A Good Year for Wildflowers

March 31, 2010

The above photos were taken by Stephen Wormser on excursions to Anza-Borreego Desert State Park and to Joshua Tree National Park. Because of the winter rains, the deserts are experiencing an abundance of blooming wildflowers.

At Anza-Borregi, according to Michael Rodriques, the park's interpretive specialist, the park will have hundreds of acres of desert sunflowers, sand verbena and dune evening primroses. Brittle bush and other perennial shrubs will add color to rocky areas. Along with the visual beauty, there will also be a powerful aroma as all these flowers bloom.

In Joshua Tree, there will be cacti, small forget-me-nots and all sorts of other flowers that are not seen annually. The seeds lie dormant until sufficient rain causes them to germinate. We have not had such an opportunity to see the desert in bloom for several years.

If you would like to know more about the wildflower preserves, these five parks update wildflower reports during the viewing season.

Anza-Borrego Desert State Park www.parks.ca.gov/?page_id=638

Joshua Tree National Park www.nps.gov/jotr

Antelope Valley Poppy Reserve www.parks.ca.gov/?page_id=627

Mojave National Preserve www.nps.gov/moja

Death Valley National Park www.nps.gov/deva

Especially Anza-Borrego and Joshua Tree are great day trips for residents in our two county Inland Empire region.

An Interesting Comparison

March 30, 2010

The Sun newspaper in its real estate section of Saturday, March 27 had an interesting comparison table in the advice column of Miguel Terrazas. In the table, Mt Terrazas makes a comparison between a $215,000 purchase price at 5% interest for 30 years versus a $193,500 purchase price at 6.5% for 30 years. The lower purchase price speculates that real estate prices might yet drop another 10% this year. The 6.5% interest rate speculates that interest rates will be rising.

Here is a Mr. Terrazas' table:

Price.........................................$215,000.........................................$193,000

Interest Rate..........................5%.....................................................6.5%

Monthly P&I Payment.........$1,133.26.........................................$1,200.89

Taxes (Monthly)....................$233.60...........................................$201.24

Insurance................................$70.00.............................................$65.00

Mortgage Insurance..............$96.75..............................................$87.08

Total monthly payment........$1,523.41........................................$1,554.21

Over the length of a 30 year loan, the difference is $11,401.20. This calculation does not mention the $8,000 tax credit if you meet the deadline for this benefit. It also does not take into consideration the interest deduction you might have on your annual income taxes.

Bottom line: If you are planning to purchase a home, waiting for further price reductions is probably not the best strategy. Finding a home that fits your lifestyle when you have made a decision to purchase a home is a better long term decision.
(Just a caveat - these are Mr. Terrazas' calculations and I have not reverified them.)

"The House That Got Away"

March 29, 2010

"The House That Got Away" was the title of an article published in the on line Inman News. the article, written by Tara-Nicholle Nelson was published on March 19, 2010. Specifically the article was a response to a reader's question or complaint about being out bid on numerous properties and finally getting an offer accepted which the reader subsequently canceled because of the perception that the price paid was more than the property was worth. Unfortunately, the reader has not found another property and cannot forget about the "one that got away".

Buyers, particularly in the real estate market of the past several years, are fearful of overpaying for a property. This fear is understandable in as much as prices have declined and many buyers thought they had paid a rock bottom price only to find that another property in the neighborhood was listed at a lower price.

I can remember when my husband and I were in the market for our first home. We submitted an offer on a home that we just loved and that had everything we wanted - neighborhood, floor plan, yard, decor, etc., etc. Our offer was lower than the list price, the seller countered and we refused to negotiate. it took us a few months to forget how much we loved that house and to find a house that was just O.K. We learned that the value of being willing to negotiate.

During my real estate career, I have worked with buyers - and for that matter sellers - that have had regrets about "the one that got away". When looking for a home that meets your needs, finding one that works for you may be more important than getting "a deal". Purchasing a home is a big decision, but living in a home can shape your life. In any negotiation, take a deep breath and know your ultimate goal - a deal or a place to enjoy your particular lifestyle. You will be less likely to dream of "the house that got away".

Special Events in the Inland Empire

March 27, 2010

For 26 years, Redlands has been a mecca for bicyclers. Begun in 1984, the Redlands Bicycle Classic has attracted both professional and amateur teams from around the world. Starting early in March you can see bicyclers in their racing suits bicycling up and down the streets of Redlands. This week, from March 25 to March 28, the races are in progress. Saturday, downtown Redlands will be alive with the annual Kiwanis Pancake Breakfast, music, food booths and assorted vendors. The start/finish line for the many criteriums will be on Citrus Avenue. Certainly great spectator events as the bicyclers woosh past in their circuits of the race course.

Saturday a.m. will feature the public races for children and adults. For schedules of events, road closing and all information you can go to http://www.redlandsclassic.com/

If your interest is airplanes, the 18th annual Airshow located at the Riverside Airport will be from 9 a.m. to 4 p.m. on Saturday. This event will also have a pancake breakfast from 7 a.m.. C-17s have been deployed from March air field to deliver cargo to Haiti and to airlift orphans after the January earthquake. For the airshow, pilot Lt.Col. Timothy Harris will show off the C-17's three point star turn and backing capability. Admission to the airshow is free. For a full schedule of the day's activities visit http://www.riversideca.gov/

The Riverside Airport is located at 6951 Flight Road in Riverside.

The 14th annual Citrus Harvest Festival will be held in the historic section of Highland know as "Old Town". This festival takes place on Palm Avenue extending south form Pacific Avenue to Fisher Street. Enjoy the entertainment, the food booths and the Kiwanis car show. The Festival hours are from 10 a.m. to 3 p.m.

How Does an Agent Price a Short Sale?

March 25, 2010


How do I price a short sale? This was a question posed to me by an agent who was in the process of working with a seller to list a property that was going to be a short sale. How did she know that it needed to be priced as a short sale? Because the seller owed more than the selling price of other properties of similar size, age and location.


The answer to the question of "How do I price a short sale?" is basically the way that agents traditionally recommend prices for traditional or "standard" sales. The present market is a tad cloudy on this issue because frequently, lender owned properties are priced at extremely competitive (i.e. low) prices. The strategy being to entice multiple bidding which generally drives prices up and lender sellers believe that in that strategy they will obtain the best possible price.


The first step in any real estate pricing process is to do a comparable market analysis (CMA). This will include similar properties that are listed for sale but that have not yet sold; similar process that have accepted offers but the transaction has not yet closed (pendings); and similar properties that have sold in the past two to three months. One of the challenges of the present market is the small number of properties in both the pending and sold categories.


The goal of any seller should be to obtain the best POSSIBLE price in a reasonable amount of time. To do so, the pricing must be both realistic and competitive. If it is not, ultimately sellers will wait a long time and generally will end up settling for a lower price than they might have obtained with a price that reflected present values.


Buyers in today's real estate world are very well informed. They have searched on the Internet and they know what properties have sold and which have not. They seem to feel that the days on the market are an indication of an overpriced listing.


But, back to the original question - "How do I price a short sale? Basically the same way you would price any property with perhaps a bias to the lower end of the comparables. Your goal and presumably the sellers is to sell the property. The reality is that the lenders will ultimately decide how much loss they are willing to take and the likelihood of the offeree being able to comlete the transaction.

San Bernardino County Resource Fair

March 24, 2010


If you live in San Bernardino County and you can take the time to visit the Community Resource Fair at Victoria Gardens tomorrow, March 25, 2010 from 9 a.m. to 5 p.m. it would be a worthwhile opportunity to really learn about the county and its services.


There will be informational workshops on community development and housing. There will be a job fair from 10 a.m. to 1 p.m. that will help to connect local job seekers with employers looking to recruit employees for more than 600 positions.


There will be public safety and healthy living displays as well as displays for the many recreational facilities located in San Bernardino County.


There will be ticket giveaways, music, games and all the fun activities that are usually associated with community fairs.


Based on the pre event literature, this will certainly be both educational and entertaining. For families with children on spring breaks, this could be more fun that a trip to Disneyland and it is open to the public for free.


For more information you can call 888-818-8988 or visit http://www.sbcounty.gov/

Reforesting Our San Bernardino Mountains

March 23, 2010

With the weather so wonderfully spring-like, volunteers will be attempting to plant 25,000 trees in the San Bernardino National Forest. This effort will begin this Saturday, March 27 and will continue for the next seven weeks. Officials with ForestAid, a partnership of the San Bernardino National Forest Association and the U.S. Forest Service and TreePeople are hoping to recruit 3,500 volunteers to accomplish this project.

New trees are need to replace the trees lost in the wildfires of 2003 and 2007. More than 91,000 acres burned in October of 2003, the Old Fire and in September of 2007, approximately 14,000 acres burned in the Butler II Fire.

This replanting effort began last year and the partnerships feel that they learned a great deal and should be able to accomplish this goal. School children and members of the Urban Conservation Corps and any all folks willing to volunteer some time will be vital to this effort. Sempra Energy has donated $50,000 to ForestAid to help fund this project.

More information can be obtained by calling 909-382-2780.

Springtime In the Inland Empire

March 22, 2010


Spring is officially here. The vernal equinox occurred on Saturday, March 20. It was ushered in with sunny days, temperatures in the high 70s, low 80s. Added to the perfect weather was the arrival of our unique Inland Empire aroma- the sweet smell of citrus blossoms. A few days of warm weather bring out the blossoms and the wonderful scent that they emit.


At one time you could smell these blossoms in the air almost everywhere because there were so many citrus groves. Nowadays, it is not so easy, but fortunately some municipalities and other entities have purchase groves and are preserving them so that future generations of Inland Empire residents will still enjoy the scent of the blossoms.


Saturday, when I arrived at our office, I was delighted to exit my car and be welcomed with the unique scent. If you have never experienced this incredible scent, come to our parking lot which adjoins the San Bernardino County Museum. The museum had a small grove, that is presently beginning to blossom. It is a real treat for all of us at CENTURY 21 Lois Lauer Realty to be able to have our senses greeted so sweetly.


I know that I am getting maudlin, but as a native Ohioan who had never smelled an orange blossom until I came to California, this sign of Spring is still a wonderment to me. It is one of the reasons that so many of us plant citrus trees in our yards. Let's be sure that it never disappears from our environment.

Two Events to Raise Funds for Children

March 20, 2010

There are probably many more events occurring in the Inland Empire than the two I am posting. If you want to post your event you can click comment and if I have space, I will post the information.

This Saturday evening, March 20, at the Edwards Mansion in Redlands, the Sunrise Rotary Club will be serving Crab and Jazz. This is their annual fund raiser for their projects that benefit young folks. This "all you can eat" crab fest features music and a silent and live auction of many special items.

The festivities begin at 5 p.m with dinner being served at 7:30 p.m. Remember that this is a fund raiser so it is not free. The cost is $75 per person. For tickets or more information you can call 909-327-5668.

On Sunday, March 21, from 10 a.m. to 4 p.m. the fifth annual Cut-a-Thon benefiting the Childhood Cancer Foundation of Southern California will be held at the Rose of Sharon Salon in Redlands, 101 E. Redlands Blvd (The Centennial Plaza Building). Children with cancer will be shaving the heads of firefighters and anyone else wishing to have a shaved head. There will also be professional stylists available to cut and style hair for a minimum of a $20 donation. They will also be collecting 12 inch hair donations to send to Wigs for Kids. You can call the Childhood Cancer Foundation of Southern California at 909-558-3419 or on the Internet http://www.ccfsocal.org/

Since shaved heads for men are in style right now, it will be great to see all those bald heads and know that these folks care.

Not a fund raiser, but for the environment. The University of Redlands Students will be collecting electronic waste on Saturday from 10 a.m. to 4 p.m. Just bring your unused cell phones, computers, TVs and other electronic devices to the stadium parking lot on the corner of Brockton and University. The students will see that they are disposed of properly.

They're Getting Closer -

March 18, 2010

This year has started with a bang ! Major seismic activity has been occurring around the world. To date, Southern California has been shaking, but only in the 1-5 range on the Richter scale. I have posted earthquake preparedness information from time to time over the past several years, but if you are like I am, you have only casually prepared. Perhaps now is the time to become more serious.


The California Governor's Office of Emergency Services has published and Emergency Supplies Checklist. If you kept up on the news reports from both Haiti and Chile, you learned that for at least three days, you might have to be on your own. You will be without some of the basic services we take for granted in our daily lives - electricity, gas, water and telephones. It is recommended that you be prepared to be self-sufficient and able to live without these basic services.


You can go to http://www.google.com/ and search Emergency Supplies Checklist. Out of the choices, there is one from The California Governor's Office of Emergency Services. This is a great minimal supply list. If you collected the items suggested, chances are you could survive the first days following an earthquake.


If you search further, under earthquake preparedness, you will find suggestions for making your home safer. Such actions as child safety locks on cupboard doors, strapping to the wall your free standing china cupboards or book cases. It would be wise to walk carefully though your home and look for the items that might go flying through the air should we have a major shake.


It is possibly time to get serious about preparations.

New Rule - Renovation Repair and Painting

March 17, 2010

In 1992, Congress passed the "Lead-Based Paint Hazard Reduction Act of 1992" and EPA released regulations that required sellers, landlords and real estate agents to provide certain disclosures concerning lead based paint hazards in pre-1978 housing. C.A.R. provides agents with a two page disclosure form which is completed by a seller and the agent. Also there is a booklet entitled "Protect Your Family From Lead in Your Home." which is given to buyers and sellers, tenants and landlords.

Fast forward ahead to April 22, 2010. That is the date a new law will become effective. All contractors who engage in renovation, repairs or painting of these pre-1978 houses will be required to have an "Renovator Certification". Their business must also be EPA certified. In addition, before any work begins, the owner/tenant must receive a copy of "Renovate Right", a pamphlet produced by EPA.

If you want more details go to http://www.epa.gov/ or call 1-800-424-LEAD (5323)

(I went to the site and it was not super easy to find the information.)

Every 10 years - America Takes a Count

March 16, 2010

Yesterday you should have received your official U.S. Census Bureau form. Once every ten years, the U.S. government attempts to count every person living in the United States. This is obviously an awesome task. Since the census of 2000, there have been amazing strides in data gathering. The sophisticated GIS (geographic information systems) such as the Redlands firm of ESRI have developed along with satellite mapping techniques allow mapping of homes throughout the country. If you noticed, your census form was addressed to "Resident" and then the address of the property.

Census results are used to determine how many representatives we have in the U.S. Congress. These results also may determine the amount of money our Inland Empire constituencies receive to provide a variety of services.

It is important that you answer the questions accurately and in a timely fashion. Do it today and drop it in the mail. At some point, if the census bureau has not received your data, they will be calling on you personally. This personal tracking down of folks is a tedious process. How much simpler and more cost effective this ten year counting can be if each household does its part.

The census is not meant to be an intrusion of your privacy nor a limit to your freedom. It is a way that we assess who we are.

Do it NOW!!!

Deal or No Deal

March 15, 2010

A few years ago there was a popular TV show called "Deal or No Deal". I am not a TV watcher so I know very little about the actual show. It is the title that caught my attention. In the current real estate market, it seems as though many buyers are wanting to play the game of "Deal or No Deal".

The first round of the game has to do with finding a property that is priced at a level such that it is viewed as "a deal". Some serious buyers really do a lot of homework to research such data as prices in the neighborhood, prices per square foot, what percentage of price decline has occurred, etc., etc. By the time they are ready to make an offer on a property, they evaluate the listing price as to whether it is "a deal". If not perceived as "a deal", then they either pass on that property or submit an offer in line with the perceived "deal" price.

In this game, buyers often are dismayed to discover that they are in a multiple offer situation and that they end up losing (i.e. not being the successful buyer). If a property is now listed at 20-30% below the price for which it sold in 2005-2007, chances are that it is a good value - maybe not "a deal", but certainly an opportunity for a buyer to purchase a home that might formerly been out of reach price wise. This could be a "real deal".

The second round of the game has to do with the loan process. Many prospective buyers now search the Internet for financing. They may also call local mortgage agents. They then compare the stated interest rate. Sometimes they remember to also ask for the financing fees. New RESPA regulations do offer rules so that a potential borrower can compare the actual costs of obtaining a loan. Often , the "deal" here is the lowest quoted interest rate - at least that is the reason a borrower selects the lender that will process the loan. Unfortunately, like any vendor, there are reliable lenders and less than reliable lenders. It is not always "a deal" to choose a lender whom you never meet and who may be physically located in another part of the country.

I have seen some of these "deals" turn into "no deal" when, after a month or so, this lender says, "Sorry, No deal."

The best "deal" on this real estate market, in my opinion, will be a property that meets a buyers lifestyle needs and financial needs. A professional real estate agent will provide information on comparable sales and will be able to help the buyer construct an offer that will be competitive in a multiple offer environment.

Something For Everybody

March 12, 2010

Around the Inland Empire this weekend there are choices in musical events that meet a variety of tastes in music. "The Fantastiks" musical will be performed Saturday at 8 p.m and Sunday at 2 in the University of Redlands new Frederick Loewe Theatre, 1200 Colton Avenue. Tickets are $10 for general admission, with discounted prices for students, faculty and seniors. More information or reservations can be obtained by calling 909-748-8028 or on the Internet www.redlands.edu/Theatrearts.asp

The Fox Performing Arts Center in Riverside will be the venue for a performance by Gladys Knight. The Center is at 3801 Mission Inn Avenue. Tickets are $50-$129. For more information or to reserve tickets, you can call 951-788-3944 or on the Internet http://www.foxriversidelive.com/

"In Celebration of Spirit" is the theme of the spring concert of the Inland Master Chorale. The Chorale will be presenting spirituals and gospel songs on Saturday evening at 8.p. and Sunday afternoon at 2 p.m. The venue for the performance will be the First United Methodist Church, 1 East Olive Avenue in Redlands. For more information or to reserve tickets you can call 909-798-4462. Tickets are $16 in advance, $18 at the door and $8 for students and children.

On Saturday evening at 8 p.m., the Redlands Symphony Orchestra will perform in the Memorial Chapel at the University of Redlands. The concert will feature three orchestral pieces that are favorites with lovers of symphony music. The concert will be comprised of music of Mozart, Beethoven and Mendelssohn. Tickets are $15-$60. To reserve tickets or for more information you can call 909-748-8018 or on the Internet http://www.redlandssymphony.com/

I am certain there are more entertainment opportunities. If you want to post your event just click on "comment" and post the information.

FHA Changes and Updates for 2010

March 11, 2010


FHA insured loans have become the most popular financing in the past two years. These loans were popular in the past, but with the advent of the 100% financing available in the first decade of the 21st century. (This is a contributing factor to the relatively low number of FHA foreclosed properties.) With the demise of the 100% financing and the tightening of down payment and credit qualifying requirements, FHA insured loans have become a popular financing tool.


Yesterday I attended a workshop hosted by the NAHREP. On of the panel members was Nancy West, Marketing Outreach for the Department of Housing and Urban Affairs. She addressed the changes and the common myths about FHA loans.


First, she clarified that FHA is not needing to ask Congress for a bailout. The FHA insurance fund is solvent and has sufficient monies to cover the losses they have when they foreclose. Because of the insurance premium paid by every FHA borrower, the actual lender suffers no loss in the foreclosure as this insurance fund pays the lender the outstanding loan amount. FHA takes the property into its inventory and then offers it for sale. You can go to http://www.hudpemco.com/ for a list of HUD properties available for purchase.

2) FHA (Federal Housing Authority) does not make loans. It insures loans made by FHA approved lenders. FHA does not have a FICO score requirement. It is the lenders who determine what FICO scores will be sufficient to qualify for the loan they will make.

3) FHA is a subsidiary of HUD as is RESPA.

4. Effective April 5, 2010, the up front insurance premium (MIP) for an FHA insured loan will increase to 2.25%.

5. Currently the down payment requirement is 3.5%.

6. At the present time, anyone, family, agents, etc. can contribute up to 6% of the costs of obtaining the financing. There has been significant discussion about reducing this contribution to 3%. Some lenders have already changed their rules to the 3% amount.

7. There have been changes to the regulations regarding approval of condominium projects. Only projects that have bee approved since 2008 are approved. If you are planning a condo purchase, it will be important to be aware of the guidelines for FHA approval.

Changes are in the air, so if you are planning to purchase a home in 2010, it might be wise to do so sooner rather than later.

Six More Weeks

March 10, 2010


Just a little over six weeks and the tax credits available from the federal government will be history. This credit has been available for first time homebuyers who purchased a home after November 1, 2009 and before May 1, 2010. However, purchases subject to a binding sales contract that was signed before April 30, 2010 will also qualify if the closing occur by June 30, 2010.


If you checked my post of yesterday, it is obvious that there are many properties available that would be eligible for FHA financing with as little as 3.5% down payment. The interest rates at the terms currently in effect are also favorable for buyers.


If you seriously want to purchase a home in the next six weeks, find yourself a real estate agent and set aside a day or two to really view the current listings. The Internet is a good search tool, but to really find a home that suits your lifestyle, nothing beats actually taking a walk through the home. Open houses may be helpful, but frequently properties that are new to the market are never shown at open houses. The conscientious buyers have an agent looking for them and alerting them of new listings.


This $8,000 tax credit may never occur again. If you want a home of your own, pick up the phone and connect with a real live real estate agent!

MedianHome Prices-February 2010

March 9, 2010


The median prices seem to be indicating that we are bouncing along the bottom for the prices of homes in the 14 communities that I track. There is not much change from the January medians. (See post of 2/11/2010) The tracking of the median prices for the month of February as reported in the IMRMLS shows where we once were. It also shows a bit of how the market rose from February 2003 to the peak in February 2006/2007.

The usual caveat: I just divide the number of closed transactions by 2 and report that selling price. Nothing scientific. Just using the definition of median as half sold above and half sold below.

Banning/Beaumont.............2010/165,000.......2009/175,000.......2008/240,000.......2007/314,000

...............................................2006/305,000......2005/245,000.......2004/175,000........2003/127,500

Bloomington.........................2010/110,000.......2009/145,000.......2008/269,000.......2007/357,900

...............................................2006/330,000.......2005/263,900......2004/230,000.......2003/159,950

Colton....................................2010/118,000.......2009/125,000.......2008/250,000.......2007/285,000

...............................................2006/335,000.......2005/250,500......2004/200,000.......2003/157,500

Fontana................................2010/200,000.......2009/205,000......2008/345,000.......2007/415,000

..............................................2006/400,000.......2005/344,000......2004/253,000.......2003/191,000

Grand Terrace................................2010/199,900........2009/224,900......2008/280,000.......2007/365,000

..............................................2006/348,000.......2005/310,000......2004/270,000.......2003/217,000

Highland..............................2010/155,000........2009/188,000......2008/318,000.......2007/369,000

.............................................2006/380,000........2005/280,000.....2004/187,000........2003/185,000

Loma Linda...................................2010/240,000........2009/284,000......2008/340,000.......2007/414,000

.............................................2006/329,000........2005/292,500.......2004/300,000......2003/245,000

Mentone.............................2010/225,000.........2009/71,000........2008/350,000.......2007/350,000

.............................................2006/350,000........2005/250,000.....2004/222,000........2003/167,000

Moreno Valley.................................2010/149,000.........2009/115,000......2008/235,000........2007/362,000

............................................2006/372,000.........2005/295,000......2004/230,000.......2003/165,000

Redlands............................2010/219,900.........2009/260,500......2008/350,000.......2007/397,000

............................................2006/380,000........2005/346,000......2004/255,500........2003/189,900

Rialto..................................2010/144,000........2009/154,000.......2008/237,000.......2007/355,000

............................................2006/365,000........2005/287,500.......2004/210,000.......2003/175,000

Riverside...........................2010/200,000........2009/178,000.......2008/300,000......2007/410,000

............................................2006/400,000.......2005/350,000.......2004/266,000......2003/198,000

San Bernardino........................2010/92,400..........2009/85,000.........2008/196,900.......2007/309,000

............................................2006/298,000.......2005/247,000.......2004/150,000......2003/120,000

Yucaipa/Calimesa............2010/195,000........2009/180,000......2008/255,000.......2007/340,000

............................................2006/370,000.......2005/296,000......2004/239,900.......2003/167,500

There you have the numbers for the rise and fall of median home prices.

Closed Transactions fo February -2010-2003

March 8, 2010

As I checked the numbers for January and February 2010 for the closed transactions reported through the IMRMLS, it looked as though the volume is holding pretty steady. In some of the communities that I track, the volume was about equal to or greater than the numbers reported in 2003 and 2004.

Here are the numbers.

Banning/Beaumont.............2010/107.......2009/105.......2008/46.......2007/54.......2006/70

...............................................2005/71.........2004/68..........2003/50

Bloomington.........................2010/24.........2009/23..........2008/4.........2007/10.......2006/20

...............................................2005/18.........2004/16..........2003/23

Colton....................................2010/51.........2009/52..........2008/21.......2007/22.......2006/42

...............................................2005/34.........2004/25..........2003/38

Fontana.................................2010/217.......2009/293........2008/80......2007/92.......2006/190

...............................................2005/202......2004/170........2003/175

Grand Terrace.....................2010/10.........2009/5............2008/4........2007/6..........2006/10

...............................................2005/7...........2004/11...........2003/4

Highland...............................2010/35.........2009/47...........2008/25......2007/24.......2006/39

..............................................2005/56.........2004/45..........2003/57

Loma Linda.........................2010/8...........2009/7.............2008/8.........2007/14........2006/10

..............................................2005/8..........2004/10...........2003/7

Mentone..............................2010/5...........2009/7.............2008/12.......2007/4.........2006/4

..............................................2005/7..........2004/4..............2003/6

Moreno Valley....................2010/236......2009/345.........2008/140.....2007/109.....2006/222

..............................................2005/187.......2004/197........2003/192

Redlands..............................2010/43........2009/38...........2008/19.......2007/43........2006/50

..............................................2005/65........2004/39..........2003/58

Rialto....................................2010/93........2009/114.........2008/21.......2007/50........2006/71

..............................................2005/96........2004/90..........2003/83

Riverside.............................2010/329.......2009/391.......2008/147......2007/229......2006/333

..............................................2005/280......2004/305.......2003/301

San Bernardino...................2010/209......2009/256.......2008/78........2007/103......2006/177

..............................................2005/164......2004/198........2003/185

Yucaipa/Calimesa..............2010/45.........2009/35..........2008/38.......3007/33........3006/39

..............................................2005/47.........2004/61..........2003/40

These numbers seem to support the theory that the real estate market in our area is stabilizing - at least in terms of the number of transactions.

Antique Appraisers Coming to Phelan

March 5, 2010

You don't have to go to LA to have your mementos and family heirlooms appraised. On Saturday, March 6 beginning at 9 a.m., There will be three professional antique appraisers and one professional quilt appraiser at the Phelan Memorial Library. Admission is free, but there is a charge of $8 per item. The limit per patron will be three items.

The Phelan Memorial Library is at 9898 Clovis Road in Phelan. For additional information you can contact Lenore Cole at 760-868-4176

This Sunday, March 7, 2010, the San Bernardino County Museum will had free admission in keeping with their first Sunday of the month tradition. The day will be filled with bird watching activities as well as a concert at 2 p.m. by the Etiwanda High School Jazz Band.

"Shadow Inventory"

March 4, 2010

For the past year or so, there has been talk about the "shadow inventory" of homes. These homes are not presently on the market, but are allegedly already part of a lender's real estate owned (REO) property rolls. I have read articles that suggest that to clear out this "shadow inventory" of REO properties will take three years and put pressure on home prices. This forecast has been appearing for well over a year. The flood of REO properties was predicted to occur in 2009, but did not. In February of this year (2010), Standard & Poor (certainly a respected financial entity) reiterated that the "shadow inventory" problem still exists.

Thus far, lenders have not flooded the market with foreclosures. Th federal government is giving incentives to lenders and loan servicers to modify existing loans or to approve short sale transactions. If these incentives work, the number of REO properties should decrease.

Quite frankly, from my observations, lenders are not putting their REO properties up for sale at prices hugely below comparable sales. The real discounting by lenders is occurring on the court house steps as they reduce their opening bid price and investors snap up these bargains. Many investors then rehab the properties and put them on the market at competitive prices, but not substantially below current market sales.

I would not presume to challenge the experts at Standard & Poor, but I shall keep careful tabs to see a serious increase in the rate of foreclosures and the number of REO properties on the market in our region.

Just as a footnote, Zillow's latest study of negative equity indicated that the percentage of homeowners with negative equity appears to be on the decline. In the communities that I track, Riverside was mentioned as being down 5.7 points - whatever that really means.

Underwater Homeowners - Scenario #1

March 3, 2010

According to a report released in February by FirstAmerican CoreLogic, nearly one-fourth of all Americas with a mortgage owe more than their home is worth. Once a borrower owes more than the value of the property, there are decisions to be made. The federal government has been attempting for over a year to deal with these "underwater" mortgages, but thus far, none of the programs seem to have alleviated the problem.

Scenario#1 is one in which the overall financial situation of the borrower has not changed since the mortgage was first obtained. The borrower has the same income and is still able to make the mortgage payments. The borrower really likes the property and would like to continue to live in it. While it may seem to be a poor financial decision to continue to pay when you have negative equity, in the long run it may be a wise choice. Your credit remains in tact, your payments will credit toward the principal balance, you do not have to pack up and move and any place to rent may be far less desirable.

If the future resembles the past, sometime in the latter half of this decade, your property will recover its former value or even exceed it.

Even in this scenario, you might contact your lender and see if you might be eligible for either a loan modification or an interest rate reduction. Participating in either of these programs may effect your credit, but probably not to the extent that a short sale or a foreclosure would.

This is not the first real estate downturn that created "underwater" borrowers. The severity is probably due to the use of 100% financing. Back in the downturn of the 1990s, a 3% down FHA mortgage, created underwater borrowers. In time, those that were able to stay put, recovered equity and then some.

Short Sales - Will the Seller Owe Tax?

March 2, 2010

The answer to "Will the Seller Owe Tax?" is "It depends. One of the important steps that a short seller would be well advised to take is to consult a Tax account or tax attorney. Real estate agents are generally not certified in tax law or IRS regulations. Therefore, the advice of an expert in these fields can be crucial in an underwater seller's decision to sell, to attempt a modification or to enter into a short sale or to just let the foreclosure process run its course.

Just as an aside, it is my belief that lenders generally receive a better financial result from either a modification or a short sale. Yet for the past two to three years, lenders seem to have been averse to responding to an underwater homeowners request for either modification or short sale. The federal government under the Making Homes Affordable Program have attempted to incentivize lenders, but the process is still lengthy and extraordinarily frustrating for a seller or a potential purchaser of a short sale property. Lenders seem willing to greatly discount the debt owed when a property is sold, mainly to investors with cash, at a foreclosure sale on the courthouse steps.

Back to the main question. The IRS has extended the regulation that eliminates the payment of income tax on the amount of "debt forgiveness" that a short seller might owe, This extension is in effect for federal income taxes until January 2012. However, a California short seller can still be liable for state income tax on the amount of "debt forgiveness" (COD- Cancellation of Debt). There have been two bills presented in the state legislature, but both seem to be stymied.
There are at least two categories of home loans: recourse and non-recourse. (There are also all those home equity lines of credit). A recourse loan is one that was hard money or one that was not taken out when the property was originally purchased. California is a non-recourse state and a non-recourse loan is a purchase money loan - a loan put on the property at the time the property was purchased. Non-recourse means that the lender can only take the property back in a foreclosure action. The lender can not lien other assets that a borrower may have.

The question that a professional tax person can answer is whether income tax will be owed to the state of California on COD if the loan was a non-recourse loan. If you get an answer to this question, please click the comment button and let me know.

Listings and Pendings as of March 1, 2010

March 1, 2010

Here we are at the beginning of another month. As I have been doing for the past several years, I am sharing the number of listings and pending sales as they are reported in the IMRMLS. I have started to also include the pending sales that have been listed in the "Back-up" category. These are properties that have an accepted offer, but these transactions have a variety of contingencies that still need to be removed. The ratio in parenthesis includes the back-up number.

Banning/Beaumont.....Listing/499......Pending/215.......Back-up/105.......Ratio/.431 (.641)

Bloomington.................Listing/66........Pending/82.........Back-up/14..........Ratio/1.242 (1.455)

Colton............................Listing/120.....Pending/92.........Back-up/31..........Ratio/.758 (1.017)

Fontana.........................Listing/496.....Pending/611.......Back-up/217........Ratio/1.232 (1.667)

Grand Terrace.............Listing/26.......Pending/13.........Back-up/5............Ratio/.500 (.692)

Highland.......................Listing/149.....Pending/101.......Back-up/40.........Ratio/.678 (.946)

Loma Linda..................Listing/55.......Pending/39.........Back-up/22.........Ratio/.709 (1.109)

Mentone.......................Listing/28.......Pending/8...........Back-up/3............Ratio/.286 (.393)

Moreno Valley.............Listing/574.....Pending/692......Back-up/226........Ratio/1.206 (1.60)

Redlands......................Listing/270.....Pending/98........Back-up/50..........Ratio/.363 (.548)

Rialto............................Listing/258.....Pending/278......Back-up/71...........Ratio/1.078 (1.353)

Riverside.....................Listing/1113....Pending/855......Back-up/327........Ratio/.768 (1.062)

San Bernardino...........Listing/720.....Pending/541......Back-up/120........Ratio/.751 (.916)

Yucaipa/Calimesa......Listing/259......Pending/109.....Back-up/48..........Ratio/.421 (.606)

As you can see, in most communities, sales have been a good percentage of the properties that have been listed. Redlands continues to lag because there are a higher percentage of properties that are listed over $400,000. The $400,000 and above market has yet to recover.

If you wish to compare the figures with those for February 1, 2010 or January 1, 2010, you can go to the previous posts of 02/01/2010 and 01/04/2010.