Real Life Real Estate Blog

Do you live in the Washington D.C. area? Do you want fair access to a multiple listings service? Too bad…at least for now. Federal anti-trust lawyers are working to unravel the web of collusion created by a group of Columbia area brokers who formed the MLS company in their area and are using it to exclude other brokers and maintain higher fees…allegedly. For more on the story you can read this detailed article at cnbc.com.

Sacramento’s under $300K market is “popping,” and many first time home buyers aren’t preparing themselves to take advantage of it.  I get calls everyday from folks who’ve finally made the decision to get into the real estate loop. The problem now is TIMING. For the first time in 2+ years, I run a report for active listings in the morning, show about a half dozen homes, pick one we like, call the agent to see if any offers have been made…and find out that the home has just gone pending with 3 to 8 offers.

So what’s happening out there? Well, the investors are swooping in like hawks and scarfing down anything that has a pulse. They often make all cash offers on the best deals; namely bank-owned REO’s. How does a first time home buyer have a chance in this market? The solution is to get PRE-APPROVED, have a good down-payment (borrow it from family if you must), and be ready to pounce the second something scurries onto the market. A good agent can follow default short sale properties and place a low offer just to see if you get it! They should continue to follow the defaults that don’t sell … and be ready when it re-lists as an REO listing from the bank. All can be done simultaneously. Many inexperienced buyers don’t know you can make offers on different properties at the same time. So find a good, honest loan person to help you be armed and ready. I have a few trustworthy sources …as I’m sure many an agent does.

Ever hear the phrases, “turn that frown upside down” or “see the glass as half full?” Each one is a reaction to the palpable pessimism of the person at whom it is directed (try saying this three times fast…palpable… pessi… uh!). Depending on your mood, or which parking space you didn’t get into this morning, these phrases can be quite annoying. Yet, other times you’ll find yourself repeating these colloquialisms to a downtrodden friend or co-worker. Even though I’m a pretty optimistic person, I am certainly not one of those suspiciously cheerful gals who smiles widely no matter what’s going on around me. However, I am willing to run the risk of offending some of my more pessimistic readers (none of which is intended) by applying a “look on the bright-side” mentality to the current Sacramento Real Estate market.
I know there are people out there whose houses are “upside down” and that is definitely reason to frown. But even in the worst of situations some good can be found for someone. Short sales with governmental debt forgiveness help or even a phone call to the bank for loan modification might possibly save some owners from complete despair. Instead of going down the path of Chicken Little, I would like to address the flipside of the housing downturn for the new fortunate members of society. There are plenty of people who would like to own homes that never have before, and others who are finally able to afford to invest in real estate for the long term benefits. These people are the yang (tranquility) to the housing markets ying (chaos). While average home prices are still lowering, the number of great deals on homes for sale is slowly starting to decline. “Why?” one might ask. It’s simply because… many people who buy homes now for $250K that sold years ago for so much more…are finding their “diamond in the rough” instead of a “sinking ship.” Great deals are going into “pending status” daily in the greater Sacramento area. My advice, change your frame of reference and act now because people will still be complaining of the housing market woes when the glass really does get to half empty and the housing market starts to bubble up again.

My advice is to forget the media, water-cooler buzz, bank advertisements, etc… and go straight to your favorite Realtor and ask for recent pending & sold statistics within a 1/4 mile neighborhood radius of your “dream home.” Why? Because the bottom has literally gone up in some markets. Since February 1st, I have been involved with more multiple offerings than all of last year combined! Anatolia and Elk Grove in the Sacramento Valley have people clammering over short sales and bank owned properties. Just last week, I could no longer find what 2 of my buyers were looking for in these areas. They were priced out with 8 offers on one home and 15 on another. Ok, I admit the homes are priced to sell, but eventually they will ALL sell. I think you get the point. Don’t hedge your bets so closely that you get greedy! Think about it for a minute. That was pretty much the mindset that got us into this mess. All I can say is go out and purchase now and make any reasonable offer on a traditional listing, short sale or bank owned home you like. Regardless of what you hear about the market going up or down…you are likely to get a great home in the scheme of things. So cheers, California has NEVER been so affordable…and I’ll drink to that!

Everyone from Wall Street to Singapore would like to know exactly when the US housing market will bottom. Being a savvy investor, I am not disclosing the date and time that I have accurately predicted.

However, I will let the world know some of the methods I have used:

1. Swing a pendulum over the Real Estate section of your local newspaper and ask it, “Is today the bottom?”.
2. Talk with your pet. Animals tend to be more in tune to the climate outside. The same applies for the financial climate.
3. Listen to one of Donald Trump’s Trump University CD’s backwards. He’ll tell you when the bottom will hit and it will blow your mind.
4. The month before the bottom comes the show “Flip that House” will not run as often on TLC.
5. Eat Alphabits cereal and look for the month in which the bottom will be upon us.
6. Consult your trusty eight ball.
7. Go to the sauna at your local gym. Stay in longer than the recommended 10-15 minutes to find your “Spirit” Financial Advisor.
8. Send a letter to Ben Bernanke asking when the housing bottom will hit. I’m sure you will get a prompt and overcompensated response.
9. Watch the much anticipated upcoming movie, “The Sub-prime Code.”
10. Wait for CNN, FOX News, MSNBC, and Oprah to tell you when the bottom hits.

Just now Ben Bernanke and the FED announced yet another rate cut. The FED’s discount rate was cut 3/4 of a % to 2.5% and the FED Funds Rate was also cut 3/4 of a % to 2.25%. I know most people think that rate cuts are good and they look that way because people automatically think that rates going down means adjustable mortgage rates go down…not true. A lot of people’s rates can actually go up because they are tied to other indexes that rise when the FED rates are lowered. If you are one of those lucky people whose adjustable mortgage payments went down, congratulations! You can thank Ben Bernanke for decreased housing expenses and for inflation that makes everything else in your budget more expensive. This is quite a gutsy move for the FED to pull when one of America’s biggest and oldest financial institutions, Bear Stearns, went from something like $150 a share to being bought for $2 a share by JP Morgan in a week! If that isn’t a Great Depression style bank run, I don’t know what is. Check out CNBC.com for more details about the cut or read Pat Kitano’s article about Bear Stearns on Transparentre.com

On the occasions that you’d been to Acapulco, you would have probably remembered the rounds of golf that you might have played, a morning of fishing, or dinner at one of its many restaurants. Surely you would remember with nostalgia the fresh sea breeze or the sunset on the terrace of your hotel room. During many years Acapulco has become one of the favorite tourist destinations of our country and on a world level. However, in the last 10 years Acapulco has been renewed; the well-known areas like Acapulco Diamante located between the Puerto Marquez bay and the international airport have given a modern thrust to the old Acapulco. This modernization boom has been fueled by the thousands and millions of public (through modern infrastructure) and private investment dollars by means of three additional golf courses, shopping centers, new entertainment, and the buildings of groups and departments dedicated to more luxurious and modern development of our country while keeping intact the traditional taste of the port city.
In Realty World Opus we are participating in the commercialization of the best of the developments of the area: Vidamar which groups 240 apartments in 10 clusters that surrender themselves immediately, and Vidamar 2 with a beach front of 150m (~450ft) the most luxurious option in Acapulco Diamante. E-mail denise@teamshanahan.com for more information.

From the United states the most frequent flights are from the cities of Los Angeles, Houston, Chicago, and Newark among others.

It’s official. The conforming loan limit has been temporarily raised. While it won’t save the economy, it will definitely make it easier on those who are encountering difficulties when looking at their home finance options. Check out this article in the Seattle Times.

I feel as if there should be horns blaring from every mortgage office in America with the news of a bill that will raise the conforming loan amount from $417K to $625-$725K. Either number would add some much needed help. One of the main obstacles in doing a loan in California or New York or any area where the median home price is more than $150K is the conforming loan amount. Most people don’t know what the conforming loan amount is, so if you are not already privy to it, here it is. The conforming loan amount is the maximum total loan amount (includes fees, taxes, insurance,etc.) that either of the two government entities, Fannie Mae or Freddie Mac, will guarantee to buy on the secondary market. What does that mean? That means that under the current rules, if your bank does a loan for you for under $417K and they can’t sell it on the secondary market as a mortgage security, the government guarantees them that either Freddie Mac or Fannie Mae will buy them. Because loans over this amount are somewhat more risky because there is no guaranteed buyers for the banks, these loans cost more and are often prohibitively expensive to home buyers.

It’s been floating around news rooms all over the world that Bank of America bought Countrywide. This seems like a very smart move for B of A CEO Kenneth D. Lewis. He’s taking advantage of the markets downturn to buy out and absorb one of his company’s biggest competitors in the lending market. Having already invested some $2 billion in Countrywide in August, B of A purchased Countrywide for an additional $4 billion bringing the sticker price to $6 billion dollars including Countrywide CEO Angelo Mozilo’s estimated $36 million in walking money. While some critics say that it may not be a good idea for B of A to incur the risk inherent in Countrywide’s poorly qualified loans, I say nay. While it may seem like an odd decision right now, B of A is obviously playing for the long run; something Countrywide never payed attention to.

This is indicative of two things I see happening as a result of the “mortgage mess,” that will lead us into an economy where only the big banks are going to survive and get bigger. First, large banks are bulking up liquidity in order to participate in a buyer’s market by keeping consumer interest rates near the same level as before the cuts and they are closing their doors to the wholesale brokers who make loans from multiple banks. Second, CEO’s of failing financial firms who are packing their desks are also throwing sweet severance packages into their saddle bags as they ride off into the sunset. This gives CEOs who are sweating the current market some relief because they know at least they can take the money and run, regardless of shareholder interests or poor performance. So what does this all mean? It means that their is an incentive for CEOs of smaller financial firms to sell to big banks resulting in fewer banks which will completely eliminate the wholesale brokers and decrease competition. The era of big interest rates from a few big banks is coming back into vogue in the next decade and Bank of America is leading the way. Perhaps Kenneth D. Lewis is in the process of writing a theatrical masterpiece called, Death of a Wholesale Mortgage Broker.