Have we hit rock bottom in the real estate market?!

Have we hit rock bottom in our real estate market? If you could see what I see right now, you might think so. Right now there is a severe shortage of homes under $300,000. The bank owned properties in that price range have all but dried up. 'Normal' sellers are few and far between. What's left are Short Sale's (properties that are being sold by the home owner for less than what they owe on their mortgage). And it's the Short Sales that are getting all of the offers now. Buyers are getting desparate!

What's typical these days is for Banks (via the Listing Agent) are listing properties for FAR lower than the 'comps' in the area. Obviously buyers will come out of the woodwork to submit offers on really good 'deals', with most of the offers coming in WAY above the asking price. So the great deal you might have seen for $225,000 just probably sold for $265,000 or more. Had it been originally listed for $265,000, it might not have looked like such a great deal. But buyers are emotional, and they tend to react differently when there's competition. And it's HIGHLY competitive out there right now.

So, with a limited inventory and numerous buyers, prices are bound to go back up. Even if it looks like prices are still dropping because banks are listing them so low, chances are the SOLD price is much higher, bringing in a higher 'Comp' for the next listing or appraisal.

With interest rates at all time lows, and prices dropping more than they have in decades, is now the time to set your sites on your next investment?

Maybe so!

Snag a great deal on a short sale

Short sales - where a lender agrees to take less than it's owed on a mortgage - are rising sharply. Here's how you can profit.

(Money Magazine) -- When Brian Gavitt, a physician, and his wife Gayleen, a stay-at-home mom, started to eye homes in Sacramento last winter, they knew they were looking in the hardest-hit areas of the housing bust. So the couple, who were relocating from Lansing, figured they could land a fantastic bargain in no time at all.
The part about the bargain turned out to be true. The Gavitts bought a five-bedroom house in the upscale Natomas Park neighborhood ("Even now, you don't see FOR SALE signs up anywhere," says Gayleen.) And it was a steal at $300,000, a full $200,000 less than they would have paid just two years ago.
The amount of time it took to land the deal was another story. It was more than six months from when the Gavitts first saw their dream home to the moment they held the keys in their hands. The reason: The home they bought was a short sale.
Not along ago, few people had even heard of a short sale, which occurs when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.
If you're in the market for a home today, you're almost guaranteed to be looking at some short sales. Nationwide, 14% of homeowners are currently underwater on their mortgages, calculates real estate website Zillow.com. And in many areas, it's far more: In the Gavitts' zip code, for example, over half of homeowners would owe more than their home is worth if they sold today, calculates Dee Schwindt, the Gavitts' realtor.
The good news is that short sellers are likely to still be living in the home and some may even be current on their payments. That means these aren't the run-down, distressed properties that you often find among foreclosures; in fact, there's a good chance that some of the most deluxe homes for sale in your market are underwater.

http://money.cnn.com/2009/01/27/real_estate/short_sale.moneymag/index.htm

Southern California REO Bank Owned Foreclosure Deals!

Check out these latest Southern California REO Bank Owned Foreclosure Deals!

http://www.mrmlsmatrix.com/Matrix/Public/Portal.aspx?k=426619X0F08&p=DE-36728289-420

As low as $58 per square foot! Unbelievable prices! The banks want these SOLD now!

Decline in California Foreclosure Activity: Due to New Legislation

Last September, the California Senate Bill 137 was passed as response to the worsening problem in the state’s housing industry. The said bill included a provision that requires lenders to contact the distressed homeowner several times and wait for another 30 days after initial contact before filing for foreclosure. After its implementation, ForeclosureRadar.com reported a 61.8 percent decline in default notices and a 47.3 percent drop in trustee sales notices. Although this should be interpreted as good news, the website does not consider it as such. Instead, it believes that it has only made it even more difficult to understand and determine the real state of the local housing industry. For them, the long term effect of the said bill is to only delay the foreclosure process and not really provide troubled borrowers with genuine assistance. To make matters worse, the new legislation also encourages loan modification. The problem is that most of the troubled mortgages show negative equities which will make it close to impossible for lenders to change any terms of the mortgage. The only way a loan modification can work is if the lender agrees to significantly reduce the principal balance or lower the interest rates – both of which pose considerable risks to the lenders. If the lender agrees, it could encourage the other non-defaulting borrowers to default just so they could enjoy lower mortgage rates or principal reduction. For homeowners facing foreclosure in California, it is probably best for you to consider availing of the mortgage relief program sponsored by the government. There are certain requirements you must meet before qualifying but if you do qualify, you will be able to shift your existing mortgage to a government-backed housing loan, which has a fixed interest rate. Check with your local county office for more details about this program.

What this economy means for you

As the most serious credit crisis in decades rocks your finances, you've got to have questions. Here are the answers.

(Money Magazine) -- Back in January, when it first became clear the economy and the markets were in for a rough patch, the consensus forecast was that we'd have seen the worst of it by now.

Perhaps you put a bit more cash in the bank, trimmed the fat from your budget and tweaked your 401(k) allocations, but otherwise you were confident you could stay the course.

Then came the extraordinary events of September: the government's seizure of Fannie Mae and Freddie Mac and rescue of American International Group; the bankruptcy of Lehman Brothers and pending sale of Merrill Lynch; the first money market fund loss in more than a decade; a series of bank fire sales; and a politically charged federal bailout plan that could carry a $700 billion price tag. You can't help but wonder what all this means to you.

Here are some key questions, from when stocks could bounce back to what's ahead for the economy and home prices. Choose a topic to get some answers.

The Economy
The Stock Market
Your Savings
Insurance
The Real Estate Market
The Credit Market
The Job Market
Your Retirement

Do you qualify for HUD?

The Housing Authority provides two basic types of rental assistance. The largest program is the Section 8 Housing Choice Voucher. The applicant receives a Housing Choice Voucher once they have met all eligibility requirements.

The program participant can select an appropriate rental unit (house or apartment) and live where they wish.

The unit that is selected must:
Meet housing quality standards
Must have an appropriate number of bedrooms
The rent must be reasonable with regard to current market rents
Must also be affordable to the participant.

For more information, click below:

HUD information

Just a thought...

Okay, right now we have a heavy supply of Bank Owned (REO, Foreclosure) properties. And because of the competition on the market, and the desire for the banks to get rid of these properties fast, they are being priced extremely low.

So, now that President Bush is talking about the 'rescue' plans and the Presidential candidates are proposing everything from buying up banks and bad debt to restructuring loans to reflect current appraised prices, does that mean that more homeowners will be STAYING in their homes? Does that also mean less foreclosures? Less Short Sale properties? Less Bank Owned properties?

With the heavy amount of foreclosures and short sales, our supply of homes was greatly increased, which brought the prices down considerably.

Now, with the potential of so many homeowners having more options to save their home, does that mean a decrease in new properties on the market? More importantly, does that mean a descrease in the LOWEST priced homes (bank owned and short sale properties) on the market???

When the supply starts to descrease, the prices go up. Check for yourself. This link will take you to the most recent up to date REO listings that have hit the market within the past 5 days! Whether you click on it today, or next week, or next month, it will bring up the previous 5 days of RECENT REO, Bank Owned (Foreclosure) properties:

The LASTEST REO'S TO HIT THE MARKET!

Today (as I write this) there aer 85 NEW REO Listings (that does not include any REO properties that were listed before the 5 days). How many new REO"s will be on the market when you click on the link above!?!?

Good news for the homeowners, and potential sellers.

Eventually not so good news for the buyers.

Visit my REO blog today, and check out the amazing deals that are currently on the market. Sounds like they won't be around for long!

http://www.californiareo.blogspot.com/

U.S. seizes Fannie and Freddie

U.S. seizes Fannie and Freddie

Historic move would place twin mortgage buyers into the hands of new regulator. Top executives are out.

NEW YORK (CNNMoney.com) -- Federal officials unveiled an extraordinary takeover on Sunday of troubled mortgage giants Fannie Mae and Freddie Mac, signaling the most dramatic move to date aimed at shoring up the nation's housing market. The plan, which was delivered by Treasury Secretary Henry Paulson and James Lockhart, director of the Office of Federal Housing Enterprise, places the twin mortgage buyers into "conservatorship" to be overseen by the Federal Housing Finance Agency. Under conservatorship, the government would temporarily run Fannie and Freddie until they are on stronger footing.

"We examined all options available, and determined that this comprehensive and complementary set of actions best meets our three objectives of market stability, mortgage availability and taxpayer protection," Paulson said. Both agencies will be open for business Monday morning. Dividends on both common and preferred shares will be eliminated in an effort to preserve capital. The regulators also ousted Richard Syron and Daniel Mudd, chief executive of Freddie Mac and Fannie Mae, respectively.

In their places, two finance veterans will be charged with restoring the mortgage titans to health. Herb Allison, who has shaken up TIAA-CREF in his eight years as chairman there, will head Fannie Mae. Allison formerly served as vice chairman of Merrill Lynch.
David Moffett, who served as vice chairman and chief financial officer of U.S. Bancorp until early 2007 and then joined the Carlyle Group private-equity firm as a senior advisor, will take over Freddie Mac. Mudd and Syron, who have shouldered much of the criticism of the companies' failures, will stay on to help with the transition, Paulson said. The executives have also come under fire for collecting multi-million pay packages as investors saw losses mount and share prices plummet.

Freddie (FRE, Fortune 500) and Fannie (FNM, Fortune 500), which were created by the U.S. government, own or back $5.4 trillion worth of home debt - half the mortgage debt in the country. Since last summer, they have suffered about $12 billion in losses.
In mid-July, the Treasury Department and Federal Reserve announced steps in to make funds available to the firms if necessary and Congress approved the sweeping proposals later that month.

Fannie and Freddie have become virtually the only source of funding for banks and other home lenders looking to make home loans. Their ability to do so is crucial to the recovery of the battered home market and the broader U.S. economy. The two firms buy loans, attach a guarantee, then sell securities backed by the loans' income stream. They have been badly hurt in the last year by the sharp decline in home prices and the rise in mortgage delinquencies and foreclosures. Both companies have been losing money for the past few quarters due to the subprime mortgage meltdown and steep declines in housing prices.
Shares of both companies are down more than 80% so far this year.

REO and Overall Home Sales Up in California

REO and Overall Home Sales Up in California, DataQuick Report Says
Carrie Bay 08.20.08

According to a report released by MDA DataQuick today, 44.8 percent of properties sold in California during July were REOs, up from 42.5 percent in June. Only 7.6 percent of California home sales were comprised of REO properties in July of 2007. DataQuick said a total of 39,507 homes – including REOs, owner resales, and new homes – were sold in California last month. That figure is up 12.2 percent from 35,202 in June and up 12.3 percent from 35,185 in July 2007.Based on DataQuick's numbers for California, the median price paid for a home last month was $318,000, down from $328,000 for the month before, and $478,000 a year ago. DataQuick cites half the drop in median price as a result of depreciation, the other half due to shifts in the types of homes selling and how those homes are financed.

The typical mortgage payment in California last month was $1,501, the real estate research company reported. That was down from $1,543 in June, and down from $2,316 in July a year ago. According to DataQuick , mortgage payments are back to where they were in early 2002, and are 41.7 percent below the current real estate cycle's peak in June 2006. It is no mystery that the California housing market is experiencing far-reaching adversity and has been one of the hardest hit states by the national mortgage crisis, but are we beginning to see a glimpse of recovery, or at least a plateauing of the downward spiral? Indicators of market distress continue to move in different directions in the Golden State, DataQuick cautioned.

Foreclosure activity has reached record levels, but financing with adjustable-rate mortgages (ARMs) is near an all-time low; down payment sizes and flipping rates are holding steady; and non-owner occupancy buying activity is flat, the research company reported.MDA DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies, and industry analysts. The company's numbers cover all sales, new and resale, houses and condos.

Will the homeowner rescue help you?

Check out the following link and read up on the latest 'rescue' plan:

http://articles.moneycentral.msn.com/Banking/HomeFinancing/WillTheHousingRescueHelpYou.aspx?page=2