HARP - Home Affordable Refinance Program Remember when you were growing up and your parents or teachers said, "IF you do this, THEN you can have that?" In Real Estate it might be something like, "IF we get rid of all the distress sales, THEN we can have price stability and the eventual return of appreciation again." That is the way life is supposed to work, right? We like to know that if we do something, something else will naturally follow. IF I eat right, THEN I stay in shape; IF I follow the rules, THEN I stay out of trouble; IF I treat my clients well, THEN they tell their friends, etc. Well for 6 years now I have been commenting on a Real Estate business that has not been at all predictable. Starting with the Bush Administration, the thinking was IF we make short sales easy to do, THEN sellers will use them as a way out of being upside down. Wrong! Lenders will tell you that 60% of people in default never even speak to their lender about options. They
Neal's Blog
I have suggested in my last few posts that there is so much information available about statistics and trends in Real Estate that we should be clearer on where the market is going than ever. I have also stated this is not the case because for every story with something positive (foreclosures at lowest numbers in 4 years, prices up in May and June), there is an equal negative (unemployment unexpectedly higher, closings off 30% from 2010). Because Real Estate is about numbers, and numbers can be easily manipulated, I like to share what I know is happening right now in Santa Clarita and what I think we will continue to see for the next few years. Hopefully this explanation will eliminate confusion for buyers and sellers alike so that they can buy or sell with confidence. Or at least I hope it does. I call it the "20-60-20?rule of Real Estate, and understanding which group the home you are thinking of buying or selling falls in, explains a lot. 20% of the homes
I sold my first house in May 1991, 20 years ago. The business then was in many ways easier to understand and predict, especially with respect to values. In California for example, when we go up we go up a lot and when we come down, the same has been true. Appreciation of over 20% or depreciation of over 20% in a single year happens more here than any other state. So you can see why being able to look at trends and make value predictions is important for a good agent when advising clients. In 1991, the business was also much more labor intensive – offers were presented in person, cell phones were rare, and the internet and email didn’t exist. If a buyer wanted to see property, they relied 100% on the agent to pick the homes to view, often from a book published every 2 weeks. Think about it! Still, with all the tremendous improvements in the amount of information and statistics, it is amazing to see just how difficult it is to fully understand what is really going on in the
For 15 years I have started the New Year with a review of the past year in Real Estate and offered some suggestions on what we might see in the year(s) ahead. Reviewing a year like 2010 may be harder than any year before it. The first half of the year had unexpectedly strong buyer demand (fueled by government incentives) and the second half was much slower than expected as the stimulus ended and inventory rose every month from June on. I would describe 2010 as "confusing." As I have suggested before, I have never read so many news reports on Housing that would seemingly contradict each other. Many well respected analysts have published convincing articles explaining why housing in many areas is "undervalued." Could that include Santa Clarita? Yet, in the very next article I would read that there are over 7 million homes in some stage of foreclosure which will keep values down until 2020. 2020? That would be the longest slide in home
As we wind down 2010 in Real Estate there have been big changes in how short sales are being negotiated that ultimately will affect how long this market will continue. First, just the amount of attention given to short sales in 2010 was more than ever before. For regular sellers, they likely had an appraisal or even a sale affected by lowball short sales happening in their neighborhood. For Banks and investors, they invested huge capital into processing short sales as they were inundated with short sale requests by upside down sellers. Buyers continued to be frustrated by prices that were too good to be true and turn times on offers that still require many months in most cases. Many buyers will now tell their agents, "don’t even show me a short sale!” Finally, realtors continue to be confounded by how to best process them and to understand why some are approved and some are denied. This yearend report will be for every one of these people because the simple reality is that short sales
A friend of mine that sells Real Estate in the Bay Area was commenting to me recently how it seems to be taking much longer for his listings to sell, in almost all price ranges. Another realtor friend in San Diego shared that the amount of showings he has on his listings has gone down considerably, especially in the last 75 days. Every week I meet with the top agents in Santa Clarita at a network meeting and the consensus there is that even the large under $400,000 thousand buyer pool we had 6 months ago seems to have all but evaporated. When you are contemplating selling anything, and especially Real Estate, it is important to know what to expect before you start. How many buyers are out there? How long might this take? How much room should I expect for negotiation? What should I do to make my home more attractive to buyers? For each home the answers may differ slightly, and knowing the answers is one of the most important services any good realtor