East Bay’s housing market collapse may not be over

Tue, 9 Feb 2010 19:11:51 -0800

Below is an article from the San Jose Mercury News published in the Contra Costa Times.  By Sue McAllister
As home values in some parts of the East Bay began inching up last year, local homeowners may have thought the housing market collapse was behind them. But another decline in values — a "double dip" — could be on the way.
Alameda County home values rose just 0.06 percent in the fourth quarter of 2009 from the third quarter, and were flat in December compared with the previous month, after eight months of stronger appreciation, according to a report from Zillow.com, a Seattle company that calculates the values of millions of U.S. homes, regardless of whether they have recently been sold. The median estimated value of Alameda County homes at the end of the fourth quarter was $427,484, Zillow reported.
In Contra Costa County, home values posted a 0.09 percent increase in the fourth quarter, to a median estimated value of $338,652. That figure was flat in December from November.
It's that slowdown in appreciation that led Zillow to put Alameda and Contra Costa counties on a sort of watch list for a "double dip" in home prices for early 2010, said Stan Humphries, the company's chief economist.
"We see high levels of foreclosures still, and some worrisome demand-side factors as well," he said. The factors include expiration in April of the federal tax credit for homebuyers, likely hikes in mortgage interest rates as the Federal Reserve ends a program to purchase mortgage-backed securities and a tightening of lending criteria by the Federal Housing Administration.
"We are seeing weakening trends in home values, which we think are likely to go negative for the next few months," Humphries said. But he added that the predicted second decline in home prices will not be as severe as the one that pummeled Bay Area home prices for the past two years.
The specter of a double dip in home prices has been raised by housing market observers, who note that impending foreclosures and high unemployment put housing prices at risk of further declines, despite the federal government's efforts to stabilize them.
Some East Bay real estate professionals questioned Zillow's forecast.
"In the regions closest to San Francisco with the better school districts, I don't see a decline in price, I only see continued demand for these places," said Linnette Edwards of Prudential California Realty in Piedmont.
Steve Dhillon, an agent with Realty Experts in Fremont, said he sees abundant demand from first-time buyers and not many properties for sale so far this year. Two weeks ago he listed a remodeled 1,700-square-foot Union City house for $588,000, and the sellers received six offers, choosing one for about $600,000, he said.
Alameda County has about 1,900 houses for sale this week, about 40 percent fewer than a year ago. In Contra Costa, about 2,250 houses are on the market, down about 48 percent from a year ago, according to Altos Research.
Humphries said Zillow defines "double dip" as when home prices decline for at least five months at an annualized rate of at least 1 percent, followed by five or more months of appreciation of at least 1 percent, followed by five or more months of depreciation, with only a year's time separating the depreciation "troughs."
Other California metro areas on Zillow's double-dip candidate list include Santa Cruz, San Diego and Ventura. Atlanta and Denver were among the large U.S. cities on the list. Humphries said further home price depreciation makes sense in the face of high unemployment and the likelihood of continued foreclosures nationwide.
"What we're seeing is the natural evolution of the market correction, which we saw a little bit of relief from in 2009, because of substantial policy support" from the federal government, he said. "Things still need to be played out."
Once Bay Area home values do bottom out, he expects recovery to be gradual. Zillow's estimates of property values rely on public records data of comparable sales, and the company's proprietary formulas.
In a hopeful sign for the region, Zillow said the portion of homeowners who are "underwater" on their mortgages — who owe more than their homes' market values — dropped in Santa Clara, Alameda and Contra Costa counties in the fourth quarter from the third quarter.
In Santa Clara County, the company estimated 14.6 percent of homeowners had negative equity, down from 16.6 percent. Alameda County's negative equity figures dropped to 21.9 percent from 24.2 percent, and in Contra Costa County, 38.9 percent of homeowners were underwater, down from 43.2 percent.
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Managing Multiple Offers

Wed, 23 Sep 2009 00:37:32 -0700

Below is an article from the California Association of Realtors about managing a multiple offer scenario and how to get a deal accepted.
Article from California Association of Realtors, California Real Estate Magazine, September 2009
How to win a bidding war  By Marcie Geffner
It’s no secret that a strong purchase offer−a high price, all-cash, no contingencies−can help to win the day when buyers get into a multiple-offer situation. But what many REALTORS® may not realize is that their own behavior also can make a huge difference in the outcome even if their buyer’s offer isn’t the best of the bunch. Agents who are well prepared, professional, and positive can do a great service for both the buyers they represent and themselves.
Linnette Edwards, an associate broker with Prudential Highland Partners in Piedmont, has had plenty of experience with multiple-offer situations. She says it’s not unusual for her to write up at least one buyer’s offer a day in a streak. She once wrote three offers for buyers in just one day, and many of her buyers’ offers come out on top.
Her winning strategy includes four secrets:
1. Put on the charm. The buyer’s agent needs to create a rapport with the listing agent just as the buyer needs to establish a connection with the seller, Edwards says. Buyer’s agents should signal to the listing agents that they will be professional and easy to work with from soup to nuts. To send that signal, the buyer’s agent should call the listing agent and try to get to know him or her, but keep the conversation short and on point.
“Don’t come across as a high-maintenance buyer’s agent,” Edwards warns. “Ask questions to assess the competition, but don’t get too detailed about issues with the house because all houses have issues.”
2. Manage buyers’ expectations. Buyers who are well prepared for multiple-offer situations won’t hesitate when it’s time to make an offer, Edwards says. That preparation doesn’t happen in a vacuum; rather, it takes a concerted effort on the part of the agent. Discuss multiple-offer strategies with buyers and educate them about the offer process. Unless you’re a brand-new agent who needs to learn the ropes, don’t write offers for buyers who can’t possibly win a competitive situation.
3. Assess the competition. Perhaps the most important part of the strategy is a solid assessment of the other offers. While buyer’s agents generally aren’t told specifics, it’s still possible to suss out the competition in a conversation with the listing agent. Here are some questions Edwards asks:
> How many offers have been received?
> How many disclosure packages have been distributed?
> How many other agents have inquired about the home or said they intend to write an offer?
> What will it take for the buyer to get his or her offer accepted?
> Would it be worthwhile for the buyer to offer X dollars?
Edwards also checks in with agents who represented buyers and sellers in other recent multiple-offer situations on comparable homes.
“I call them to get a feel for how much those properties sold for. They may not tell you directly, but they will give you an idea of how high [the bidding] went, and those buyers who lost on that pending [sale] will be bidding,” she says.
4. Pull together a complete offer. A strong offer shines in presentation as well as terms, Edwards explains. Her offer package includes a cover letter, a “love letter” from the buyer about why they want to purchase the home, a loan preapproval letter, and, sometimes, the first page of the buyer’s credit report. The cover letter highlights the strongest aspects of the offer and summarizes why the seller should consider it.
“When possible, present [the offer] in person,” she suggests, “and follow up with the agent over the phone at a minimum. You’d be surprised how many people who write [an offer] on my listings never call to follow up.”
Last Buyer Standing Wins
Carla Lemon-Wilcoxen, a sales associate who handles mostly short-sale listings at RE/MAX Gold in Yuba City, is also quite familiar with multiple-offer situations.
“We continue to accept offers throughout the process, so we almost always have multiple offers on the properties,” she says.
Even in a short sale, it’s still important for the buyer’s agent to get to know the listing agent and demonstrate an ability to represent the buyer. If the two agents have worked together in the past, an introduction isn’t necessary, but if the buyer’s agent doesn’t know the listing agent, a friendly telephone call can pave the way for the offer to receive a warm reception, Lemon-Wilcoxen says.
“Take a little extra time to let the listing agent know a little about you and that you will be sending an offer. Be professional, explain the buyer’s situation a little bit, and give [the listing agent] a heads up,” she suggests.
The buyer’s agent also should become educated about the short-sale process, which can take weeks or months while the lender considers the various options and offers. Agents who aren’t familiar with the process should “surround themselves with knowledgeable people,” she says. Ask questions, and explain the process to the buyer as well.
Often, Lemon-Wilcoxen says, “the last buyer standing” will be able to purchase the property simply because the others have fallen by the wayside as the process has dragged on. That means both the buyer and the buyer’s agent need to be patient.
Positive, Friendly, Helpful
Erik Weichelt, a REALTOR® who lists bank-owned (REO) homes at Weichert REALTORS ® -Elite in San Diego, says such homes can attract as many as 25 offers. He’s in a position to know since, he says, his team fields as many as 70 offers a day on hundreds of postforeclosure homes.
Weichelt says banks would prefer to receive just one solid full-priced offer, rather than multiple offers, because a bidding war “makes their life substantially more difficult” and “dealing with that many offers is not fun.” And yet, multiple offers are common. That means buyer’s agents must be prepared for such situations.
Charm alone may not go far with Weichelt, whose rules and recommendations are brief and to the point: “Be positive, helpful, and friendly,” he says, and “make sure the offer is clear and concise.” The offer should be complete, the loan preapproval should match the offer price, and the offer should be turned in on time. If the bank instructs buyers to submit a highest and best offer within 24 hours, “you can’t wait three days” and then submit an offer, he warns.
Agents who aren’t familiar with the REO process are encouraged to ask questions about what they need to do to submit an offer, Weichelt adds.
“In my office, we help people. [We say] ‘Please make sure the offer is clean.’ We don’t keep this a secret; we want to get the property sold,” he says.
And here’s one more tip from Weichelt: The buyer’s agent should be sure to put his or her own name and contact information on a cover sheet, so the listing agent will know how to get in touch.
“You’d be surprised,” he says, “how many offers I get that I don’t know who wrote them.”
Marcie Geffner is a freelance real estate reporter
Article from California Association of Realtors, California Real Estate Magazine, September 2009

First Time Home Buyer Tax Credits

Thu, 3 Sep 2009 18:07:20 -0700

Early next week a reporter from the Contra Costa Times is interviewing me about the First Time Home Buyer Tax Credits. I thought it would be interesting to reach out to some first time home buyers directly (please disregard this entry if you are not a first time home buyer) and hear their perspective on the tax credits. Lately, many of my buyers have felt the pressure to buy before the $8k credit runs out supposedly Dec.1. What do you think?
I want to hear your thoughts! If you have 2 minutes, please take this quick survey (only 7 questions).
http://www.surveymonkey.com/s.aspx?sm=yKCsOK61_2bXBJeKmO8ficWQ_3d_3d
If you would like to be quoted on your answer to the 7th question, please email me directly with approval to quote you (ledwards@myhousingguide.com).
I really appreciate your time and input on this matter. I hope your home search is going well and you have a fab Labor Day Weekend!
Linnette

Grand Lake Farmers Market - One of the East Bay and Oakland’s Finest

Sat, 27 Jun 2009 16:28:32 -0700

I had a cancelation this morning, so I stopped by one of my favorite Farmers Markets in the East Bay - The Grand Lake Farmers Market located at the corner of Grand and Lake Park Ave. across from the Grand Lake Theatre. They are open every Saturday from 9:00 am - 2:00 pm. The Grand Lake Farmers Market is a great selling factor!

If you haven’t had the opportunity to shop at this farmers market, I’d try and make it one Saturday this summer. Not only do they have an abundance of produce vendors they also have fresh fish & meat, plenty of prepared foods for a picnic, live music, kettle corn, inflated jumpy castles for the kids, petting zoo with ponies and some arts and crafts booths as well.

If you can catch it on a sunny day like today, it is really nice to shop around, have lunch (or breakfast) in the shade and enjoy the live music…oh and people watch! (click video above)

My favorite booth of the day was a company called East and West Gourmet Afghan Food. You have got to try their Spinach Bolani with a little bit of their Garlic Mint Cheese and Cilantro Pesto on top. Yum!

The Farmer’s Market is one of the big draws to this coveted Grand Lake Neighborhood that consists of Crocker Highlands, The Rose Garden, Tresle Glen, Cleveland Heights, Lake Merritt, Lakeshore and Adams Point all within walking distance.

**come with cash as many stands don’t take credit cards. Reasonable prices!

Up and Coming Neighborhoods in Oakland That Are Still a Bargain

Tue, 28 Apr 2009 11:36:47 -0700

A buyer recently asked me, “What Oakland neighborhoods are up and coming, but still a bargain?”

Answer:
Although competitive at this time in the market, you can find some great bargains in the following areas of Oakland. Keep in mind, these are “up and coming” areas and therefore might not be right for you depending on your tolerance level for edginess.

1. Communities that Border Temescal
• The “New Gourmet Ghetto”: This area is block by block. If you are going to look to buy in this area, I would suggest talking to neighbors to find out more about the street.
• Santa Fe: Check out 5215 Genoa. This listing currently has 10+ offers. It is a GREAT home with good bones listed at $230k
• Longfellow

1. North Oakland/Berkeley Border (around Bushrod Park): I sold a house to a couple on 60th between Shattuck and Telegraph. That block has a great, strong community. In fact, they hold block parties… I’m going to check one out in a few weeks!

1. Glenview (try the outskirts for more affordability): I find this area is underrated for walkability as it has access to AC transit and there are many great new restaurants popping up! That's a good sign in light of the downward economy.

I believe communities offering walkability (www.WalkScore.com) and transportation (www.BART.org and www.actransit.org) are and will continue to be the hottest and most up and coming over say, Maxwell Park. Granted, this is my personal opinion as everyone has their own definition of “up and coming”. The demographics of my buyers are 20-30's and also baby boomers looking to downsize.

Coming soon, cool up and coming East Bay neighborhood links….

Online Bay Area Real Estate Resources for Home Buyers and Sellers

Wed, 22 Apr 2009 14:53:24 -0700

Did you know that you can see all the available listings on the market almost as soon as realtors? That is right! The internet has provided significant transparency for buyers and sellers. There are websites available to the public that are FREE for home buyers/sellers to peruse. When looking for a home it is a good idea to educate yourself on the inventory and the market even before finding a Real Estate Agent.

Below are a list of websites I feel are helpful to view MLS listings, educate yourself on the market, and information on the process of buying or selling a home:

✦ www.zillow.com - Shows comparable sales and prices. Note, they are often off in their calculations, but nonetheless, the site is interesting, insightful, and the listings are updated multiple times a day.
✦ www.myhousingguide.com - Great website for all MLS listings in SF and the East Bay. Be sure to save searches so you will automatically be notified the day a new property matching your criteria gets posted on the MLS.
✦ www.homebuying.about.com - Great website to understand and learn more about home buying and selling! Tons of information. For example, lets say you wanted to find more information on how a Foreclosure or Short Sell might affect your taxes.
✦ www.greatschools.net - By far the best school research and comparison website out there. This is very important for the re-sale value of any home you purchase. For example, here are the Lafayette high school comparisons. Other notable websites are www.schooldigger.com or http://parents.berkeley.edu/. If you are looking for a home in Oakland, check out the interactive map at http://mapstacker.ousd.k12.ca.us/MapStacker.htm.
✦ www.walkscore.com - If you want to find out how walkable a property is, check out walkscore.com. Shows the closest amenities to a particular address. MyHousingGuide.com has also integrated WalkScore’s mapping function into the website. What’s the walkability of your house?
✦ On The Block – Fun Bay Area blog from a local perspective
✦ Open Houses: When searching for Open Houses, check out www.SFGate.com, www.craigslist.com or your local newspaper online. These do not cover all open houses but are a quick and easy resource.
✦ If you want to look at the crime rate around a particular address or area of Oakland, check out these websites; http://oakland.crimespotting.org/, http://gismaps.oaklandnet.com/crimewatch/, and http://www.spotcrime.com/ca/oakland.

What are some of your favorite online resources for Bay Area real estate?

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Buying a New Home from a Builder in 2009

Thu, 19 Mar 2009 22:23:03 -0700

With all of the reasons to buy a home in 2009, why not consider a new home? Builders are taking drastic measures to sell out their inventory of homes by reducing sales prices along with adding extra incentives for purchasing now. Builders open for sale in today’s market have already invested the money into their developments, now they need to get it back out by doing what they have to to continue building. Banks are limiting the amount of construction loans that they are giving to builders, so they are limited to what they can build and hence, sell and close. Which means their inventories will be limited soon. They are only able to build the next home when their available homes are sold or in contract.

Builders frequently give credits to buyers for using their preferred lenders. This is a no brainer: the lender applies those credits towards closing costs and/or buying down the interest rate making for a great ‘package’ for a new home owner. The buyer gets an even better rate than what is currently available - even though rates are already extremely low. Good luck asking for closing credits when buying a foreclosed or REO home. For a young (or not so young) home buyer with very little down, this can really help make your dream a reality.

After qualifying with their lender, buyers interested in securing a new home in a development are required to give a reservation check to the builder to ‘reserve’ the property. This is merely a deposit and not to be confused with your down. The deposit check is the builder's assurance that you are a) serious b) pre-qualified and c) signing a contract within the week.  For as little as $5,000 you can get the process started. They don’t even cash the check until after you are in contract. At times you might negotiation how much you give as a deposit or when you give it. When the home is finished, you will need to money up all the remaining down, minus whatever deposits and credits that you may have available to you from the builder. It is a beautiful thing. 
If the interest rate that you qualify for is low, the builder credits are going to make it even lower.  This will either allow you to purchase a bigger/better house for the same monthly payment or if you prefer to keep the purchase price at the original and keep your payments low for the next 30 years so you will have funds left for other things. Always remember to take your agent along so that you can take full advantage of all of the leverage that this market has to offer. Don’t count on inventory to last forever because with the new stimulus package we may see a change coming soon. Builders require that your agent accompany you on your first visit, but in this market, that is not necessarily true. Mention your agent to them when you first walk in and you will generally be ok.    With all of the advantages to owning a home, it is a wonder why so many people rent. The monthly expense of ownership and maintaining the home may keep some people from purchasing, but what about the income tax benefits?  In 2009, the benefits are even greater than before: state and federal tax credits, low interest rates and now added builder incentives, you may be able to afford a new home in 2009. For a new home owner, this is a perfect opportunity to get into a beautiful, new home that is free from repairs and the clean up often required with a bank owned home. For those of you who prefer resale, there is a lot of that as well. But don't forget to check out local builders. You might find that the overall benefit of having a new home, coupled with a lower monthly payment, may make home ownership easier than you think.

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