We continue to see more national articles that support our theory that the real estate prices on the Central Coast are starting to stablize, particularly in the Santa Maria and Orcutt areas.   In an article entitled “Real Estate Outlook: Worst is Over“, Kenneth R. Harney identifies some more signs of improvement in the housing market and some reasons for the signs. 

The Wall Street Journal printed an article today that backs our May 1st blog.  James R. Hagarty writes in “Home Sales Rise in Hard-Hit Areas
In it, he mentions, as we did, that lenders are pricing foreclosed homes more aggressively and that sales are up in those areas that are hardest hit.  This is the situation for Santa Maria and Orcutt real estate.

Posted: May 28th, 2008 under Real Estate Sales Activity.

First American Title Company in Santa Maria reports each month on residential real estate sales activity and compares it to previous years.  Here is a summary of the number of sales of single family homes, condos,and Planned Unit Developments (PUDs.)  The report confirms that sales activity is really picking up.  In fact, the number of sales increased 60% from last year.  Another sign that the market is improving?

Total Sales in the Santa Maria Area for:
April 2008 – 117
April 2007 – 73
April 2006 – 97
April 2005 – 130
April 2004 – 112

Posted: May 23rd, 2008 under Real Estate Sales Activity.

 An article in the Wall Street Journal on May 6, 2008 by Cyril Moulle-Berteaux gives an opinion about the real estate market that supports our blog on May 1st Are Real Estate Prices Starting to Hit Bottom?

Berteaux raises some different and interesting points as to why he believes the market is starting to bottom-out.  Take a look at his article and see what you think: The Housing Crisis Is Over

Posted: May 21st, 2008 under Real Estate Sales Activity.

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.

One of my favorite places on the Central Coast to produce shop is the Avila Barn at the entrance to Avila Beach.  They have a fabulous selection of fresh vegetables and fruits and a wonderful bakery.  This year they added an ice cream parlor and candy store.  I picked up an olallieberry pie for our Mother’s Day brunch, and it was a big hit.  It’s worth a visit if you haven’t already been there.

Posted: May 13th, 2008 under Real Estate Sales Activity.

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.

There was an article in last weekend’s Wall Street Journal (April 26-27, 2008) that caught my attention.  It talked about how difficult it is for first-time home buyers to qualify for loans, citing higher credit score requirements and additional costs such as private-mortgage insurance for those who don’t have large down payments.  The article had the usual “doom and gloom” tone to it that so many real estate-related articles have these days.

But as I read it, I remembered that similar requirements were in place when I bought my first home many years ago – dare I say how many?  (Hint: It was in the 1970s.) Precautionary measures and stricter requirments were the norm, and with good reason.  The mortgage mess that the country is in right now is a result of many ignoring the sound reasoning behind those guidelines.

That said, I don’t believe that homeowership is becoming a “nightmare” for “many first-time home buyers,” as the WSJ writer states.  First of all, there are more loans options available to first-time than the article depicts.  Secondly, I meet first-time buyers who have proven that they are responsible borrowers with excellent credit scores.  They are prepared to prove that they can handle the debt and believe that the sacrifices they will be making today will pay off down the road.   When it comes to home ownership, I think that we’ve just come back to the basics, and there is no confusion as to why.

If you are a first time home buyer, you may find our article, “Can I Afford to Buy a Home?” helpful.  You can check it out: http://homescentralcoast.com/first-time-home-buyer.html.

Posted: April 27th, 2008 under Real Estate Sales Activity.