Sacramento Real Estate Views

Short Sales Streamline The Distressed Sales Process

Selling Short Has Become Accepted

An article published by RealtyTrac.com cited a 19% increase in the amount of short sales being completed between the first and second quarter of 2011.  In fact, the gap between the amount of short sales to bank owned foreclosure sales is closing rapidly.

Nationwide, there have been 102,407 short sales to 162,680 bank owned foreclosure sales completed from April to June of this year, the closest this gap has been since the housing downturn began.

Selling short is not only being widely accepted among, well, your neighbors, friends and family but also with lending institutions and the government as well.

If you’ve followed my site at all, you know that I’m a firm believer in the short sale process being the best way for everyone to avoid the messy foreclosure process regardless of your situation.

If you’ve got to move for any reason or just not being able to afford paying your lender an additional $300K over the life of your underwater mortgage, a short sale is the best option.

The term “hardship” that is tossed around now has very liberal meanings attached to it whereas before the definitions were very narrow.

Time To Complete A Short Sale…..Shortens!

In addition to short sales being more widely accepted and actually getting done, the time to get them done has decreased 4.3%.  So not only can you get through the process virtually unscathed, your lender is ready for it with a more streamlined process and you can get out and on with your life more quickly.

This is in the best interest of anyone selling short.  It just needs to get done and you need to move on if not for your family for your health. Housing st

Big Discounts

In addition to everyone in the process being easier to work with as compared to past years and the time frames shortening, the discounts got larger in the second quarter.

Currently, nationwide, a short sale sells for 21% less and a bank owned home sells for 40% less than a non distressed property.

In Rocklin, a short sale sells for 14.53% less than non distressed property sale and a bank owned REO sells for 20.76% less than a non distressed sale.

In Sacramento, these percentages are closer to the national average.  Short sales sell for 18.31% less and a bank owned foreclosure sells for 36.69% less than a non distressed sale.

Now if I’m a bank seeing these numbers, I would be doing the investors that I work for a favor by allowing mortgage holders to sell short and keeping up to 18% of the selling price preserved rather than allowing the mortgage to go into foreclosure.

I’d pay people 5% of the 18% I’m saving to do it.  Guess what??  The larger banks are paying people to sell short versus going through foreclosure.  It makes too much sense and based on the above information, they’re finally getting it.

Do you have questions about your underwater mortgage or potentially selling your home short?  If so, please feel free to phone, text, email or simply fill out the form below and I’ll get right back to you.

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Tags: Roseville, sacramento, short sales rocklin

Pending Sales Skyrocket in January!

Placer, El Dorado and Sacramento Counties

Since October of 2010, the total amount of homes for sale has come down precipitously.  In the 3 county area of Placer, Sacramento and El Dorado, the inventory of homes for sale increased month after month until the tide of homes coming on the market slowed partially due to the “robo-signing” debacle by the banks.

Now, pending sale numbers have gone up in Placer, Sacramento and El Dorado counties more than 50%, the largest total gain in month over month pending sales that I’ve seen in my 9 years in the industry.

Here are the graphs from Metrolist, Inc.’s TrendVision:

Placer County

Pending sales in Placer county are up over 82% from December to January and up over 66% since August.

Sacramento County

Pending sales in Sacramento county are up over 50% from December to January and up 45% since August.

El Dorado County

Pending sales in El Dorado county are up over 52% from December to January and up over 30% since August.

These increases are striking.  Sales have stayed pretty consistent, as the graph shows, then the spike.  What’s causing this?

Factors

Interest rates are going up.  The “economic recovery” is happening and that is driving mortgage rates up.  What it cost in November to own a home is up in January.  From my previous article today, if you got a $200K mortgage in November your payment would be about $1000 a month.  Now with interest rates going up, that same mortgage today will cost you $1100 per month.   That is one factor.

Another reason could be that the economists have been calling for a bottom to the housing market by the end of this year with a more robust economic / housing recovery happening in 2012.  If this the case, this year would be the time to get the best price on a home.  Buyers could be responding to that as well.

If you’re looking for a home, it seems like this year will be the best time to buy at the lowest price. (actually, that could have been the last quarter of 2010 depending on what interest rates do)

I’ve been saying for months that this housing recovery will be slow going and I still believe that.  The employment picture hasn’t gotten much better in our region, if it has at all, and that is going to continue to stall the housing market as well as the overall economic recovery in our region.

Looking for an agent to help you purchase a home?  Sacramento and Placer counties are my specialty.  Please fill out the form below and I’ll be in touch promptly, guaranteed.

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Tags: el dorado, homes for sale rocklin, Roseville, sacramento

Your Mortgage Payment Just Went Up $100

Interest Rates On The Rise

If you’ve been sitting on the fence waiting for something to shift, for something to pop, for anything to rear it’s head to let you know the market is going in ANY given direction, maybe your sign is here.

Mortgage interest rates are on the rise.  The average mortgage interest rate in November was somewhere around 4.42% making a $200,000 mortgage cost about $1000 but now, at 5.23%, that same mortgage has gone up to about $1100.  That’s the reward for holding your breath!! LOL

That said, the average sales price has gone down in the last quarter of last year to soften the blow but over time, waiting to buy could have cost quite a bit more than the difference between the two.

In addition to that….

Pending Sales Numbers Skyrocket

I was just looking at the pending sale numbers for both Placer and Sacramento Counties.  The pending sale numbers for January increased almost 51% in Sacramento county and in Placer county they increased almost 83%.

Seems like buyers have come to the party.  With activity like this the inventory numbers are sure to come down, something we’ve already been seeing in both areas since October of 2010.

While there is typically a jump in the pending sale numbers from December to January, this is unprecedented in recent history.

Based on the pending sale numbers, there is only 2.2 months of inventory left in Placer county and 2.4 months left in Sacramento County.  That is pretty amazing considering the slowdown in sales that occurred from June to December of 2010.

Looking for a home to buy??  Now might be a good time to get it done.  If you need assistance, please feel free to fill out the form below and we’ll get back to you promptly.

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Tags: homes for sale rocklin, Roseville, sacramento

Possible Double Dip In Region Home Prices?

Case Schiller Thinks So…Before Spring!

Could it be the case that home prices will dip yet again to new post peak lows?

As hard as it is to believe, it could be true.

In an article from DSNews.com, it looks like if the trend in home price weakness continues, we could see new lows for home prices in the Rocklin and Roseville real estate markets and throughout the rest of the region as well.

I haven’t completed the 2010 sales summaries for all zip codes in the South Placer County area yet but so far, each zip code I have done lost value in 2010.  Albeit not much but a loss is a loss.

A double dip in values would be icing on the housing bust cake.  What a bust it’s been.

According to Case-Schiller, all but two of the cities surveyed, San Diego and Washington DC, suffered housing value declines in 2010.  A double dip would result in even more homes being underwater in our region than there are now, further damaging our local economy.

Economy Stabilizing?

Based on the information from economists nationwide, we’re supposed to be coming into a period of economic stabilization toward the end of this year.  Housing prices are supposed to begin bottoming out or at least flattening.

With a double dip in housing prices is this really possible?  Doesn’t seem so.  In an article today on HousingWire.com, Fiserv is calling for housing value stabilization in late 2012!  Wow…let’s just keep putting the date further out there and see how it goes! 

According to Fiserv Chief Economist David Stiff. “Foreclosure activity declined at the end of 2010, but sales activity of bank-owned homes increased. In bubble and crash markets, the uncertain timing and volume of bank liquidated properties will cause home prices to bounce around their lows for many years.”

So our prices will go down more this year and stabilize at their lows for “many years”.  Wow!  There is a silver lining here though..read on.

The Good News?

There is good news here.  If prices are going to go down more than they have, if we see a double dip in housing values, anyone walking way from their home or selling short will be able to purchase again in a few years at prices lower than what they are right now!

Like any news, we have to get many sources and take everything with a grain of salt.  However, this isn’t new and to see it actually happening is more than we saw when the housing downturn began.

If you’re thinking of selling your home short or walking away, I would always advise selling short if you can, now is the time to do it.  In a few years, based on this information, you could purchase again at below or at least close to the prices for real estate today.

Need more information on selling your home short?  Please fill out the form below and we’ll get back to you promptly.  We’re short sale experts and can help you get out from underneath your underwater mortgage as quickly as possible.

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Tags: Lincoln, Roseville, sacramento, short sale rocklin

Your Lender Doesn’t Want to Modify Your Loan

92% of Loan Modification Attempts Fail

As much sense as modifying your mortgage makes to, well, everyone..your lender doesn’t really want to do it.  The answer to why this is the case remains a mystery.

There are so many variables involved and behind the scenes dealing that goes on, no one can really tell for sure what’s going on.

The bare bones facts are that 92% of all loan modifications will fail.  92%!

While your lender will lead you to believe that they are diligently working on an approval, it’s more often the case that they are just telling you that so that you stay in the house longer.  This, they have found, insures the condition of the asset.

A lived in home is not open to vandalism and is in better condition as a result making it more marketable when auctioned off.

What If Your Loan Modification Is Approved?

Chances are that if your loan modification is approved, you won’t be saving that much AND your home is still massively underwater making your overall financial condition poor.

We have so much emotional attachment to our homes.  We have been trained, or brainwashed, that we want to keep our homes no matter the cost even to our financial detriment.

Keeping a home that is in negative equity is financially detrimental.

No one wants to lose their home, no one.  If you’re in trouble, your lender doesn’t want you to keep it unless you’re able to meet the terms of your mortgage with them.

With interest rates as low as they have been for so long, even with a loan modification, how much lower can your interest rate be reduced?  Not much and if it is reduced, it will be for a limited amount of time.  In 3 or 5 years, you’ll be faced with the same situation – an underwater mortgage and a home with negative equity.

So What’s The Solution??

Making the decision to walk away from your home is a tough one.  My family and I did that last year.  I still have trouble, in fact I haven’t done it, going back down the street we used to live on.  It’s only 2 minutes from where I live now.  I knew at the time it was a decision that was best for my family and our financial future.

That said, it wasn’t an easy decision to make but I don’t regret it.  We tried to sell it short but they denied that at the last minute and sold it at auction putting us in the precarious position of needing to find a place to live quickly.   We were out in 5 days.

I would make the same decision again if I had to.

Everyone has to make the decision that’s best for them.  There are many, many things to take into consideration before making the decision to sell short or walk away.  It’s clear now that a loan modification just isn’t going to work unless you hire a third party to get it done and even that’s no guarantee.  Hiring a 3rd party is expensive and if it doesn’t go through, you’ll be out money that could have been used in a more worthy pursuit.

I spoke with a woman last month who had all but exhausted her entire savings to save her home…and still lost it.  It just doesn’t make sense to do that anymore.  If she had sold her home short, the result, while still not good, would have been better than foreclosure.

Weigh your options carefully and I can tell you that almost any situation where you no longer have an asset that is in a negative equity position is better than the reverse.

If I can be of any help to you, please feel free to fill out the form below and we’ll get right back to you.

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Tags: Lincoln, loan modification rocklin, Roseville, sacramento

No Further Extensions or Postponements

Wells Fargo Action Sets Precedent

In a move that was expected after Fannie Mae, the largest mortgage investor in the country, announced in March that they would no longer be extending short sale close dates or postpone foreclosure trustee’s sales, it appears that Wells Fargo is now on board with the same policy.

Wells Fargo will no longer extend short sales or postpone foreclosure trustee’s sales for now.  I say for now as this could change as many things in this miserable housing market have.

The reason, they are citing, is because investors have asked them not to extend the time frames.

This makes complete sense given that people are staying in their homes and not paying mortgages in excess of a year when deciding that they need to give up their homes, work through the loan modification process or the other myriad of reasons that delay a process that should take about 6 months and 20 days in the state of California.

It appears that investors are done with facilitating loan modifications and are not willing to participate in the government programs that were designed to keep people in their homes.  These programs have largely failed anyway so what’s the point?

And This Means….?

What this means to virtually anyone regardless of whether or not you have a loan or are being serviced by Wells Fargo is that the days of staying in a home and not making payments for an extended period of time are over for now.

If you have a hardship situation or are strategically walking away from an underwater mortgage you have to set everything up in advance to make sure you’re not going to be foreclosed upon.

Before you miss a payment, I would advise you meet with your financial professionals to ascertain your best course of action.

Selling short is more often than not the best option to foreclosure as the credit ramifications are not as penal. Get started in advance so that you don’t run the risk of foreclosure.

If Wells Fargo, one of the largest and most organized mortgage servicers in the country is adopting this policy, it will not be long before the investors who utilize the services of other big banks follow suit.

This will speed up the foreclosure process and could potentially increase the number of bank owned homes for sale so it appears on the surface.

I’m holding a Homeowners Workshop that will address all of these issues on October 20th in Rocklin.  Click here to register or contact me for more information.

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Tags: Lincoln, Roseville, sacramento, short sales rocklin, wells fargo

Buyers On The Sidelines…Again

Number of Single Family Homes for Sale Continues to Rise

With the threat of a double dip housing recession and no incentive for first time home buyers to purchase, the Sacramento real estate market is losing, or has lost, steam.

I know it sounds like a broken record but every month this year the number of homes for sale has gone up.

The threat of a double dip housing recession in the Sacramento region with the typical slowdown point of the “buying season” approaching is very daunting.

Depending on what the banks do, there could be more and more homes coming on the market without buyers to purchase them as investors wisely wait for the fallout yet again.

Where does our market go from here?  From the looks of it right now, not in the preferred direction.

Simple economics dictate that when supply goes up, values go down.  As you can see from the graph, supply is going up and has gone up every month this year.

Status Of Homes For Sale Remains Consistent

The status’ of the homes on the market has remained consistent since the beginning of the year, percentage wise. Looking at the fact that the notices of default keep on coming, albeit at 47% less than last year, it seems as if the foreclosures inventories should be increasing but they aren’t.

The reason for this is that many homeowners are working with their lenders to get loan modifications and some are going the short sale route.

Still, foreclosure sale after foreclosure sale is being postponed. In fact, 29% more postponements than the same time last year and 16% more postponements than last month.

I’ve heard that recovery really isn’t in the cards for our region economically until 2014.

I hope that’s wrong.  What we need right now is a huge bright spot something to get a smile on the face of the region.  A few more jobs would help.

I’m smiling anyway..regardless of what’s going on.

Looking to buy or sell in the Sacramento region?  Give us a call or simply fill out the form below and we’ll get back to you promptly.

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Tags: homes for sale rocklin, Lincoln, Roseville, sacramento