March 5, 2013

The Opportunity And The Sacrifice In California

The Orange County Register reports from California. “Yes, we now hear pundits claiming the recent advances in home prices should be viewed with steep skepticism, as in the minds of these purported experts these price increases may already be overdone. I’m all for a healthy debate. But some of these comments feel more like sour grapes from a bunch of market observers who not too long ago thought prices had further to fall. I’m not saying that future gains are by any means guaranteed or that the local housing market isn’t vulnerable to shocks, especially large economic ones. But in the broadest sense, Orange County’s housing market is still in the early recovery stage. Bubble? Hardly!”

CBS Los Angeles. “A dozen pre-qualified buyers have pitched tents in front of the still under-construction Brightwater Capri development in Huntington Beach. Before the first sale on March 2, the home builder believes there will be as many as 30 buyers camped out for a chance to buy a home between $800,000 and $900,000. ‘So if you want the opportunity, you gotta make the sacrifice,’ camper Terry Torline said. ‘Based on what’s out there in the marketplace, it’s a real good deal right now.’”

The San Gabriel Valley News. “The Century 21 Marty Rodriguez team in Glendora managed to rise above those challenges last year to rank No. 1 in Century 21’s nationwide network. The office’s total volume of more than $3.9 million in commissions was more than double the production of the second-ranked Century 21 team. The Marty Rodriguez team sold a total of 409 housing units in 2012. Rodriguez said about 40 percent of the transactions her office handles these days involve Chinese investors who put 30 percent or more down on the homes.”

“‘They think it’s a better investment,’ she said.”

The Santa Clara Valley Signal. “The hunger for listings is so intense that I listed a property at 8 p.m. a week ago Monday only to have 12 offers on it by 2:30 p.m. the next day. None of the offers came from prospective buyers who had even seen the property; all 12 were all-cash offers; and, all of the offers were at list price, with the exception of one offer, which was significantly higher than list.”

From KFSN. “Merced County has often had one of the highest foreclosure rates in the state, and even the country over the past few years. But now the numbers have dropped dramatically. ‘The days of going home to go and sleep on it are over. If you see something you like you better make an aggressive offer,’ Realtor Andy Krotik said.”

The Victorville Daily Press. “The Victor Valley housing market has shown a steady recovery in the past year as home prices rose 23.5 percent. The recent price hike is largely due to a lack of homes for sale in the market and a growing demand from buyers. The January inventory was about a half of what it was in 2012. Quality homes under $200,000 get multiple offers in a matter of a few days, local real estate agents say. But regular homebuyers who have to take out loans are having difficulty competing against cash investors.”

“Investors are buying Victor Valley homes and planning to sit on them for seven to 10 years before they start selling at increased prices, said Ben Lamson, who manages local properties for a few out-of-the-area investors. For now, these investors are renting out the houses.”

US News & World Report. “Could California’s battered housing market finally be pulling out of its long and painful decline? As with all news that seems ‘almost too good to be true,’ it probably is. That’s because the major drop in foreclosures is tied to recent state legislation passed—dubbed the Homeowner Bill of Rights—that went into effect January 1. More recently, foreclosure prevention laws in Washington and Nevada have followed a similar boomerang pattern—albeit a pattern that took longer to develop.”

“A July 2011 law in Washington state triggered a 12-month foreclosure slowdown, but the state’s foreclosure starts have now increased on an annual basis over the last seven months, hitting a 26-month high in September 2012. Meanwhile, Nevada foreclosure starts rebounded to a 16-month high in January after a 14-month foreclosure hiatus following a new law that took effect in October 2011. Maybe the pattern will be different with the California Homeowner Bill of Rights. But don’t count on it.”

The Desert Sun. “Foreclosures plunged across the Coachella Valley, Inland Empire and California in January, and the new California Homeowners Bill of Rights is being given credit for a big part of the drop-off. Real estate professionals and analysts said another reason for the drop in foreclosures is that homeowners have an ever-expanding array of programs available to help avoid default.”

“Pat Veling, CEO of Brea-based real estate analysis firm Real Data Strategies, said much of the inventory of lower priced homes is now gone, and some banks are holding on to properties. ‘The banks are clearly manipulating to add value to the assets they are holding,’ Veling said.”

The Monterey County Herald. “A Florida couple have filed a lawsuit alleging two local real estate professionals conspired to enlist them in a fraudulent home loan to secure a house in Pacific Grove. Seemingly backed up with tape-recorded evidence, the couple claim loan officer Robert Walker and Realtor Deba Christensen tried to persuade them to fabricate a lease agreement and rental income on their Florida residence to qualify for a loan. When they balked, commercial pilot David Hurstfield-Meyer said, he lost more than $13,000 he had placed in deposit.”

“According to the suit, Christensen and Walker conference-called Hurstfield-Meyer’s girlfriend, Tracey Michel in mid-December and told her underwriters might require that the couple lease their Florida home to show additional income. Both allegedly told Michel the lease did not need to be authentic. ‘All (they) had to do was to get a friend to draw up a lease agreement with them and get the friend to deposit a check into their account until the loan was approved … then tear it up,’ the suit states.”

“When Hurstfield-Meyer objected that the plan would be illegal, the suit alleges that Christensen told him: ‘Money is tight in today’s market and people are looking for ways to get loans approved. It’s not like trail blazing, everyone does it.’”

“Sandy Haney, CEO of the Monterey County Realtor’s Association, and former state Real Estate Commissioner Jeff Davi said loan fraud remains a problem, in part due to strict lending practices put in place after the housing market crash. ‘Fraud is still a big thing on the Department of Real Estate’s radar because the market is so tight, people are desperate,’ Haney said. Said Davi: ‘After what we’ve been through in the last six years … I’m surprised that there are still people out there who think it’s still OK to lie to a lender, (but) it happens a lot.’”

The Mercury News. “Don Faught, a 25-year veteran of the real estate business, is this year’s California Association of Realtors president. In an interview, Faught talked about the housing crash and nascent recovery and his plans as the association’s president this year. Q: What do you hope to accomplish during your year in office?”

“A: We’re working on professionalism and ethics. This distressed property market seems to have brought out some bad actors. We have a task force working on changing the licensing laws.”

“Q: Any advice for homebuyer? A: I would tell the buying public, be cautious. Buyers who are waiving inspections and doing anything they can to get into properties may wake up with a huge hangover the next day.”

Bits Bucket for March 5, 2013

Post off-topic ideas, links, and Craigslist finds here.