Archive for category Help for Realtors / Brokers

How Private Hard Money Lenders Help Borrowers

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on April 8th, 2010

Private hard money lenders are often individuals or small companies that provide special kinds of real estate loans for various asset classes. They offer borrowers with mortgage loan issues short-term loans or bridge loans, the amounts of which are dictated by the value of property rendered as collateral for the loan. Due to the higher degree of risk involved in lending money to such borrowers, these money lenders usually charge bigger interest rates compared to brokers and banks (among other financial institutions) as they handle transactions that the latter do not. Lenders from this category have emerged into the real estate mortgage industry due to their ability to aid borrowers who have difficulty obtaining loans through other avenues due to current economic conditions.

Borrowers who cannot work with the customary lending entities often work with private hardmoney lenders to alleviate their mortgage concerns, in spite of the higher rates involved. These types of transactions are risky, although the danger of defaulted payments for the lender is lessened by the ten to thirty-percent equity boosting the security of the loan. Aside from individual borrowers, high-risk companies also work with these lenders, as they, too, may have been unable to transact with larger lenders because of the increasingly stringent guidelines for underwriting the latter implement.

Private hard money lenders can recoup their expenses from these bridge loans or short-term loans through the interest rates they charge, which can range from a low of eleven percent to a high of around sixteen percent – much higher than what banks charge. A borrower can use his or her loan to refinance a mortgage, purchase property, or construct buildings on commercial real estate. A bridge loan may also be used towards alleviating the effects of property foreclosure and bankruptcy, or working out loans for residential and commercial real estate, vacant areas of land, and so on.

Private hard money lenders will transact with a borrower based on their analysis of his or her hard assets. Transactions with these lenders comprise partial property deed release, payments focused solely on interest, and participation, resulting in typically quicker turnaround time, and with the property’s value as collateral.

Private hard money lenders can enable delinquent borrowers or high-risk businesses to obtain much-needed financial support when needed, with the loan money usually given to the latter faster than ordinary lenders can. However, one has to ensure that after the loan is awarded, one has a solid strategy and comprehensive business plan to pay the loan as agreed upon prior to its release. At http://hardmoneylendersonline.com you can see more articles.

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Real estate expert: S.D. at leading edge of recovery

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on August 20th, 2009

By Roger Showley
Union-Tribune Staff Writer

The chief economist for the National Association of Realtors predicted yesterday that mortgage interest rates will rise to 6 percent next year but saw no evidence of a “double dip” in housing price declines.

Economist Lawrence Yun, keynoting the San Diego Association of Realtor’s regional real estate summit, said California and San Diego are at the leading edge of a real estate recovery, based on rising prices and sales.

He noted that demand locally is strong enough that there is just a 2½-month inventory of homes for sale. With construction running at a sluggish pace, he said a shortage could develop next year as buying interest picks up.

“Usually, there is a 5 percent or 10 (percent) to 15 percent recovery” in sales, he said. “That’s been the past, historic experience. California markets have seen a 50 percent increase and there have been some markets up 100 percent.”

Yun spoke to an overflow crowd of more than 700 local agents and other industry professionals at the Doubletree Hotel in Mission Valley.

Also on tap were the San Diego and state realty presidents, last year’s national association president and other speakers who all aimed to calm the jitters of agents and brokers wondering about the state of the economy and outlook for housing.

Acting like a psychiatrist speaking to his patients on the couch, Yun calmly covered many economic and political issues facing the nation’s real estate market.

He began with a confession about how he missed the real estate bubble of 2004-06. Surely, the system had enough checks and balances to avoid a runaway market, he thought at the time. “I was clearly wrong,” he said.

He said the mistake was in not realizing that lenders were indiscriminately handing out loans. But the situation became clear when he caught an HGTV interview of a young UCLA couple who had succeeded in buying a $1.5 million home with a view of the ocean.

“I was jealous!” Yun said, tongue-in-cheek.

Just two years ago this month, all started to unravel as homeowners holding subprime mortgages were unable to cover rapidly increasing monthly payments. Now, Yun said several California markets, including San Diego, are starting to recover as prices rise month by month and sales increase, sometimes 100 percent over last year’s levels. He said the monthly changes are more indicative of the future than comparisons to year-ago levels.

Yun said San Diegans should be thankful that they aren’t in Detroit, where homes are going for as little as $20,000 because of economic woes.

But in his presentation, he illustrated how San Diego had experienced a roller-coaster ride in housing prices — compared with the flat-line, no-change situation in Midwestern cities like Dayton, Ohio.

San Diego prices fell from the peak $517,500 in November 2005 down to $280,000 in January, and have risen to $320,000 as of July, according to MDA DataQuick.

“We are back to justifiable levels,” Yun said, adding that affordability is the best on record.

But nationally, he said, reports continue being issued that prices are expected to fall another 10 percent, though that may not apply to all areas of the country, especially in places where they never raced upward. He expressed concern that consumers will hear reports of further drops and will continue holding off buying and thus delay a housing recovery.

Prices are strongest in Pacific Coast states, he pointed out in one slide, helped along by what he called the “tipping-point phenomenon.”

“You had a bubble bust,” he said. “Nonhomeowners were reluctant to enter the market and are still cautious.”

But with word that buying is increasing, the fence-sitters “don’t want to be left out” and buying has become acceptable in such markets.

With the Federal Reserve’s very low short-term interest rates in force, mortgage interest rates have remained at historically low levels, currently between 5.2 percent and 5.5 percent for a 30-year, fixed-rate loan.

But come next year, Yun predicted that rates might rise to 6 percent or higher, if the Fed sees signs of inflationary pressures.

“That’s not good news,” Yun said, but he argued that 6 percent is better than much higher rates first-time buyers’ parents paid 20 or 30 years ago.

He also predicted that foreclosures will continue at high levels for the next 12 months because of the weak economy. But unlike last year, he said this year’s foreclosures are being snapped up in many markets, including San Diego.

That demand for low-cost distressed properties leads Yun to discount any chance of a “double-dip” in price drops caused by an excess of distressed properties for sale.

Noting the historically low levels of housing construction, Yun said it is possible spot shortages might develop in places like San Diego, where the inventory of homes for sale is only about 2½ months. He acknowledged that the shortage might be somewhat artificial, since many lenders are holding off marketing foreclosures in hopes that asking prices will rise.

Union-Tribune

Roger Showley: (619) 293-1286;

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Sales Activity Spiking In Southern California Real Estate

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on August 20th, 2009

By Austin Kilgore

Some investors are spying a good opportunity in Southern California real estate, where low median prices and enhanced financing is helping to fuel demand. Sales activity has recently spiked to a three year high. To learn more, see the following article by HousingWire.

Southern California posted the best July sales volume in three years and the fastest pace of any month since December 2006.

But as volume saw double-digit increases in all but one of the six Southern California counties, median prices saw double-digit declines from 2008 levels in the same number of counties.

A total of 24,104 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties in July, MDA DataQuick reported, an increase of 18.6% from July 2008.

Sales volume increased for the 13th straight month, driven by low mortgage rates, the availability of both Federal Housing Administration financing for first-time home buyers and improved financing for jumbo loans, a strong investor demand, and increased affordability, DataQuick said.

But median prices in the six-county area were down 23% on average. San Bernardino County saw the greatest increase in sales volume (40.8%), but the July 2009 median price was down 39.1% from July 2008. In Ventura County, where sales volume decreased 3.8%, the median price was only 10.7% lower than 2008.

The average monthly mortgage payment for Southern California buyers was $1,180, down from $1,193 in June 2009 and $1,710 in July 2008.

Foreclosures made up 43.4% of house and condo sales in July 2009, down from 45.3% in June 2009 and the peak of 56.7% in February 2009. It’s the lowest percentage since June 2008.

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Request for Permanent Reversal of HVCC

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on August 18th, 2009

Representatives Childers (D-MS) and Miller (R-CA) introduced legislation (H.R. 3044) requesting an 18 month moratorium on the Home Valuation Code of Conduct (HVCC). ThinkBigWorkSmall applauds the introduction of H.R. 3044 and would like to thank Representative Childers (D-MS) and Representative Miller (R-CA) for their continued efforts and leadership on this issue but it is not enough. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo’s rule. HVCC needs to be permanently reversed in order to lower costs to the consumer and to restore the thousands of real estate transactions stalled by this horribly misguided code. We the undersigned understand that the intentions of the Home Valuation Code of Conduct (”HVCC”) were to help curb the potential for fraud with respect to the valuation of residential properties. We must however bring to your attention the reality of the situation that HVCC has already caused.

1.    Since “Appraisal Management Companies (AMC’s)” are taking up to 40% of the total appraisal fee, and are not being regulated to ensure that their appraisers are licensed and competent, we are seeing unlicensed and inexperienced individuals performing property inspections with grave data entry errors. These inferior appraisals are then being “signed-off” by other parties that NEVER INSPECTED THE PROPERTY and are creating unnecessary financial hardship for buyers and sellers.

2.    With mortgage loans being denied due to inaccurate appraisals, borrowers are being forced to apply with other lenders who in turn have to charge the consumer ANOTHER APPRAISAL FEE to proceed with the transaction. This vicious cycle can go on endlessly costing well intended clients a great deal of money and time.

3.    Under HVCC, no one involved in the transaction is allowed to communicate these major issues (EVEN LICENSED LOAN ORIGINATORS) directly to their appraisers. So countless real estate transactions that would have otherwise closed are now failing, resulting in continued property devaluation and offering NO stimulus to our economy with the exception of the unregulated AMC’s who are making unjustified profits at the expense of home loan applicants and licensed, qualified appraisers.

4.    Licensed appraisers have legal and ethical standards in place already. The emphasis should be on making appraisers abide by these, rather than frustrating the ordering and communication process. This well intended legislation is severely misguided.


Although HVCC has good intentions, its flaws are severely hurting our housing industry, the consumer and our economy. We are requesting that HVCC be discontinued permanently, in order to stop the devastation it has caused and will continue to cause on our housing industry and our economy.

Sincerely,

The Undersigned


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Reappraising Home Appraisers

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on August 18th, 2009

By JAMES R. HAGERTY , 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 builders say that the pendulum has swung too far toward caution, and that lowball appraisals threaten to snuff out any recovery in the housing market.

APPRAISE

Appraisers like Evie Salazar, of Corona, Calif., are traveling far afield to find work.

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.

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.

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Real Estate’s ‘Hottest’ Zip Codes (Nope, 90210 Isn’t On the List)

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on July 29th, 2009

By Nick Timiraos, wsj.com

90210: Not as hot as it used to be.
90210: Not as hot as it used to be.

Where are sellers receiving offers that are beating their asking prices?

Try looking at neighborhoods where lots of bargain-priced foreclosures are driving bidding wars between buyers. Unsurprisingly, neighborhoods that have been glutted with foreclosures are leading the ranking of the “hottest” zip codes in a survey of the highest sales-to-list price ratios by ZipRealty, an online brokerage.

Youngtown, Ariz., tops the hottest zip code list, with homes selling in the Phoenix fringe suburb for 11% above their asking price during the second quarter, followed by the 90731 zip in San Pedro, Calif., a blue-collar Los Angeles suburb, where offers topped asking prices by nearly 10%. The list of hot zip codes includes a mix of similar middle-class suburbs close to city centers, such as Richmond, a San Francisco Bay Area community.

Hottest Cities ZIP % of Asking
Youngtown, Ariz. 85363 111.08%
San Pedro, Calif. 90731 109.90%
New Haven, Conn. 06515 107.30%
Oakland, Calif. 94606 105.61%
SD-Encanto, Calif. 92114 103.31%
Oakland 94601 103.18%
Hermosa Beach, Calif. 90254 102.58%
Chula Vista, Calif. 91913 102.52%
Richmond, Calif. 94805 102.52%
Rialto, Calif. 92376 102.45%

Other hot zip codes included New Haven, Conn.’s 06515 (7.3% above asking price), Oakland, Calif.’s 94606 (5.6%), and Encanto, Calif., (3.3%), a San Diego suburb. ZipRealty surveyed 31 of the 36 markets in which its brokerage operates. 

While eight of the top 10 zip codes came from California, ZipRealty’s Leslie Tyler notes that “many California banks may be holding onto ‘shadow inventory’ … meaning more homes could come on the market pretty quickly to change the dynamic.”

Six of the 10 “coldest” zip codes were in Florida, where sellers have taken advantage of a big overhang of supply–or wildly unrealistic list prices from sellers–to win huge cuts.

Several zip codes have had prices skewed by bulk sales of condos, including the 30326 zip, in Atlanta’s Buckhead neighborhood. That ranked as the coldest zip in the survey, where buyers paid on average two-thirds of the asking price.

Other cold zip codes included Miami’s 33142 (sellers paid an average 77.5% of the asking price); Lantana, Fla., (78%); Wareham, Mass. (79%); Boca Raton’s 33431 (80%); and Eloy, Ariz. (81%).

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A mixed bag for local San Gabriel Valley housing

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on July 29th, 2009

By Ryan Carter, Staff Writer

San Gabriel Valley Tribune

 

 

For the fourth month in a row, the median price of a single family home in California rose in June as first-time local home buyers and cash-ready investors took advantage of low prices - which continued creeping up. But in some San Gabriel Valley cities, strapped by rising unemployment, prices continued to fall.

Home sales across the state rose 20.1 percent in June, compared to last year, according to the California Association of Realtors, which issued its monthly report on Friday. And while the median price of a home declined more than 26 percent, in June it rose to $274,740 - a 4.2 percent rise from May’s $263,600 median price, according to CAR.

CAR officials and other real estate experts said the bolstered market was fueled by a continued surge of first-time homebuyers who took advantage of state and federal tax credits to move in.

The question is, will the momentum they created last, said Delores Conway, director of the Casden Real Estate Economics Forecast and professor at USC.

“These are the prices of sales in June … so probably people bought these in May, which means people are taking advantage of the stimulus,” she said, referring to the $8,000 federal tax credit. “But California is no longer taking applications.”

It remains to be seen what effect limited rebate funding will have on inventory, Conway said. Shrinking inventory has driven the median price up. And while the market is showing signs of recovery, there are other headwinds to watch out for, such as more foreclosures and rising unemployment.

Another surge of foreclosures is expected later this year, CAR’s Senior Economist Leslie Appleton-Young said. If demand for homes remains strong, the market may be able to absorb the surge. If not, the median price will fall.

Much depends on jobs.

Worries about unemployment not only spark foreclosures, but they also create timid buyers.

“It’s not just people who are unemployed,” Conway said. “It affects people who are nervous, potential buyers who might want to take advantage of these prices ….”

The unemployment picture seemed to link up with the housing picture in some areas of the San Gabriel Valley.

For instance, El Monte - at 14 percent unemployment - bucked the state trend of rising prices. The city saw its home values fall 7 percent from May to $270,000. La Puente’s home values held steady compared to May at $230,000. Whittier continued falling from $305,000 in June to $295,000 in July. So did Covina, which went from $291,500 in May to $281,000 in June.

But other cities mirrored the state’s trend.

In May, the median home price in Pasadena was $503,000, according to CAR. In June, it was $521,500. In all cases, across the valley, home values are much less than what they were in June 2008.

That has attracted buyers looking for deals, and those with ready cash have an advantage.

“There’s a lot more cash offers,” said Victoria Chen, who with her partner Charles “Buck” Stapleton at Masters Realty in San Marino is seeing values reaching 10 percent above asking prices as bidding wars spark up on homes.

“It’s definitely turning around,” she said.

Nationally, new home sales jumped in June by the largest amount in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.

But whether the housing market had recovered - or when it would - was something Chen could not say.

Uncertainty about jobs may be why.

“Can we say the housing market is stabilized yet?” Conway asked. “We need to see unemployment stop rising. But it’s better than the alternatives.”

The Associated Press contributed to this story.

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In East Bay, not all assessed values of property dropping

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on July 28th, 2009

Alameda Journal

They’re the East Bay’s elite eight — cities where assessed property values have bucked downward trends and eased the pain city governments are feeling from the recession.

Alameda, Piedmont, Albany, Berkeley, Emeryville, Lafayette, Moraga and Orinda have all seen their assessed property values increase, albeit slightly, according to data from the Alameda and Contra Costa counties’ assessors’ offices.

The increases are from 1.5 percent to 5.4 percent, but they buck a trend that has seen assessed values decrease by 2.24 percent in Alameda County and 7.2 percent in Contra Costa County.

Property tax assessments are calculated by county assessors’ offices and are used to determine property taxes to be paid for a given parcel. Property values, on the other hand, are set by what a house or parcel would fetch on the real estate market. The two are distinct and separate numbers, and property values can drop even when property tax assessed values rise.

“I suspect it’s because we are not suffering the same foreclosure rates as other communities,” said Lisa Goldman, Alameda’s deputy city manager. “We also have a lot of older properties that tend to hold their value.”

Some observers suggest that in cities with fewer home sales, houses usually are also reassessed less often.

Steve Reiser, president of the Contra Costa Association of Realtors, said Lafayette, Moraga and Orinda are three cities where homes change ownership less often. When people stay in their homes longer, he said, the value of the property is more likely to increase when they eventually sell.

 

“You’re probably going to see overall the adjustments go up because there’s not a lot of turnover,” he said.

In areas where there has been more turnover, assessed values were driven up faster and so are more likely to decline in the recession, Reiser said.

Alameda County Chief Deputy Assessor Russ Hall agreed, pointing to lower turnover as a possible factor in increased assessed values.

He said cities where taxable valuation has increased are those with values that were, on average, higher to begin with.

“Those folks, they buy those very nice houses and they’re happy,” Hall said. “They don’t sell them.”

In Piedmont, the average sale price has dropped as the economy has slumped, despite the assessment values remaining about steady, said Mark Bichsel, the city’s finance director. The average price is now $1.4 million, compared to $1.7 million a few years ago, when the market was booming.

Regardless of what has caused the assessed value increases, city officials are happy to have the additional property tax money — or at least to not see another revenue source dwindle.

“It certainly helps,” Goldman said. “But there are so many factors that play into our budget that it’s hard to say how it will affect things.”

This year Alameda could lose about $2.2 million in property taxes — part of the money the state wants from local governments to help bridge a $26 billion deficit — under the latest budget proposal from Gov. Arnold Schwarzenegger.

Lafayette had budgeted for about a 3 percent increase in property tax revenue, just less than the 3.31 percent increase now expected, said Administrative Services Director Tracy Robinson. The monetary difference is small, about $50,000, but Robinson said the extra cash is more than welcome.

“Fifty-thousand dollars is $50,000,” she said.

At the other end of the spectrum, Antioch officials were told their property tax revenues would be reduced nearly 22 percent, much larger than the 4 percent reduction that had been budgeted, for a total hit of $3.25 million.

“It means we can’t maintain operating in the current manner, even in the current fiscal year,” said City Manager Jim Jakel. “We’re going to have to make significant operational changes.”

Staff writers Hilary Costa and Peter Hegarty contributed to this story.

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So Cal Home Foreclosures strike in waves

Posted by Chas W. Leeper, SRA in California Home Values and Market Trends, Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers on July 28th, 2009

INLAND EMPIRE–Riverside and San Bernardino counties posted Southern California’s only decrease in foreclosures during the spring quarter.

In San Bernardino County, the drop was 8.2 percent compared to the second quarter of last year.

But, Andrew LePage at the DataQuick real estate information service points out, “In late June across the state, foreclosure activity started to pick-up again. It’s difficult to say if the worst is behind us.”

Foreclosure activity picked up the fastest last quarter in such large counties as Los Angeles and San Francisco.

Story Date: July 28, 2009
 

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US new home sales in June above expectations

Posted by Chas W. Leeper, SRA in Help for Buyers, Sellers & Homeowners, Help for Realtors / Brokers, Help for mortgage pros on July 28th, 2009

By Armando Duke

(AXcess News) Houston - New home sales in June rose 11 percent, its highest one-month gain in eight years, according to the latest US Department of Commerce Report.

Last week data showed that existing home sales in June rose 3.6 percent, adding to the level of demand for US property purchases.

On a seasonally adjusted annualized  basis 384,000 properties were sold in June, with May new home sales figures revised upwards to a rate of 346,000 units.

Credit was given to the tax break provided to first-time homebuyers of up to $8,000 for the number of new homes sold in June.

Real estate pundits on average expected to see a total of 360,000 units sold in June.  But with homebuyers having to take advantage of the tax credit, sales need to be completed by November, which may be why the rush for properties is taking place.  Still, tax credits aside, the price of homes have dropped considerably since the onslaught of the recession.

The median price of a new home sold in June was $206,200, which is down 12 percent from the same period last year when the median home price was $234,300.  But compared to May, the median home price dropped 6 percent from $219,000.

Despite June’s strong showing in home sales, the National Association of Realtors (NAR) insists that appraisal problems are affecting sales and if the issue is dealt with, even more homes would have sold.

“Our members were experiencing delayed and lost sales because of poor appraisals conducted often by inexperienced appraisers who were not familiar with the area,” said NAR President Charles McMillan in a statement issued July 23, 2009 when the Realtor’s group praised the Federal Housing Finance Agency’s move to clarify confusion over the new Home Valuation Code of Conduct for home appraisers implemented this past May.  The FHFA had instructed Fannie Mae and Freddie Mac to take action.

“The ramifications were so great to our members and to the housing industry that I personally met with the New York Attorney General’s office and with the head of the FHFA to share our concerns,” explained McMillan.

“In those meetings I shared an NAR survey that found 76 percent of our members, representing both buyers and sellers, had experienced an increase in appraisal time since the new HVCC rules were enacted. Similarly, 71 percent of Realtors noted an increase in the use of appraisers who were not from the local area. These factors often adversely affected the sale or the sales process, which occasionally resulted in the loss of a sale or a homeowner’s inability to refinance into today’s lower rates. I expressed our serious concern in the meetings.”

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