April 5, 2012

The Race Is On In California

The Milpitas Post reports from California. “Demand in the housing market is growing rapidly in Santa Clara County, according to the Santa Clara County Association of Realtors. ‘This is not a market for the faint of heart,’ said Barbara Lymberis, president of the county Association of Realtors. ‘You either do or do not do there’s no try. Buyers, if you really want a particular home, your attitude must be to win the deal. Sellers, if you really want to sell, price under market, even at 99 percent of market value, and let the buoyancy of the market lift the offers up. Whatever you do, get moving now… The race is on!’”

From CNBC. “A stronger jobs market and higher incomes for technology workers has brought back bidding wars in San Francisco and Silicon Valley. Properties listed at $1.5 million are getting bids $200,000 to $300,000 higher. Don Faught, president-elect of the California Association of Realtors, says selling prices in the tightest Bay-Area markets bear no relation to appraised value. Instead, buyers are waiving appraisals while sellers are looking for the best terms to close a sale rather than trying to max out their selling price.”

“‘First-time home buyers are still looking for steals and not looking for a deal,’ says Faught. ‘The marketplace is not in the same condition as three years ago; people are still writing under the asking price but should be writing offers at asking price.’”

USA Today. “China’s great wall of cash is pouring into the struggling U.S. property market. Buyers from mainland China and Hong Kong are snapping up luxury homes, often paying cash, in major U.S. cities such as New York, Los Angeles and San Francisco. In the U.S., the Chinese are now the second-largest foreign buyers of homes, behind Canadians, accounting for $7.4 billion of sales in the 12 months ended March 2011, up 24% from the previous 12 months, according to the National Association of Realtors.”

“Lily-Sui Zhang, 30, says her husband’s Beijing family bought a house in South Pasadena, Calif., last year so her three young children would have access to good public schools. The family thought investing in the U.S. was ‘probably more stable than in Beijing’ due to concern about a Chinese real estate bubble, Zhang says.”

“One of her recent mainland Chinese buyers paid $5 million for a 5,000-square-foot home in Pasadena that the family expects to occupy for one month a year, says Linda Chang of Coldwell Banker. ‘They treat it like a hotel without room service,’ says Chang, who estimates that a quarter of shoppers in the $3 million-plus market in her area are from mainland China.”

“In the San Francisco Bay Area, Realtor Stanley Lo of Green Banker real estate says mainland Chinese — a third of his clientele — are looking for homes priced at $800,000 and up. One recent rainy afternoon, Lo showed a six-bedroom $4.5 million Hillsborough home to Lee Xiao Jun, from Hubei Province in China. Her husband works in manufacturing and makes frequent trips between the U.S. and China, so they want a home in a good location close to the San Francisco airport.”

“‘The prices here are more reasonable than in China,’ she says.”

The Reporter. “The Solano County area’s foreclosure rate dropped again in January compared to a year ago, taking its average below the nation’s for the first time in at least three years, according to CoreLogic. Prudential California Realty’s Linda Cook said that while the latest figures look good, several elements are at work complicating matters. ‘I think what’s really holding people together, is a sense of false hope,’ Cook said. ‘People are maxing out their credit cards trying to hold onto their homes thinking some new program or loan modification will save them. But there are some situations out there, where the people will never recover and should just inflate the boat and float away.’”

“Cook said she’s seeing multiple offers on homes especially in Vallejo, but mostly from foreign investor groups who are squeezing individual home buyers out and driving prices up. ‘It’s a mess,’ she said. “We have 27 days of inventory, where in a healthy market, it would be several months.’”

The Signal. “Santa Clarita residents who want to purchase their first homes but need some help are encouraged to apply for the FirstHome program, which offers a low-interest and deferred-payment second mortgage to low- and moderate-income families. The FirstHome loan program allows residents to use the funds from the loan as a down payment within the city of Santa Clarita’s boundaries, according to city officials.”

“‘The costs of living in Santa Clarita are so high that our loans are a little higher than other cities because that’s what it takes to get people into homes,’ said Erin Lay, housing program administrator for the city of Santa Clarita.”

The Press Enterprise. “A new version of a federal refinancing program designed to ease the financial pain of upside down homeowners has been embraced to various degrees by lenders, posing obstacles for prospective borrowers. An expanded Home Affordable Refinancing Program called HARP 2.0, that the federal government announced in October was supposed to make it possible for homeowners with mortgages owned by Fannie Mae and Freddie Mac to refinance at today’s rock-bottom interest rates no matter how much more they owe on their homes than those homes are worth.”

“However, prospective borrowers are discovering that some loan brokers are not as yet offering the program and some lenders are adopting guidelines that are more restrictive than Fannie Mae and Freddie Mac require to buy and guarantee the mortgages.”

“Some lenders said they are adopting loan to value limits and setting their own minimum FICO scores for applicants because they fear that if the loans default in the future and mistakes are found in the loan underwriting, Fannie Mae and Freddie Mac will require them to buy the loans back at a substantial loss. ‘The consumer is scrambling because a lot of lenders are saying they are not doing HARP 2.0 the way it was announced by the president,’ said Jeff Lazerson, president of Mortgage Grader, an online brokerage based in Laguna Niguel.”

“Diane Piela, a 56-year-old former family physician who is disabled, said she and a friend who is a professor at Mount San Jacinto College owe 38 percent more on the house they own in Menifee than its market value. When Piela heard on the news that the HARP program had expanded, she went to a broker in Temecula who helped her and her friend apply for a CMG loan. ‘We just made an application and submitted all our financial information and we are waiting,’ she said. They plan to use their anticipated $300 a month savings to pay other bills and build their savings. That prospect, she said, ‘makes us feel much better about the future.’”

The Record Searchlight. “The north state’s economy is showing a pulse: Homes sales are up (though houses are selling for about 50 cents on the dollar); two manufacturers in town are looking to grow; the Turtle Bay auction had another good year; and claims for jobless benefits, both locally and nationwide, are down. Even area home building is buzzing again, thanks in large part to the city of Redding’s decision to temporarily slash development fees.”

“But news last week that Mercy Medical Center parent Dignity Health and the Coca-Cola Bottling Co. plant are cutting jobs in Redding are reminders that things are still tough. Then there’s the story of Machelle Sanders. Readers met Sanders last week in a story I did about the state’s mortgage relief program for unemployed workers. The 39-year-old Anderson resident has been jobless since June. She holds bachelor’s and associate degrees.”

“Sanders told me she has worked since she was a teenager and never had trouble finding work. But this recession is testing her. She applies for jobs and finds dozens vying for the same position. You hear this a lot. ‘The job market is very discouraging and depressing,’ Sanders said in last week’s story. ‘I keep getting letters, ‘Thank you for applying.’”

“Remember Famous Dave’s BBQ? The restaurant drew 1,200 job-seekers to a hiring fair it staged at the Red Lion Inn on Hilltop Drive in February. Joe Wong’s View 202 restaurant had some 700 apply for work.”

The Bay Citizen. “On Monday, April 2, 2012, Occupy Bernal and ACCE (Alliance of Californians For Community Empowerment) and two San Francisco City Board of Supervisors, David Campos and John Avalos announced their intention to vote on a foreclosure moratorium at a 2:00 p.m. meeting of the Land Use Committee. At a 1:30 p.m. Press Conference on City Hall steps, several homeowners, whose houses were at risk or had been foreclosed upon, spoke passionately about the pain and suffering big banks, specifically Wells Fargo Bank, brought to their own and their neighbors’ lives.”

“Ross Rhodes, foreclosure fighter from Bayview Hunters Point boomed passionately, ‘These predators loans … were singled out for us minorities. You came into our communities and bull-jived us about the … predator loans you put out. They knew the properties were going to fail. We want the American Dream like anybody else. We bailed them out when they were in trouble. Now it’s time for them to bail us out!’”

“Inside City Hall during the Land Use Committee hearing, Kathryn Galves spoke about the powerful health impacts on her of Wells Fargo evicting her, her sister, and their dog from her valuable Noe Valley Victorian home of 40 years the prior week. ‘Please! Please! Please! Stop these foreclosures!’ Kathy insisted she didn’t want others to ‘throw away their memories, their emotions, their treasures.’”

Bits Bucket for April 5, 2012

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