We already saw the first ride out to determine occupancy, now that the locksmith has come by and changed the locks, somebody has to verify that there is ‘personal property’ like the locksmith said.
Video Trip Two, to east Valley Center:
My task is to take photos of the alleged ‘personal property’ inside the house, and post a notice to warn the former owners that they have 18 days to remove their junk. Of course, the locks are changed, so if they do call, guess who has to open the door for them?
The N.A.R. has a thing called ‘Center for REALTOR Technology’ which apprarently has been on a 14-month journey to find the most inspiring agents who use technology:
We have plenty of help to complete these tasks, so there’s no problem doing the work.
When I was complaining the other day, it was only because I’d like to occasionally get assigned a local high-dollar REOs, in exchange for travelling around the county selling the cheaper mold farms and crack houses.
For example, remember the RSF house featured here a few days ago? The listing agent represented the buyer and seller, which means he was paid 6% on $2,090,000. I’d just like to see one of those come my way.
In the meantime, I’ll quit complaining. I don’t want high-powered, award-winning realtors to think I’m not grateful, because I am – I love listing REOs!
Over the last twelve weeks there have been 785 trustee sales where a bidder purchased the property, rather than it go “back-to-bene”.
There were probably a few of the 785 that were bought by an owner-user, but we can probably guess that more than 700 were bought to flip:
Trustee-Sale Results, last 12 weeks:
Week
3rd Pty
Back-to-Bene
Total
6/29-7/3
75
233
308
7/6-7/10
48
210
258
7/13-7/17
74
204
278
7/20-7/24
62
170
232
7/27-7/31
74
219
293
8/3-8/7
69
273
342
8/10-8/14
62
233
295
8/17-8/21
60
232
292
8/24-8/28
77
240
317
8/31-9/4
62
173
235
9/7-9/11
58
195
253
9/14-9/18
64
252
316
12 weeks
785
2,634
3,419
A whopping 23% of the trustee sales over the last 12 weeks resulted in a 3rd party buy.
The chances of “stealing one” must be greatly diminished by the increased competition between bidders. Will the banks/servicers take notice, and trustee sales become a primary liquidation spot? They should unload more at the court house steps with that much action – we’ll keep an eye out!
Altos Research, a real estate statistics company from the Bay Area, has agreed to let us use their data gathering and reporting for specific zip codes in the North SD County Coastal region.
It might take a rocket scientist to make sense of it, but if ‘Market Action Index per Quartile’ sounds interesting to you, then click on your favorite area below – for the week beginning 9/14:
Nothing puts stress on a new marriage like inadequate bathroom space, so contractors/school-of-life therapists Dean and Derek decide to upgrade an engaged couple’s tiny bathroom.
Even though homeowners Josh and Betina have no bathroom space, they’ve got plenty of room outdoors. Dean and Derek craft an outdoor master bath plan with a luxurious hot tub and tented pavilion as the center of attention.
The couple can also cool down with an outdoor shower or kick back in a comfortable seating area. For accents, there are tropical plants, bamboo fencing, and-to add a touch of California cool to the space-a flowing fountain.
With this master bath paradise in their very own backyard, Josh and Betina will have no reason to travel anywhere for their honeymoon!
The show is running a few more times, starting tomorrow – set your TIVO:
The Federal Reserve is reviewing banks’ exposure to commercial real estate, the troubled sector whose slide poses a risk to many institutions because of the wide distribution of loans and mortgage-backed securities.
In its regulatory role, the Fed will look into a cross-section of banks to build a picture of how resilient institutions are to the troubled market. It is keen not to characterise the exercise as a “stress test”, which has come to evoke the audit of 19 large banks earlier in the year.
A cross-disciplinary team will look at the variety of commercial real estate assets on banks’ balance sheets, encompassing loans and commercial mortgage-backed securities.
The Fed’s own Beige book reported last week that the economy continued to stabilise during July and August, but loan demand and commercial real estate remained weak.
Commercial property prices are now 26.9 per cent lower than one year ago and 33.9 per cent below the level seen two years ago, according to an index compiled by Moody’s Investor Service. Values on commercial property prices are now 35.5 per cent below the peak seen in October 2007.
Commercial real estate ”is ground zero for the distress happening over the next 3 to 5 years,” said Rich Friedman, head of Merchant Banking at Goldman Sachs on Wednesday. It will be five to six years before there is any real improvement, Mr Friedman added. Real estate deals were often more leveraged than the buyout deals done at the height of the bubble, precisely because there was so much leverage, to refinance will be a huge challenge.
“The deterioration continues,” said Richard Parkus, analyst at Deutsche Bank. “There’s been no dramatic acceleration…but there’s been no slowing.”
Other regulators are also trying to assess the impact of the problems in commercial real estate, which has seen large increases in vacancy rates, declines in rents and high levels of defaults.
Banks and bank regulators decide the extent to which loan problems are reflected on the books, said Mr. Parkus. It’s “highly uncertain” when they will be fully realised, he added.
Positive news about the broader economy is unlikely to be “manifested commensurately in CRE,” he said. “The fact that we don’t have 10 banks a day going under [does not mean] that things are not as bad as we thought…We have a relatively enormous amount of deleveraging that has to take place.”
Analysts consider a blockage in refinancing as potentially the most serious impact of the deteriorating commercial real estate market. The Fed has tried to help by opening up its Term Asset-Backed Securities Loan Facility (Talf) to investors in CRE securities.
But some with links to smaller banks believe the doomsday consequences of the troubled market have been over-played. “I don’t think it’s the doom and gloom scenario that we had in housing,” said Steve Brown, chief executive of Pacific Coast Bankers’ Bank, which serves thousands of community banks. “Spreads are tightening in a lot of the paper that’s out there.”
Richard Levenson, president of San Diego-based Western Financial, a niche investment bank that works with community banks, said he had noticed increased regulatory attention on commercial real estate. Regulators, he said, are “making sure [community banks] understand where their collateral values are”.
He noted that in California’s “strip malls there are a lot of vacancies” but argued there were also investors waiting in the wings who might provide a boost to the market.
“Mr. Stearns estimates that owners of a newer home that do some work for themselves but contract major work out to others willpay 3.6 percent of the original purchase price annuallyfor maintenance and 4.5 percent if it’s an older home.”
“So if you own a $400,000 home, your costs will probably hit the five figures each year — and may rise with inflation. These expenses will be another 20 percent or so higher if you live in a severe weather area. He does note, however, that the tax benefits of home ownership can offset half or more of these costs in some areas of the country.”
Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.
“It was a no-brainer,” said Mr. Myers, a commercial underwriter. “Owning something is the American family dream.”
The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later.
Their home is now a monument to the government’s generosity. They bought a leather couch, a kitchen table, a bed, television stand, china cabinet, kitchen table, coffee table, grill and patio set.
“We did exactly what the government wanted us to do,” said Ms. Myers, a third grade teacher. “We stimulated the economy.”
Buyers like these above will probably go on to live happily ever after, and good for them. But the $8,000 tax credit is small potatoes in the stimulus world, compared to what’s coming.
The biggest stimulus package in the history of the world is upon us.
It’s name?
“Stealing One From The Bank”
As more bank-owned properties hit the open market, today’s buyers, already frustrated with the lack of inventory, will swarm to new meat – the well-priced REO listings.
Carmel Valley is the best example, because the product line is so similar – it’s the only place in North SD County where all you see are tract homes built in the last 25 years. The CV pricing last month was $327/sf for the 38 detached homes that closed in August, which has been steady.
There are 90 properties on the default list in 92130.
If 30 to 60 of them hit the open market over the next six months at $300/sf to $320/sf, they will IGNITE the marketplace.
Buyers will be scrambling to buy, because they won’t be paying any more than they had planned to pay, even after the overbids, and they’ll have the bragging rights that they ‘stole one from the bank’.
Look at how crazy people are about $8,000 – do you think they’ll be even crazier about stealing one from the bank? Bet on it.
ARE THE REOs COMING?
This morning I received my third REO assignment in the last 2.5 weeks:
1070 Buena Vista Way, Carlsbad
4 br/3 ba, 2,288sf
YB: 1959
Lot = 7,000sf
SP: $800,000 2/06 100% financed
LP: $650,000 short sale that failed
Trustee Sale O-Bid: $535,500 9/14/09
Remarks from last listing: Extremely interesting 2 story home west of I-5 in olde Carlsbad.Approx 2300 sqft. Home features gargoyles, hardwood floors, french doors, vaulted ceilings, dual pane windows, new appliances, ocean view wrought iron, built in storage. Additional detached 600sqft building in back.Walking distance to beaches and ‘The Village’.
The REOs are coming – look for their sales to take off like a rocket. Yesterday we saw that there were 657 bank-owned properties listed as actives, the contingent and pending REOs total 1,584. Do you think buyers will flock to a 2,288sf house west of the I-5 freeway in downtown Carlsbad that has an extra unit for mid-$500,000s, even with the gargoyles? Count on it.
People love bank deals – we don’t need any other stimulus than a pure marketplace!
More from the cutting room floor – where it probably should have stayed.
The beginning shot is of a brand new house in Vista that has sat vacant all year, looking for $3,700/month. You can bet its owner thinks the economy is really bad!
