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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘Foreclosures/REOs’

RSF Bank-Owned Mold Farm

This sold for $4,000,000 in 2001. On 9/11/2007, the former owners of this property took out a mortgage for $8,500,000, and the bank foreclosed in 2014…….but they haven’t sold it yet:

It will be back on the market some day!

We might see this REO sooner, now that the bank foreclosed after the former owner who got sentenced to 34 months (WaMu/Chase had $4.5 million in loans):

https://www.zillow.com/homedetails/6036-San-Elijo-Ave-Rancho-Santa-Fe-CA-92067/16730510_zpid/

Posted by on Aug 30, 2018 in Bubbleinfo TV, Foreclosures/REOs, Jim's Take on the Market, Rancho Santa Fe, REO Pre-Listings | 5 comments

It’s Different This Time

Our YoY home sales are in decline, and it makes you think, ‘Here we go again”.

We know that sales are the precursor, and historically prices are the last to go.  But with so many different variables this time around, could it actually be different this time?

Let’s consider the changes:

During the last two local declines (1992-1996 and 2007-2009), banks were the main culprits.  They were visibly foreclosing and dumping homes, which affected the whole marketplace. Regular home sellers were burdened with the lower comps, and had to give them away if they wanted to move.

But now they’ve changed the accounting rules for banks, and they don’t have to dump everything they own.  In fact, they can do whatever they want now.

Remember this McMansion in Carlsbad?

BofA first began the foreclosure process in 2011, but didn’t get around to actually foreclosing until July, 2017 – six years later!  Then they off-loaded it to an investor in March, without having to put it on the open market.  Bernanke told bankers in 2011 not doing anything that would harm the economy, and they took him up on it!

I think it’s safe to say that no matter how bad any future recessions might get, we don’t have to worry about a flood of foreclosures ever again.

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Ok, so if the banks don’t/won’t foreclose and dump, then what about the institutional investors?  They are smarter and more nimble – certainly they will be selling once they sense the top!

Not so fast – according to the WSJ, investor buying is on the upswing:

An excerpt:

Wall Street is betting that more well-off Americans will want to be renters.

Financiers who loaded up on homes after the housing bust for pennies on the dollar are buying yet more—despite home prices in many markets being at all-time highs.

Their wager: High prices, higher mortgage rates and skimpy inventory are making homeownership harder. Well-to-do families who might have bought a single-family home in another era are willing to rent a house now, especially if it means access to a good school system.

The number of homes purchased by major investors in 2017 was at least 29,000, up 60% from the previous year, estimates Amherst Capital Management LLC, a real-estate investment firm that made nearly 5,000 of those purchases.

This year, investors have raised billions of dollars from bond buyers, pension funds and even wealthy Chinese individuals to purchase more homes. They have been particularly aggressive buyers in places like Atlanta, Phoenix, and other metro areas with good schools and faster-growing economies.

Cash to acquire and renovate homes has become so abundant lately that some rental investors can’t spend it fast enough. Without enough homes to buy, some investors are now building their own in popular residential markets like Miami and Nashville, Tenn.—upending a traditional pattern of Americans buying starter homes and moving up.

“The American dream no longer includes homeownership,” said Jordan Kavana, chief executive of Transcendent Investment Management LLC, a south Florida firm that has been a big acquirer of rental homes. “You will earn your equity in other ways, not your home.”

Link to Full Article

The big-time Wall Street investors are betting on the affluent taking over the real estate market, and turning the country into a renter’s society.  It may only affect 10% to 20% of the market for now, but that might be enough to keep it all propped up.

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Local flippers and ibuyers are providing another floor.  Any homeowner that will sell for 10% under value today will have a host of choices to pick from.  If you play it right, and have a great realtor help you, it could turn it into a retail sale quite easily!

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The biggest threat?  While there are still people underwater, today’s market has to be the most equity-rich in history.  If sellers had to dump in order to sell, they could – and still make a profit.

But for there to be an extended trend of declining prices, there would need to be a series of sellers in the same neighborhood that were all in the same boat.  For now, we only see an occasional dump, and it doesn’t need to be more than 10% off to attract a crowd.

With the vast majority of recent buyers having to qualify for their mortgage, and use a regular down payment in order to buy their house, you have to like the prospects of them fighting to hold on to it, no matter what.  Back in the last bust, too many people got in with little or no down payment, and got stuck with exotic financing that exploded on them.  Those days are gone.

We’re most likely going to live in Stagnant City, with fewer sales in most areas.  But it’s not the end of the world.

Get Good Help!

Posted by on Jul 9, 2018 in Flips, Foreclosures/REOs, Jim's Take on the Market, Market Buzz, Market Conditions | 8 comments

Regulating SFR Investors?

Now that the big investors have virtually stopped buying homes, a legislator wants to find a way to regulate them.

Typically the term “institutional investor” refers to private investment firms that buy dozens of residential properties with the explicit aim of generating a steady income stream through rentals. Often they invest the money of wealthy individuals and public pension funds, like those established for California state workers and teachers.

The best example is Blackstone, a publicly traded Wall Street firm that barrelled into the country’s single-family home market in the depths of the Great Recession in the late 2000s. Through its residential investment-focused subsidiary, Invitation Homes, Blackstone is now the largest owner of single-family homes nationwide. In California, they own about 13,000 homes.

But firms such as Blackstone have stopped buying wide swaths of California homes. According to the real estate data firm ATTOM Data Solutions, which defines institutional investors as entities that buy 10 or more homes in a given year, institutional investors accounted for less than 2 percent of the state’s single-family home and condo sales in 2017.

That’s a pretty steep drop from as recently as 2012, when institutional investors accounted for about 7 percent of sales.

Why the decline? California no longer has a glut of cheap houses that can be easily gobbled up in foreclosure auctions. A sustained economic recovery and a lack of construction of new housing has sent housing prices skyrocketing. It’s now too expensive for institutional investors to buy lots of California homes. Blackstone’s Invitation Homes bought only 82 California houses last year.

Read More

Posted by on Apr 10, 2018 in Foreclosures, Foreclosures/REOs, Jim's Take on the Market, Local Government, Real Estate Investing | 3 comments

Will The Real Estate Bubble Pop Again?

Our local home prices have risen so quickly that it feels like we’re in ‘bubble’ conditions again – could the bubble burst this time?

The last two times the real estate bubble has popped, it was due to banks having to offload their foreclosed properties for whatever the market will bear.  They flooded the market, and buyers – and prices – backed off.

But that has all changed now.

Look at the new devices being used to avoid a flood of desperate selling:

  1. New accounting rules.
  2. California Homeowners Bill of Rights
  3. Reverse mortgages

The accounting rules were altered so banks could hold their REO properties longer, and the California Homeowners Bill of Rights has, in effect, stopped foreclosing.  Lenders are now required to offer a loan modification to anyone in default, and only if the homeowner can’t or won’t qualify are they at risk of being foreclosed.   With today’s higher rents, there isn’t much relief for those in default to give back their house and go lease one nearby.  Besides, with our higher home values today, they can always sell before getting foreclosed.

Homeowners who need money can get a reverse mortgage too, as long as they haven’t been tapping into their equity already.

We end up with virtually no desperate sellers who need to dump on price.  Someone who wants to cash out quickly can price their home at last year’s comps and look like a deal!

The game is rigged – the Banking Cartel won’t let the bubble pop again!

For the bubble to pop, we would need a dramatic shift in the supply and demand – either a flood of homes hit the market, and/or we run out of buyers.

I thought we’d be seeing more baby boomers unloading their homes due to downsizing or sickness, and while the market consists mainly of those listings, there aren’t enough of them to call it a flood – at least not yet.  Because they are in quality locations, more kids are probably trying to buy out their siblings and take over their parents’ house, rather than sell it.  They could be moving in with the folks too, rather than sending them to assisted living.

Could we run out of buyers? You would think there would be a price point where buyers can’t or won’t go any higher, but there seems to be a steady flow of people with more horsepower.  We saw two weeks ago the prediction that the population of San Diego County is expected to grow by 700,000 people by 2050, which is over 21,000 per year – where are they going to live? Will they be rich? They will need to be!

There hasn’t been enough (has there been any?) sellers so desperate that they had to dump on price – instead, they just keep waiting.  We would need more than a few price-dumpers to start a panic, which could cause the market to flood with supply and burst the bubble.

Some air might escape occasionally, but it is doubtful that a market change could occur without the government finding a way to save the bankers.

People like this guy think the conditions are ripe for a downturn.  But if prices started falling, sellers are more likely to wait, than dump, which would cause our market to stagnate, rather than crash.

Posted by on Mar 27, 2017 in Boomer Liquidations, Boomers, CA Homeowners Bill of Rights, Foreclosures/REOs, Jim's Take on the Market, Loan Mods, Market Conditions, Mortgage News | 3 comments

Foreclosure Mop-Up

foreclosure-history

The latest foreclosure numbers are out, and we’re down to less than 1% of all mortgages being in foreclosure:

The national foreclosure inventory – the number of loans in the foreclosure process – fell 29.6 percent year over year in August 2016, according to the latest CoreLogic Foreclosure Report. The foreclosure inventory has fallen on a year-over-year basis every month since November 2011 (Figure 1), and in August 2016 it was 77.5 percent below the January 2011 peak.

The foreclosure rate – the share of all loans in the foreclosure process – fell to 0.9 percent in August 2016, down from 1.3 percent in August 2015. While the foreclosure rate is back to 2007 levels, it is still above the pre-housing-crisis average foreclosure rate of 0.6 percent between 2000 and 2006.

But it still bugs me that NONE of the national real estate players or national media ever questions how or why foreclosures stopped.  After 2+ years of 60% or more growth of foreclosures AND serious delinquencies, all of a sudden BOTH dropped off a cliff at the end of 2009.

Our federal government and the banking industry obviously conspired to stem the losses, and then funded community activist groups who buy mortgages at a discount.  Here is an example:

Nevada’s distressed home loans are still caught in economic quicksand, but not for lack of trying to combat banker haste with consumer-oriented ideas. The National Council of La Raza (NCLR), for example, has invested significant donor funds in efforts to bail out underwater borrowers when banks won’t negotiate fairly.

“You want to keep families in place if possible, so foreclosure is the absolute last choice that we want, if we’re involved in the transaction,” NCLR Vice President for Housing and Community Development Lot Diaz told ThinkProgress.

Diaz’s colleagues at an affiliated non-profit called Hogar Hispano purchase distressed mortgages and then return the homes to the owners at a fair market price that restores their chances of building up equity in the property. Hogar Hispano did 463 of these distressed debt acquisitions in 2013 alone, and saw a favorable outcome for the original homeowner in 316 of those cases.

Hogar Hispano also buys up houses that have already been taken over by the bank, known as REO properties, and then finds a buyer for them or converts them into rental units targeted at low- and moderate-income families. The group says its REO work has created close to 900 new homeowners and turned bank-owned homes into occupied housing more than 1,100 times, in Nevada and elsewhere. (LINK)

The whole mess just got swept under the carpet, which gave the insiders a fantastic opportunity to profit!  What a country!

Posted by on Oct 12, 2016 in Foreclosures, Foreclosures/REOs, Jim's Take on the Market, No-Foreclosure as Banking Policy | 3 comments

Foreclosure Throwback

bp

Homes that were foreclosed back in the day have been re-selling – and someone you know just happens to have an extensive video library!

The original purchase price for this McMansion in Chula Vista was $1,301,500 in 2007, but got foreclosed 20 months later.  The bank listed it for $585,900, and it closed for $630,000 in March, 2009.

This is how it looked then:

It resold again for $965,000 a year ago, and then it closed for $1,275,000 this month.  Here is how it looked:

http://www.realtor.com/realestateandhomes-detail/361-Bryan-Point-Dr_Chula-Vista_CA_91914_M22586-80814

Posted by on Sep 27, 2016 in Bubbleinfo TV, Foreclosures, Foreclosures/REOs, Jim's Take on the Market, Sellers Waiting For Comeback | 4 comments

Jim TV

Just one more rerun before Kayla introduces our new listing tomorrow night.

This is the 7th most-watched video on Bubbleinfo TV, and is a greatest-hits tour through the REO-listing days.  In April, 2008, the Bank of America had dumped twenty of their REOs in my lap, and over the next 12 months the JtR foreclosure extravaganza ensued.

A month after this video premiered here on the blog (March, 2009), I was on the front page of the L.A. Times, which led to the spot on ABC News Nightline:

Posted by on May 10, 2016 in Bubbleinfo TV, Foreclosures, Foreclosures/REOs, Jim TV, Jim's Take on the Market, REOs, REOs for sale | 0 comments