Are Lenders Finally Getting It?

May 31, 2012
It has been over four years since the real estate market boom ended and folks who purchased homes in the boom found that they now had mortgages that were greater than the decreased market value of their homes.
The short sale process (which had occurred in the recession of the 1990s) began again. The government also developed programs such as HAFA which were designed to expedite the sale of underwater properties.
Under this program the underwater homeowner could get an approval prior to marketing the property and supposedly then the "short sale" could be closed in a timely fashion. Unfortunately, it has been difficult to measure the success of HAFA as lenders/investors still seemed unwilling to process short sales quickly.
Those of us in the trenches can still cite the four to six month time frame to get a short sale approved.
However, the lenders seem to be realizing that getting rid of a non producing asset via a short sale may actually cut their losses. Last week several banks announced that they would now speed up the approval process and prospective buyers who make offers on a short sale property could expect an answer, approval or disapproval or even a counter offer, within 30 days. Some lenders said 20 days and I believe that I read that Bank of America actually said that they would act on offers within 10 days. This would be wonderful!
Buyers would know where they were in buying a property, sellers could move on. Perhaps even other underwater homeowners would decide to put their properties up for sale and foreclosures would go down.
It has been a mystery as to why lenders have taken so long to respond to offers on short sales. We certainly hope that all these news releases about speeding up the process reflect lenders who have established a process that will work. The fact that there have been a record number of short sale closings in the past month is a sign that these news releases do reflect what lenders are actually doing.

Headlines Can Certainly Be Confusing

May 30, 2012
It is always interesting to follow the housing market reports in the news media. In the Business section of the Los Angeles Times this morning, a front page headline read "Home prices hall 2.6% in March". On the Business page of The Sun Newspaper the front page headline read "Home prices rise". Do these contradictory headlines make your head spin?
Reality about the housing market in our area seems to be that we are experiencing a bumpy ride along a bottomed out real estate market. Volume in pendings in April was up substantially. Next week I shall be posting the numbers for May.
If you are a prospective home buyer, you may have already realized that new listing are being sold at a much faster pace. You see a property one day and it might not be there the next. Activity seems very brisk and next week we shall learn whether the numbers bear this out. A factor that may impact the number of pending sales could be the shortage of inventory. If several buyers want the same property, at least one possible pending sale will not occur.
Interestingly, we have not really seen many overbids. Purchasers are still wary, particularly when they hear experts saying that prices may still decline.
As in every real estate market, folks who find a property that suits there needs and desires will make offers and properties will sell.

The First Step

May 29, 2012
For almost anything you want to do in life there is always a first step. The purchasing of a home is no exception. It once was the case that the first step was to call a real estate professional, set up an appointment, discuss your wants, needs and your finances. In today's world, things are not much different. However, the real estate professional will direct you to get yourself preapproved for a loan. Preapproval is a step beyond prequalified. Preapproval means that the lender has review the information you provided, verified your credit scores and income and established the amount of mortgage for which they would approve you.
This preapproval letter is the important first step for purchasing a home.
Why? It sets the parameters for the price range in which to seek a property. Looking at homes you can't qualify for leads to disappointment in the homes that better fit your price range. Also, in the present real estate environment with the limited number of homes available, having that preapproval letter allows you to make a sold offer when you find the property you wish to purchase. Most seller will want the p[reapproval letter to accompany an offer.
Many prospective home buyers begin their search for a home on the Internet. This is a good way to educate yourself about what to expect in a home of a certain price. While this can be a first step in the decision to purchase a home, unless you have money to pay all cash, you will be well advised to seek out a mortgage representative and actually obtain the preap[proval document that sets your purchasing power.

A Day to Pause and to Remember

May 28, 2012
It is the fourth Monday in the month of May and it is a national holiday. What began after the Civil War as a day to honor the soldiers killed in that war has become a day to honor and remember all the members of the armed forces who are presently serving and who have served in the past. Our American way of life has survived  because some have been willing to serve as its defenders.
There will be many tributes at cemeteries and parks throughout the country. We believe that it is important to pause today and participate in moments of remembrance.

It's the National Orange Show Festival

May 25, 2012
The National Orange Show opened in San Bernardino yesterday afternoon with a variety of attractions including BMX bike races and acrobats from Hebei, China. Today is Senior Celebration time with free admission for seniors starting at 2 p.m.
The Festival will continue on Saturday, Sunday and Monday with gates opening at noon each day. Admission is $5 and  children 10 and under are free. Wristbands are $15 for unlimited rides until 9 p.m.
Those of us who live in the area are aware of the folk history. The original Orange Show opened in March of 1911. While looking for a site, one considered was an Indian burial ground and so the Indians put a curse on the event that there would be rain at least one day. And interestingly, no matter when the National Orange Show is held, there has been at least one day of rain. Just to continue the legend, rain is predicted for today and there was a bit of a drizzle as I came to work.
Rain, however, has not hindered crowds from attending and enjoying the citrus celebration.

Selling Your Home

May 24, 2012
The real estate market is definitely improving and you have decided that it is time to make a move. It may seem a bit paradoxical  for you to list all the features that you like about your house when you have decided to leave it. However, a good strategy for selling it is to let potential purchasers know what you found really special about the property.
For example: You love gardening and have created a beautiful garden for enjoying California outdoor living.
                     You love cooking and have created a dream kitchen that any fine chef would find perfect.
                     You love walking in the neighborhood and all the friendly neighbors.
                     You have a master bedroom and adjoining bath that rival a fine resort.
                     You have an exceptional amount of customized storage.
                     Etcetera, etcetera, etcetera.
If your home is one of a hundred homes in a tract development, on a scale of 1-10 is the neighborhood the greatest. Block parties, neighborhood socializing can attract buyers who are looking for that special location.
If your home looked like so many others, how did it become uniquely yours?
Homes are much more than a roof over ones head and 3 bedrooms, 2 baths. They are the spot on earth where folks create their lives. Help the next owner to see the possibilities by pointing out your "wow" factors.  

Buyers' Requests for Repairs

May 23, 2012
An inspection of the property is now a routine part of every sales transaction. Almost always, the inspector will find items needing attention. These can be relatively small such as plugs with reversed wiring or they can be major such as electrical panels that have been decertified due to fire hazards.
Since we are still in a real estate market in which sellers accept offers that are less than they might have wished, they often want to insist that they are selling "as-is". Unfortunately the choice may be between fixing or losing the sale.
As agents we do try to guide our buyers when they prepare their requests for repairs. Health and safety issue are legitimate requests, but cosmetic issues such as paint touch-ups are probably not something that a seller will redo.
There is some discussion as to whether it could be useful for a seller to hire an inspector prior to offering the property for sale, thereby knowing what repairs might be needed. The benefit of this strategy would be that the additional repair costs will have been considered before setting the price or prior to accepting an offer.
Inspections and requests for repairs have become a significant part of a standard real estate transaction.
Buyers need to be reasonable in their requests and Sellers need to accept the fact that items may be uncovered that were never a problem to them, but which are now an issue for the buyer.
Lenders have also gotten into the repair discussion as they will review the inspection and may also require that electrical or plumbing problems be corrected prior to funding a loan. I have seen appraisals where the appraiser will have to return to verify that the work has been completed.
It is clear that we have gone miles past the days of "caveat emptor".

The Upper End Real Estate Market ($400,000+)

May 22, 2012
As those of you who follow the CENTURY 21 Lois Lauer Realty blog are aware, I track the unit numbers for the properties that have sold over $400,000. Remembering that once, about five years ago, some of our communities had median prices of $400,000, I look to see how this segment of the market is recovering as the over $400,000 sales almost entirely dropped off. They still remain a very small portion of the overall sales reported through the CRMLS.
Banning/Beaumont.............Jan/1......Feb/0......Mar/0......Apr/0
Bloomington......................Jan/0......Feb/0......Mar/0......Apr/0
Colton...............................Jan/0......Feb/0......Mar/0......Apr/0
Fontana.............................Jan/1......Feb/3......Mar/1......Apr/0
Grand Terrace...................Jan/0......Feb/0......Mar/0......Apr/0
Highland............................Jan/1......Feb/1......Mar/0......Apr/2
Loma Linda.......................Jan/1......Feb/0......Mar/0......Apr/1
Mentone............................Jan/0......Feb/0......Mar/0......Apr/0
Moreno Valley...................Jan/0......Feb/0......Mar/0......Apr/0
Redlands...........................Jan/5......Feb/10.....Mar/8......Apr/6
Rialto................................Jan/0......Feb/0......Mar/0......Apr/0
Riverside..........................Jan/18.....Feb/18....Mar/20....Apr/20
San Bernardino.................Jan/1.......Feb/0......Mar/0......Apr/0
Yucaipa/Calimesa.............Jan/5.......Feb/3......Mar/2......Apr/4
The numbers in Riverside, Redlands, Yucaipa and Highlend are remaining fairly consistent. However, these communities have a larger number of "for sale" properties in the over $400,000 category and it would be encouraging to see an uptick in this end of the real estate market.

Median Prices - January Through April 2012

May 21, 2012
Here are the median prices for the homes reported sold through the CRMLS. Remember that this is not a scientific determination. I simply take the number of single family homes reported as "sold", divide by 2 and use the selling price of the property at that halfway point as the median - half of what was sold sold for more and half sold for less.
Banning/Beaumont.........Jan/156,000......Feb/145,000......Mar/158,000......Apr/160,000
Bloomington..................Jan/110,000......Feb/132/140.......Mar/175,000......Apr/145,000
Colton...........................Jan/125,000......Feb/121,500......Mar/114,000......Apr/120,000
Fontana.........................Jan/210,200......Feb/210,000......Mar/197,000......Apr/215,000
Grand Terrace...............Jan/179,000......Feb/145,000......Mar/199,000......Apr/170,000
Highland........................Jan/160,000......Feb/145,000......Mar/194,000......Apr/157,000
Loma Linda...................Jan/230,000......Feb/185,000......Mar/195,000......Apr/230,000
Mentone........................Jan/115/130......Feb/140,000......Mar/129/155......Apr/118/165
Moreno Valley...............Jan/147,000......Feb/144,000......Mar/153,000......Apr/149,000
Redlands........................Jan/178,000......Feb/186,000......Mar/220,000......Apr/190,000
Rialto.............................Jan/163,000......Feb/165,000......Mar/165,000......Apr/175,000
Riverside........................Jan/195,000......Feb/180,000......Mar/190,000......Apr/190,000
San Bernardino..............Jan/110,000......Feb/100,000......Mar/105,000.......Apr/110,000
Yucaipa/Calimesa..........Jan/189,000......Feb/160,000......Mar/170,000.......Apr/180,000
The areas with the larger volume of units sold have more consistency in their median prices. Areas such as Bloomington, Grand Terrace and Mentone are much more likely to have larger fluctuations. Nevertheless, this chart can give us a picture of a real estate market that is beginning to stabilize.

Chili and Cars

May 18, 2012
Tomorrow, Saturday, May 19, the Optimist Club of Redlands will be holding their annual car show and chili cook-off. This car show will include vintage cars, muscle cars, foreign cars and all sorts of special interest cars.
For those who are lo9vers of chili, there will be a chili cook-off. I am happy to say that Century 21 Lois Lauer Realty has entered a great chili for the competition. Please come by and taste it and give us a public vote. Our agent-chefs have prepared pounds and pounds of chili and had our own in company competition. The winning recipe is the best ever!
The event is held at Sylvan Park in Redlands from 9 a.m. to 4 p.m. Admission is a donation of $3 for adults and $2 fro children 12 to 18. Children younger than 12 are admitted free.The monies raised support the many youth oriented activities that the Redlands Optimist Club underwrites.

Units Reported Sold - January through April 2012

May 17, 2012
One component of tracking the real estate market in our Inland Southern California area is watching the number of units sold each month. There is always a bit of seasonal variation, but since the huge downturn in 2008 when buyers really stood on the sidelines, it is useful to see the numbers. As you could have noted in yesterday's post, the numbers tend to be relatively consistent in both the down times and the up times. Generally in the down times there is a surplus of inventory that remains unsold. In the up times there is a lack of inventory so the numbers actually decrease. In this present market, we have a lack of inventory which may be a factor in the numbers. Here are the numbers for the properties reported sold through the CRMLS>
Banning Beaumont......Jan/96.......Feb/105......Mar/120......Apr/122
Bloomington...............Jan/15.......Feb/25........Mar/24........Apr/22
Colton........................Jan/29.......Feb/42........Mar/46........Apr/44
Fontana......................Jan/188.....Feb/190......Mar/224......Apr/201
Grand Terrace............Jan/13.......Feb/8..........Mar/11........Apr/10
Highland.....................Jan/45.......Feb/46........Mar/46........Apr/63
Loma Linda................Jan/16.......Feb/12........Mar/21........Apr/12
Mentone.....................Jan/7.........Feb/16........Mar/13........Apr/10
Moreno Valley............Jan/195.....Feb/174......Mar/244......Apr/199
Redlands.....................Jan/49.......Feb/55........Mar/80........Apr/65
Rialto..........................Jan/97.......Feb/85........Mar/118......Apr/103
Riverside.....................Jan/323.....Feb/364......Mar/405......Apr/352
San Bernardino...........Jan/189......Feb/133.....Mar/210.......Apr/175
Yucaipa/Calimesa.......Jan/55........Feb/57.......Mar/78.........Apr/61
There you have it. It seems to reflect a real estate market that is bottoming out.

Solds - April 2012

May 16, 2012
For those of you who watch the numbers, here are the numbers for the residential real properties sold for April 2012 back to April 2003 as reported through the CRMLS.
Banning/Beaumont.......2012/122......2011/129......2010/136......2009/117......2008/90
...................................2007/53........2006/76........2005/93........2004/90........2003/73
Bloomington................2012/22........2011/32........2010/37........2009/40........2008/8
...................................2007/4..........2006/26........2005/19........2004/19........2003/22
Colton........................2012/44.........2011/44........2010/47........2009/73........2008/17
..................................2007/21.........2006/46........2005/45........2004/36........2003/45
Fontana......................2012/201.......2011/246......2010/265......2009/422......2008/146
..................................2007/106.......2006/244......2005/286......2004/210......2003/245
Grand Terrace........... 2012/10.........2011/10........2010/9..........2009/12........2008/5
..................................2007/5...........2006/7..........2005/4..........2004/8..........2003/4
Highland.....................2012/63.........2011/58........2010/58........2009/65........2008/31
..................................2007/39.........2006/49........2005/70........2004/63........2003/74
Loma Linda................2012/12.........2011/12........2010/21........2009/10........2008/31
..................................2007/12.........2006/10........2005/15........2004/11........2003/15
Mentone....................2012/10.........2011/4..........2010/9..........2009/9..........2008/9
.................................2007/4............2006/10........2005/7..........2004/8..........2003/5
Moreno Valley..........2012/199........2011/246......2010/47........2009/459......2008/183
.................................2007/87..........2006/60........2005/74........2004/267......2003/200
Redlands...................2012/65..........2011/67........2010/47........2009/52........2008/62
.................................2007/62..........2006/60........2005/74........2004/79........2003/81
Rialto........................2012/103........2011/116......2010/144......2009/168......2008/54
.................................2007/39..........2006/105......2005/128......2004/95........2003/113
Riverside...................2012/352........2011/383......2010/445......2009/503......2008/246
.................................2007/202........2006/414......2005/443......2004/399......2003/338
San Bernardino.........2012/175........2011/220......2010/253......2009/376......2008/101
................................2007/92..........2006/227.......2005/227......2004/187......2003/254
Yucaipa/Calimesa.....2012/61..........2011/58........2012/64........2009/55........2008/44
................................2007/43..........2006/54........2005/80.........2004/64........2003/65
There you have the numbers. It is interesting to note that closings are generally less than April of 2011. This could be attributed to the lack of inventory but since the pending numbers are way up, it may be attributed to the large percentage of properties entering escrow that are short sales and take a long time to get approval from the banks and therefore remain pending for several months.

Assessing the Real Estate Market

May 15, 2012
The Wall Street Journal in yesterday's edition had a section entitled "Squaring Off on Personal Finance". One of the featured articles had to do with the housing market; namely to buy or not to buy now.
The article had opposing points of views written by Eric Lascelles (for buying now) and A. Gary Schillling (for not buying now). Mr Schilling is well known in the real estate data field and is often quoted. Mr. Lascelles is a chief economist at money management firm RBC Global Asset Management.
As I prepared my monthly report of the properties on the market for sale and in escrow, I was struck by Mr. Schilling's position that the excess inventory will continue to impact prices and that prices still have a ways to go before hitting bottom. If you read the numbers I posted yesterday for the fourteen communities that I track in Inland Southern California, you might, as I do, question where the excess inventory is hiding.
Mr. Lascelles, while believing that the U.S. housing market is several years from "normalcy", clearly argues that this is "the mother of all buyer's markets, and won't last forever". He cites the fact that affordability is the best that it has been in thirty years due to the 34% decline in prices and the 4% average rate for a thirty year mortgage.
It will be interesting to see how potential buyers and sellers react to the differing opinions. As my numbers show, we could use a lot more inventory. Even if buyers want to ppurchase a home, their choices have become limited. We can hope that some of the surplus inventory will come on the market to fulfill the increasing desire of folks to take advantage of the present affordability of home buying.

Listings, Pendings and Back-ups - May 1, 2012

May 14, 2012
Here are the numbers for the active listings, pendings and back-ups as reported in the CRMLS on May 1, 2012. In the April 1, 2012 data there had been a significant change in the ratios between active listings and those properties that had accepted offers and had been put into the escrow process. As of  May 1, 2012 the ratios have almost doubled with the number pf properties in escrow being almost twice the number of remaining active listings.
Here are the numbers for the fourteen communities that I track.
Banning/Beaumont..........Active/312......Pend/253......Back-up/150......Ratio/1.292
Bloomington...................Active/31........Pend/50........Back-up/28........Ratio/2.516
Colton............................Active/63........Pend/98........Back-up/28........Ratio/2.000
Fontana..........................Active/341......Pend/542......Back-up/277......Ratio/2.402
Grand Terrace................Active/25........Pend/30........Back-up/16........Ratio/1.840
Highland.........................Active/113......Pend/139......Back-up/68........Ratio/1.832
Loma Linda....................Active/17........Pend/42........Back-up/25........Ratio/3.941
Mentone.........................Active/13........Pend/17........Back-up/13........Ratio/2.308
Moreno Valley................Active/395......Pend/502......Back-up/294......Ratio/2.015
Redlands.........................Active/175......Pend/121......Back-up/93........Ratio/1.223
Rialto..............................Active/146......Pend/250......Back-up/108......Ratio/2.452
Riverside.........................Active/658......Pend/868......Back-up/469......Ratio/2.032
San Bernardino...............Active/402.......Pend/433.....Back-up/170......Ratio/1.500
Yucaipa/Calimesa...........Active/143.......Pend/120.....Back-up/81........Ratio/1.406
If you look at these numbers, you may not believe the news media that continues to cite the glut of homes on the market. Certainly we are not presently having a large supply of unsold properties. As new listings are posted in the CRMLS, they have been having offers and entering escrow at a rate that we have not seen in some years.