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Virtual Staging

This is why it’s important to see properties in person – we are less confident than ever that the online photos can be trusted. From the WSJ:

Real-estate listing photos have always accentuated the positive, but computer-generated imagery of the sort Hollywood uses has now become so cheap and prolific that home sellers are taking out walls, removing ugly paneling and even adding digital swimming pools.

At the same time, photos are more important than ever: Nearly every home search begins online and deals are often struck without in-person showings, particularly among investors who are putting photos through their own algorithms to price homes as they make an unprecedented move into the U.S. housing market.

The technology allows sellers to green browned lawns, stage rooms with virtual furniture like digital dollhouses and even perform full-blown HGTV-style makeovers with clicks of a mouse.

The hazards to buyers range from disappointment when they arrive for in-person showings to blown renovation budgets. That could prove an especially thorny issue for investors, who may need to retrain computer models they use to comb through listings for houses that are good candidates to turn into rentals or flips.

Risks associated with doctored listing photos could spread beyond sight-unseen buyers. Federal rule makers are considering a proposal to open up more of the home-appraisal business to computers that generate property values partly by scraping online listing photos to gauge condition and finishes.

The computer-generated images are so good these days that humans have trouble spotting them. That’s causing problems for regional broker cooperatives, known as multiple listing services, that serve as repositories for property listings and sales data.

At a recent conference for brokers in New York, an executive from property photo-editing firm BoxBrownie.com Pty Ltd. urged agents to post altered photos side-by-side with the originals. However, Peter Schravemade, the Australian firm’s strategic relationship manager, said that labeling augmented images has occasionally gotten agents in trouble while altered images without disclosures have slipped past listing-site overseers.

For $1.60 per image, BoxBrownie will punch up pictures of a house for sale, making dull skies blue, patching lawns and maybe popping photorealistic flames into fireplaces. It charges $2.40 to change wall colors and $24 to swap out flooring. Starting at $64, it will virtually renovate a room to produce a marketing image that looks realistic but nothing like the real thing.

“We’re like Photoshop on steroids,” BoxBrownie co-founder Brad Filliponi said of the popular photo-editing program.

The ease and extent to which images can be altered has brokers and the organizations that police listings wondering where to draw the line on augmented images.

The National Association of Realtors code of ethics requires agents to present a “true picture in their advertising, marketing and other representations,” which extends to listing photos, a spokeswoman said. Donald Epley, a retired University of South Alabama real-estate professor who helped write national appraisal standards, said misleading photos are no different than fudging the square-footage or misstating the number of bedrooms in listings.

“This is a really new technology,” said Denee Evans, chief executive of the Council of Multiple Listing Services, a trade organization. “It’s just starting to bubble up questions as to where is that line.”

https://www.wsj.com/articles/home-sellers-doctored-photos-challenge-buyers-bots-11551708001

Posted by Jim the Realtor on Mar 19, 2019 in Jim's Take on the Market, Staging | 5 comments

Olivenhain with Horses

Another video I did for potential buyers – these were tract homes that sold in the $300,000s back in the early-1990s. This just closed for $2,400,000:

Posted by Jim the Realtor on Mar 18, 2019 in Bubbleinfo TV, Jim's Take on the Market, Olivenhain | 0 comments

Best Cities To Live

Carlsbad was named as one of the best cities to live in America for 2019, according to rankings released by Niche, that ranked the city as No. 21.

The “Best Places to Live” rankings include cities, city neighborhoods and suburbs. Niche defines a “place” as a “non-rural town” with a population of 1,000 or more, including neighborhoods, suburbs and cities. Niche also separately ranked the best cities, neighborhoods and suburbs in which to live.

Carlsbad received an overall Niche grade of A+, with the following Niche scores by category:

Public Schools: A+
Crime & Safety: B
Housing: C
Nightlife: A-
Good for Families: A+
Diversity: A-

Carlsbad also ranked as No. 7 for Cities with the Best Public Schools in America, No. 11 for Best Cities to Retire and No.13 for Healthiest Cities in America.

The top 10 Best Suburbs to Live in California are:

Berkeley
Santa Monica
Albany
Mountain View
Manhattan Beach
Palo Alto
Solana Beach
Irvine
Los Altos Hills
Hermosa Beach

The top 10 best places to live in America are:

Bluemont, neighborhood in Arlington, Virginia
Carmel, Indiana
Overlake, neighborhood in Redmond, Washington
College Terrace, neighborhood in Palo Alto, California
Davis Island, neighborhood in Tampa, Florida
Rose Isle, neighborhood in Orlando, Florida
Colonial Village, neighborhood in Arlington, Virginia
Okemos, Michigan
Chesterbrook, Pennsylvania
Radnor/Fort Myer Heights, neighborhood in Arlington, Virginia

Niche released its “Best Places to Live” rankings on Monday. The publication says its goal is to “provide accurate, comparable and thorough evaluations of places.” Using data from government and private sources, Niche grades the places evaluated for the rankings on factors like public schools, crime and safety and housing.

Link to Patch

Posted by Jim the Realtor on Mar 18, 2019 in Jim's Take on the Market, Where to Move | 2 comments

No Payments for Eight Years

Those who pay their bills on time will cringe at how people can work the system successfully. Hat tip to SM who sent in this story told by a mortgage rep in Orange County:

My client had both a first and second mortgage on his Southern California home. He fell on hard times back around the Great Recession days. He filed for Chapter 7 bankruptcy in 2011.

Meanwhile, he got back on his feet income wise and credit wise. He made timely payments on the first trust deed, but never paid one penny of his remaining $250,000 second trust deed balance in eight years.

He contacted me about refinancing both his first and second loans into a single new loan. He also had negotiated a $140,000 reduction of the second. So, $250,000 owed turned into a $110,000 second mortgage payoff.

A very sharp underwriter looked more closely at the circumstances of this file. She was able to approve my client on a new Fannie Mae fixed-rate loan with a whopping $545 lower house payment because Fannie’s loan had an interest rate that was 1.875 percent lower than the non-prime loan we were seeking. Hallelujah!

It used to be that mortgage underwriting guidelines were absolutely against any borrower who was perceived as somehow stiffing the lender. In this instance, non-payment and a reduced payoff.

“I’m pleased to see a lightening of the guidelines,” said Susan Ashton, sales manager at Plaza Home Mortgage. “It’s really a positive thing.”

So, let’s dig a little deeper.

While bankruptcy discharge protects borrowers from having to reimburse lenders for missed house payments, it doesn’t protect them from foreclosure, according to Newport Beach bankruptcy attorney Michael Nicastro. Hence, borrowers typically continue to make their required house payments.

Mortgage lenders cannot demand payment on unpaid debts. So, post-bankruptcy, lenders do not report borrower late payments or delinquencies to credit bureaus.

Often the second mortgages are underwater — meaning the value of the house is less than the sum of the first, second, and accrued interest, etc. So, there is no point in foreclosing.

Those lenders typically sell the non-performing seconds for pennies on the dollar to what is known as “scratch-and-dent” investors. These scratch-and-dent investors hope to collect when the property value comes back.

Nicastro points out that the lender can send to the borrower a 1099-C (Cancellation of Debt), reporting the unpaid balance as income to the IRS.

“Check with your CPA,” Nicastro said. “If debt is canceled in bankruptcy, it’s possible that there is no taxable impact.”

Link to Article

Posted by Jim the Realtor on Mar 18, 2019 in Jim's Take on the Market, Mortgage News | 0 comments

Inventory Watch

Statistics can be quirky, or maybe St. Patrick’s Day is a real holiday? The new listings dropped off 18% this week, just like in the 3rd week of March last year!

In 2018, the number of pendings hit a peak in the third week of March, and then dropped four consecutive weeks. But it’s probably more a result from so many closings from the initial surge of activity following the Super Bowl.

The average LP/SF is hanging tight. We are at, or near, 12-month highs in all categories, and I don’t expect any change. Sellers aren’t motivated enough to really drop their price, instead they will just wait.

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Posted by Jim the Realtor on Mar 18, 2019 in Inventory, Jim's Take on the Market | 2 comments

Open-Concept Reversal….Not So Fast!

We had that story about the open-concept (great rooms) going away, due to them being too noisy and less private.

But Susie disagreed, and sent in a couple of photos of her new 2,321sf house in Boise, Idaho that cost $491,000 (for those who might be thinking of moving).

I will never go back to walls to divide my living room, kitchen and dining room. And the more windows, the better – Our new home has 40 windows, and still attains a HERS rating of 70 energy efficiency.

The builder also surprised her with this tiled feature wall: