March 2010 Foreclosures

For the 203 sold homes in SLO County in March 2010, 45% of these homes were foreclosures (either REO or Short Sale).  In March 2009, we also had 45% foreclosures. But there is a difference in  the mix of REOs and Short Sales. In March 2010, 26% of the homes were REOs compared to 37% in March 2009. Short Sales in March 2010 were 19% compared to 8% in March 2009.

Median home prices for REOs and Short Sales were pretty close to each other but the median home price for non-foreclosures was a lot higher.

Median Home Price March 2010:

Non-foreclosure = $438,750
REOs – $331,000
Short Sales – $347,500

Here’s the distribution of short sales in March 2010 per city:
Arroyo Grande (5), Atascadero(8), Cambria(2), Grover Beach(2), Los Osos(1), Nipomo (4), Paso Robles (12), San Luis Obispo(3)

REO distribution:
Arroyo Grande(5), Atascadero(13), Cayucos(1), Creston(1), Grover Beach(2), Morro Bay(1), Nipomo(5), Oceano(1), Pismo Beach(1), Paso Robles(20), San Luis Obispo(2), Templeton(1)

Open House Weekend Results

Last weekend (April 10-11)  was “Open House Weekend” which was something the National Association of Realtors came up with to try to help sell some homes.  To try to see if it made a difference, I looked up the number of escrows for the last 4 weeks in SLO County:

Mar 21- 27    94 pendings
Mar 28 – Apr 3    102 pendings
Apr 4-10        64 pendings
Apr 11-17      76 pendings

I would assume that the week after “Open House Weekend” there would be an increase in accepted offers. While the number of pendings did rise from 64 to 76, it’s 25% below what they were the week of Mar 28-Apr 3.

What’s more alarming is how slow the month of  April is so far.  Through the 17th, we’re at 140 pendings.  The number of pending sales for April 2009 (the entire month) was 366. We need a lot of pending sales the last part of this month or inventory is going to go UP!

California Home Buyer Tax Credit May Be Gone In 10 Days

The California Association of Realtors (CAR) says that the money allocated to new home buyers may go quickly, from 10 to 20 days when it starts May 1st. There is $100 Million allocated to first-time home buyers and $100 Million allocated to new home buyers on a first come, first get program.

CAR also says that if buyers that were scheduled to close in April pushed off their close until May to get the tax credit, then it will be gone even quicker.

Cal Poly’s “Poly Royal”…eh…Open House

Cal Poly’s Open House is this weekend, with most activities happening on Saturday. The tractor pull is scheduled for 1 pm.  I guess they haven’t totally got rid of the old “Poly Royal” name as a Poly Royal parade is scheduled for 9:30 on Saturday.

If you’re not familiar with the history, the university used to call it Poly Royal (also known as “Party Royal” to the students).  It started getting out of control in the 90′s until one year, there were mini-riots and property damage. So, no more Party Royal, bring on the Open House.

The change appears to have worked as it’s not the party weekend as it once was.

Here’s the event schedule.

Double Dip Tax Break Opportunity for Californians

California homebuyers have a small window of opportunity to capture up to $18,000 in combined State and Federal tax breaks. To qualify for the federal incentive, contracts must be inked by April 30th, while closings need to happen by June 30th. The California credit covers closings on existing and new homes on or after May 1st. Here is a link to an informative chart put together by C.A.R. which explains the rules and requirements for both the state and federal tax credits: http://www.car.org/legal/legal-questions-answers/2010-qa/homebuyer-tax-credit-2010/?redirectFrom=login.

Mary Anne Lodato:  (805)235-3795

The Keith Byrd Team’s San Luis Obispo and Avila Beach Expert

Light, Bright and Airy Home Staging

Quick outside tips today:

• Always think about the front door when you are selling your home! Make sure its clean and inviting.
• Always check your curb appeal before selling- if people drive by and don’t stop, they may never come back.
• Always make sure there is an easy path to your front door. Very few buyers can relate to a home where they can’t find or get to the front door.

Good luck and happy real estate selling. I will be back next time for more staging and preparing tips for your home. Visit my site @ www.LightBrightandAiry.com or email me: shannon@lightbrightandairy.com

Lessons From the Lone Star State

While homeowners in California and the rest of the “sand states” are continuing to struggle with unprecedented numbers of foreclosures and short sales, Texas seems to have all but escaped the nation’s real estate crisis.  Why?

Texas ranks 13th on the list of lowest mortgage foreclosure and default rates in the entire US, only trailing rural places such as Montana and South Dakota, where real estate booms are nearly impossible.  Texas boasts 3.1 million homeowners with mortgages, making them the only big state with big cities that has avoided the big real estate problems facing the majority of the nation.  Fewer than 6% of Texas’s mortgagors are in or near foreclosure according to the Mortgage Bankers Association.  This is well below its “sand sisters” Arizona and Nevada, with foreclosure rates at 13% and 19% respectively.  The national average is nearly 10%.  The 19% foreclosure rate among subprime borrowers in Texas is also the lowest of any state except Alaska.  These numbers are especially surprising considering Texas was home to two of the nation’s largest homebuilders, Centex and DR Horton.

Part of the reason for this superior mortgage performance is that Texas did not experience the same rapid home value appreciation that other states did.  On average, the home prices in the 20 major metro areas in the Case-Shiller Home Price Index more than doubled between 2000 and 2006.  In Dallas, one of the 20 major metro areas, home prices rose only 25%, and have barely declined during the current economic recession.

When you take a step back, the reason becomes clear why Texas was able to protect homeowners from a real estate collapse.  Since the early days of its statehood in 1845, Texas has maintained very strict guidelines regarding cash-out refinances and home equity loans.  A cash-out refinance is a mortgage taken out for a higher balance than the one on an existing loan, net of fees.  While skyrocketing home prices across the nation made it possible for homeowners to use their home equity like ATMs, Texas did not budge.  There, cash-out refinances and home equity loans cannot exceed more than 80% of a home’s appraised value.  There is also a 12-day cooling-off period after an application, during which the borrower can opt out of the transaction.  And when a borrower refinances a mortgage, it’s illegal to pay off other debts with proceeds, or get even one dollar back.

The home equity borrowing restrictions in Texas helped keep home prices from overinflating, and helped keep other risky mortgages scarce there too.  Homebuyers didn’t need to turn to exotic mortgages with such features as short fixed-period ARMs, interest-only payments, or negative amortization in order to buy a home.  Perhaps the entire country could learn a lesson from Texas to avoid future real estate bubbles and keep household spending within its means.