. We are starting to see multiple offers on foreclosed homes. Last week, a client I represent was competing against 11 other offers for the same property. Fortunately, my client’s offer was the one that the bank accepted.
3. Multiple offers on foreclosures is driving the prices up. In other words, in order to secure the home they want, buyers are offering more than list price. That is a big sign that we may have reached bottom.
4. The federal government is very anxious to do things that will help the economy and reduce the large number of homes on the market. Interest rates are a big part of that, and they are very low right now. However, that can’t last forever. As soon as they go up again, we are likely to see a slowdown in real estate buying activity.
5. There are a lot of active buyers right now. People have a general sense that the time is right to jump back into the real estate market.
6. Sellers of homes that are not in any stage of foreclosure are very willing to negotiate terms of sale right now. They are willing to pay for things such as closing costs (normally something that the buyer and seller split) or provide an allowance for repairs.

If you are seriously looking to take advantage of the real estate opportunities out there right now, my biggest piece of advice for you is to meet with your lender and get a prequalification letter. Many of the banks who own foreclosures will not consider an offer without it. If you need some recommendations for experienced, reputable lenders, please check out our recommendations at http://www.homescentralcoast.com/mortgage-rates.html.

Posted: May 1st, 2008 under Foreclosures, Real Estate Sales Activity.

My blog in September 2007 stated that 26% of the real estate listing inventory were either foreclosures, notice of defaults, short pays or REO’s. Now that percentage has increased to over 56%. The market is still bracing for a wave of new foreclosures by spring of 2008. Bank of America’s announcement of its plans to purchase Countrywide Home Loans is a good sign for the real estate market, in my opinion. It says to me that Bank of America is betting that the market is getting close to hitting bottom. Personally, I am seeing an increase in sales activity and hearing the same from others in the business.

On another very important note - mortgage interest rates just came down to as low as 5%.

Posted: January 10th, 2008 under Foreclosures.

The Santa Maria/Orcutt real estate market continues to feel the effects of the fallout of the sub prime loans of the previous years. As those loans are coming to maturity, we are seeing the percentage of our inventory increase in our valley. Quote from Joseph Holland, county clerk, recorder and assessor, states 85 percent of the counties foreclosures this year have been in the Santa Maria Valley. Multiple listing Service (MLS), states today 758 homes available with 285 of those being foreclosures, notice of defaults, or short pays, that’s over 26% of the inventory now. If you are looking at any of these possible situations arising, don’t wait until the last moment - you have options that should be explained in detail to you prior to it being to late.

Posted: September 20th, 2007 under Foreclosures.