Houses still not selling...looks like prices will still sink a little lower this year.

There are plenty of reasons to wonder why houses aren't selling yet this spring. I believe it is because in part we haven't seen the market prices hit bottom. Interestingly in a non-scientific poll at our local Realtor Caravan meeting a couple of weeks ago, about 80% of the attendees thought the market was going to stay the same, 5% thought (hoped) the market would increase sales prices, and 15% thought that we would see a decline in prices. I am a realist. I see the market around me stalled out for homes over $500,000 and slowing for homes over $450,000. There are shoppers out there, but I believe that affordability is still the main factor for most families buying today. Unemployment isn't getting better, and although some workers feel more secure in their jobs, it doesn't mean they are more secure or even happy with the way their jobs have transformed in this economic turn down. There are a variety of factors that influence house pricing growth or decline, I am not so naive to assume that nothing is possible in terms of growth, but from where I am working, it doesn't appear to be very likely. Of course I hope that I am wrong and that the wisdom of the masses who think things are stabilized is correct. Just waiting to see I suppose. Here are some interesting links to articles that were just published.....

 

http://www.housingwire.com/2011/01/31/realtytracs-sharga-banks-still-holding-70-of-reo-from-market?

 

http://online.wsj.com/article/SB10001424052748704680604576110442537531026.html?source=patrick.net&mod=WSJ_hp_LEFTWhatsNewsCollection#printModeAd

 

 

 

 

The Week Before Christmas -Realtor on the edge....

'Twas the week before Christmas, and in every listed house
Not a Realtor was stirring, not even my spouse;
The buyers were shopping for gifts at the mall,
But shopping for houses wasn’t happening at all.

The children were harping for toys of all kinds,
Without any care for these hard economic times;
And my broker in his office, and me in my car,
We were searching for clients no matter how far.

And then, out of the west, there came a great storm,
Driving the very last buyers to stay home and warm.

The phone sat there silent, no other agents did call,

My sellers were anxious, and yes… prices did fall.

My spirits were soggy, my outlook just grey,
I regretted I threw the employment want-ads away.

I sat and I played Bejeweled with my friends

Wishing this holiday season would simply just end.

When, what to my disbelieving eyes should appear,
But an economic forecast rosy, plump and so clear.
A bullish outlook for a turn in the tide?
I looked up on Google to see who had lied.

But there on the screen, so crisp and so white,

The report was quite lengthy and had charts to the right.

Data that analysts claimed proved their case well,
But naysayers warning ’twas too early to tell;

Unemployment is down! Confidence is up!

And retailers fighting for every last buck.

A whole month declared Black, as black as the ashes,

And cyber incentives emailed to the masses.

Online and in-store, daily deals were promoted

Malls stayed open late and cashiers stayed devoted

Economic confidence was boosted, retail numbers looked great

Perhaps housing would rebound, if it wasn’t too late.

Skeptical analysts snidely respond with a snear,
“The outlook is good, but things aren’t fixed yet, dear.”

The dollar is weak and the stock market soft,

Defaults are down, but houses for sale and foreclosures still rot.

Amid conflicting reports, good and bad news

Nobody really knew what side to choose.

“Tell us what it all means!” My sellers begged and pleaded,

But my crystal ball broke, so much caution I heeded.

“It means that the holiday market is rosy for now,

But don’t count you chickens or butcher your cow.

We have no offers in, no inspections are pending

But sign here please, our 6 month listing is ending.”

Oh Freddy! oh Fanny! oh, Federal Reserve!

What about all the contradictions we’ve heard?
From the bottom of charts to just out of the red
A happy Christmas surprise? Or is it just in my head?

A new tax incentive?  A reason for buyers to buy?

Give us more rebates, loose credit, or a sign in the sky!

Though the housing forecast isn’t spectacular or crazy

They say we’ve hit bottom …. well at least maybe.

As I sat at my computer, writing this blog,

I ate Santa’s cookies and drank his eggnog.

I thought about past Christmas’ and remember with pain

This happens every winter and probably will again and again.

So what can a weary Realtor hope for from heaven?

Perhaps a new business plan for two thousand and eleven!

How about knocking on doors, making snazzy new flyers

Holding open houses and finding new buyers.

Farming for listings and holding community garage sales,

Maybe talking with past clients, if everything else fails.

We must do what we can to help our economy recover,

Handle short sales, foreclosures and challenges one after another.

Then I realized again, almost one year to the day,

My worries and concerns will eventually fade away.

Buyers will buy when the timing is right,

So it does me no good to sit up and worry all night.

Finally I closed down my laptop, turned off the cell phone.

Then listened to my children in my own home sweet home.

I thought of our blessings, and then for some reason

I decided I didn’t really mind the less busy holiday season.

*adapted from Clement Clarke Moore's "A visit from St. Nicholas" by Kathryn Deem 2010.*

What I would tell foreclosure and short-sale negotiators if I could address them all.

  I just read an interesting article by an AP Real Estate writer Michelle Conlin, http://news.yahoo.com/s/ap/20101208/ap_on_bi_ge/us_foreclosure_wrong_people?source=patrick.net#yn-story
where she gives a glimpse into some of the personal stories of people who have been wrongly caught up in the foreclosure cyclone rampaging across the country. She writes about people who have been caught in the path of the lending industry chaos even though they didn’t have any payment delinquency or reason for the bank to foreclose on them.
     As shocking as these stories are, there are thousands of other stories out there of folks who are getting just as bad or even worse treatment because a job loss, retirement, illness, or other valid hardship reason left them unable to make their home loan payment on time.  If you have been watching the news lately, you know that a lot of those kinds of stories are now coming to the attention of lawmakers and the media.  Hearings in the Capitol have exposed the lack of professionalism and lack of personal regard by our top lending institutions for the individuals being swept up and destroyed in the foreclosure tornado. Articles like the one by Ms. Conlin give the issue real names and real faces and hopefully will stir some public outcry.
   As a Realtor I have seen a LOT of short-sale and foreclosure processes in the last 5 years. No, I haven’t worked for a bank as an REO agent, I have tried to help owners navigate the modification process, and if that fails, help them avoid losing their home to foreclosure, lose the remnants of their good credit and often try to help them avoid losing self-respect.  What I have come to understand though is that the chance for a family to avoid foreclosure and successfully complete a short-sale is entirely in the hands of bank negotiators who are over burdened with the volume of their work and often unfamiliar with the variations in valuations in different parts of the country. Articles like Ms. Conlin's illustrate how some employees process paper and never think about the lives of the individuals that paper represents. The recent news articles about the “robo-signers” who are simply rubber stamped foreclosure warrants without ever reviewing files seems to more than validate my own conclusions that this is a widespread problem. I have my own set of at least a half dozen stories about homeowners lives being ravaged by inconsiderate and down right awful bank representatives.
    Some articles we find in the media have pressed forward with the attitude that many of the people defaulting on their loans are taking the easy way out and/or abusing the system. What is usually not addressed in these hard-line attacks on distressed homeowners is that many homeowners have been working against a wave of uncooperative, misleading, and sometimes directly hostile bank employees and policies.  If I could share anything at all with those decision makers inside the banks who have that attitude, I would tell them that I have yet to sit down across a dining room table and find a family that isn’t truly traumatized about the prospect of losing their home.  Usually, by the time I am called, it is almost inevitable that they are going to be walking away without a single penny no matter whether they are able to successfully negotiate a short-sale or ultimately let the bank take the property in foreclosure. If  I could, I would tell every bank employee who deals with distressed properties to remember that a house with a mortgage or trust deed loan isn't just a house...it is somebody's home and inside that home are people who are probably pretty stressed out and traumatized. And maybe, just maybe, it isn't their fault, and it isn't their intention to contribute more to this national foreclosure nightmare.

Bundle up for the winter months, real estate sales are freezing up.

     As reported in the NY Times today, the S.&P./Case-Shiller indexes released this week showed widespread declines in national home prices in the third quarter of this year. Prices aren't the only thing that dipped, sales volume is down as much as 9% in Orange County, according to the Orange County Register on Sunday. Lower prices+less sales = bargains for buyers, right?  Oh wait, to make things better...mortgage rates are at amazingly low prices....buyers SHOULD be flocking to purchase homes right? Then why aren't they?
     No simple answer to that one. It seems that for every good factor there is an equal or more powerful negative factor influencing buyers today. Over the next few days I will try to focus on some of the key elements that seem to be making our recovery out of this housing pit slow and painful. Seasonality, mortgage industry issues, unemployment factors, foreclosures & distressed properties, and credit chaos all make for interesting aspects of our teeter-tottering progress.
     First, the factor of seasonality is one that I referred to in my last blog. Tis' the season for everyone to forget about buying houses. Fall and winter have generally seen a drop off in volume (the number of houses actually sold) as less people shop for houses and instead shop for holiday presents. Even in those great booming years that everyone remembers so fondly, there were generally dips in volume during the fall and winter months. I wouldn't expect this year to be any different. In fact, this year's slump might appear to be a bit more severe.  This season's market is lagging additionally because those buyers who wanted to buy were prompted to do so earlier in the year in order to take advantage to the federal and state tax incentives. Those tax credit inspired "pre-season" sales led to a minor rally in prices and supported the sales volume for most areas of Orange County. It is my belief that those "Hurry up and buy now!" tax incentives pulled the rug out from under us when they disappeared. Now, left with no extra incentives,  we have a much more realistic picture of what true demand is, and that picture is not looking so pretty.
     Yes, there are random encouraging factors in the news leading to a few rosy, feel good days on Wall Street and in the media....but for me, the bottom line is that sales volume, week over week and month over month, is the best indicator of where we are headed in housing.  Until good news translates into the average person getting loan approval and then finding a house they want to call home, we might want to stay bundled up and working hard to do all we can for our sellers, because "Baby its cold outside."

Tis the season....

Every year I have to tell myself (and David) not to freak out because the phone hasn't been ringing this weekend. Normally  the phone rings throughout the day with other real estate agents inquiries about houses, sellers asking for advice, buyers wanting prices, etc. However, once Thanksgiving weekend arrives it seems that all of the real estate world goes on vacation. Sure, some individuals are out there working, but for most people this is the season of great distractions and a real estate transaction is the last thing on their list. What a pity...there are some great bargains to be had on the market right now.

It seems that the only people who want to put their house on the market during the holidays are those who really do NEED to sell, but those who might otherwise be house hunting are shopping for televisions and gadgets to put under the tree.  If buyers weren't so entranced by the piped in music at the mall, they might see some really great homes with for sale signs in front of them.

Seasonally the prices are softest in the winter around the holidays...why not take advantage of this, especially while interest rates are so amazingly low? Ahh, if Santa would just think of leaving new house keys in someone's stocking instead of candy and apples...what a merry holiday season this would be for all of us!