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Most Banks say, "Wasn't me!"
..but will they have any impact? The reality is that these programs are always coming up with something new such as..
Fannie Mae & Freddie Mac offer quicker Short Sale Responses
Remember that in the short sale world, the Servicer is the entity that collects your monthly mortgage payment. The Investors are the entities that actually OWN the note. Fannie & Freddie invested in millions of loans and now are left holding the bag on underwater loans. I love that they are offering these timeline guidelines. Let’s hope they actually ACT on them!!!
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With home prices still falling in La Quinta and across America, could the housing market really be healing? That’s what two of the major U.S. banks say – Wells Fargo and Chase. Their earning reports disclosed that more Americans are taking out loans, paying them on time and taking advantage of low interest rates to refinance.
Chase, the biggest bank in the U.S., says that their income from new home loans made from January through March is record-breaking. They issued 6% more loans than this time last year and received 33% more applications.
At Wells Fargo, the bank issuing the most home loans, booked the most mortgage fees since 2009 and issued 54% more mortgages than a year ago . . . and took in 84% more applications.
As manufacturing and consumer spending have held their own or grown, the housing market has been the biggest drag on our nation’s economic recovery. Home prices are still falling, but have slowed down in the past serveral years and more than half a million American homes were in the foreclosure process at the end of March.
Yet, the stronger mortgage business reported by Chase and Wells Fargo helped to surpass Wall Street’s expectations for first-quarter earnings. Signs are encouraging and it’s a wait-and-see process as the year 2012 unfolds.
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The number of La Quinta homes and homes across the country that received first-time foreclosure notices rose 7% in March from the previous month, marking the third consecutive monthly increase this year. This increase reflects the heightened efforts of banks in taking action against homeowners who are behind with their mortgage payments.
Some real estate experts are pointing out that we have not seen the last of rising foreclosures and that there will be many more to come down the pipeline. Foreclosure activity slowed down markedly in the fall of 2010 – that’s when claims began to surface regarding banks and mortgage servicers processing foreclosures without properly verifying documents. Since then, a $25 billion settlement was reached in February between the largest U.S. mortgage lenders and state officials. This paved the way for banks to now take action on unpaid mortgages, some of which have been hanging in limbo for months and years. These are the homes that may be looking at being foreclosed and eventually ending up back on the market.
Typically, foreclosures sell at a discounted price compared to other homes and these sales can drag down the value of neighboring properties . . . meaning that it could now take even longer for home prices in certain markets to gain value.
Some experts are saying that it’s likely that the new crop of foreclosures will arrive in smaller waves throughout the year rather than all at one time. The sad part is that even more Americans will be losing their homes, never good.
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Bank of America; short sale lemon
Just read an article in the New York Times called Banks Always Win. How serendipitous when I am encountering that very thing with my now year long Short Sale with B of A. I have been writing of this journey because it is so unbelievable to me and the Sellers, that it deserves the written word.
When you see a Short Sale listing that has been sitting for hundreds of days and the List Price keeps going up, then back down, it’s because the appraisal came in too high, the Investors believed it, and their counter was so far over what the property is worth that the Buyer walks, shaking their head in disgust. Does B of A really think that because they have a higher value in their little pea brain it is the Reality of the homes’s value? Buyers set the value you ding dongs. It’s called a Buyers’ Market for a reason. Your property is worth what a Buyer will pay..period!
First appraisl one year ago (4/15 marks 365 days with this listing and four qualified buyers). Anyway, first appraisal comes in at $980,000. At that time, I tried to convince them that my offer of $850,000 was fair. No offers came in until the List Price had been reduced to that number from my original list price of $1,050,000. Buyer of course walks.
I raised the LP to $980,000 and began reductions. Again..no offers until I hit $850,000. B of A counters at $980,000 again. Buyer #2 walks.
I get Buyer #3 at $850,000. B of A does a new appraisal. Must’ve been closer because they counter at $865,000. Buyer accepts with a conventional loan. Lender appraises the house at $825,000. Buyer #3 walks.
I List the home at $865,000..the “approved B of A price” per the approval letter which was set for a March 15,2012 close. I get an offer of $865,000 and this time I call the Lender. Local woman and she guarantees that she will fund this loan. OK..I submit the offer. Darned if the B of A negotiator doesn’t tell me “this file is aged,” so we close and re-open it once again. New appraisal is ordered. Yippee! Surely, this time it will come in at $865,000! Not so fast…
This appraiser has decided that over the past year, the home has gone up in value to..drumroll..$1,050,000!!! Hey, wasn’t that my original List Price? Why yes it was! Sure wish I could get them that number and make more money. I get the file escalated and send in the ONLY THREE COMPS that have SOLD in this SAME NEIGHBORHOOD over the past 6 months. All support this offer..maybe a little less in fact. I’m sure this time they are going to approve this offer. But no…
B of A in their wisdom, have countered at $925,000. Now, if this home was EVER worth $925,000 we would have already received an offer at that number. Well, they say..your 3 comps are very close indeed, but the comps our appraiser sent us are higher and we are choosing to use those. REALLY???? Why go outside the exact gated community for comps? Across the freeway puts you closer to the beach..values are different. A neighboring community is valued higher because of the builder.
Did B of A hand our a booklet for their appraisers that changes the rules? Since when does using DIRECT sold comps not hold any merit? I thought the BEST comps were what give you true value for that home in that neighborhood.
Oh, the best thing. I just received my first back up offer. Agent says his clients don’t see the value of $865,000 because another Short Sale just closed in the community a couple months ago for $850,000, so they are offering $815,000 since values are declining.
Who wants to take bets that B of A runs off my Buyer #4 at $865,000 and ends up with at least $50,000 LESS when they do finally accept an offer. Hee-hee..why the banksters continue to decimate property values…
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Who's paying for the view??
Who’s buying the really BIG properties..big prices and big locations? The Russians according to the New York Times. This specifically talks about New York, but it made me wonder…will they be heading here to the Palm Springs Valley any time soon?
Some of our most luxurious high end properties are on golf courses. Of course, they could BE golf courses. Porcupine Creek just sold. Escena and Palm Desert CC both sold to development companies that are now re-habbing them and building the properties out. Then there are the luxury golf developments of Bighorn in South Palm Desert. If you want a more rural surrounding, The Madison Club in La Quinta might be the one for you. Indian Wells, located centrally in our Valley offers several exclusive clubs..The Vintage is one of them. There are some glorious properties in downtown Palm Springs that just might ring your Russian Bell..
Luxury property sales here in our Valley have continued to record higher and more frequent sales through the first quarter of 2012. These sales are expected to continue through the year and into next year. Great values can be had in these higher end properties now that their List Prices are more reflective of the market.
If you’re looking for luxury..now could be the time.
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Diamond in the rough???
Real Estate Investors are not a new thing. Investors buying LOTS of homes, however, may be. This New York Times article points out the surprising numbers of homes being purchased for Lease homes and Flipping..it’s predicted to continue to grow. Here in the Palm Springs Valley, I am seeing more and more Investors-both local and from afar-purchasing vacant or distressed properties.
What are they doing with the homes? Two things..
1. Minimum clean up. Meaning cosmetic clean up to get the home prepared to lease. The return on their investment money is much higher than parking the money in a bank, buying bonds and deemed to be less risky than the Stock Market.
2. Maximum clean up. Buying homes that REALLY need some help. Roofs, knocking down walls, adding a bathroom, updating a kitchen. These homes are then being sold. Flipping has lower long term margins, but if done correctly, can return a quicker profit to the Investor.
The key to success is having the right people in place. Realtors that KNOW the area. Scouters that can find these Realtors. Software in place to estimate repair costs and after repair values. Realtors that can re-sell the property. Is this a new Trend? Yes, I think it is. In our Valley, there are many areas that invite investors to help reduce the blight and move inventory. Both good for our Valley.
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Last week was the first week that I received this comment from potential La Quinta home buyers..not once, but twice. Is that ubiquitous bottom, behind us?
I have no way to know for sure if we are at the bottom..in any price point. If you run into a Realtor that swears they DO know..I would suggest running. We Realtors are out in the streets daily, looking at homes, studying the inventory of available homes, looking at numbers of foreclosures that may be coming down the pike. We do have a better feel for the “bottom” than the average bear, but we do NOT have a crystal ball that predicts the future. So..are we at the bottom?
In many developments in La Quinta, Indian Wells, Rancho Mirage and Palm Desert..as well as Palm Springs proper, it appears we may be. Why? There are more Buyers looking for the same properties than there are those properties. What is everyone looking for in the desert?
- Sun orientation. South means more hours of sun. West is setting sun.
- Views. We have a unique situation in that we are a desert with mountain ranges and Buyers want to see them!
- Lot size. Large or small, Buyers want something in particular
- Water? Many Buyers demand water views or proximity
- Fairway location: HUGE here in the desert.
So..as you can surmise. If you are a buyer looking for a home with 3 of the 5 criteria above, your Inventory is very limited..no matter the price point. However, there are plenty of homes WITH the above mentioned criteria. They just are no longer only selling if they are short sales or foreclosures. Equity homes (standard sales) are now becoming more and more normal.
Buyers are still demanding a good value, just not a “steal.” The Steals are now much fewer and further in between. But, hey, look at it this way. Now you KNOW you are buying into a desirable area, right? There is nothing more comforting when you buy ANYTHING than knowing that lots of other Buyers desire exactly the same thing. Value is rising.
Views, location, sun..Buyers are paying for these!
Eldorado merges with Golden Voice
If you thought the Coachella Valley Music & Art Festival could not get any bigger, think again. Golden Voice, which operates the Festival, has just partnered with the Lake Farm owners of Eldorado Polo Club in it’s quest to increase the holdings for the Festival here in the Coachella Valley. Eldorado Polo Club sits on some of the most desirable acreage in the Valley and consists of 13 polo fields, a clubhouse, Cantina/restaurant and acres of stalls and corrals.
It’s not clear if Golden Voice actually purchased the polo club, but that may be the case. They are promising Polo as it’s always gone on..but better. During the festival, the fields will be converted into parking, tent cities and all the other things a music festival of this magnitude requires. The Coachella Music & Arts Festival is heading into it’s 12th year of continued growth and success. Now running for 2 weeks, including the ever growing Stagecoach Festival of Country Music greats, this recent purchase ensures the Music Festivals presence in the Valley for years to come…and sounds like the continued presence of the famous polo club and all the revenue the players/grooms/families and their ponies bring to the East Valley.
If you are thinking of buying a home in Indio or the East Valley..now may be much better than later.
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who wouldn't want to own in La Quinta???
I am working with Investors, or Investment groups from Australia, the UK, New Zealand, Canada and France..and that’s just in the first quarter of 2012. Our Real Estate market is benefitting from foreign buyers belief that the US is the best place in the world to park their money. These buyers are helping reduce our inventory and get the housing market back in balance again..come on down!
Foreign clients bought 41 billion worth of stateside houses and apartments during teh 12 month period that ended in March of 2011, according to the NAR. Pretty much the same as last year..BUT add in the $41 billion spent by immigrants who moved here within the past two years and people with visas for longer than 6 months and the total is $82 billion..up from $66 billion just a year ago.
Realtor.com is nov visible internationally and can be viewed from practically anywhere in the world..and in 12 languages. Wow! Talk about checking out real estate while in the comfort of your own home. What states are they buying in????
1. Florida- nearly 55% of all international sales from May to November, 2011 were in Florida.
2. California-appprox. 6% in California
3. Nevada-5 % of all foreign sales were here.
4. Arizona-17% of foreign investor sales were in AZ
Why in these states? Because these states have the most standing inventory! The glut of homes in these 4 states is still considerable and therefore the price/sf is the best buy..more for your international money! It’s not ALL about investment. It’s also about buying a home in a country where you want to live..even if it’s only part time.
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Is it time to buy in our winter paradise?
Sales continue to rise here in the Palm Springs Valley. The Median keeps moving slightly down, but that is to be expected when the luxury homes are really starting to pop. So..even when the entry level homes price/sf falls slightly, the luxury home sales fall ALOT and that skews the median. Don’t put too much emphasis on the median price..look at the development in the City you are looking to buy in. Check those comps carefully for the past year and that will tell you the true story in a micro level.
This article from today’s Desert Sun emphasizes all our recent Sales. The last Q of 2011 has continued it’s steady sales numbers into the First Q of 2012. Entry level homes are pretty much consistently receiving multiple offers. I often get outbid on investor homes at this level. First Time homebuyers are taking advantage of the “First Look Initiative” for Freddie and also Fannie Foreclosures and usually beat out the Investors! This is probably a good thing for the healing of our communities.
Luxury home Sales have really started popping. PGA West continues to sell rapidly. Buyers from Australia, New Zealand, Asia, Canada, the beach cities, L.A., and many local buyers that are selling and moving up to communities they have been eyeing but were unable to afford..all are pushing luxury home sales up.
I am hearing over and over…”Where else can I put my money to diversify my portfolio and get such a strong return?” Good question…
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