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El Dorado County “Home Update for February”

Bud Zeller — Fri, 18 Mar 2011 23:18:11 +0000

Of particular note this month are the following: (1) listings are still down but increasing. (2) Inventory is very low in many markets – particularly the Placerville and Cameron Park areas. Is there a reason prices dropped by 12% with a 5 month inventory in Cameron Park? Help me out here! Even the divide has very low inventory. With an overall inventory of under 6 months.

Banks are announcing an increase in their staffing for modification and short sale negotiators, and there is a substantial drop in new delinquencies…

Some things don’t change much; 1/3 the activity is still in El Dorado Hills, nothing happening in the higher priced homes and we still have 90%+ of the sale activity under $600k. 3 out of 4 transactions are still under $400,000. Worse yet 63% are under $300,000 and 43% are under $200,000! Prices once again dropped another 2.5% or $4.00 per foot from the previous month and 5% since December.

Well, I say let the “Shadow inventory” come – we need listings, so I am told and as these reports validate.

Information courtesy of Vitek Mortgage Group – Placerville, California. (Commentary solely that of the author), Steve Cockerell, Branch Manager www.SteveCforloans.com

IT IS TIME TO STAND UP AND SAY NO! To the banks

Bud Zeller — Sat, 12 Feb 2011 17:59:12 +0000

To the banks and their continued deterioration of home prices.

Well I am sorry, but HOW DO YOU EXPLAIN THE LOW INVENTORY AND BIG SALES IN THE LOWER PRICES…AND YET PRICES ARE DROPPING! What on earth is going on??? Sellers, stop your own bleeding – DO NOT ACCEPT LESS! BANKS – GET YOUR HEADS OUT OF YOUR (BLEEP)S! THIS IS THE GREATEST DEFINITION OF INSANITY OF OUR TIME! Agents, STAND UP to the pressure!

In all market areas, prices fell even more and yet there is NO logic to the situation. The only market that may need more adjustment is the very high end, and really only because there are NO buyers in that price range. If we ever expect to see recovery in our markets, it is now that we need to put a stop to the bleeding. Only when we stop giving away our entry level homes, can we expect normal sellers to enter the market and move up into those markets that are stagnant! I would love to hear opposing views.

Who is causing this problem? Your survey says it is the banks and the media (along with buyers now “expecting” to steal their homes). Read my economic survey and forecast. All factors point to what should already be a turn around in our market and if anyone tells me about “shadow inventory” again, I am going to chuck my cookies right now. After all the media hype, there were a whopping 2 Million homeowners in the US who lost their homes in 2010 (guess what, there are about 90 Million of us! In El Dorado County we had only 1332 lost to foreclosure, that is 2.4%! And guess what else, NOD filings are dropping!

Enough ranting and raving, am I the Lone Wolf out here? I welcome your comments or rebuttals. Go and list!

Information courtesy of Vitek Mortgage Group – Placerville, California

Steve Cockerell, Branch Manager www.SteveCforloans.com

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Where have all the REOs gone?

Douglas Zeller — Wed, 09 Jun 2010 02:20:57 +0000

The presence of real estate owned (REO) properties held by lenders and not yet on the market, known as the shadow inventory, is a constant reminder to those in the real estate business that the real estate market still has a way to go before it normalizes. To build a market and get out of this real estate limbo, REOs must first be resold to owner-occupants or income property investors, not speculators, even though the possible REO deluge will likely have an observable but temporary adverse effect on home prices.

However, with so many banks, speculators, trusts and government-controlled entities holding REOs using different methods to report their foreclosed home holdings, it’s difficult to ferret out the exact number of REOs that remain to be placed on the market. This wildcard creates a quandary for brokers and agents looking forward to the day real estate prices finally stabilize and then begin their annual upward rise — probably limited to the rate of inflation for the next few years into 2015.

What reports do exist indicate that REO inventory is rising as banks are beginning to initiate more foreclosures on those homebuyers who are not eligible for loan modifications or who re-default after modification. So where are the REOs taken in by lenders on foreclosure, and how long will it take them to show up to the party?

The “missing REO” phenomenon is a symptom of a bigger problem, and it’s not the destabilization of prices by putting the REOs on the market immediately after foreclosure. Here’s what the banks aren’t talking about when explaining the slow trickle of REOs onto the market: when they sell an REO, they must then for the first time report the loss (as all REOs currently are supporting an unreported loss) on the lender’s books. It doesn’t take a mathematician to figure out that these massive losses could topple the solvency of any bank that may be on shaky ground — and many of them, even the largest ones, are.

Thus, we probably won’t see a flood of REOs any time soon. Banks are biding their time, holding onto the REO losses and waiting for the economic recovery to see them out of their difficulty.

By Giang Hoang-Burdette • Apr 29th, 2010, first tuesday Realty Publications, Inc.