The March/April edition of Realtor Magazine (yes, I read this, but don’t expect you to!) featured an article that I found to be quite entertaining and wanted to share it with you.
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1.  In an attempt to stem the problem of unwanted manure left in front of residential properties and businesses, Watertown NY is considering a law requiring horses to wear diapers.

2.  Residents of Illinois (excluding Chicago) are now permitted to pain their trees purple in order to keep trespassers off their property.

3.  Hedges that encroach on sidewalks must be kept trimmed in Plattsburgh, NY.  The new law allows the city to trim overgrown hedges and bill property owners.  Similar laws in Lockport, NY and Harlingen, TX allow the town to mow residents lawns when grass grows over one foot.

4.  Toy ranches in Pitkin County, CO, are no longer considered agricultural properties.  A property is considered a toy ranch if the property around the house is used for grazing but the house itself isn’t integral to the ranching operation.

5.  Home owners in South Carolina who want to recycle copper pipes must obtain a permit from their local sheriff’s office.  The goal is to curb illegal stripping of copper for cash sale to recyclers.

Here is a link to the original article, including sources for each law: http://realtormag.realtor.org/law-and-ethics/feature/article/2012/03/5-obscure-real-estate-laws

The answer is yes.  According to the article “home prices have plummeted 34%,” “mortgage rates continue to hover around record lows,” and “homes are more affordable than they have been in 40 years.”  All of this is true.  HOWEVER.  Yes there is a but.  One thing we are experiencing that other markets are not is multiple offers which are artificially increasing home prices.

Our inventory levels, unlike many areas, are really low, as low as I have seen in 9 years of real estate.  Inventory is down about 50% from what we might normally be seeing this time of year.  Because rates are down, and prices are down, and affordability is high, there are a lot of buyers.  Buyers need housing inventory and when the demand is higher than the supply, prices go up.

What’s happening:

• NOBE (North Oakland/Berkeley/Emeryville) is especially hot right now.
• A recent Albany sale had 7 offers and went $80k over asking.
• A house in the Berkeley hills currently has 64 requests for disclosures.
• A dump of a fixer in Berkeley had 4 offers and closed with conventional financing!
• A sweet 2 bed house in Rockridge just had 8 offers.

Low low inventory means fewer houses for us to preview.  I don’t recall, with the exception of nearing a holiday, the numbers ever being so low.  Unbelievable.  It is no wonder we are seeing so many multiple offers.

Click here to see a copy of this weeks tour:

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S E L L E R S : this is the time to sell!!! 

The national mortgage delinquency rate as of January month-end was 7.97 percent.  The delinquency rate registered a decline, both for the month and the year, with January’s rate down 2.2 percent from December 2011 and down 10.5 percent from January 2011.

The total foreclosure inventory rate hit 4.15 percent last month – up 1.1 percent compared to December 2011, but down a slight 0.1 percent when comparing year-over-year numbers.

According to LPS’ report, there were 2,084,000 properties that were counted as part of the foreclosure inventory last month.

The number of properties with mortgages 30 or more days past due but not yet referred to a foreclosure attorney tallied 3,998,000. Of these, 1,772,000 had been delinquent for 90 days or longer.

States with the lowest percentage of non-current loans in January included Montana, Alaska, Wyoming, South Dakota, and North Dakota.

Data released this morning by Standard & Poor’s showed an annual decline of 3.7 percent in November for the 20-city composite reading of its S&P/Case-Shiller home price index. Analysts were expecting a year-over-year drop in the range of 3.2 to 3.4 percent. Eighteen cities were in negative territory. Detroit and Washington, D.C. were the only exceptions. At -11.8 percent, Atlanta continued to post the lowest annual return.

DQ News just released their December sales and they are also showing an overall drop in prices for the Bay Area.

What we need to remember is that this is a generalized report, and goes county-by-county.  In Alameda County and Contra Costa County there are micro-neighborhoods where sales are very skewed (such as Oakland in Alameda County and Richmond in Contra Costa County) and these figures throw these reports off.  This is why it is SO IMPORTANT to look at the zip codes, and some of those zips should even be dissected further.

Take a look at Berkeley zip code 94708, which has seen a 7.1% increase from this same time last year. One house, located in this zip code, is on the market and had over 50 requests for disclosure packets.  Albany, as a whole, has seen prices drop.  But if the house is centrally located and in good condition, multiple offers are happening left and right…one house I know currently has over 30 disclosure packets out.  Now this doesn’t necessarily mean that it will have that many offers, and these examples are not typical of all houses.  What it does say is that there are a lot of buyers out there, and with such low inventory, these buyers will end up driving up the prices in some of the communities.

Please take the headlines with a grain of salt and understand that 1) they are designed to draw readers and 2) that they usually report information on a national or regional level.  Prices in our area are expected to stabilize over the course of the year so if you really want to know what is happening in a particular city, zip code, or neighborhood, talk to a Realtor so that you can get the facts straight.  Chances are you will be talking house-to-house, not even neighborhood to neighborhood.

While I don’t think that we will see prices in Berkeley or the surrounding areas decrease significantly, I don’t think we will see much increase either.  With rates continuing to remain low there is no reason for buyers to make rash decisions.  Buyers are indeed picky.  And they are patient.  Because of this, they will wait.

There is talk of an influx of foreclosures hitting the market.  This doesn’t surprise me.  I think we will see more short sales, but the days on market for short sales will decrease.  Not because the banks have their systems in place, but because more sellers will lose their home to foreclosure during the process.  The one thing to watch is that banks are starting to promote short sales for their distressed clients, and are proactively calling owners to see if they would like to short sale their home.

I think the allure of investors seeking foreclosed properties will continue to rise.

2011 brought a ton of cash buyers.  As the economy attempts to recover, cash purchases in all price brackets will continue.

One demographic that is being hit is the younger market, the 30 – 34 year old market.  Loss of jobs, loss of appreciation, and student loans out of deferment, homeownership amongst this age bracket is falling faster than any other.  This is a market that I service, and I have definitely seen a shift in the mindset of the 30-somethings.

Sellers are discouraged.  They are fearful.  They are worried that prices will never go up.  Those who don’t need to sell, won’t.

This all sounds pretty grim, doesn’t it?  Well come on now, the economy is still in the pits.  Did you think real estate would be any different?  The good news is that if you are a seller, there are a TON of buyers who are well-qualified.  If you are a buyer, rates are still at an all time low.  And with rents projected to rise, now is the time to cash in on some real estate wealth.

Wherever your real estate path may take you in 2012, I wish you good health, happiness, and a hot cup of tea by a cozy fire.

Cheers!

Yes, cash!

I just had a listing in Berkeley that received 6 offers, 2 were all cash.
My 2-bed El Cerrito listing received 4 offers, 1 was all cash.
Another listing of mine in El Cerrito received 2 offers, 1 was all cash.
My clients just presented an offer on a cute house in Berkeley, they lost to all cash.

Where is everyone getting so much cash!!??!!

I asked some people and here is what they said:

1) “My parents gave us the cash, we are paying them back.”  (couple, 34 and 35 years old)
2) “We pulled all of our money from the stock market in 2010.” (couple, 41 and 44 years old)
3) “Stocks and 401K.” (39 year old single woman)
4) “We have saved for 6 years.” (38 year old and 44 year old couple)
5) “My company gave me a loan.” (46 year old single man)

Guess there is still some cash floating around in the Bay.

In addition to propping up the ceiling, which dropped to $625,500 on Oct. 1, the Senate amendment would also restore through 2013 the formula in use during much of the downturn for determining the upper loan limit in high-cost housing markets.

This is great news for the Bay Area!

The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hindering the ability of families in California to purchase homes by making them less affordable.

I am so thrilled to be with Berkeley Hills Realty.  With small-compay ethics and big-world views, Berkeley Hills Realty has an outstanding reputation in the real estate community which gives buyers and sellers a real advantage.  For the agents, everyone is treated equally and with respect.  From the moment I walked up the stairs of the Craftsman house that I have walked past for years, and into the office, I was greeted with nothing but kindness and consideration, a true testiment of the quality of agents at BHR.

You can now find me at:

Berkeley Hills Realty
1714 Solano Ave.
Berkeley, CA 94707
www.berkhills.com
office: 510-524-9888

http://newscenter.berkeley.edu/2011/09/13/in-law-units-east-bay/