California Home Inventory Shrinks to 5-year low.
January 29th, 2010 by Village PropertiesInteresting article in last week’s WSJ.Click here to read more…
The Pressure Cooker
January 25th, 2010 by Elaine AbercrombiePhew! After four years of declining home sales across the country, the numbers appear to be finally turning back upward, with closed sales and pending contracts at above-normal increases. In particular, first-time buyers helped buoy the market by taking advantage of low prices and interest rates, as well as they $8,000 tax credit offered by the federal government.
Weekly MLS Pendings
December 14th, 2009 by Jackie Walters33 pendings for week ending 11/29/09
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0-1 million 21
1-2Â Â 6
2-4Â Â 2
4-8Â Â 3
8+Â Â 1
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36% over one million - highest percentage since September 2009
The Village Voice Real Estate Update - Fall 2009
September 30th, 2009 by Village Properties
Village Properties quarterly newsletter is now available.
Housing market may be nearing equilibrium, latest price numbers indicate
September 16th, 2009 by Maddox ReeseNationwide, the average price of both new and existing homes sold in the second quarter fell 1% from the same quarter a year ago, according to the latest government figures.Among the country’s 32 largest metropolitan areas covered in the survey by the Federal Housing Finance Agency, 16 showed price increases and 16 registered declines. Read the rest of this entry »
Consumer Confidence
September 16th, 2009 by Jenae Johnson
On August 25, 2009, The S&P Case-Shiller Home Price Index indicated the the home sales prices are moderating at a faster rate than expected.  On September 1, 2009 the Associated Press reported that the Housing and Manufacturing sectors are showing signs of strength. Home construction, pending home sale and manufacturing are all at their highest levels in 10 to 18 months.Consumer Confidence rebounded in August after a slight decline in July. July Pending Home Sales are at their highest level in 2 years and are rebounding faster than expected. “The overall trend toward stabilization is undeniable at this point,” wrote Mike Larson, real estate analyst at Weiss Research. According to the National Association of Realtors “Pending Home Sales Are on a Record Roll”.According to Forbes.com, Santa Barbara is among the top 10 best cities for a housing recovery.For the 4th straight month in a row, new home sales surged and for the first time in 3 years home prices post quarterly rise.Federal Reserve Chair, Ben Bernanke, has stated that he believes that the worst is over.According to a recent survey by Relocation.com, people are moving for happier reasons.
A few good articles from the Wall Street Journal
September 9th, 2009 by Maddox ReeseHi Everyone,
Here are a couple of good articles from the Wall Street Journal.
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The first provides a few strong statements about the improving marketplace. The second illustrates some of the challenges with the new appraisal system and might help you gain insight as well as motivating you to write your representative so that the someone from New York stops dictating how business is done in California!
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Cheers!
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PEOPLE STARTING TO INVEST IN REAL ESTATE AGAIN
Wall Street Journal
Recently over dinner, a friend of mine startled me by saying he and his wife were looking to buy a lake cabin. I figured that in this time of economic uncertainty, people would still be stuffing their mattresses with hard, cold cash. But buying real estate? That seemed particularly surprising.
The more I’ve talked to people, though, the more I get a sense that things have started to change. While the economy remains in rough shape and the jobless rate continues to rise, the frantic desire to save and build cash reserves has ebbed. Those fortunate people who have weathered the storm are emerging from their fetal crouch and starting to think more about taking some investment risks.
What I find especially interesting is where most of my risk-taking friends are headed. It isn’t the stock market; in fact, the only folks I know who have waded back into the stock market are the gunslinger types who never really left it.
Instead, they seem to be heading for real estate. At first I found this puzzling, given the brutal battering real estate has taken. But that’s the point: An increasing number of my friends see this as the perfect opportunity to find something at a bargain-basement price.
And so, among my friends: A New York executive and his wife are looking for a summer place in New England; a small-business owner in Minnesota is thinking about acquiring some rental property; a New Jersey technology consultant is considering buying a small apartment in New York, perhaps with some other friends.
The Case for Real Estate
The people doing this are employed, feel confident that they’re not going to lose their jobs, and believe that while housing prices may fall a bit more the bottom is not too far away. Moreover, financing remains relatively cheap and, according to one lawyer I know in house-hunting mode, banks aren’t as tight with mortgage lending as headlines indicate.
As I wrote a couple of months ago, it’s always dangerous to hypothesize a global trend based on the all-too-limited view from your own backyard. But it’s also sometimes an insightful way to get a jump on what’s coming. And for me, what’s most intriguing is that, for now, most of this risk talk is prospective. There’s no sense of rushing, no desire to “stretch” too far in making a purchase. It’s like these people are permitting themselves to dream a little bit and get closer to pulling the trigger. But they want to be doubly sure before making a move.
What’s more, all of these people have a similar, cautious, mind-set. They don’t believe real estate will rebound or make a great investment. But they also don’t think real estate will lose a lot of value. Instead, they are focused on real estate as something they can use: a solid place to live or play that should also be, at worst, an OK investment.
Not all investments are the same. You can’t live in a stock certificate or gaze wistfully at a bond (at least most of us can’t). In what is still a time of tumult, there’s something deep inside us that finds the solidity of a home soothing. I think that explains why people moving out on the risk scale are focused more on real estate than on stocks or bonds.
The Personal Hunt
My wife and I recently considered buying some property, too. We don’t own our home, and we’ve thought about one day returning to the Midwest. On a recent trip to Minnesota, we looked at several properties, including an old farmstead on the outskirts of St. Paul.
Examining the farmstead, it became clear why people who have ridden through this economic storm in decent shape are thinking more about real estate. It had been on the market more than a year, the price had fallen more than 60% and the seller would only take offers that didn’t require the sale of another home before closing.
Ultimately, we decided not to purchase the house, but we continue to hunt because we believe bargains can be had. We also think those bargains aren’t going away anytime soon, which is a thought shared by many and a big reason that real-estate sales remain sluggish.
Even as my friends, as well as my wife and I, consider making real-estate purchases, I am quickly reminded of how real-estate fixations got out of control earlier this decade.
An entrepreneur I barely know recently confessed how he owned seven homes, all of them rented, all of them underwater. He figures he’ll do all he can to hang on until prices rebound. His credit cards are groaning and his business is struggling. He provides a stark reminder that investing in property can go off the rails as quickly as anything else.
That is probably why the current real-estate chatter I hear sounds very different from the speculative boom of the recent past. While buying a second home or even considering some rental property entails risk, I don’t hear the kind of zero-down fervor familiar just a couple years ago. Instead, it’s about buying something that you can touch, feel and see—and imagine holding onto for a long time.
CHALLENGES WITH APPRAISERS IN THE NEW ENVIRONMENT
Wall Street Journal
After being blamed for helping to inflate home values during the housing boom, the appraisal business is again coming under fire.
Squeezed by a drop in fees, some appraisers are compensating by driving long distances to handle more assignments. Their wanderings are raising questions about whether they know enough about the neighborhoods to accurately assess the value of homes—which has implications for both home buyers and owners.
Bob Blake, a flight-test engineer who lives in Palm Beach Gardens, Fla., was shocked when an appraiser who traveled 44 miles from Port St. Lucie, Fla., valued his home at $228,000 in late May. Mr. Blake’s mortgage broker, Skip McDonough, protested to the appraisal-management company, Nations Valuation Services Inc., that the appraiser had failed to look at comparable homes. Eventually, Nations sent another appraiser, who valued the home at $295,000. The dispute delayed Mr. Blake’s refinancing by more than six weeks.
A spokesman for Nations Valuation declined to discuss the details of the appraisals but said, “We feel we handled it properly.”
Appraisals are supposed to shield home buyers from paying too much and lenders from overestimating the value of collateral. If appraisals come in too high, buyers may overpay, making defaults more likely. If they are too low, it becomes hard to sell or refinance homes. Many real-estate agents and
In June, Evie Salazar traveled about 75 miles from her office in Corona, Calif., to do an appraisal in Cathedral City, Calif. Usually, Ms. Salazar says, she tries to work within about 40 miles of her home, but business was slow at the time she accepted that job. “You do what you’ve got to do at times to feed the family and pay the bills,” she says.
Ms. Salazar, an appraiser for the past 12 years, says she researched the Cathedral City market carefully and did a good job. But many real estate agents and mortgage brokers charge that some wandering appraisers are coming up with dubious estimates. Too many appraisers are getting assignments in places where they “just don’t know the nuances,” says Rick Turley, who oversees the San Francisco Bay area for the Coldwell Banker real-estate-brokerage chain.
The debate over appraisals is inflamed by a natural tension: Real-estate agents and mortgage brokers, who need to complete transactions to collect their fees, are unhappy when an appraiser nixes the sale price. But it also suggests that there may be unintended consequences to an attempt by New York Attorney General Andrew Cuomo to reform the appraisal business.
Using the threat of litigation, Mr. Cuomo last year prodded the government-backed mortgage investors Fannie Mae and Freddie Mac into adopting a new code of conduct for appraisers. Since those two companies provide funding for the bulk of U.S. home mortgages, the code, which took effect May 1, has become the national standard for most home loans.
The code bars loan officers, mortgage brokers or real-estate agents from any role in selecting appraisers. One result is that more lenders have outsourced the selection to appraisal-management companies, or AMCs, which take a sizable cut of the appraisal fee, often 40% or more. The AMCs pay appraisers as little as $175 to $200 per assignment, compared with the $350 or more that many get when they work directly for a lender.
“Many appraisers are struggling to survive on the fees paid by the AMCs,” says Bill Garber, a spokesman for the Appraisal Institute, a trade group based in Chicago. Appraisers are being asked to work faster even as their fees are cut, and that conflicts with the goal of getting reliable appraisals, he says.
Squeezing Appraisers
Appraisal-management companies deny they are squeezing appraisers too hard. A spokesman for banking giant Wells Fargo & Co., which owns an AMC, says it “has invested substantial time and resources in the quality control of the valuation process to, among other things, ensure that individual appraisers have relevant knowledge of the markets and properties they review.” A spokeswoman for Mr. Cuomo says the new code is working well and helping protect appraisers from pressure to inflate estimates.
Appraisers are required to follow a set of national rules known as the Uniform Standards of Professional Appraisal Practice. Among other things, those rules require that “an appraiser preparing an appraisal in an unfamiliar location must spend sufficient time to understand the nuances of the local market.”
Yet some appraisers who travel long distances to find work may be hard-pressed to spend “sufficient time” in an unfamiliar market. LaRon Hall did an appraisal in early June on a home being sold in Palm Desert, Calif., about 86 miles from his office in Rancho Cucamonga, Calif. He says he needs to accept jobs within a broad swath of Southern California to earn a living. Under the new appraisal code, Mr. Hall says, “you’re getting less money and you’re having to do more. … It’s definitely a sticky situation.”
Mr. Hall appraised the three-bedroom home at $186,000, far above the $138,000 for which it sold in late June. Concerned about accuracy, the mortgage lender that financed the purchase rejected Mr. Hall’s appraisal and ordered one from another party before making the loan, according to a person involved in the transaction.
A spokesman for Equifax Inc., whose AMC unit ordered the appraisal in Palm Desert, says Mr. Hall has an excellent record on appraisals and that Equifax has a “rigorous quality-control process.”
Though consumers can’t choose their own appraiser—unless they’re paying cash for a home—they should request a copy of the appraisal and examine it to see whether it contains any errors in the description of the property and whether the nearby homes, or “comps,” used to gauge its value are truly comparable. If they aren’t, the consumer should present any evidence of flaws to the banks and insist that the appraisal be reviewed and redone if necessary.
Carol Kearns, herself a real- estate agent, complains that an appraisal done on her own Montvale, N.J., home in June was “an unprofessional guess.” The appraisal came in at $730,000, which was more than enough to qualify Ms. Kearns and her husband, Robert, to refinance their mortgage. But Ms. Kearns, upset at what she sees as sloppy work, maintains that the home is worth more than $900,000.
The appraiser was Uchenna Eboh, whose employer, Kobi Group, is about 46 miles away in Mendham, N.J. Ms. Kearns says Mr. Eboh didn’t seem to know her neighborhood and used dissimilar houses as “comps.” Among those, she says, were two on much smaller lots and one on a busy street corner.
‘Reasonable Proximity’
A colleague of Mr. Eboh says he couldn’t comment and referred questions about the appraisal to the AMC that ordered it, Lender Processing Services Inc.’s LSI unit. A spokeswoman for LPS says the appraisal “followed the processes required” by federal standards and LSI’s “more-stringent requirements.” She says LSI “only uses local, knowledgeable appraisers located within a reasonable proximity to the properties.”
Sometimes appraisers are called on to express opinions on the values of faraway homes without even seeing them. LandSafe, an appraisal unit of Bank of America Corp., in May assigned Jane Price, an appraiser in Dallas, to review another appraiser’s estimate of a home in Cathedral City, Calif. Ms. Price didn’t visit the neighborhood in question, but her review cited nearby homes she used to determine comparable value.
Ms. Price declined to comment. A spokeswoman for Bank of America says Ms. Price was asked to do only a “desktop review” of the original appraisal. “California is a state which has a lot of market information available, which allows a reviewer to gather credible data about a property even when they are not in the immediate area,” the spokeswoman adds.
Get them while they are hot!
August 5th, 2009 by Elaine AbercrombieWow, here it is August already and the market is showing signs of sizzling sales. Another month in the triple digit sales for the south County of Santa Barbara. From Carpinteria to Goleta home sales are averaging four a day and we have an overall supply of seven months supply. But don’t let the supply number fool you. Just when you hear the media talk about another wave of foreclosures let’s look to see what’s happening here. With the low end flying off the shelf and only leaving 17 homes in the area available under $600,000 regardless of short sale, real estate owned by the bank or a traditional sale seems the only difference is that there’s not much to choose from. With pressure on interest rates to rise in the future, might this be the bell ringing loudly, saying it’s time to buy if you are going to make it at all?
Santa Ynez Valley Real Estate Market Showing Rebound
August 5th, 2009 by Judy CrawfordAfter months of not so good news about the real estate market in general, more recent statistics show the Santa Ynez Valley is experiencing a turn around. Those statistics include a 20% jump in number of sales in the Santa Ynez Valley in the first six months of this year as compared to the last half of last year! The Valley has had 24 final sales (closings) in the past three weeks alone!!!
Welcome to Horse Heaven
July 22nd, 2009 by Charlotte BredahlThe beautiful Santa Ynez Valley is located about 30 miles north of