Wallbangers at Pt. Mugu

Normally I like to keep my blogs focussed on the real estate.  But as we close the year, I wanted to take a minute to talk about some of the most important people we have in Ventura County and the country as a whole.  A few weeks ago, I was honored to attend the Change of Command Ceremony for my friend and client Commander William Reed.  He took over the Command of the Carrier Airborne Early Warning Squandron One One Seven from Commander Fred Goldhammer.  I was part of an intimate group of people who were invited to witness this time honored tradition of the US Navy.



Living in Santa Rosa Valley and Camarillo, surrounded by so many men and women who serve out country out of Pt. Mugu and Pt. Hueneme and other areas around Ventura County is always a reminder to me about the sacrifice these people make on behalf of you and I, the citizens of the USA and our constitution. But there was something about being there that day.  On base at Pt. Mugu, hearing Captain Kevin Mannix talk about the threats we still face around the country and then, especially hearing about what this specific group of men and women will do over the next 12 months drove it home for me.  We have the leisure of our freedom, we have the ability to walk and talk and create wealth and go to church and so many other things that we take for granted because of men and women like the Wallbangers and my friend William Reed.

For those of you who don't know, and I certainly did not until a few weeks ago, but the mission of the Banger Nation is "First off the flight deck and the last to recover, the Wallbangers provide Command and Control and Airborne Early Warning ANY TIME, ANY PLACE in order to accomplish our Warfare Commanders' intent. The Wallbanger team stands ready to deliver time critical situational awareness and decisions necessary to support our Navy-Marine Corps, Joint, and Coalition Partners in waging ware and peace." They fly (as you can see from the pictures) "the most advanced version of the Northrop-Grummann E-2C Hawkeye 2000, an all weather, carrier based airborne command and control aircraft that provides early warning surveillance of enemy disposition..."

The Change of Command Ceremony was a real reminder for me just how dangerous a world we still live in.  It was a real reminder for me just how much the men and women of our armed services give for our freedom. I can't say thank you enough.  Words are just insufficient to match the sacrifice. But, nevertheless, I say thank you for your commitment and your sacrifice, for your hard work, for the loved ones who stay home and support you, for the loved ones who support the spouses and children of these brave Americans.

I am honored to call Commander William Reed my client, I am blessed to call him a friend and I am humbled by the job he has undertaken to lead the Banger Nation on behalf of our country.

Camarillo Inventory of Homes

The inventory of single family homes in Camarillo and Ventura County remained at very low levels. In Camarillo today there is only one SFR on the market today under $250,000 and only 6 from $250,000 to $400,000.  Only 36 homes are on the Active market under $1.0 million.  In total, that leaves us with an inventory of of less than 1 month (.6 months to be exact) of single family homes in Camarillo less than $1.0 million.  Over $1.0 million there are 14.7 months of inventory on the Active market.  The numbers are similar when you expand the search to all of Ventura County.  Needless to say, under $1.0 million, we should continue to see price appreciation and a Seller's market until these inventory levels get back to 3 to 4 months.  If you are thinking about Selling your home in Camarillo or Ventura County, now is a good time for you to call me to discuss your options.  I look forward to hearing from you.  

Camarillo Home Sellers are finally in a better position!

Camarillo Home Sellers are finally in a better position! During the last 5 years as values have been coming down because of all the bank-owned sales and Short Sales in your Camarillo neighborhood, you have been in a no-win situation if you had to sell your home.  Your value was going to have to come down because of all the declining-value  distressed sales.  See chart below for the declining REO Activity in Camarillo.



But it appears we, at the least, have a window where values are beginning to rise again. A big part of values beginning to rise is because the foreclosure activity is beginning to wane. But most of the increases are due to what I have talked about in the last few blog posts which is that the inventory is down significantly.  As you will see from two posts ago at http://wp.me/p24x2o-1I , for all homes under $1.0 million in Camarillo, the inventory is down around 1 month. That provides a good opportunity for Camarillo Home Sellers because it allows you to compete with fewer Sellers and a demand of Buyers that seems to be unending.

So, if you have been thinking about selling your Camarillo home, now may be the right time.  Click on the link below for your free Home Evaluation so we can get started on helping you to make that decision.

New Info on Foreclosure Data in California

New reports are out this morning from the people at foreclosure.com.  They are stating that in October of 2012, the foreclosure cancellations in California were up 62.1% from the month prior and they think that the main source of the increase is the new law that will go into affect in January called the California Homeowners Bill of Rights.  One of the primary features of this law is to prevent "dual-tracking".  Basically what that means is that if you are under consideration for a loan modification or have submitted a request for a Short Sale, your lender has to CANCEL your foreclosure proceedings.  In the past, the lenders have been able to process your foreclosure at the same time your are in process for a Short Sale or Loan Modification.  That way, if you were denied for either, the bank was still in the position to move forward and complete the foreclosure right away.  

While this is a great new law for homeowners, it will have a continue negative affect on the amount of inventory that is available in California.  As I have said in my last few blog posts, the level of homes available to buy in California is down to almost record levels and that will have a dramatic impact on values.  When demand is high (and it is high) and inventory is low, it almost always means that values will be on the rise.  The National Association of Realtors is projecting that, assuming we avoid the infamous "fiscal cliff", that real estate values will rise nationally by 5.1% next year.  If the inventory levels remain at their existing levels, I believe values in California, Ventura County and Camarillo and surrounding communities will rise more than that.  

If you think that you may have to, or want to sell in the next 6 months, the market should be support higher values than you thought were achievable 6 months ago.  

One other thing to note today that we certainly want to keep our eye on is the delinquency data.  LPS, one of the country's largest servicing companies is stating that foreclosure starts in September suddenly spiked by 7.7% from the month earlier.  They are stating that most of the increase came in homeowners who are now 30 days late on their mortgage.  This "new" activity is troubling and it points to continued weakness in the overall economy.  

Please let me know if you know anyone who is thinking about buying or selling in the next 6 months.  It is the best time ever to use a Realtor who knows the market and understands the foreclosure and Short Sale process.  

Sellers Market - Inventory Week of November 12, 2012

If you have been thinking about selling your home...now is one of the best times we have seen in recent history due to a lack of inventory on the market in Camarillo and Ventura County. As you will see from the chart below, most categories of Single Family Homes in Camarillo and Ventura County have apx. 1 month or less of Active Inventory.  To give you an example, in the $400,000 to $650,000 range, there are only 18 homes on the market in Camarillo as of 11/12/2012 per the MLS.  In the last 12 months, in that same category, there were 324 homes sold.

[caption id="attachment_107" align="alignleft" width="555"] Low Inventory means prices will continue to increase.[/caption]

If the pace of sales maintains at the current levels then we only have .7 months worth of inventory available for new buyers.  All expectations are that demand will continue to be high as long as interest rates stay low and the economy doesn't fall back into a recession.  As a Seller, what does that mean to you? Well, with fewer homes on the market it means that you get to be more aggressive with your price.   So, if you are thinking about selling your Camarillo home or your home anywhere in Ventura County, today's market is much more positive than it was earlier this year and prior.So, please take some time and head to my website where you can complete a form to get more information on what the value of your home looks like in this new market.  See the link below:

http://2cidirect.com/free_home_valuation.asp

Thank you!

I just wanted to take a minute on this Veteran's Day to say thank you any and all of you who serve our country. Thank you for your service to our country. Whether it be civilian or military involvement, I am honored by your dedication to support with your time and, some, with your lives, the founding principals of freedom. It is a brave and honorable thing that you do and I am so thankful for your work.

You have my constant appreciation and respect! 

Case Shiller says home prices are up again!

The Case Shiller Index is one of the most nationally recognized indicators on the overall health of the real estate markets around the country and the came out today with their report that states that we had another national rise of 2% year-over-year from August 2011 to August 2012. The closest big city index for Camarillo Sellers and others in Ventura County real estate is the Los Angeles index and it reflected a 2.1% year-over-year gain as well.  You can read the full report at http://bit.ly/SvgbC5.

However, they did have some long-term housing concerns.  The most near-term risk the the infamous "fiscal cliff" that we face the beginning of 2013.  The consensus is that the DC politicians will figure out whatever they need to do to pass the buck on this down the road to the next president, the next Congress to deal with.  But, given the politics of the day, there is certainly some risk that we will hit January 1, 2013 without a solution to this large problem.  If it does happen, it will have a negative impact on both the equity markets and the real estate markets.

The second risk identified as a more long-term risk is that of the Baby Boomer generation selling and downsizing their current homes.  This may leave a gap of buyers at the higher end causing larger homes to come down further in value than they already have.

Zillow.com reports that Camarillo values are up 4.3% year-over-year and with national prices rising now for the last few months, I would expect that trend to continue in the short term.  But, if you are thinking about selling your home in the 93010 or 93012 zip code, now may be a good time to take advantage of the window of opportunity that presents itself in this market.

In the meantime...have a great day!

Is it finally time to sell?

October has been an interesting month. We started out on a very positive tone with the monthly report from RealtyTrac stating that foreclosure filings in Ventura County had slipped almost 23 percent in September from a year earlier.  This was a trend that has been developing over the last few months, so it really wasn't surprising.  This trend was similar to the changes that California had as well with a 27% drop in year-over-year foreclosure filings.  But these reports did come with a caveat from Realty Trac.  Per Daren Blomquiest, a VP at Realty Trac "the other foreclosure shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market". But he did make it clear that it is dropping.



So, the shadow inventory is beginning to get dealt with.  CoreLogic supported this view with an article in early October stating that the Shadow Inventory had dropped by 10% in July from where we were in the year prior.  See chart to the right for details.  While there is still a large number of REO Inventory to deal with, it is my belief that this inventory will trickle onto the market here in Ventura County and Camarillo rather than slamming the market with it all at once.  It is certainly what I have experienced in my relationships with banks and servicing companies since that beginning of 2012.  Their activity level is below what they have been used to which means that this inventory of homes really has not hit the front lines of the REO liquidation firms at this point.  It will take a few years to continue to wind down out of this inventory and get back down to the normal levels we had in 2006 and prior.

Also in early October the Fed in their Beige Book report also spent some time talking about the real estate markets in a positive way by noting that "Consumer spending, which represents about 70 percent of the economy, “was generally reported to be flat to up slightly since the last report...". And that "Residential real estate proved to be a bright spot amid an otherwise pedestrian report."  The Beige Book also noted that “all twelve Districts reported that existing home sales strengthened, in some cases substantially,” since the last report. It did note that one reason that values had seen an increase is due to the decline in overall residential inventory.  I'm not talking about the infamous "shadow inventory" here.  This is the overall number of homes on the market.  This has been a key to values increasing in Ventura County and in Camarillo real estate.  As I write this there are 58 single family homes on the Active market right now in Camarillo.  In the last 6 months, we have sold 382 homes.  This puts our inventory at less than 1 month.  We will continue to see price increases until that number looks more like 3 to 4 months of homes on the market.

The chart below is from zillow.com and it outlines that prices in Camarillo were up 4.3% from the same time last year. But we do have some things to be worried about.  On October 22, 2012 Lender Processing Servicers came out with their "first look" mortgage report and while they agreed that the overall foreclosure inventory continued to decline, "the delinquency rate saw a sudden mont-over-month surge.  The delinquency rate, which stood at 7.4% in September, hiked up 7.72% from August.  And while this number is still down from a year ago, it is certainly something to keep a close eye on.  I have always said that if the economy continues at this sluggish rate, we run the risk of seeing the foreclosure rate begin to tick up again.

Camarillo Zillow Home Value Index

Camarillo real estate info

If you have been thinking about selling your home because of a job change or a change in the size or structure of your family or if you are one of the many who continues to struggle in this economy, there is a window of opportunity with so few homes on the market. Now may be the perfect opportunity to get your house on the market for a premium before we see the market shift again either with an increase in the interest rates or an increase again in foreclosed homes. If you have been thinking about selling your home in Camarillo or anywhere in Ventura County or the west San Fernando Valley, please call me right away for a thorough evaluation of your homes value and whether or not it is the right time for you.

...and the summer bubble continues!!!

Ok.  Last month, the Case-Shiller index had the largest month-to-month gain in its history.  As I outlined in my last blog entry, I suspected that most of this increase was due to an overall lack of inventory pushing values higher.  Well, today, Case-Shiller came out with the news that their index has jumped by 6.9% from the 1st quarter of 2012 to the 2nd quarter of 2012.  This also is the largest gain, quarter-to-quarter, in the history of the index.  In addition, their 20-City index rose by 2.3% just from May to June. This is also the largest month-to-month gain (last month was 2.2%). For all the details, please go to the Standard & Poors website for details.  http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

So we are seeing some sustained growth which is really good news, but I wanted to put the inventory issue into perspective.  In Ventura County, we have had 8,461 sales of Residential Properties in the last 12 months.  As of today, we have 1,323 Residential Properties on the Active market.  That is an inventory of 1.88 months.  To get more specific, in Camarillo alone, we have had 932 sales of Residential Properties in the last 12 months.  As of today, we only have 115 Residential Properties on the Active market.  That is an inventory of only 1.5 months.  That is insanely low.  A natural/neutral inventory of homes where it is not having an impact on value one way or another is typically around 4 months.  Someone asked me this past weekend at my Open House at 350 Commons Park Dr. in Camarillo why inventories were so low.  There are a few basic reasons.  First, if you own a home today, unless you are forced to sell via a distressed sale (Short Sale or Foreclosure) or a job or life relocation, then you are likely going to do everything you can to hang onto your real estate and what is still a depressed level.  Second, the level of new bank-owned homes has not jumped like most have expected.  This is the infamous "Shadow Inventory". Most experts are now predicting that this "Shadow Inventory" will not have a dramatic impact on values over the next few years as we continue to see the level of bank-owned homes decline.

Unless we see some major shifts in the market for Seller's I would anticipate that the inventory levels would stay low and that values would continue to rise until we get back to some normalcy as it relates to the numbers of buyers and sellers.  Expect that it will be a Seller's market through the end of this year.

If you are thinking about Selling your home, now is a great time to call me to discuss strategy.  If you are thinking about Buying a home, there is no time better to be represented by a Realtor who is working hard to quickly identify opportunities that fit your requirements than now.  Do not try to do this on your own. I appreciate you taking the time to read this blog entry and...as always...if you know anyone who is thinking about buying or selling in the next few months, your advocacy is my greatest form of advertising.  Thanks for your referral!!!

Summer Bubble?

As most experts predicted, we saw a sharp rise in real estate values in May.  The new Case-Schiller Index came out today showing a 2.2% increase in their 20-City index from April to May of 2012. This was the largest month-to-month increase of the 20-City Index since they began the Case-Shiller index in 2000.  Since 2000? That's right! This includes all the massive increases we saw in 2004. May's increase beat all those month-t0-month gains.

[caption id="attachment_85" align="alignnone" width="532"] Case-Shiller 20-City Index since it's inception[/caption]

Now the question is...can we sustain it? Is this just due to an overall lack of inventory?  I suspect so, but this leads me to the next question. When will the inventory come back?

Inventory, obviously, is a result of supply and demand. That means we either need more Sellers or fewer Buyers in order for more inventory to return.  I don't see either of these happening any time soon unless prices continue to increase at this pace.  If so, normal Sellers who have been waiting to move-out, move-up or move-down will finally begin to sell again.  If it is just a temporary increase, I don't know why you would sell today unless you had to.  Even many of the normal Sellers who are being relocated today are trying to figure out a way to hang on to the house and try to rent it so that don't have to take the financial hit of selling that asset at the bottom.  Hang on, rent it, wait for the market to return.  Well, now may be that time as long as we can see some continued gains in values.

In doing this research, I came across a great chart by www.ClearOnMoney.com.  They put together an amazing chart that reflects how closely home prices are tied with the level of Home Inventory.  Take a look below.



 

This chart really shows the amazing strength between supply and demand in the real estate market. Free, open market capitalism at its best. Where buyers and sellers come together and establish a price without any market influence. As the availability of that product becomes more scare, the value increases.  As it becomes more available (apparently around 8 months worth of inventory) values decline.  This chart only goes through January of 2012, so we don't see the current level of increases, but certainly it shows a clear history of the two being tied together.

So, let's see if we can get some sustained growth in the real estate markets.  If we can, it will be a real boost to how people are feeling about the economy.

If you are one of those who have been waiting to Sell...now may be the time.  Call me so I can hear your story and give you my best advice on whether or not it's the right time for you to sell your home.

Goldman Sachs moves Building Industry from Neutral to Attractive

A few days ago, Bloomberg ran an article outlining the fact that Goldman Sachs feels strongly that the down cylce for builders is over and has moved their recommendation for that industry from Neutral to Attractive.  They have attributed low mortgage rates, a low inventory of homes, a shrinking shadow inventory and a US economy that is creating, at least, enough jobs to give this sector hope for the future. See the article below.  

http://www.bloomberg.com/news/2012-07-23/goldman-sachs-sees-strong-recovery-starting-for-housing.html 

While it appears that the number of REO's has been on a steady decline, the total number of distressed sales (Short Sales and REO Sales) as a percentage of the market has remains high.  See the chart below for Camarillo Distressed Sales as an example.  

Zillow says prices have hit bottom

I'm so glad that someone was finally smart enough to let us all know that prices have finally hit bottom.  See the link below to an article by zillow.com that announces the bottom has arrived.  Based on research by zillow.com, in Camarillo, prices are still down .6% from a year ago today, but the data also suggests that prices are up slightly from December 2008 where the zillow home price index was at $396,000 vs June 2012 at $397,300.  

http://money.msn.com/business-news/article.aspx?feed=AP&date=20120724&id=15366554

I'm certainly not smart enough to know if we have hit the bottom, but it certainly appears that recent activity this summer would suggest that values will continue to increase over the summer.  The big questions are twofold.  Is the economy going to hold? And, is the foreclosure shadow inventory going to force prices down?  The economy is anyone's guess, but at the best it is fragile.  Most of the experts I have been in contact with suggest that the shadow inventory is not as big as most predict and should not have a large impact on values going forward.  So, regardless of whether or not zillow.com is right or not, I do support the theory that we are at least CLOSE to the bottom.  

Do you want the good news or the bad news?

I think we will all know that we have gotten through this crazy real estate market when we can wake up and just get GOOD news.  It seems that every day there is some report that we have made it through the crisis.  But then the next article says something like "...but don't get too excited because I've got some bad news."  Today is a good example.  There is an article in the Wall Street Journal with a headline of "Yes, the US Housing Bust is Over" http://online.wsj.com/article_email/SB10001424052702303644004577520414196790098-lMyQjAxMTAyMDEwMjExNDIyWj.html?mod=wsj_valetleft_email. But then the same day we get this headline and article from Default Servicing News reporting from RealtyTrac that states "Foreclosure Starts Up for the First time since 2009" http://www.dsnews.com/articles/-2012-07-11. I could go on, but I think you get the point.

My job as a Realtor in Camarillo and the surrounding markets of Ventura County is to educate my clients on the things that are happening in the real estate markets.  Well the answer is unclear, but sometimes the best answer really is "I just don't know!" Most of the "experts" believe that we have either hit bottom or are very close to the bottom.  But we still have bad news that keeps coming.  The Short Sale portion of sales in Ventura County continues to rise. And, while the level of foreclosures as a percentage of the market continues to decline, we got bad news from the same Reaty Trac report outlined above that California's foreclosure rate leads the nation in June of 2012.  That certainly means we have more pain to come.  Having said all that, I do believe that we are beginning to get close to a "normal" market.

So, what is normal? Well, barring the Mortgage Market Meltdown in 2007 and the preceding unreasonable rise in real estate values, most real estate markets trend pretty closely to the growth of the economy and the rate of inflation.  So, when things are going well in the US economy and we are seeing growth and jobs and a little inflation, we are also seeing real estate values grow at a very similar rate.  Well, that rate has been out of whack for some time.  Now that we are through the worst part of the housing crash and now that we are seeing signs that the economy has begun to have some slow growth, we are beginning to see the relationship between home values and US GDP growth get back into sync.

For those of you who are thinking about selling, I don't feel any different than I did a week or so ago in my previous blog.  Inventory is down and there are plenty of good buyers who want to buy your home.  This is causing, at least, a temporary increase in home values.  If you are a buyer, then stay patient.  There are no signs that the increase is going to spike values and all indications are that interest rates aren't going to jump any time soon.  So, be ready.  Get pre-approved so you know what it is you qualify for.  Make sure your Realtor knows exactly what it is you are looking for so that when those properties hit the market, you are ready to act right away.

Have a great day today and make sure you let me know if you want to take advantage of this reduced inventory to sell your home.

Do people really live this way?

A few days ago I was assigned two new bank-owned homes to sell for two different banks.  Both properties were located in Camarillo and both left me walking away saying to myself..."how do people live this way?". Below are pictures from both REO Homes in Camarillo.  

The picture above is not just wet marks on the carpet.  It is dog-urine-soaked carpet!!! Literally!  The entire upstairs was just like this.  You could barely breathe inside the home.  I got sick from just having to walk through and take the pictures.  

The picture above is similar.  The tenant had just vacated this home a few days before this picture and the entire home was filled with dog feces and dog urine. Now there are the obvious problems for the dog and this being an inhumane way to keep a pet, but I just can't figure out what causes someone to think that this is an acceptable way to live. 

It is normal for most homeowners, once they have begun to miss payments and realize that they may not own the home for much longer, to stop maintaining things.  They stop watering the grass! They stop mowing the lawn! They don't pull the weeds! They down replace light bulbs! But these examples of distressed homeowners goes beyond what is normal. There are solutions before you get to this point.  A Short Sale in Camarillo would have stopped most of this destruction from happening.  Not only that, but the Short Sale can help to not devastate your credit and ability to borrow at competitive rates in the near future. 

It is always my pleasure to sell homes for banks in situations like these because I know I am improving the community.  Many banks have begun to rehab properties before they come on the market and this is another reason why values have begun the process of improvement.  A few years ago, the banks would have just tried to sell these assets "as-is".  Find a cash buyer who would buy them on the cheap, rehab them and then flip it.  But that "on the cheap" purchase was dragging values down.  Now, the "on the cheap" value doesn't exist because the banks are taking the time and resources to allow these properties to be sold on the open market.  The banks make more money!  The community makes more money because the bank is using local contractors to do the rehab! And, the neighborhood values are improving because they are able to sell these properties at higher values.  

Don't let your home get to this point.  Use the process of the Short Sale to get out of your situation.  

Rent Prices as an Indicator of Rising Prices?

I read an article today that outlined a common philosophy in real estate that when rents rise, that is an indicator that real estate values will follow suit and rise as well.  I'm just not sure that is the case. 

In this market, things have not been normal for some time.  So, I am not sure "normal" thinking in this regard makes sense. One plus one usually means two, but in this market nothing seems as it should be. The historical philosophy has been this.  If rents are increasing, most renters would begin to say to themselves "why rent at this price when we could own". It is a very logical thought process.  The fallacy of it in this market is that so many renters in today's world CAN'T BUY! Many of the renters in this market now have a foreclosure on their record or they have a new Short Sale on their record or their credit is so damaged from our slow economic recovery that they can't even get an FHA loan. In addition, so many of these renters have not been able to save any money for a down payment.  So ever a 3.5% FHA down payment is not achievable. So, normally, as these renters filter back into the entry level housing, it would have a trickle affect on prices throughout the cycle.  But, because we are now seeing this influx filtered due to limited financing options and limited ability to save, we are not getting the full influence on the market.  

In addition to this, there is also continued pressure on higher end values.  So many people are NOT MOVING UP. With distressed volumes (Short Sale and Foreclosures) at 35% to 40% of the market here in places like Camarillo and Thousand Oaks and Santa Rosa Valley, the higher end markets are having trouble finding new buyers. Normal sellers would generally be looking to buy a bigger house.  Now they are looking to rent.  So, demand for rental housing is up significantly, hence the higher rents.  Supply and demand.  Right? 

Lastly, as our population continues to get older, we also see more and more the influence of homeowners looking to down size.  While this group doesn't necessarily want to rent, they certainly are looking to sell the big, two-story home they have owned for the last 20 years and find a smaller, single story home.  Also another reason why we are not seeing values overall beginning to rise.  

There are two bright spots to look to for continue price growth in this market. First is the lack of inventory. The chart below outlines that the inventory in Ventura County is down 40% from two years ago.  This is a great sign for anyone looking to sell residential real estate in this market.  It always means a higher price. Fewer choices, higher demand, higher prices. 

 

The other positive sign for increasing values is the continued low interest rates.  This has allowed the affordability to remain at an all time high.  The chart below has been provided by the National Association of Realtors and it shows, on average, there has never been a better time to buy a home.  

However, most economists, and more importantly, most regular Joe's assume interest rates are going to rise. It's inevitable. Especially in a country like ours where we just don't let things stay down forever. The markets will get better, the economy will grow, jobs will come back. As these things happen, interest rates will rise and the Home Affordability Index will begin to drop.  The fear of interest rates rising should be an impetus to spur homeownership. And, spurring homeownership will increase values.  

So whether you are a Seller or a Buyer in this market, things are looking up, but I don't think it has anything to do with rising rents.  Let me know if I can help with any of your real estate needs or questions.  

The Scary Shadows of a Shadow Inventory

I just got finished reading two different articles today about how distressed sales and mortgage delinquencies are affecting the market and future values and I thought it was important information to share with anyone thinking about buying or selling Camarillo real estate or any real estate for that matter.

The first article was published by Core Logic and outlined the status of the infamous REO Shadow Inventory. For those of you who haven't heard of this term before. The REO Shadow Inventory is what most consider to be this pipeline of REO Assets that banks are keeping off the market waiting for some magical moment to release them and sell them off into the market.  In reality, the real Shadow Inventory is an estimate of three items. 1. REO Inventory owned by banks that they either are waiting to put on the market or that are on the market and have not sold yet.  The average time to close an REO Asset from the time it goes to foreclosure until the time it gets sold is about a year. This is the smallest portion of the Shadow Inventory and, in reality, its not really a shadow.  It is real REO Inventory.  2. Pending REO Inventory. This number is also a projection and includes all the loans where an NOD has been filed, but the bank has not yet foreclosed and taken possession. It is the second largest portion of the REO Shadow Inventory. 3. The last and largest portion of the Shadow Inventory is the loans that are seriously delinquent but where the bank has yet to file a Notice of Default.

So, this article by Core Logic simply outlines that the Shadow Inventory remained stable at 1.6 million units in October 2011 from the month prior. However,  it is down from 1.9 million units in October of 2010. In addition, it outlines that Florida and California account for a third of all this inventory.  So, this will continue to cause downward pressure of values in spite of all the other positive factors we have in the market. See their chart below.

[caption id="attachment_20" align="alignnone" width="400" caption="Shadow Inventory as estimated by Core Logic"][/caption]

A second and related article also came out recently in DS News which reported that a poll by Housing Predictor said that "47% of those surveyed would intentionally stop making their mortgage payments even if they could afford to in order to get out from under the sinking investment of home-sweet-home." This is a startling high number but also represents at least one reason why the REO Shadow Inventory is as high as it is. Much of the category #3 outlined above is homeowners who think they have to be late to get a modification or a Short Sale and many of these will never become REO Assets.  But it still impacts the market because the perception is that these people will push down values. Most homeowners believe that you have to be delinquent to get a loan modification and that you have to be delinquent in order to get a Short Sale approved.  None of those can be further from the truth. There is a way to sell your home in this market with dignity and not completely ruin your credit.

If you are thinking that a Camarillo Short Sale or a Short Sale anywhere in Ventura County or Los Angeles County is the right thing for you, please call me first to discuss the overall strategy for making the right decision for you in this volatile time in the real estate business.

Ventura County Real Estate bucks Nationwide trend

This morning there are new reports that the real estate activity in the US was down in February and inventories began to rise again. Ventura County seemed to buck the nationwide trend in February with activity up from the month before by 4.9% and real estate values holding steady from the month prior.



The other good sign for Ventura County is that inventories continue to shrink.  In January, levels had dropped to about a 3 month supply of homes on the active market.  So, if you are looking to buy a home in Camarillo or Thousand Oaks or the surrounding area's of Ventura County, you have to be ready to move when new properties come on the market because there are fewer and fewer homes to choose from.

 

For Seller's, these are both good signs.  First, there are people who are out there, ready to buy your home. Second, with inventories dropping and fewer homes available, you should be able to sell your home quickly AND get a higher price than you would have otherwise. This month, I was representing a Buyer who made a full price offer on a $600,000 home in Village at the Park in Camarillo. We wrote our offer within 3 days of it coming on the market. The property had multiple offers and the Seller gave everyone one final chance to submit their highest and best offer. We can in at $618,000 and lost to TWO higher All-Cash offers.  I tell this story to give you a sense of what is happening.  There is money available to buy your home if you need to or want to sell in this market.

 

If you need to sell in this market, there may be no better time to do it than this upcoming Spring/Summer. If you have any questions about the information included in this blog or about the value of your own home, please call me right away. I look forward to hearing YOUR story.