Sellers Are Frustrated In California
The Union Tribune reports from California. “Almost two-thirds of property owners who sold homes in San Diego County this summer lost money on the deal, according to an analysis by MDA DataQuick. Those who lost money were down an average of $161,000, or 35.5 percent less than the home had sold for previously. Not surprisingly, many of the properties that sold at a loss had gone through foreclosure. In some ZIP codes, foreclosures represented nearly 90 percent of all sales. Many of the other sales were short sales.”
“Many real estate agents are cautioning their clients to keep properties off the market for the time being. ‘I’m trying to counsel that if someone is not absolutely having to sell now, please hold on,’ said Barbara Brown, president of the Pacific Southwest Association of Realtors, which focuses on the South Bay market. Asked for the prospects for the next six to 12 months, she said, ‘It probably will get a little worse before it gets better.’”
“Cynthia Henry was one of those who had to sell. She bought a 1,288-square-foot house in Rancho Bernardo for $523,000, with no money down, in mid-2006. But within a year, she lost her $188,000-a-year job selling houses for a new-home builder and her marriage broke up. She feared for her future and that of the 19-year-old granddaughter she is raising.”
“‘So many Americans, not only me, are one step away from being homeless,’ Henry said. ‘That was a terrible feeling for me - that I could be homeless.’”
The North County Times. “Lenders continue to make mortgages that require little or no down payments in areas where housing prices have fallen as much as 3 percent each month. In some cases, loans issued as recently as June already exceed the market value of the home.”
“Over the last year, 30 percent of all new mortgages in Riverside and San Bernardino counties, or about 16,000 loans, carried a down payment of 10 percent or less, according to data from First American CoreLogic and DataQuick Information Systems. During that time, the median price in Riverside County has fallen 35 percent, according to DataQuick.”
“‘Banks still have to lend money to stay in business,’ said Shawn Harris, a mortgage broker based in Oceanside. ‘They’re just betting that people are not going to walk away.’”
“Further, some loans in the region were made on properties that real-estate agents said were overvalued at the time of purchase. In south Escondido, prices at one condominium complex increased by 31 percent while the median price in the area tumbled by 54 percent.”
“Units at Brookhaven Condominiums at the corner of 15th Avenue and Escondido Boulevard were the only condos to sell in 2008 for more than $300 per square foot. The average price in the area was $141 per square foot, according to Sandicor.”
“Not only did the condos sell at double the price of comparable units, but banks also approved loans that carried very little down payments. For one unit, Washington Mutual approved a no-money-down mortgage in December 2007 at the price. Seven months later, a notice of default was filed on the condo, according to county records.”
“In total, 12 units sold at prices that baffled real estate agents. All carried loans with down payments of 12 percent or less, according to county records. Four mortgages carried down payments of 5 percent or less.”
“‘The prices are not at market value, they’re just not,’ said Troy Sauvageau, a real estate agent in Escondido.”
The Mercury News. “After a three-month decline, the number of Santa Clara County homeowners who received pre-foreclosure notices from their lenders rose again in August. In May, June and July, fewer homeowners received ‘notices of default’ from their mortgage lenders with each passing month, according to ForeclosureRadar, raising hopes that the county’s foreclosure problems were tapering off.”
“But in August, 1,200 homeowners got such notices, up 5 percent from July. The number has doubled since August 2007.”
“The number of actual foreclosures rose 32 percent in Santa Clara County in August compared with July, with 853 properties foreclosed upon. That number was about 4 1/2 times the August 2007 level.”
“Santa Clara was one of few California counties to see an increase in foreclosures last month. Santa Cruz and San Francisco were two of the others, with increases of 91 percent and 26 percent, respectively.”
“And while foreclosures rose in Santa Clara County, they fell 9 percent statewide from July to August. But Sean O’Toole, founder of ForeclosureRadar, thinks that fact may need further investigation before anyone breaks out the champagne. The number of properties scheduled for foreclosure auction sales has been increasing every month since February, he said, so the number of foreclosures should still be increasing, too.”
“‘It doesn’t follow’ that foreclosures truly fell in August, he said. Clearly, lenders are postponing more foreclosures, but it’s unclear whether that is because they are modifying borrowers’ loans to keep them in their homes, or because of borrowers’ bankruptcy filings, or some other reason.”
The Press Enterprise. “A year’s worth of foreclosures and a declining job base have taken a toll on Inland Southern California’s standing in the eyes of the nation’s economic experts.”
“The metropolitan area composed of Riverside and San Bernardino counties ranked third in the Milken Institute’s 2007 study of cities considered the best at creating and sustaining jobs. This year, the metropolitan area has seen a precipitous drop, all the way to 53rd place on the group’s annual survey.”
“The Inland area’s drop came as no surprise to regional economist John Husing, who said the housing situation has caused a “regional recession.’ Unemployment rose 8.9 percent in July from 6.5 percent a year ago, according to state figures.”
“‘Obviously, others see that the unwinding housing market caused the economy to falter,’ Husing said.”
The Ventura County Star. “Deborah Williams has learned to live with uncertainty. Like many people faced with being downsized, she has had to job-hop more than she’d like. She moved to her hometown Oxnard about two years ago because she was unable to find another finance job in Colorado Springs.”
“The anxiety used to grate on Williams, but now it’s like an old companion. ‘I’ve become comfortable with the uncertainty,’ she said. ‘I’ve been in uncertain mode for a number of years. Nothing anymore is permanent.’”
“Williams has become a little more comfortable since she moved in with family. Though housing prices are falling, Williams said homeownership is out of her reach. ‘I don’t think I’ll ever have a mortgage in California,’ Williams said.”
The Sacramento Bee. “C.C. Myers’ liabilities total $309 million, according to bankruptcy documents filed this week. The celebrated Sacramento highway contractor’s assets, including several homes and the ownership stake in his namesake construction firm, come to $44.9 million, according to documents filed in U.S. Bankruptcy Court in Sacramento.”
“One debt in particular forced Myers into Chapter 7 bankruptcy last month: the $65 million borrowed from Wachovia Bank to develop the upscale Winchester Country Club golf and residential project northeast of Auburn. He still owes $40 million on that loan after Wachovia foreclosed on Winchester in May.”
“He is one of the most prominent casualties of the housing market crash. His assets include his primary residence in Arden Oaks, valued at $5 million; a second home at Lake Tahoe, worth $4.5 million; and a home he’s building at Winchester, valued at $1.8 million. His 45 percent stake in C.C. Myers Inc. is valued at $13.5 million.”
The Fresno Bee. “Traditional home sellers in the central San Joaquin Valley face stiff competition. ‘Sellers are frustrated,’ said Greg Kosareff of Realty World Strachan Gamber in Fresno. ‘They are not getting the traffic. There are so many [foreclosures], and they don’t want to compete with their pricing.’”
“The statistics are daunting — almost 50% of all sales in the metro region are bank-owned properties, according to the Fresno Association of Realtors.”
“Terance Frazier, a local foreclosure expert who works with investors, suggested that people hold off selling their houses. He said he believes bank-owned properties will be nearly 70% of the market in a year.”
“‘The average homeowner would be foolish to try and compete for a sale in this type of market unless there is absolutely no choice,’ he said.”
“In many cases, the foreclosures carry discounted prices because lenders are eager to sell them. And people are eager to buy them. Kosareff recently negotiated a deal where a two-year-old house with an original purchase price of $536,000 was sold out of foreclosure for $259,900.”
“The house in northwest Fresno had granite counter tops, upgraded appliances and received 13 offers. Kosareff’s clients got it because they put 20% down and didn’t ask the lender for any concessions.”
The Bakersfield Californian. “Firms that did work for SunCal’s McAllister Ranch managed to postpone the property’s auction Friday, asking the courts to find a way to get them payment for their services. Records show that creditors filed several involuntary petitions for Chapter 11 bankruptcy against various SunCal Cos. entities Wednesday and Thursday in U.S. Bankruptcy Court in Santa Ana. The creditors seek about $2.6 million. The auction was postponed to Oct. 14.”
“Had lender Lehman Brothers filed for foreclosure, however, creditors could have lost money they were owed, said Bakersfield attorney Steven Gibbs, who represents Masonry Plus.”
“‘My client, I believe, was in a better position by participating in this, to be one of the petitioners on this, rather than sitting by and allowing Lehman Brothers to foreclose and look for their white knight and have all of these claims potentially wiped out by the foreclosure sale,’ he said.”
“The planned 6,000-home development sits on three square miles at the city’s far southwestern tip, about 15 miles from downtown Bakersfield. The tract currently has curbs, gutters, walls and some landscaping, but no homes have been started.”
“The Greg Norman-designed golf course intended as its crown jewel has fallen into disrepair. A herd of sheep currently lives near the 18th tee.”
“Before the auction was set to begin Friday, spectators joked they would pitch in $20 apiece to buy McAllister Ranch. When the auctioneer said the sale was postponed because of bankruptcy, several men simultaneously said, ‘Bankruptcy?’”
“Attorney Darren Burge, who represents Pacific Soils, said the hope is the land is valuable enough ‘to compensate the people that are owed money for the work that they did on the property.’”
