New York City metro has the longest with 202 months to clear the inventory.  That’s almost 17 years!  That’s ridiculous.  How that works out in the real world remains to be seen.  Some short sales take forever but 17 years is a little skewed.

In this figure they added 70% of the loans that were previously defaulted and had become current or cured because they thought those loans were likely to redefault.  I disagree.

I think that number is much smaller.  What we’re seeing is the unemployment situation steadily improving.  It’s not setting the world on fire, but it’s steadily improving.  I’m seeing well qualified people that I know get back to work after six months, a year, two years, three years of un or under employment.  Those people are getting back on their feet and won’t be re-defaulting.  They want to stay in their homes.

In Contra Costa County we’re coming out of this thing.  People are getting back to work.  We are actually in a seller’s market here.  Inventory is at all time lows while buyers are poised and ready to buy.  Interest rates are at all times lows where they will not stay.  If ever there were a great time to buy, it’s now.  Don’t let the national numbers skew your local thinking.  It’s tough but it’s worth it.

Multiple offers?  Yes.  Some have had as many as 20 offers on them.  My listings have all had multiple offers, thankfully not more than 15, but multiple.

This just in from the California Association of Realtors:

Last week, C.A.R. leadership met with federal housing regulators and California’s Congressional Delegation in Washington, D.C., to discuss the Federal Housing Finance Agency’s (FHFA) bulk sale REO pilot program.

Leadership expressed C.A.R.’s strong opposition to the pilot program given the low inventory of homes for sale across California.  According to C.A.R. statistics and discussions with California REALTORS®, the state is facing a shortage of available housing, and the lack of inventory has forced many buyers to face multiple offers across the state.

Although the pilot program calls for Los Angeles and Riverside counties to be included, federal regulators have stated they do not believe that properties that would sell for a higher price through the current REO broker network should be included in the bulk sales program.

Because many REO listings are selling for near or above listing price with multiple bids, C.A.R. hopes the FHFA will refrain from implementing the pilot program in California.

I hope they do too.  Affordability is at an all time high and good qualified buyers are looking to make their move.  Let’s not move these tapes out to investors, let’s move it out to American families.

As is my practice, I set my buyers up with automatic drips from our MLS and give them a listingbook account to play with on their own.  No one ever stops there.  They go out onto all of those other websites and look their too.  Estately, Zillow, Redfin, Movato, ZipRealty, craigslist and who knows what else.  Generally it’s a retread of what’s on the MLS, but not always.  Here’s what that has yielded this week.

A home that is a short sale in Contra Costa County being listed by a firm in San Bernardino County.  I called them on Friday for showing instructions.  My business model is to put the clients in the home that fits their needs.  Period.  It’s Sunday morning, no return call.  There is no lockbox on the property, it’s occupied.

So to recap, this agent took the listing in spite of being 300 miles from the subject property and probably having never seen it.  They did not put it on the local MLS.   Did I mention it was a short sale?  How are they doing their clients any favors?  More importantly, they are making agents as a whole look bad.  They should have taken a referral fee and referred it out.

I just got a request from another client to look at a property that they found on one of those websites.  I couldn’t find it in our MLS so I searched the internet and there it was in the San Joaquin County MLS.  Some counties dovetail nicely, Contra Costa and San Joaquin don’t.  They only overlap out in the Delta where they actually meet.  Hundreds of buyers will never know about this house.  Here I sit on Sunday morning wondering how I am going to show it to my clients.

Dollars to donuts, the agent doesn’t respond to my email.

Sellers beware.  If your agent has a different area code than you do, ask if they belong to the MLS that your home should be listed in.  We have six area codes in my area.  I belong to the MLS that covers the lion’s share of the area.  I partner with another broker who belongs to the other two.  If I don’t belong to the MLS where the property should be listed, I co-list with him to assure maximum exposure.  We put the appropriate lockbox on the property for the area and we market it appropriately.  Maximum exposure equals maximum price.

If the seller is having to short sale, it is paramount that the agent is 100% engaged, that the property has maximum exposure and the agent the prove to the bank that they brought in maximum price.  I don’t know how that would occur if the agent failed to put the home on the proper MLS.

If you are thinking about buying or selling, I promise to give you sound advice and honest representation, even if that means I refer you to a colleague.  It’s my promise to you.

I didn’t.  And I won’t.  And I never will.

Why?  Because while my competition is sipping on their egg nog lattes and shopping at Nordstrom, I’m out doing what I always do.  I haven’t let up.  I always find a steal of a deal for one of my clients this time of year.  After all, it’s not going to close this year, more likely than not, but it will be in contract to close the beginning of next year.  While everyone is shaking out the cobwebs getting back into the swing of things for the new year, I’m handing over keys to new buyers.  New buyers that got screaming deals because they were out buying a house in December.

What I’ve found is clients that want to look right now are very serious about finding their next home.  Sellers who have homes on the market right now are very serious about selling their home.  A lot of the normal competition that muddies the waters are out at a holiday tree lighting ceremony, leaving me a clear field to play in.

If you need to shop for a house while everyone else is shopping at Neiman, call me.  I’m saving my egg nog latte for Christmas Eve.

There has been lots of talk about the shadow inventory and what it is going to do to the market.  What we are seeing now is that banks don’t want to take a property back unless they absolutely have to.

Here is the real math.  A bank can expect to take a 41% haircut when they take a property back through foreclosure.  They have to buy insurance for it, maintain it, fix the things that are wrong with it, or at least some of them, market it, hold it through two or three buyers and then finally get out of it.

In a short sale situation, the bank isn’t outlaying any cash.  They don’t carry any insurance, they don’t fix anything and they don’t have a non-performing asset on their books.

The big banks get this.  The off shore investors in mortgage backed derivatives, not so much.

Currently a lot of loan modifications are what’s called “double tracked”.  That is, while they are working on the modification they are also going through the foreclosure steps in the background.  Unfortunately the result is the homeowner finds out the loan modification is denied and BAM! the home is foreclosed on the next day or so.  It’s a reprehensible practice.

Alternatively, a foreclosure can be held at bay with a short sale and the homeowner can leave with some dignity.  The National Association of Realtors reports that over 70% of the people who lose their homes to foreclosure never ask a professional for help.

What’s more, some banks are offering people up to $30,000 to short sale their home.  HAFA allows for a $3000 payment to the homeowner to short sale their home, but there are conventional lenders out there offering a lot more money to distressed homeowners to short sale rather than walk away from their homes.

If you or someone you know is in a tough situation, call me, I’m here to help.

The ever-evolving and swiftly-changing policy and regulatory landscape concerning greenhouse gas emissions has created an exciting, while often challenging, context for preparation of the Climate Action Plan. The lack of action at the federal level continues to stymie a comprehensive, national approach to achieving emission reductions. However, California, which has a history of leadership in energy conservation, environmental regulation, and support for research and development of innovative practices and new technologies, is also a leader in combating climate change.

I grew up in Fremont, so I can say “True dat!” I’ve gone through the plan and unlike Berkeley’s plan it takes more of a common sense approach, with one notable exception.

E-R5 Consider adopting a residential energy conservation ordinance (RECO), which would require energy assessments and implementation of measures to reduce energy and water use at time of sale and/or other trigger points.

This would be fine if it was 2005 and we were all counting money with our tongues. But it’s 2011 and very few home owners or home buyers are flush right now. Over half of the sales in the marketplace right now are distressed, more if you count the people who aren’t upside down but are having to sell because of some hardship like job loss or divorce. In this climate requiring retrofits is just another burden on a struggling sector. While I applaud the City of Fremont for being pro-active in the creation of a Climate Action Plan, it needs to be implemented through incentivization right now, not a RECO based on point of sale.

Now his new home wasn’t the prettiest girl at the dance, trust me.  If they were playing Stairway to Heaven, this girl was going home alone if not for my buyers.  The last remodel took place…never.  It was original to 1959.  Yellow formica, matching worn linoleum and the carpet was perfectly threadbarren.

We have a shortage of inventory in my market right now.  I have two other well qualified buyers in his range who were in contract when I got him into contract on his new home.  They fell out back in August, in both cases due to wacky sellers, and NEITHER are back in contract yet.  It’s dicey out there.

I don’t know if the listing agent knew that.  I think my guy paid a fair price for the home.  I would have advised my sellers to take our offer.  If we faltered, someone would have snatched that house right up.

So I wrote FHA.

Stop laughing.

I have a great lender and I knew he could do it.  And he did, so I thought.  We made it through the inspections. The appraiser required carbon monoxide detectors, smoke detectors, the gas turned on so he knew the dishwasher worked and the “tripping hazards” corrected.  That made me laugh.  My house closed, although not FHA with huge gaping cracks in the garage, the driveway and the walkway.  How big?  Lizards live in there.  Swarms of termites nest in there.  Mice and rats escape through those cracks.  It’s a complete ecosystem in the cracks in my garage.  But I went out there with the buyer and we smoothed them over.  And we got loan approval.

Not so fast sweetheart.

It started as an innocent phone call.  My mortgage broker’s assistant called my buyer.  He needed to pay for the appraisal.  ”Can I use a credit card for that?” he asked.  ”Sure” she said.  He had the money in his checking account but didn’t want to read his debit card number over the phone in a busy office and have his checking account compromised if somebody wasn’t completely scrupulous.  Fair enough.  Then I order the inspections.  ”Can I use a credit card for that?” he asked.  ”Sure” I said.

I heard my mortgage broker tell me the ratios were tight.  My buyer owned another property in another state that was being rented out but wasn’t claimed properly on his taxes so he couldn’t offset the rent and there wasn’t time to amend his taxes.  He could make it but it wasn’t going to be tight on paper.

He signed off on time, we were right on time with everything.  And then they re-ran his credit.  He had used two different credit cards for the appraisal and the inspections.  The $20 a month for each of the cards threw the ratios off and they couldn’t fund.  Paying off the credit cards wasn’t going to solve the problem.  For reasons I cannot explain, I slept that night.  I think it’s because I trust my mortgage guy.

The next morning he calls.  He relocked the rate.  Simple enough.  The interest rate had gone down since the initial lock and now with the new lower interest rate his payment was lower and the ratios work.

At the end of the day, we closed three days late and my guy will be saving a little over $40 per month every month for the next 360 months.  Win.  Win.

I’m glad I work with a true professional for my mortgages.  He makes the difference sometimes.  I don’t know that another broker would have had to chops to figure that one out, or even try the solution.

The lesson I learned was when somebody says “the ratios are tight”, my answer is now, take your credit cards out of your wallet and unless you have a death in the family, leave them there.

I have five buyers right now all looking for something similar.  Each buyer has their own little ticklers which makes them a little different from the other, but the MLS search is the same.  I’ll look at each new property that goes out to them and think “Oh they won’t like this one but Bob and Sue will”.  And vice versa.  One wants it move in ready, one wants medium work, one wants it barely standing, one needs a big kitchen, one is sensitive to mold issues and one wants room in the back to play with the children.

There are 96 homes on the market right now that fit their criteria.  I’ve probably seen 70 of them.  The rest are on busy streets (no one wants that) or impossible to show.  You know the one, show W or F 3-4pm only, 24 hour notice required, call LA for appt. and they never call back.  I haven’t seen those, which gets me to my point.

If I can’t find your home and I can’t see your home, I can’t sell your home.  And trust me, your home isn’t special enough for me to jump through all of those hoops.

This morning I had an email from a client.  They saw something on Redfin, could I show it to them.  It wasn’t on the MLS.  I went onto Redfin and there it was, with an MLS number that was foreign to me.  I wondered where it was listed.  After noodling around for about 15 minutes I found it.  It was in the Santa Clara MLS.  The Santa Clara county line is 50 miles south of this property!  The property had been on the market for 75 days and I doubt anyone from our area has seen it.  What a disservice to that client!  Can you imagine what they are saying about real estate agents?  The market?  I can hear it now “The market is terrible, no one has come by to see our home!”  And the time is ticking on their short sale.  It’s darned near criminal.  Imagine what they’re saying about real estate agents.  ”My house has been on the market for almost three months and no one has come to see it and now they want to reduce the price!

Before you list your property BE SURE that the agent is going to list your property in the local MLS so the maximum amount of potential buyers can see your home.  How can anyone buy your home if they don’t know it’s for sale?

It is a full moon, but that doesn’t explain what’s going on.   I’m wondering if Bill Compton is secretly battling the werewolves somewhere on our behalf.  It’s been building for about three weeks. There are buyers out there but the inventory is stale. Really stale. There are a lot of homes that have been sitting on the market for a while for any one of a number of reasons.  Whenever a fresh nice looking home comes on, it’s such a rare occurrence that it disappears with about 10 days.

One of the mentors here at Keller Williams told me when I first started that there are three things matter when you sell a house.

1. Does it look good?
2. Does it smell good?
3. Is it priced good?

That’s it.  Right now much of what’s on the market does not pass that test on any level.  I was at one house yesterday that had such a smell about it that I still have that smell back in my sinuses.  The last thing you want is for a Realtor to remember that your house smells bad.

Right now there are a lot of properties out there that don’t look good.  I’ve seen sunset yellow appliances, dark oak cabinets from the 70′s and an avocado range.  Just in the last 10 days.  And not the same house.  Nor does it include the house with shag rug on the wall.  Or the one with the collapsed swimming pool.  Or the failed septic tank.  All this month, all different houses.

I’ve also seen two recently that I know for a fact have foundation problems.  Both of those homes were purchased by inexperienced flippers who think that they can do paint and carpet on a house with a crumbling foundation and throw it back out on the market for a profit.  Notsomuch.

This is how you sell a flip in this market.  This home came out beautifully.  New roof, new HVAC, new paint, flooring, kitchen, baths, new everything.  This house will not stay on the market.  It looks good, smells good and is priced good.  It’s going to fly out of here because it’s the best of the best in this market.  For every suspect situation in a house, buyer’s are ticking that off in their heads and DQing properties.

Currently buyers want to see a flip done properly or they want it priced properly so they can do the work themselves and benefit from the sweat equity.   Right now, I’m seeing a lot of neither.

I used to be a stock broker.  While I love the flashing numbers on the screen and the art of picking the right stock and building a beautiful portfolio for a client, I couldn’t sit at a desk for that long.  I love being outside.  I did learn what to watch for.  I managed against the dot.com bomb.  The market lost 80% and my clients on an average lost 2%.  That’s right.  I beat the market by 78%.  9/11 pretty much put a fork in my fledging stockbroker career.  It was fun while it lasted.

We’re seeing something very interesting right now.  Generally when stocks rise, yields on bonds go down and vice versa.  When bond yields are down, so are mortgages.  Not so right now.  Stocks are down and bonds are down too.  And mortgages are ridiculous.

Bankrate.com has the overnight low for a 30 year fixed at 4.19% last night.  That’s obscene.  If I believed in refinancing, I’d refinance.  They are giving money away right now.  It is far cheaper to buy than to rent in most of the Bay Area.

Yesterday a client of mine, who is a seller said “Yeah but nobody can qualify for a loan.”  Actually they can.  Lenders have relaxed the idiotic standards they put into place in 2008 and normal people can get a loan.  By “normal” I mean people like you and me.  People who have families.  People who work hard, take care of their families and save their money.  Normal people.  The only problems I’ve had with a client’s credit had to do with divorces that didn’t have formal separation agreements or weren’t finalized.  If your credit score is over 580, there’s a good chance you can buy a house.  If you’re on the fence, it’s a good time to get off.

If you’re thinking about buying or selling right now, click over to the contact page and give me a shout.  Even if I don’t work in your area, I have a massive referral network and will find you a qualified professional in your area to answer your questions.