New confidence with the real estate maket?

New Legislative Action…May We Finally Restore Consumer Confidence

It was a week full of stories and reports, both from the cynics and proponents of the American Recovery and Reinvestment Act of 2009. The $780 billion package was signed into law on February 17 and truly is the largest, most unprecedented recovery act in history.The provisions of the bill were changing even up until hours before the House and Senate voted on the bill, but the final provisions were recently posted to NAR’s website. Click here to access the details and learn more about the housing elements that were included: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home?lid=ronav0019Also announced this week was Obama’s $75 billion foreclosure prevention plan. The multipronged plan calls for modifying loans for borrowers both at risk or already in default and for allowing those with little or no home equity to refinance into more affordable loans through interest-rate reductions.Click here to read the details of the prevention plan: http://www.realtor.org/RMODaily.nsf/pages/News2009021901Obama’s administration said Wednesday that this prevention plan will help up to nine million people avoid foreclosure, by providing government funds to provide incentives to borrowers, loan servicers and mortgage investors to modify loans to affordable monthly payments.I know many are wondering if this new program will help them. Official guidelines of the plan won’t be unveiled until March 4, at which time we will focus our March Reality Check on the details of the plan and how consumers may take advantage of it. In the meantime, I did find this article on CNN.com which may help in educating yourself: http://money.cnn.com/2009/02/18/real_estate/Obama_foreclosure_plan/index.htm?postversion=2009021911I realize this is a highly debatable topic right now but what is not debatable is the fact that in order to fix this housing crisis, we must stop foreclosures. Just take a look at this week’s DataQuick release which showcased a further dip in prices due to distressed home sales: http://www.dqnews.com/News/California/Bay-Area/RRBay090219.aspx. Real estate is 20% of the gross domestic product in this country. The only way to fix 1/5 of this country’s GDP is to stop falling home prices and the only way we will do this is to stop people from loosing their homes. This prevention program should help millions of people stay in their home and will hopefully get our country back on track.The fact is, when consumers feel safe in their homes, feel safe in making their payments and once again feel confident that they will continue to have a roof over their heads, they will begin to put their money back in the economy. They’ll begin to make home improvements. They’ll begin to feel more confident in their future and that consumer confidence will begin to trickle into all areas of our economy. From home improvements to car purchases to vacations—and the jobs and associated spending that these create. What we know is, when consumers feel confident, they spend.Now I realize for many that statement conjures up far too many negative emotions from the recent past—people who are living beyond their means simply because they think their house is going to appreciate. Fortunately this plan and that of the American Recovery and Reinvestment Act of 2009 provide stipulations that we hope will stop history from repeating itself. Couple that with the fact that lenders have become far more conservative in their lending practices, we should finally be on a level playing field that will safeguard against such an issue.Now, let’s take a look at this week in real estate:

East Bay—Berkeley reports that there continues to be lots of buyers out there are some are writing offers. Some are still trying to feel out the stimulus bill, to see if there are enough perks in it for them, to assuage their fears of further price reductions. Consumer confidence is a big issue. If buyer’s jobs are secure, they will write offers. If they fear layoffs, they are hesitating to write. Some are waiting for the magical 4% loans. They will probably be waiting a long time for that product—if it ever happens. Danville shares that more than half of this week’s new sales were neither REO nor short sales. It appears that more sellers are getting realistic about sales prices. The Livermore office reports it had two walk-ins over the weekend and the majority of our new pending sales are short sales. The low end market is where the action is happening. One of the new pendings was at $750,000 while the remaining six pendings were $385,000 and below. Walnut Creek reports inventory is very low. We have fewer REOs coming on the market. Sales seem to be consistent.
Monterey County—Activity seems to be improving somewhat. We are seeing more floor calls. We have a lot of offers being written and we had a high number of new escrows with 18 last week.
North Bay—Greenbrae shares that no matter what or where you price a home, buyers want a deal so we are telling our sellers to expect some bargaining and not to be surprised with low ball offers. We saw sporadic attendance over the rainy three day weekend at open houses. Some did quite well while others didn’t with no real pattern. Southern Marin shares that even on the holiday weekend, we saw some good activity. One Agent in our office represented a buyer in a multiple offer situation on a home in Fairfax in the $900,000 range. Listings in the A+ neighborhoods are getting offers immediately as evidenced by a $1.4 million in Sycamore Park. Open houses got some buyers kicking tires, even in the pouring rain. Petaluma shares that inventory in Rohnert Park is dwindling. New inventory is coming on slow. In Rohnert Park, one REO property listed for $219,000 had 25 offers. In East Petaluma, in the $325,000 to $400,000 range, multiple offers are the rule rather than the exception. We are seeing some Westside Petaluma properties in the $475,000 to $575,000 range move very quickly. Only four properties on tour this week for broker’s tour in Petaluma. Sebastopol reports it is seeing multiple offers on short sales and REOs. We saw less activity at open homes over the weekend, probably due to weather. We had two accepted offers on properties in the $600s, after they reduced it from the $700s.
Peninsula—Burlingame shares that we saw an increase in sales and offers being written this week. Hopefully this is an indication of changes in buyer thinking and confidence. Our office prevailed in a five offer multiple in San Mateo which sold over asking. The Menlo Park El Camino office shares that we had slow sales but buyers migrate to the “discounted” properties; hence 50% of our sales were multiple offers. Open houses are robust, however, most buyers are still waiting for a sign that their investment will not evaporate in the coming months. The office also notes that 70% of our inventory is still overpriced. Sellers are slow to come to the reality that no amount of marketing on any property will prop up prices above fundamentally justified levels. Palo Alto reports a relatively slow week. Activity at open houses varies from just a few folks to a couple dozen groups. Activity has been good, but mostly lower end and foreclosures in outlying areas. San Mateo shares that active listings are up13% over 2008. Pending sales are down only 2% from 2008. Solds are down about 29%. New inventory was very light today, putting emphasis on the good properties. Woodside reports that for the first time in all recorded months, there were 0 closed sales in the town of Woodside and Atherton and only one in Portola Valley per the MLS for the month of January. Sales in these towns are generally based on desire not need. The declining prices of the unsold inventory tell the tale—that and the number of cancelled or withdrawn listings. So far this month, we’ve had one sale in Atherton (28% off list price), one sale in Woodside (22% of list price) and one sale in Portola Valley (20% off list price).
San Francisco—Lakeside reports that the weekend traffic was slow because of the rain and the fact that a lot of the homes on the market have been out there awhile. By Wednesday, three Agents in the office were in contract. The Market Street office shares open house attendance was all over the map. It went from one person coming through to 30 people going through a TIC on Steiner during the height of the rain. In the last couple of days, Agent’s offers are being ratified as buyers and sellers are becoming more realistic about this market. Lombard shares that there was more activity this past week. Weather reduced open traffic. There were still lots of fence sitters, but we saw good value on a condo and a serious price reduction on an apartment building brought multiple offers. Strong down payments are becoming the norm.
Santa Cruz County—The market slowed down in February as compared with November, December and January. Open house activity continues to be fairly good and well attended depending on area and price of the home. The REO properties especially in south county seem to be slowing down in terms of number of units although the new properties continue to pull multiple offers. The under $300,000 mark, first time buyers or investors with cash are buying up the properties.
Silicon Valley—The Cupertino DeAnza office reports that we are getting some very nice listings. We hope this will translate into sales. The Los Altos First Street office notes that buyers are coming to open houses and openly commenting that they are waiting and trying to “time the market” for the upswing. At least they are generally feeling that we will have an upswing soon. Our San Jose Almaden office reports 40 groups through an REO open house that was trashed with no power and no plumbing. An offer was written by the Agent and accepted. To give you an idea, currently 70% of the Blossom Valley market is distressed sales. We are seeing 20% in Almaden and 25% in Cambrian. Almaden is the third slowest market (15% pending) behind Saratoga and Los Gatos in number of sales. The low end still appears to be the driving force right now. The San Jose Will Glen office reports that things have slowed up a bit. Again, open houses are busy and the floor calls keep coming in. Several Agents are working with buyers.
South County—Our Morgan Hill office reports that it seems that this week’s news—as it relates to real estate—has had a positive effect on potential buyers. The fact that the President has signed the stimulus bill coupled with the recent foreclosure prevention plan, has given a psychological boost to buyers, sellers and Agents. In South County, prices continue their downward spiral—but to the benefit of buyers who are seeing try bargains. Agents are reporting great attendance at open houses with buyers showing genuine interest. “Lookie Loos” and “Bottom Feeders” are out—serious potential buyers are in!
Of course time will only tell if all of this legislative action will work and we’ll only know if it does when we are able to reflect on it a year, two or even three down the road. But the fact is we’ve been in a holding pattern for far too long. And our economy, country and people have struggled and lost far too much because of it. The recent passage of these two very important housing initiatives—which include (among other things) the $8,000 first time home buyer credit and the increase in conforming loan limits—should finally put us on the road to recovery.

Until next week,
Have a great one,
Monica

It Passed... Now What?

A compromise on the Economic Stimulus Package has been reached. The new price tag: $787 billion. That’s below both the $820 billion House-passed version and the $838 billion Senate-passed version. Just like with anything in life, the final package is all about compromise. Real estate advocates from NAR and Realogy President Richard Smith lobbied well on our behalf but in the end only a portion of the requests we had of lawmakers were made part of the final Economic Stimulus Package.I am encouraged that lawmakers have now reached an agreement and we can finally move forward with some direct action.The goal of the highly controversial Economic Stimulus Package is to create or save some 3.5 million jobs while helping to rebuild our nation’s economy which has been in a recession since December 2007. Although, at the writing of this piece, the details of the legislation had not been finalized, we do anticipate a number of important housing provisions, including (as reported by NAR):
“Homebuyer Tax Credit – a $8000 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and December 1, 2009. The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well. Click here for a chart with details on the first-time home buyer tax credit: http://www.realtor.org/wps/wcm/connect/b32db1004d05f6338052c5fd73e5610f/government_affairs_tax_credit_chart_021308.pdf?MOD=AJPERES&CACHEID=b32db1004d05f6338052c5fd73e5610f
FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae. Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.

Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.”
In addition to these new elements, NAR continues to work with the Department of Treasury to implement a mortgage buy-down program. The details on that will surface over the next several weeks.To view all of the housing provisions, click here: http://www.realtor.org/government_affairs/gapublic/uae_hr1_additional_provisionsSo what’s next? President Obama is pushing to get quick approval of the emergency package so he can sign it into law before the end of this three-day holiday weekend.Once it is signed into action, Washington is eager to get the funds into the local state governments and ultimately the local economies so they begin to directly affect Main Street. Consider reading this article from CNN with more details on the package itself: http://money.cnn.com/2009/02/13/news/economy/stimulus_individuals/index.htm?postversion=2009021308

There’s no question, it will take several weeks—if not months—before we begin to see some patterns or trends and for this package to have a full impact on our economy. But I am gratified that the government recognized the importance of passing the Economic Stimulus Package. The health of the nation’s housing market is critical to the financial well being of every household in the country and that, of course, is front and center right here at home. I believe the legislation will help to stabilize the housing market, at a time when our country needs it most.With this news in tow, let’s take a look at this week in real estate:

East Bay—Berkeley reports that buyers are definitely out there looking. Our floor time and walk-in traffic have been great. Two of our Berkeley Previews properties just went pending another listing in the $800s also went pending. Castro Valley reports that well priced, well-maintained properties are being snatched up in our local market due to decreases in inventory. We had a well-priced Castro Valley home that saw multiple offers that went pending (over asking, within five days of listing). Another clean, well-priced home in the San Lorenzo/Hayward area went back on the market and had three offers within two days. Having said that, prices continue to dip. Castro Valley pricing remains super competitive, with entry level properties hovering between $350,000 and $400,000. Danville reports that the upper end is showing signs of life. Four of our last eight sales were above $800,000 and were not REOs. Open houses also continue to be well attended in this market. Tri Valley Update: Since the first week in January 2009, Livermore active listings have decreased about 6% and total pending sales are up over 8%. Pleasanton active listings have increased 23% and total pending sales are up 20%. The active listings in Dublin have remained steady and the total pending sales are up almost 10%. Walnut Creek reports good open house attendance. First time buyers and investors are out there and actually making offers on listings. The entry level priced homes are selling.
Monterey County—The activity level seems to be picking up somewhat. Agents are busy writing offers though getting a meeting of the minds between buyers and sellers is taking more counters and more time.
North Bay—Our Greenbrae office reports that a home in Fairfax listed at $1.7 million had more than 183 people through its Saturday and Sunday open houses this passed week. One REO property came on the market at 8 p.m. and had two offers by noon the next day. Increased traffic at Agent open homes this past Sunday. One Greenbrae home listed at $1 million was in contract before the Sunday open – less than two days after listing. Southern Marin notes that while sales are still soft, open houses were heavily attended on Sunday with many seemingly real buyers. A $2.5 million property in Mountain View had almost 20 parties and that was the third open house. The Agent felt there were a handful of qualified buyers. We are seeing more listing that are starting to come on and slowly but sure the market is picking up. Petaluma reports a flurry of open house activity with 30-40 groups in numerous properties. Buyers are our in full force and Agents are bringing their buyers to open houses. We are continually seeing multiple offers in most price ranges.
Peninsula—Half Moon Bay notes that Agents are more enthused this week as the phones are ringing and floor activity is on the rise. Purchase contracts are being written but are too low at this time for sellers to understand the offer is probably market value. Menlo Park Santa Cruz reports that buyers are circling but are slow to react. Sellers are listening to the advice of their Agents and are starting to price their homes competitively to get them sold. We did have a sale this week in Woodside that was over $3 million which is helping to breathe some life into the upper end. Palo Alto is noting an interesting trend. Activity at open houses varies from open home to open home and from price point to price point. We see 100 folks show up at a townhouse in Mountain View and maybe just two or three at a condo in Palo Alto. Our Woodside office noted one $3.5 million listing had three offers. Two others over a million also had multiple offers. The lesson: buyers will buy a property that is at the right price—ones that are “discounted” to today’s market prices.
San Francisco—Lombard notes a lot of fence sitters, price reductions and low offers. But the well-presented, well-priced homes are getting the contracts. Sales over $1.5 million are still rare. New construction is taking the biggest hit. The Market Street office notes that open house attendance was brisk. Buyers have stepped back a bit waiting for the results of the stimulus package and how it will affect them.
Santa Cruz County—No information reported this week.
Silicon Valley—It was a slow week. Correction. A really slow week. Our Cupertino De Anza office write, “The only thing that matters right now is a cheap price.” Well of course that is debatable and is certainly dependent on the market—and the house for that matter—but what I would agree with is that buyers are looking for value right now. They are looking for value and only act when they see it. Los Gatos reported a number of short sales which is why our short sale seminars this week were so appreciated. San Jose Main is telling a bit of a different story noting that buyer activity is increasing. Open house traffic is up dramatically from the past weekend, especially with homes priced at $300,000 to $500,000. We are seeing increased sales activity and interest this past week, according to SJ Main. San Jose Willow Glen reports that open houses have quite a bit of traffic and floor calls are picking up slightly. Several Agents are working with buyers at this time so our hope is that it is just a matter of time until this interest turns into closed contracts.
South County—No information reported this week.
What I’d like to leave you with this week is this: it’s time to get in a position of optimism. We are in a great position for a turnaround. But we also must understand that this isn’t going to be an easy road. The road we took to get here wasn’t easy and the road ahead may be a challenge. But the up side is that we are on the road to recovery. Our market has been in neutral for some time and now it is time to put it in drive. The Economic Stimulus Package. The release of the second half of the TARP funds. These are all things that can and should help. Now it is up to our economy to do the rest. Let’s watch as the details unfold over the next few weeks and we’ll wait to see whether the $787 billion in aid is our nation’s answer to prosperity. All we can do is hope and remain optimistic.

Until next week,

Monica
408 399 1495
www.mmgproperties.com

Short Sales are the Talk of the Bay Area Now....

Short Sales Are The Talk of the Bay Area!!!

Do you know what the causes of these short sales are?


1. Over zealous construction by all builders.
2. Stated income loans.
3. Drained equity.
4. Lender fraud.
5. 100% or more financing.
6. Negative amortization loans.
7. Declining property values.
8. Inflated appraisals.
9. Rising mortgage paymemts & no mortgage insurance.
10. Seller forced to sell due to personal circumstances. (Job loss & or spouse’s death etc)


Call or email us today and let us help you understand the situation more.

The Malcolm & Manocha Group Re, CMRS,CMNP
Direct: 408 399 1495
www.mmgproperties.com
monica.manocha@cbnorcal.com