The inventory of homes for sale has increased in recent months, causing some buyers to hesitate before making an offer on a home for fear a better home at a more favorable price will become available.
KEEP THIS IN MIND
• Although real estate agents are showing more homes to clients, people still are buying homes, especially first-time buyers. According to the latest figures from the NATIONAL ASSOCIATION OF REALTORS® (NAR), first-time buyers now account for 50 percent of all home sales.

• Some agents claim that today’s buyers are having a problem staying committed to the home search. During the height of the market, home buyers were more apt to make housing hunting a priority and to move on a good deal. Real estate experts advise today’s home buyers do the same to be successful in their home search.

• Making a list of “musts” and “wants” for home features will help home buyers narrow down the search. Identifying key features, such as the number of bedrooms or bathrooms, will help buyers avoid being overwhelmed by the number of homes available.
• Buyers are best advised to work with a REALTOR® who is familiar with the area.

Media reports that home prices will decline further may be true for some areas, but not necessarily in all areas. All real estate is local, so finding out what’s happening in a specific neighborhood is most helpful.

Read the full story:
http://www.latimes.com/business/realestate/la-fi-lew-20101219,0,7137667.story
From LA Times

Tuesday, December 21st 2010 Lenders are opting to “delay and deny” in more and more short sale cases as the real estate market continues to be uncertain[1]. While many homeowners, real estate agents and housing advocates continue to argue that a short sale deal, which sells the home at a loss to the lender but removes the existing, delinquent homeowner from the property and places a paying homeowner in it, is in the best interest of most lenders, the banks themselves are not so sure and, in an increasing number of cases, are opting out of short sales to repossess and sell the home themselves. JPMorgan Chase, whose official stance on short sales is that “the company generally prefers short sales over foreclosures because they cost less and benefit the community,” has recently been citing its responsibility to investors to “get a fair price for the property,” pointing out that this may mean “seeking more than the short sale price – even if it puts the sale in jeopardy.”

Not surprisingly, this angers all sorts of people from homeowners to Hope Now advocates, who believe that “the short sale process is hampered by lenders’ concerns about fraud, difficulties in determining property values and the confusing lineup of players typically involved in a real estate deal.” One lawyer who represents sellers and lenders in short sales said simply, “The irrationality in which these applications can be dealt with is absurd.”

However, points out Frank McKenna, vice president of fraud strategy at CoreLogic, lenders are losing about $310 million each year in short sale fraud, with 1 in every 53 sales “plagued by problems” including flopping (short sale flipping), and a failure to get “the right valuation” on a property thanks to “shady investors.”

By: BEREL News Team

Calif. median home price: October 2010: $304,220 (Source: C.A.R.)

Calif. highest median home price by C.A.R. region October 2010: Santa Barbara So. Coast $864,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region October 2010: High Desert $125,060 (Source: C.A.R.)

Calif. First-time Buyer Affordability Index - Third quarter 2010: 64 percent (Source: C.A.R.)

Mortgage rates: Week ending 11/18/2010 30-yr. fixed: 4.39 Fees/points: 0.9% 15-yr. fixed: 3.76% Fees/points: 0.7% 1-yr. adjustable: 3.26% Fees/points: 0.6% (Source: Freddie Mac)

Foreclosure sales drop in Western states.

Foreclosure sales declined across the Western states in October amid foreclosure suspensions by some lenders, according to a report by ForeclosureRadar. ForeclosureRadar's monthly reports cover California, Arizona, Nevada, Oregon, and Washington.

In California, notice of default filings declined 25.5 percent year-over-year in October to 27,217. Nevertheless, overall bank-owned (REO) inventory in California rose 16.5 percent year-over-year and 1.5 percent from September.

Foreclosure time frames in California continued to rise compared with the same period last year. An average of 279 days passed between the filing of a notice of default and a sale at auction, up from 211 days in October 2009. An additional 210 days passed on average between the sale at auction and when the bank resold the property, up from 183 days.

Happy Thanksgiving!

Recently I have had a lot of inquiries about Impound Accounts especially from distressed home owners and purchasers of REOs, Short-sales and bank owned properties.

Irregardless of whether you have a 10% of value mortgage, most lenders will require a Impound Account.

An Impound Account, also known as an Escrow Impound Account, is an account set up and managed by mortgage lenders to pay property taxes and insurance on behalf of the home buyer. These accounts are set up with the lender during escrow to ensure that the home buyer’s property taxes and insurance are paid on time and in full. The biggest misconception with the Impound Account is that it is managed by the escrow company. However, after escrow collects the initial deposit for the Impound Account and after the transaction is closed, the escrow company is no longer involved.

How It Works:

Each month, an amount equal to about 1/12 of the total sum of the annual property taxes and insurance due is collected from the buyer, along with their mortgage payment, and placed inside the account. When the time comes to pay the annual property taxes and insurance, the lender makes the payment from the funds accumulated in the account on the behalf of the buyer.

Setting up an Account
The account is set up by the mortgage lender during escrow. Escrow collects an Escrow Impound Deposit, which is typically a deposit of 2-6 months worth of taxes and insurance. Due to the fact that property taxes can be adjusted and insurance rates can change, this deposit ensures there are sufficient funds to make the payments in full when they are due.

Common Questions Regarding an Escrow Impound Account:

Is it mandatory to have an Escrow Impound Account?

No. The buyer may elect to pay property taxes on their own, and there is usually a small fee when waiving the account. However, based on the type of loan, the lender may require the buyer to have one.

Is it a good idea to have an Escrow Impound Account?

Since the property taxes and home insurance bills only come about twice a year, many average Americans have a hard time saving for them, and gladly give their money to the loan company interest free. This is one less thing to worry about, as the lender makes the payments for the buyer.

Do I have to decide now whether or now I wish to set up an account?

If it is not a condition of the loan, the buyer does not have to make an immediate decision. However, depending on the lender, there may be a cost to set it up at a later date.

The purpose of impound accounts is to help home owners pay their annual property taxes and insurance on time. For more information on your account, payments and more information on how they are managed, contact your mortgage lender or seek legal advice.

Interest rates are at historic lows: less than 4.5% on a 30-year-fixed and below 4% on 15-year fixed rate loans. And prices are low, too - at or near bottom in most of the country. Together, these items mean that affordability is near an all-time high.

It's like a massive, pre-holiday sale on real estate!

Nevertheless, home sales are only "gradually" creeping up, according to the most recent data published by the National Association of Realtors. And sellers are clearly still feeling price pressures; on Trulia's October price reduction report, an all-time high 27% of American homes listed for sale had had their price cut at least one time!

So, what's stopping buyers from running out to grab up all these affordable homes at affordable rates? And what can savvy sellers (and listing agents!) do to offset these obstacles?

1. (Perceived) difficulties in qualifying for a mortgage. Mortgage guidelines have tightened up significantly over the last few years, now requiring good (but not perfect) credit, documented income, a proven stable job history and cash for down payment and closing costs. Some buyers find it difficult to scrape the down payment money up; others find that they can qualify, but not for a large enough mortgage to buy any home worth owning (banks have tightened up debt-to-income ratios, too). Many would-be buyers don't even consider themselves serious prospects, disqualifying themselves in their own heads because they heard somewhere that a 20 percent down payment is necessary - in actuality, many buyers can qualify for a 3.5 percent down, FHA loan. Between actual difficulties qualifying and perceived difficulties that don't actually exist, lots of buyers are not biting because of loan "issues."

Seller Solution: Ask your agent to have a mortgage broker colleague prepare flyers reflecting various loan options, to give open house attendees a reality check about what it would actually take - including down payment, closing costs and monthly payment - to buy your home. Also, consider offering closing cost credits or being willing to chip in for lender-required repairs to empower buyers who are struggling with mortgage qualifying to close the deal.

2. Fear of buying a foreclosure. The ongoing robo-signing/foreclosure fraud scandal and the resulting foreclosure freeze is beginning to play a role. If you haven't heard, two of America's largest mortgage servicers have frozen foreclosures and resales of foreclosed homes in 23 states, and Bank of America, the largest lender in the land, has frozen them in all 50 states, all because sweeping fraud and improprieties have been revealed in the way the banks are processing foreclosure documentation.

More and more, buyers are fearful that if they buy a foreclosed home, that sale could be reversed down the road if it comes out that the banks wrongfully foreclosed on the former owner. And that could be stopping buyers from, well, buying foreclosed homes.

Seller Solution: If your home is not a short sale, all of your home's marketing materials should be trumpeting this fact - especially if most of your home's competition (e.g., similar homes in the area and in the same price range) are bank-owned homes and short sales. Seeing 'Not an REO/Not a Short Sale' on a listing or flyer is quite magnetic to buyers right now.

3. Waiting for the shadow inventory to come out. The phrase 'shadow inventory' refers to the homes that have been (or will soon be) foreclosed on by the banks, which are not yet on the market; some estimate this inventory to be as high as 7 million homes! Many buyers who are actively house hunting -- and who are disappointed with the homes that are available -- are fearful of pulling the trigger because they believe the banks are going to start releasing their 'shadow inventory' soon, and that those homes will be better than what's out there on the market right now.

Seller Solution: Work with your agent to strategically stage your home and even do basic, inexpensive repairs, to make it stand out against the competition as a desirable property. Also, ensure that your pricing is in line - or even slightly below - similar homes on the market right now, to ensure that your home seems like a very strong value for the price.

4. Waiting for the bottom. Given the trajectory of home prices over the past couple of years, there's a large contingent of buyers who are afraid that after they buy, home price will continue to fall and they will lose their hard-earned investment in the home. These are folks who are still waiting for the bottom (although by some accounts, including that of the Case-Shiller Price Index, the bottom is here or has already passed, in many cities).

Human nature is always to wait too long for the bottom, miss it, and then end up wishing we had bought sooner. The behavioral economics theory of myopic loss aversion explains this phenomenon as being due to the fact that the pain of losing money generates a greater psychological fear and avoidance than the prospect of gaining the same amount of money. Buyers can set themselves up to gain over time, even if they lose equity in the very near term, by making smart decisions about the home they buy and how much they pay for it, and planning to stay in their home for a longer term than previous generations of buyers did.

Seller Solution: This is a difficult one to counter, because it's really more about the would-be buyer's interpretation of the market than about their reaction to your home. If you live in a market that has had recent increases in home values, include that data in your marketing - make sure buyers are aware that they may already have missed the very bottom, and create a sense of urgency to buy your home before prices go up even more.

5. Unemployment/underemployment. Take California, for instance. The national unemployment rate is 9.6%; California's is a whopping 12.8%. But right around the same number of Californians are underemployed, meaning they work part-time, but want full-time work. That's right, a quarter of Californians are unemployed or underemployed, and -- right again! - none of those people are buying homes. On top of that, many people who do have jobs lack job security, the confidence of believing they'll be able to keep their jobs in the future. Interest rates could be zero, and people will not buy homes as long as they have no jobs or job security.

Seller Solution: If there are major employers in town that are within an easy commute of your home, both you and your agent should consider marketing it directly to employees there. Share your home's listing with Facebook friends who work there or even send an email out to your own contacts, if you work there yourself! Major companies' Human Resources Departments might help you get the word out to their employees - especially if you offer some incentive to an employee who buys your home, like a year's worth of subway passes. If you have universities nearby, there are likely online bulletin boards that offer housing options directly to relocating professors and employees.

6. Need to keep options open. Because home values are so volatile, currently, there's no guarantee that you can resell today's new home tomorrow without taking a loss. If we've learned anything from this crisis, we all know that it just doesn't pencil, financially, to buy a home on today's market unless you plan to own the home for at least 7 years (give or take a year or so, depending on how your market has fared in the housing recession).

Many Americans don't want to be tied to one location, given the changes in the job market, because they simply don't want to be stuck in one place, geographically speaking. They want to be free to meet someone via online dating and move if the match sticks. They want the freedom to move across the country or even to the next city or state for a job, if that's the direction their career takes them. The more mobile the person, the less likely they are to buy a home.

Seller Solution: Price your home well - if it's been lagging on the market, make sure you get aggressive and cut the price below a common buyer search cut-off price point (see this post for more details: Sellers: 5 Signs It’s Time to Cut the List Price of Your Home). Even buyers who are seriously in the market, get nervous about buying a home when it seems a bit overpriced, because they fear the price will drop some more in the coming months and years, extending the period of time before they can sell it at a break even or (hope beyond hope) a profit! Don't let overpricing cause you to lose buyers who otherwise would have bitten the bullet, pulled the trigger and hopped off the fence in order to buy your home.

Tara-Nicholle Nelson

You should be aware that billionaire property investors love snapping up cheap bank-owned properties.

Even if you not planning to become a billionaire property investor, what is interesting to note is that those billionaires made their fortunes by looking for and buying cheap repossessed and distressed properties, both in residential and commercial sectors.

These are additional traits of billionaires have in common – and each is very easy to copy and use yourself.

Set all emotional influences aside - real estate is a commodity!

When you’re buying a home to live in, it is inevitable that you’ll be swayed by some emotional factors. When you’re buying as an investment, reason and logic must play a dominant role.

Shrewd investors are seldom rushed into purchases but have the ability to act immediately when the right deal comes along. http://www.financeweb.com/

Stay updated on the most recent property trends - stay involved and read everything:

The other trait that more investors share is the desire to be a step ahead of the market. To do that you need to stay updated on the recent property trends in your area and know your market and replacement cost values. wWith the advent of the Internet its much easier to stay in the loop as information is just a click or two away.

If you haven’t already done so, subscribe to our property newsletter – its our job to keep you updated on property trends in La Quinta, Palm Springs, Indian Wells, Palm Desert and Rancho Mirage! http://www.realestateforsaleinpalmsprings.com/

Build a closer relationship with an knowledgeable Realtor in the market areas you are interested in investing.

Another great way to find bargain deals is to build a close relationship with a property expert such as myself. Most of the best property deals are sold before they even reach the market. To get first to those ‘low hanging fruits’ you’ll need to stay in contact on a routine basis. http://www.luxurydeserthomes.com/

The growing number of freezes on home foreclosures is likely to shake up the struggling U.S. housing market. Experts say home prices could rise in the short term, but the eventual glut of foreclosure sales could hurt the market in the long run.

The move by some major lenders such as Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Ally Financial to put some of their foreclosures on hold could help temporarily lift prices, by removing the inventory of bargain-basement foreclosed properties from the market.
"Home prices are likely to be firmer than otherwise would be the case in the fourth quarter and into early next year," said Mark Zandi, chief economist at Moody's Analytics.
While that's good news for the economy, the effects might be short lived. That's because the foreclosure freezes are also likely to delay sales of the huge inventory of foreclosed properties, which would hinder a long-term recovery in prices.
"It'll probably push out the distressed sales into 2011 and 2012," said Zandi.

Questions about the validity of some of the lenders' affidavits in foreclosure cases has caused the banks to announce moratoriums over the last two weeks.

Friday, Bank of America expanded its freeze on home foreclosures to all 50 states from the 23 states where foreclosures must be approved by the courts. Some of the states that were added are among those with the highest rates of foreclosure sales, including California, Nevada and Arizona.

If freezes spread to other home lenders, or if other lenders follow Bank of America and expand their moratoriums, it could greatly increase the impact on the market.
Freezing foreclosures? What does that mean?

Distressed sales through foreclosures or short sales http://www.luxurydeserthomes.com/ now make up nearly a third of the residential real estate market, according to an estimate from home sales research firm RealtyTrac, which estimates they are depressing home prices by about 26%.

Any short-term rise in overall home sales is likely to be misleading, said Rick Sharga, RealtyTrac senior vice president, as the numbers might be skewed by the loss of rock-bottom foreclosure sale prices from the market.

"You might get a false positive read on fourth quarter home prices because you'll be eliminating a lot of sales at the bottom of the market," he said. "There are so many factors distorting the market, it's tough to get an accurate read."

He thinks the freezes could cause lenders to move toward more short sales, in which the bank agrees to a sale for less than the balance of the mortgage. That could lead to a more substantial impact on market prices.

"It might stimulate a little more short sale activity, as lenders and servicers look for ways to more efficiently move the property outside the foreclosure," said Sharga. "Typically your discount on short sales is only 15%, compared to 35% for a [foreclosure sale]." http://www.realestateforsaleinpalmsprings.com/

Just the level of uncertainty about the halt in foreclosures has the potential to depress home sales as buyers wait to see what foreclosed homes might be coming on the market in the future.

A prolonged delay in foreclosures could also hurt long-term prices by driving investors who had been returning to the real estate market to invest elsewhere.
"Some of the money that is waiting to go to [into foreclosure sales] might evaporate and those sales could be lost," said Zandi. http://www.financeweb.com/

And the delays could further depress the value of all homes in areas with high numbers of foreclosures by keeping the houses vacant longer and delaying a correction in the market.

"I would think anything that delays the disposition of these properties has the potential to further depreciate surrounding home value," said Sharga


By Chris Isidore

The La Quinta Art Festival starts this week.
28th La Quinta Arts FestivalThu Mar 11th, 10am - Sun Mar 14th, 5pmLa Quinta Civic Center Campus
Art Under the UmbrellasSat Mar 27th, 10am - 4pmOld Town La Quinta
Art Under the UmbrellasSat Apr 10th, 10am - 4pmOld Town La Quinta

Tennis Tournament Starts this week.
March 19–21, 20102010 BNP Paribas Open Trilevel Championships


To visit any homes go to http://www.luxurydeserthomes.com/ or call me at 760-574-7676

Not all the real estate news for 2010 is doom and gloom. Sure, the foreclosures are predicted to continue and even increase in 2010, and stabilizing home values will depend on the area in which you live. These three trends to expect in 2010 should help balance out the increasing foreclosures and home values:
3. 99% of short sales do not go through to closing. The other 9% are those where the lender has ALREADY approved the short-sale amount. I only work with this type of short sale as all the parties concerned at least know where they stand in a relatively short period of time rather than wondering how long before an answer is received and how much the market could change upwards to downwards. La Quinta, Palm Desert,Rancho Mirage and Indian Wells offer many approved short-sales and these can be found on http://www.luxurydeserthomes.com/ .
We currently have an approved short sale that was originally listed for $2.595 million in the Tradition available for $1.5 million!

2. More Buyers in 2010 - Expectations are for more home purchases in 2010. With the Home Buyer tax credit (originally slated to end in November of 2009) extended until April 30, 2010, the next few months should find an increase in home purchases. Additionally, the tax credit now applies to some existing homeowners, and also to some higher income owners. The market will not only see new buyers purchasing a home, but some current home owners buying up as well. And, since the Fed has kept interest rates at the current all-time low, mortgage rates are another reason for well qualified buyers to jump into the market now!

1. Continued Buyer’s Market – With the large inventory of homes on the market today, the buyer is securely in the driver’s seat. Sellers must be on their toes and always trying to entice buyers into their "move-in-ready" homes. In this type of market, many owners will offer a price reduction on properties that have been on the for-sale list over 30 days. Well qualified buyers can negotiate with these owners for a lower price, can request contingencies, request credit clauses for worn out carpets and the like, ask the seller to share closing costs, and ask for a home warranty. Actually, that is just the beginning of the list of perks a buyer can request in this market!