Archive for the 'real estate' Category



How’s the Real Estate market in Sonoma County?

One of my goals this year is to post something about real estate once a week – and sprinkle in some Sonoma County lifestyle blurbs along the way.  All I can say is that I did not anticipate the rapid succession of events in the first month of the year.  The market is hot!  What do I mean by that comment?  I have been showing property and going on listing appointments ever since I returned from Hawaii.  Last week we had some much needed rain which did not slow things down.  On Sunday, January 22 with a playoff football game as competition, I had seven groups come through an open house in the pouring rain.  That may not seem like much but I did not advertise, put 4 signs out on the road and was out in Freestone.  This is remarkable.  Three years ago, I sat in an open house on beautiful days with 12 signs and never had a looker.

Enough of the excuses.  Here are the statistics for the last half of January (16 – 31).  228 single family homes went on the market.  75 were short sales and 69 were bank owned properties.  139 homes came back on the market.  This means that 139 contracts were cancelled – the buyers walked away.  Why?  It could be that they found something wrong in the inspection that they could not live with.  It could be that the 54 short sales that were cancelled was due to the bank taking so long to approve the sale or the property could have been foreclosed upon while waiting for short sale approval.  37 bank owned properties didn’t go on to close.  Maybe the buyers could not qualify for the loan.  Whatever the case, this is a significant number of buyers not continuing with the sale.

On the other end of the spectrum is the 522 properties that went into contract.  172 were short sales and 88 were bank owned.  That is a lot of properties (359) that are regular sales where people have equity in their homes.  That is almost 70% of the properties going into contract are not short sales or bank owned properties.  This is a wonderful statistic to me.  Buyers are making offers on homes that do are not in distress.  The bad news is that for sellers, there is no longer a premium in price for these sales.  The good news is that these properties are selling.

Speaking of sales, 228 properties sold during this time.  88 of these sales are regular (not short sales or bank owned).  75 are short sales and 69 are bank owned.

For those properties that are sold in the first 30 days of being on the market, the sales price is very close to the asking price.  Non-stressed properties sell at about 96% of the asking price.  Short sales are sold at 98.6%  of the asking prices.  Bank owned properties that sold in the first 30 days sold at 104.7% of the listing price.  All this says to me is that property owners that are not under stress ask more than the sellers with properties that are under stress.  Banks price to sell and short sales go for a bit under the market value.

The bottom line is that there is a small margin on price for a short sale.  The cost is the time of uncertainty that goes with a short sale.  I attended a seminar on short sales this last Monday.  The one real takeaway was “Don’t confuse a bank with logic.”  Everyone asked why the banks do not respond or make decisions more quickly.   The answer had to do with the large number of files each negotiator handles.  I get a bit frazzled when I handle more than four files.  They were talking about ninety files for each negotiator.  That is staggering.

We are dealing with a very complex real estate market.  There are many buyers and sellers but all are looking for a great deal.  This is a great market.  If you are a buyer you will get a great deal.  If you are a seller, there are buyers out there.    Patience on both sides are what is needed to make a transaction happen.

2012 Has Started with a Splash

510 Bohemian Highway, Freestone, CA

January is half over and I am only on my first blog of the year.  I plan to write weekly but things keep taking my time.  I returned home from Hawaii on January 10 at midnight and was answering text message at 8 AM.  There has hardly been an hour that I have not been scheduled in the last 8 days.  I don’t bring this up because I need to act busy and important.  No – I bring this up because real estate is very busy.

Kitchen of 510 Bohemian Hwy

Statistics of Single Family Homes for the first two weeks of the year in Sonoma County are:

237 New Listings of which 71 are short sales and 52 are bank owned.

314 Properties went into contract of which 143 are short sales and 72 are bank owned.

176 Homes sold with 34 being short sales and 49 being bank owned.

Notice something here?  Short sales are going into contract a lot faster than they are closing.  There are plenty of “regular” or “equity” sales – sales where the sellers have equity in the home and the sale is not due to a distress situation.   If you are looking for a great price on a new home and do not mind the uncertainty of a closing date, a short sale may be the answer to your dreams.

View from the Living Room

This week I listed 510 Bohemian Highway.  The address is officially Sebastopol but most people refer to it as Freestone.  Freestone is a very small town that is home to Wildflower Bakery and Osmosis Day Spa.  It is a wonderful place.

The home at 510 Bohemian Way is situated on 5 acres with a panoramic view of the Freestone Valley.  The land is a gentle down slope that holds a garden full of exotic and fragrant plants.  The house is 3 bedrooms and 2 baths.  The floors are wide planks and the counters are concrete.  This home must be sold in the next three weeks.  While this is a beautiful home much loved by the current owners, it is a distressed property that will soon be foreclosed by the bank holding the note.  My expectation is that the property will sell for around $700,000.  It is a steal at this price.  If you have any interest in living in lovely Freestone, please send me a message or give me a call.

Garden View

2011 Has Been A Wonderful Year

Happy American Canyon Buyers and Los Altos Sellers!

The last day of 2011 and what a year it has been.  When January 2011 came around, I had no idea where I was going or what the year was going to bring.  My first post was about the increased and difficult business of real estate.  Thankfully the volume continued and I am pleased to report that I closed more transactions than I have in any other year of my real estate career.  The year finished as it had begun with a flurry of activity.  Alas, the difficultly continues as sales are plagued with late appraisals, slow loan approvals and the hurry-up-and-wait process of short sales and bank-owned properties.  Home values have continued to decline except in those few areas where the prices fell so precipitously that there is nowhere to go but up – specifically Rohnert Park has seen some price increases in single family homes.  This December was a very busy month.  Not only was I working on Sonoma County real estate but I closed transactions in American Canyon (Napa County), Los Altos (Santa Clara County) and Lakehead (Shasta County).  These put a few miles on my car but I love working with great folks and these buyers and sellers were top-notch in my book.  I would go anywhere in the State of California for people like them.  And speaking of going – I only attended 8 parties in 14 days during this frenzy of work.  I needed a rest week after Christmas.

View from a Bedroom Window - No difference which one - they are all fantastic!

I am starting 2012 with a listing that I expect to be of great interest to anyone looking for a luxury weekend getaway.  Privacy, space and up-to-the-minute elegance is the best description.  This modern tree house is in a wonderfully sunny spot on Green Valley Road.  It will hit the market late January and you can be certain that you will see it on this blog.  There are many people looking for bargains in real estate and I am working to serve them.  But enough about 2012.  This post is about 2011!

The statistics for this blog were sent to me today.  Around 5,300 hits in 2011 with 35 posts.  I have made a New Year’s resolution that you will get a weekly update on Sonoma real estate.  This is something I follow and I should be sharing the information.  I was surprised to learn that my most read post in 2011 was the one I wrote in May of 2009 on our Redwood Empire Rose Show.  I guess that tells me that I should be more diligent about reporting on the Rose Society.   And, of course, I will continue sharing events around Sonoma County and my travels.  I don’t expect much traveling this year but then, one never knows.

Just a quick report on the Sonoma County real estate numbers.  Here are some numbers comparing November 2010 to November 2011.  The months of inventory (meaning – at the rate houses are selling, how many months would it take to sell all the houses on the market if no new ones were added for sale) has dropped significantly from 5.9 months to 3.3 months.  This is an indicator that buyers are taking advantage of these great prices and low interest rates.  Another interesting fact is that while the average list price has increased from $616,000 to $773,000 (about a 25% increase), the averages sales price has only increased from $374,000 to $386,000 (only a 3% increase).  This tells us that more expensive houses are coming onto the market as owners realize that holding out for better prices may not be a good idea.  The lower priced homes are not getting any lower and the higher priced homes are seeing a price compression.

Maike in Kauai

This last week I have spent on Kauai with my granddaughter – oh, and her parents and my friend, Katy.  What a great way to spend Christmas – no hassle, no clean up, no expectations.  We have had a wonderful time and I may get to reporting on our activities here.  But now it is New Year’s Eve and I wish the very best of 2012 to all my readers, colleagues and friends.

View of Bali Hai from the St. Regis Beach

Sonoma County Economic Forecast

View from Francis Ford Coppola Winery - A Sonoma County Destination

Wednesday morning I had the opportunity to hear Ben Stone of the Sonoma County Economic Development Board speak on the state of the economy in Sonoma County in general and specifically in Sebastopol.  I have known Ben for years – long before I entered the business of real estate – and have always found his comments to be well formed and appropriate.  I was going to say accurate but who really can predict the future?

Ben is a very positive guy – and he worked hard to come up with some positive economic news.  It was very nice to hear that the West County Schools have above average SAT scores and the lowest drop out rate in the county.  The other good news was actually on home sales.  While the Press Democrat recently had the headline “Mortgage defaults jump” (which is a very misleading headline), Sebastopol saw a rebound of 4.3% in home sales from 2009-2010.

The prediction for Sonoma County is that the pace of recovery is likely to follow the path of the broader U. S. economy.  Why?  Because Sonoma County exports products outside of the area (read WINE) and tourism is dependent upon the country having the disposable income in order to travel.  Thanks to these industries, Sonoma County is in the top 20-30 economic areas of the United States.

From my perspective, the housing market is in much better condition than recent years.  The struggle today is to get loans closed in a timely manner.  The closings happen but always with a delay.  If you are looking to buy or sell, keep this in mind.

Real Mortgage Relief

Yesterday President Obama signed an order that will make a difference to many Americans.  I had the pleasure of visiting with a friend this last week.  She told me about the loan modification that she had just obtained.  The new payment is more than $1000 less than her old payment.  This is a great opportunity for many people.  The big difference is that the property does not have to appraise at the loan amount.  What an opportunity!

Here is what the California Association of Realtors published.

HARP Refinance Program Expanded

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down.  The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.  Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013.  New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

The basic eligibility requirements for an enhanced HARP loan are as follows:

  • Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.  To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
  • Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
  • Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
  • Current loan-to-value (LTV) ratio must be more than 80%.
  • Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf

RE/MAX PROs Open House on Saturday, Sept. 17

Where has the first two weeks of September gone?  It seems like yesterday was the first and now it is the 14th.  At the kitchen table I was browsing the September issue of the Sonoma County Gazette and found a dozen things that would be fun to do for the rest of the month.  Actually, there are hundreds of ideas in the Gazette but one has to limit what looks interesting.

But wait!  I can’t plan anything this Saturday!  This is the gala open house of RE/MAX PROs in Rohnert Park.  In celebration of the raging success of our new affiliation with RE/MAX, Spence and Anne Hiatt have pulled out the stops to say “thank you” to the community and introduce our office to those who have not gotten the word.   There will be live music, food, balloon artists, carnival games and more.  Great fun for the kids as well as the kid in each adult.   The only thing you will need money for is to Dunk-the-Realtor in the dunk tank.  For $1 a toss, you can take your turn to dunk the Realtor and support the Children’s Miracle Network.  RE/MAX is a major supporter of Children’s Miracle Network.  I learned this first hand when I went to the RE/MAX conference last Spring and was asked to provide my donation to this great cause.  All proceeds will go the Children’s Miracle Network.

This Carnival should be great fun.  It is free – starts at 11AM and ends at 3PM on Saturday, September 17.  We will be located in the parking lot of our building at 6250 State Farm Drive which is the northeast corner of State Farm Drive and Rohnert Park Expressway.

While the carnival is taking center stage for my weekend, there are plenty of other events happening this weekend.  The Santa Rosa International Film Festival started today and runs until Tuesday.   Saturday at the Petaluma Library is a talk on ridding yourself of gophers which I could benefit from attending.  The Sonoma County Water Agency is giving a program from 9 to 12 on  Russian River Water Supply System.  And there are art openings, winery tours, . . . . . . . .

Hope to see you locals at the Open House.

Chateau St. Jean Winery

New Homeowners in Santa Rosa

Today was one of those days when I love being a Realtor.  I was able to pass the keys to new owners.  The experience is even better when the owners are first time home buyers.   Don’t get me wrong – I like giving the keys to retirees, second home buyers and folks new to the area.  It makes all the phone calls, bank delays and inspections worthwhile.

Celebrating with a little bubbly!

I met Katie a couple of weeks before she and Justin were married.  They were looking to start their home search when they returned from their honeymoon.  I called Katie a week or so after their return.  We met to discuss the process of purchasing a home and to define what type of home they wanted.

First step – they were qualified with Redwood Credit Union for a loan.  Second step – I identified a number of homes that might meet their needs.  Third step – we went out looking at houses.

Katie and Justin were wonderful clients.  When we visited a home, they were forthright with their reactions and what worked and didn’t work for them at each house.  I was quickly able to ascertain what they really wanted.  When a vintage 1920’s home in central Santa Rosa came on the market, I emailed Katie immediately.  Bingo!  This could be the one.

Thinking about the floor plan, the neighborhood, the condition of the house, will the classic car fit in the garage . . . . . .

The offer made.  The escrow open. The inspections done.

The house is now a home.  The Wedgewood range will be producing great meals and the back deck will be the venue of great gatherings.

I love my job!

 

Memorial Day in Sebastopol

African Violet in Bloom

The morning of Memorial Day was a lovely sunny sky and the realization that my African Violet given to me in 1988 was blooming.  This was the first bloom since I moved them to the window of my living room on Joy Road.

My Prius with a Spare Tire

It was in such a wonderful beginning of the day that it took me about 200 yards down the road when I became very aware that something was amiss with my ever-so-reliable Prius.  Alas, the front passenger tire was flat.  I was back to my driveway, a quick change to the spare and off to show property.

The reminder that this day was  Memorial Day came to me as I passed the Sebastopol Cemetery.  The flags lining the roads were  flying in the wind and cars were slowly circling the graveyards.  Loved ones were taking flowers to graves – the sun was shining upon them.
One of the many wonderful expressions of community in Sebastopol is the regular and beautiful celebration of national pride.  This sometimes shows itself in the gathering of The Women In Black but far more regular are the flags.   The flags are out on Memorial Day, 4th of July, Veterans Day and Labor Day.  It is a beautiful sight.

The Flags Waving on Hwy 116

Missing a Mortgage Payment?

One of the many benefits of being a real estate professional is the abundance of information that passes to me.  The article below is from the Wall Street Journal and answers a question that I am often asked.  “Why should I not just walk away from my house and let the bank foreclose?”  There is not a simple answer to this question.  The discussion has to include hardships  that impact the person’s ability to pay and the impact on their ability to recover from the loss of good credit.   I have helped homeowners gracefully exit from a mortgage that is beyond their means.  It is not pleasant but it is less painful than a foreclosure.  Read on.

GETTING GOING: HOW TO WRECK YOUR CREDIT – WSJ.COM

Don’t underestimate the harm that even one missed mortgage payment can do to your credit score—especially if you had good credit to begin with.

The severe consequences underscore that you shouldn’t shrug off even an accidentally missed payment. Instead, you should pay it and call the lender right away, begging for forgiveness before it mars your credit record.

In an unusually specific commentary to lenders, Fair Isaac, the creator of the FICO score, recently spelled out the severe consequences to the credit scores of borrowers who are 30 days late on their mortgages—as well as the long-term impact of failing to repay the whole mortgage.

It isn’t a pretty picture.

Being 30 days late on a house payment—even if it is an accident—can knock 100 points off a pristine 780 credit score, moving you from qualifying for the very best interest rates to the edge of subprime territory.

The actual numerical drop is less severe if your starting credit score is 720 or 680, but the impact is greater, since your new score is likely to sink to a level where new credit is hard to get and very expensive.

The FICO score ranges from a low of 300 to 850, with scores of about 750 or higher generally qualifying for the best loan terms.

The details provide a warning for anyone whose home is way underwater and is tempted to simply walk away, or considering a “short sale.” That is when the sale price is less than the amount you owe and the borrower doesn’t make up the difference. More than 350,000 homes have been sold this way since 2008, according to the Office of the Comptroller of the Currency.

FICO officials usually dodge questions about the specific impact of actions on scores. But Joanne Gaskin, director of FICO mortgage markets, compiled the data partly to counter incorrect information, such as recommendations that people stop paying their mortgages so they can negotiate with a lender, she says.

FICO says a foreclosure or short sale where the size of the unpaid balance is reported are equally devastating to a good or excellent credit score, reducing it by as much as 150 points, to the high 500s or low 600s. A rarer “deed in lieu of foreclosure”—in which the borrower voluntarily transfers ownership of the home to the lender—may have less impact on an excellent score.

Recovering your original score takes about seven years. That also is how long the information stays on your credit report, where insurers and potential employers can see it. Returning to a mediocre 680 score may take only three years.

Here are some other lessons from the data:

GETGO

Your past behavior counts, but your current behavior matters more.

Credit scores are intended to measure the risk that you won’t repay a current or future debt. So your careful payments over many years translate into a higher starting score.

But your score takes the biggest hit of all when you are 30 days late on a payment, falling 70 to 100 points in the FICO example. It drops less when you are 90 days late and if you default. The reason? The first missed payment “captures a good deal of the risk of the consumer,” Ms. Gaskin says.

The best way to rebuild a damaged credit score, ironically, is to use credit.

Avoiding borrowing altogether means “you’ve frozen your credit history in a negative state,” says Maxine Sweet, vice president of public education for credit bureau Experian. You will be better off using a credit card judiciously and paying it off promptly, adding good-behavior points to your record.

A rotten score hurts more than you think.

A person with a 620 score would pay almost 12% interest on a four-year $25,000 car loan, compared with less than 5% for someone with a 780 score—a difference of almost $4,000 over the life of the loan. On a 30-year fixed-rate $250,000 mortgage, a person with a 620 score might qualify for a 6% rate, but probably wouldn’t be able to get mortgage insurance, which is required if your down payment less than 20%. A person with excellent credit might land a rate less than 5% and pay about $3,000 a year less

Written by karen.blumenthal@wsj.com

What is Happening in Sonoma County Real Estate?

Amazingly I realize that it has been almost two months since I have posted.  It is not that I have not thought about it – it all has to do with timing.

December was filled with getting myself situated at RE/MAX PROs in Rohnert Park.  Yes, it is the same office as CPS Property Advocates which I joined in November.  Four affiliations in the span of six weeks is quite an undertaking.   Fortunately during this time, I have been able to get some business transacted.

Last week the little cabin in Maribel Heights of Forestville closed.  Two days prior to the close, the short sale on Gamay Street in Santa Rosa was approved and inspections were completed.  Early last week, we opened escrow on a bank owned condominium on Racquet Club Circle in Rohnert Park.  I would say that business is picking up in Sonoma County.

But none of these escrows are straight forward or “easy.”  What is a “straight forward” escrow?  Straight forward is where the seller agrees to an offer, the inspections are completed to everyone’s satisfaction, the appraisal is submitted and accepted by the bank, the escrow company draws up the papers, the buyers and sellers sign the documents, the bank funds the loan and the sale closes.  There are many steps but everything goes in a smooth order.  This does not seem to happen often these days.

8190 Knoll Drive, Forestville

The sale in Forestville was the perfect opportunity for a regular, straight forward transaction.  It is a cute, clean cabin – built in the 50’s (maybe – who knows when the county did not keep records at the time) and with a second lot next door.  First problem was that many did not believe that the lot was buildable (i.e. that the county would allow a residence to be built upon it).   We finally (okay, it was only a couple of weeks) got an offer that seemed to be acceptable to all parties and opened escrow.  Second problem was that while there were other homes sold in the last three months in the neighborhood, none were with post and pier foundations or with a lot as large.  Then the appraisal came in $40K less than the agreed upon price – not much value for the extra lot and no comps in the same area.  When the bank reviewed the appraisal, they decided that errors were made and took another $20K+ off of the value.  So now we have a buyer who was willing to pay more and a seller who was expecting more.  After much back and forth, it was agreed that the house would sell for some over the appraisal (based upon what extra cash the buyer could pull together) and after the first of the year to allow time for the sellers to find a property to exchange into.  Everything was set – and then the interest rates began rising.  The property finally closed but it was nail biting down to the end.

1623 Gamay Street

The home on Gamay Street is a short sale.  What that means is that the bank is owed more money than the house will bring in a sale.  Wachovia is the bank who holds the note and they have been proactive in addressing the issues.  My client was qualified for HAFA (Home Affordable Foreclosure Alternatives) which is a very good program for people who are losing their homes due to financial circumstances beyond their control.  The two major benefits of HAFA for the seller are that the loan is forgiven (meaning that the bank cannot come after the seller in the future to pay off the remainder of the loan) and the seller is given $3000 to cover moving expenses.  All was going well and then the appraiser climbed under the house and said that he observed a leak in the plumbing.  The bank said that there needed to be a licensed plumber called to remedy the leak.  Two inspectors had been under the house and did not observe a leak.  The plumber did not observe a leak.  We are awaiting a resolution from the bank.

The condo in Rohnert Park is in escrow with a bank.  Fortunately (based upon the two earlier examples) there is no loan and, therefore, no appraisal.  The challenge is that the bank wants everything done yesterday but seems to be taking their own sweet time about getting their end of the deal done.  I am sure that it will work out well but I expect that something out of the ordinary will happen.

This is real estate today.  Deals are getting done.  Nothing is easy.  Most buyers and sellers are stressed.   But the bottom line is:  When you need to sell, sell.  When you need to buy, buy.  There is no better time to do it.

When I return to Sonoma County from my vacation, I will be holding the home on N. Main Street in Sebastopol open and I will be listing a horse property on Sonoma Highway.  Watch here for details in early February.

417 N Main Street, Sebastopol - OPEN FEB. 13, 2011 1 to 4


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