Ten Real Estate Predictions for 2009 - according to HGTV

I came across this article and thought it was appropriate. HGTV's Frontdoor.com came out with ten real estate predictions for 2009.

2009 is likely to be a year of continuing adjustment to a changing real estate marketplace. Prepare yourself and your business with these predictions from HGTV’s FrontDoor.com Web site.

1. Sellers will continue to face falling home values in the new year because they’ll be competing with banks and builders who are slashing prices to sell off the still-huge inventory of foreclosures and new homes.


2. The Obama administration will act on its plan to crack down on abusive lending practices.


3. Mortgage holders in danger of losing their homes will receive more assistance from a variety of programs since the Senate's Joint Economic Committee has predicted two million foreclosures in 2009.


4. Banks' restructuring should bring increasing calm, making loan modifications and short sales easier to obtain. Eventually this will lead to a decrease in the number of bank-owned properties on the market.


5. Mortgage applications will continue to receive a comprehensive review, requiring borrowers to provide extensive income and debt documentation. Those with the best credit will get the best rates.


6. The foreclosure crisis has created wiser consumers, with a deeper understanding of real estate, mortgages, and credit enabling better decision-making going forward.


7. Green is good with increasing numbers of buyers opting for smaller homes that are within walking distance of school and work.


8. Buyers and sellers will be more and more tech savvy, relying on tools like video, webcasts, and mobile search. Consumers and practitioners will benefit from being ahead of the curve.


9. Prices will be low as will interest rates, creating great buying opportunities, and likely, inspiring reluctant buyers to make their move.


10. The recession will end and buyers will regain confidence in the market.

Source: Frontdoor.com (12/03/2008)

Personally, I think it is a great time to buy, if you can afford to do so. Many of my clients are taking advantage of the homes that are coming on the market (via foreclosure or short sale), with the understanding that this purchase is an investment for a minimum of five to seven years. Granted prices may not hit the bottom until May of 2009, but I think in five to seven years, the property you buy now (if located and priced well) will not lose value and will most likely appreciate from where you buy it now.

If you are looking for some great deals, let me know and I would be happy to work with you or point you in the right direction!

The Foreclosure Timeline

Obviously, we have all read or heard in the media about the glut of foreclosures, short sales, and decline in the economy. While I feel that Lamorinda properties are protected from a lot of this, I still get a lot of questions from my clients of what the foreclosure process is all about. So thankfully, the CAR's (California Association of Realtors) legal department put out a timeline guide on how the foreclosure process works. Read below:

When a real estate transaction involves a property in foreclosure, knowing the foreclosure timeline hleps you as the real estate agent to assess whether you have enough time to close escrow before the foreclosure sale. Starting September 8, 2008, California has a special foreclosure timeline for loans originated between 2003 and 2007, inclusive, which are secured by owner-occupied residences. Indeed, loans involved in short sales are likely to be owner-occupied loans from the years 2003 to 2007, which was the heyday for subprime lending. The special foreclosure timeline does not apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations. The special foreclosure timeline will remain in effect until January 1, 2013. (Cal. Civ. Code § 2923.5.)

FORECLOSURE TIMELINE FOR OWNER-OCCUPIED REAL PROPERTY LOANS (made from 2003 to 2007)

The approximate minimum time frames for the non-judicial foreclosure of owner‑occupied real property loans made from 2003 to 2007 are as set forth below. In California, most lenders elect to foreclose non-judicially by conducting trustees' sales, not by judicial foreclosure.

Pre-Foreclosure Period
A lender may initiate the foreclosure process when a borrower defaults on a loan, such as by missing a mortgage payment. However, a slight delay may not justify acceleration and foreclosure by the lender. Hence, in practice, lenders generally wait a few months after a missed payment before starting the foreclosure process.

Day 1: Lender Contacts Borrower
For owner-occupied loans from 2003 to 2007, a lender initiating the foreclosure process must generally contact the borrower by phone or in person to assess the borrower’s financial situation and explore options for avoiding foreclosure. During the conversation, the lender must inform the borrower of the right to meet with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency.

Day 31: Filing of Notice of Default
For owner-occupied loans from 2003 to 2007, the lender may file a notice of default 30 days after contacting the borrower to explore options for avoiding foreclosure. The notice of default must be filed in the county where the property is located and a copy must be mailed within 10 business days after recordation to the borrower and all other persons who have requested such notice. The notice of default informs the borrower of the default. It must also include the lender's declaration that it has contacted the borrower to explore options for avoiding foreclosure, tried with due diligence to contact the borrower, or the borrower has surrendered the property.

Day 121: Filing of Notice of Trustee’s Sale
Three months after the filing of the notice of default, the lender may record a notice of trustee’s sale setting forth the date, time, and place of the upcoming trustee’s sale. Because of the gravity of a notice of trustee’s sale, it must be widely disseminated. The notice of trustee’s sale must be recorded, posted, mailed to the borrower and others, as well as published once a week for three consecutive weeks in a newspaper of general circulation.

Day 145: Deadline to Cure Default
Up to five business days before the trustee’s sale, the borrower may reinstate the loan by curing the default or paying the missed payments plus allowable costs. After the reinstatement period expires, the borrower still has the right to redeem the property by paying the entire debt, plus interest and costs (not just the arrearage), before the bidding begins at the trustee’s sale.

Day 152: Trustee’s Sale
Although California law allows a trustee’s sale to take place 20 days after the posting of the notice of trustee’s sale, lenders customarily wait at least 31 days instead to help protect against federal tax liens. At the trustee’s sale, the property is sold through a public auction to the highest bidder. Title is transferred to the successful bidder by trustee’s deed.

FORECLOSURE TIMELINE FOR OTHER TYPES OF LOANS
For loans that are not secured by owner-occupied real property or not made from 2003 to 2007, lenders are not required to contact the borrowers to explore options for avoiding foreclosure. For these loans, the total minimum time for the foreclosure process is roughly only 122 days, not 152 days. If the lender is not required to contact the borrower, the foreclosure process takes a minimum of about 4 months from the filing of the notice of default to the day of the trustee’s sale.

For more info, visit: http://www.car.org/legal/2008articles/foreclosure-timeline/

To Buy or to Rent - Why not Lease Option?

In this ever changing economy, we are always looking for new innovative ways to help our clients purchase a property. And while the financial fiasco continues to limit prospective buyers capability to get a loan, people are turning to "lease options." I came across this video that helps explain the process.

Lease Option.

So, as you saw in the video, the idea of a lease option may not be too far fetched, especially in an struggling economy where Sellers are looking to sell and buyers are willing to buy.

Is now the time to buy real estate?

In a recent article written by the Contra Costa tax assessor, Gus Kramer, he proclaims now is probably the best time to buy (or start looking to buy) a home. Read his article, he makes some pretty compelling arguments...

http://www.contracostatimes.com/ci_10281259

With the huge glut of REOs and short sales, prices have come down, especially in the $1M and below price range. Obviously in Lamorinda, there are few homes under the $1M price threshold, but that is not to say that they don't exist. Moreover, you shouldn't be opposed to looking in Walnut Creek and even in parts of Pleasant Hill and Concord. If school district is a huge concern, parts of Walnut Creek feed into Lafayette schools. And some of the Walnut Creek schools test pretty well too (i.e. W.C.I. & Northgate High School).

Side note:
If you are just starting a family (or thinking about starting a family), you still have some time (3 years or more) before you truly have to worry about living in a good school district. This is not to say that it doesn't matter where you live, because I will be the first to tell you that it is all about "location, location, location!" But what I am trying to say is, don't dwell on the school districts if you don't have children that are attending. Focus on the neighborhood, the house condition, proximity to local transportation, hwys, parks, etc. Those are all key elements that you will need when and if you resell in the future. Lastly, if you do have children that are a year away from starting kindergarten, then you can start focusing on schools and where your child will be attending. As the article points out, prices in the area aren't going to get much lower and interest rates will not continue to be this low either. So if you can afford to buy now, it is probably a good time to start looking.

If you want to know some of the great buys out there, just drop me a line and I will be happy to send you a list. Happy Househunting!

Donald Trump to the rescue?!?

No, don't worry, I am not changing the purpose of this blog, but in recent news, Mr. Donald Trump (yes, the one with the bad comb-over) has decided to step up and purchase Ed McMahon's foreclosed mansion. No, he is not going to tear it down and build another high rise condominium skyscraper, but instead he is being the good Samaritan that we all believe him to be; and is going to lease the property back to McMahon, so Ed doesn't have to leave...

http://www.realtor.org/RMODaily.nsf/pages/News2008081804?OpenDocument

From Ed's standpoint, I guess the saying is, "It's all about who you know!" The funny part is Donald has never even met McMahon. He only grew up watching him and Johnny Carson on Late Night and felt that this was the right thing to do... I guess, even the Donald, has a little compassion in him (of course you would never know it by the way he acts in the Apprentice).

I Want the House with the White Picket Fence

I find it appropriate to begin my blog by talking about the "house with the white picket fence". Yes, there are many houses on the market that have a white picket fence, but I use the phrase more as a metaphor for someone's dream home. This would be similar to a