We hear stories all the time about people who bought second, third and fourth homes using those crazy interest only, “pay what you want, when you want to” loans.    They all thought that they were going to be land barons, making big bucks on the rentals or buying the property, fixing it up and flipping it for a huge profit. 

Now, the homes that they bought in Fresno, Sacramento, Lodi….heck, all over the country… are no longer worth what they paid for them and, because of the economy, they can no longer require the high rents they were getting in the beginning.    In many cases, the owners can still afford to make the payments, but now don’t want to because they feel the value is not there, so they simply walk away from the properties.      That seems wrong to me.  

Another example…a year or two ago, there was a construction project started for a new house in my town.   Although the owner runs a hugely successful business, when he had a problem with the building, he simply stopped making payments, so the bank took the property back.     Since he “walked away” the property has been boarded up and there is a big, muddy hole in front of it, making the entire street look horrible.    

What really troubles me about this case, is that I recently heard that this same man has just purchased a $900,000 home right up the street.   How is that even possible?    And, how can he sleep at night knowing that he left a big mess for the entire neighborhood to stare at, as well as destroying the property values of the homes on either side?

And, lastly, I heard of a case the other day where the owner has a great job and plenty of money.   She can easily afford to make her payments, but wants to leave the country to join family members elsewhere and, if she sells, won’t get the full amount back that she owes.   Even though she will only be short on the loan approx. $10,000, and even though she could easily write a check for that amount, she has decided to simply walk away and let the house be foreclosed upon. 

All of these stories leave me wondering….Whatever happened to the honorable Americans we used to be?    In the old days, if a person borrowed money, they would do whatever humanly possible they could to repay it.    In many cases, all it would take would be a handshake and they were commited.     Now, it is as though people no longer care about anyone but themselves…forget about the neighborhoods, forget about the country’s economy…I’m in this for me, appears to be the attitude. 

Yes, I know that the banks are big, uncaring institutions, but a debt is a debt.   I believe in that old saying “my word is my bond.”    Obviously, as I mentioned earlier in this article, there are many people who, unknowingly, got caught up in this mess.   I don’t blame them at all and completely understand their need to walk away from their homes.   But, I feel nothing but anger for those who took advantage of the system and are now a big part of destroying our economy.    

What kind of example are we setting for our children?

Thanks to Zillow for providing a detailed video of “A Guide to the Zestimate” to explain how the home values are generated. I hope you will find this video helpful!

Posted by Annie W. Chang | www.TalkofRealEstate.com

The takeaway from Carson and Dastrup’s research is that the farther prices ran up in a hot market, the farther they tend to run down in the subsequent cooling. Not surprisingly, the hottest markets – Las Vegas , Riverside , Miami and Sacramento – have fallen the farthest and cooled the fastest. Many of these markets are now as cold as an Arctic winter, particularly Las Vegas , where home prices have dropped 50% and more.

However, cold markets often provide the best buying opportunity. Consider Las Vegas : a home that cost $200,000 in 2007 and lost 50% of its value costs $100,000 today. A 50% gain pushes its value up to $150,000. In other words, prices do not have to appreciate back to their peaks for people to book considerable equity or an investment gain. This simple math is worth repeating to homebuyers and residential real estate investors, especially to those residing in or near frigid markets.

www.deanrizzi.com

Shokoofeh Nowbakht, Realtor
Prudential California Realty
www.shokoo.com

Nicole Machado- Prudential California Real Estate

The window of opportunity is closing. Let me explain my thoughts. Prices in the Bay Area are already inching up, same with interest rates. The time to receive the Federal Tax Credit of $8000 or $6500 is rapidly approaching. (Must be in contract by April 30, 2010) FHA is talking about increasing the minimum required down payment and or increasing the cost of required mortgage insurance.

You can purchase a home today and your costs will be fixed for the next 30 years. What else can you buy and maintain the same cost for the next 30 years? Rents will continually go up. You are at the Landlords mercy. It is time to get off the fence. The first step is to get pre-approved. This will tell you what the bank will loan you. There are many loan programs out there. I could refer you to someone if you would like. The pre-approval process is easy, is no cost and with no obligation. If you don’t do it now you will never know.

You do not need a large down payment. You can purchase a home with only 3.5%. Yes you need mortgage insurance. I don’t like mortgage insurance but if that is the only way to own a home, then go for it. Mortgage insurance will go away once you have 20% equity. Economists think values will increase substantially in the next 3-5 years and that will more than make up for the mortgage insurance. Some people tell me they want to save for a larger down payment. That bothers me because from my experience most people cannot save as much as prices increase.    

Some people tell me they do not like the home they qualify for so they want to wait until their income increases to get qualified for a larger home. My response is; your first home is not necessarily your dream home. Most Americans move every 7 years. Get into something now. Hold it for a few years, make some money and then move into your dream home. Read my blog http://www.pruvoices.com/2009/09/is-a-condo-the-right-choice/

Also, mortgage insurance, mortgage interest and property tax are all deductible on your income tax. That will save you approximately 20-30% of the payments. Check with your tax preparer for your individual situation.

I am concerned that some people whom do not take advantage today’s market may never be able to purchase a home again. They may not qualify if rates go up or may not qualify for what they want if prices go up. If interest rates increase just 1% you will need an annual income increase of $8000 to qualify for a $500,000 home. If that $500,000 home increases just 5% and interest rates remain the same you will need an income increase of $3600.

I believe home ownership is the first step to financial freedom. It is forced savings. You build up equity. If you look at most of the wealthy people in this country and around the world real estate is the asset that attributed to their wealth. Home ownership may not be for you but if you don’t look into it you will never know. Today’s market with both record low interest rates and low prices at the same time is quite unusual. They generally work in opposites. This is a blue moon, once in a lifetime opportunity. If you want to take advantage of today’s opportunity please call me for a free consultation to discuss your options, the market, and the process. I would love to help you so please contact me lee@leesellsmore.com or your favorite Realtor now. Don’t put it off any longer.

Sincerely,

Lee Ginsburg CRS, SRES DRE# 01391378

This is a hazardous winter weather alert. Beginning Sunday and continuing through the rest of the week…a series of strong storms are expected to roll across the San Francisco and Monterey Bay Regions. The first storm is forecast to bring substantial rain across the Bay Area Sunday into Monday. Additional storms are then expected for much of next week. During the next seven days 10 to 20 inches of rain are expected to fall in the coastal mountains and 8 to 15 inches in the inland valleys and foothills. Due to many days of rainfall local flooding could occur. In addition, the storms beginning Tuesday or Wednesday are likely to also produce strong gale force winds that could cause property damage and power outages. Depending upon the intensity and duration of the rainfall coupled with a high tide localized flooding could occur in the low lying areas of SSF (San Mateo Ave. Airport, etc.).

This is the strongest storm of its type that has hit SSF for several years IF the forecasters are correct in their assessments!

Remember Your Winter Storm Guidelines

Encourage your family members and/or employees to listen to the radio, television, or NOAA Weather Radio for weather reports and emergency information http://www.nws.noaa.gov/
Make sure your family and coworkers know what to do if the power goes out
Ensure that a portable radio and flashlights are on hand with extra batteries (avoid the use of candles-fire hazard!)
Keep plastic sheeting, heavy duty garbage bags (emergency raincoats), scissors and duct tape on hand to cover broken windows or to seal leaks
First-aid supplies, including prescription medicines should also be readily available
Have emergency water and food available (food should be of the “ready to eat” type such as energy bars, etc.)
Make sure the gas gauge on the family car and work vehicles is at least 3/4 full
Have some cash on hand in the event you need to spend an unexpected night away from home (automatic bank teller/ credit card machines often go out of service when there is a power outage)
Prearrange for a friend/neighbor to check on the family if you or your coworkers get stuck at work and can’t get home
Avoid driving if at all possible. If you or your coworkers must drive, leave early to allow for slick roads and traffic detours
Remember that if you use Comcast or a cable company for telephone/internet access if a power outage occurs, you and your family or employees will have to use a cell phone to make calls.
Remember that if the cell phone system gets overload for them to use the SMS messaging capability that most phones now have (text messaging)
Public Works has placed additional sand bags for citizens and businesses to pick-up in its front parking lot on North Canal and has also prepositioning street barricades and signs in areas of the City where flooding has occurred in the past (South Linden, South Canal, South Maple, Beacon, Shaw Areas, Airport beneath the RR overpass, South Airport at the Conference Center, Produce Ave.). The Fire Department is prepared to staff an extra fire engine in anticipation of increased call volume for hazardous condition and equipping one of its 4 wheel drive support vehicles with sump pumps, water vacuums, and other dewatering equipment in the event you may need assistance clearing flooded basements, etc. Attached to this e-mail is the most recent infrared satellite picture of the storms approaching the West Coast. To report flooding call 650 877-8550. To report an emergencies or need assistance with flooding in a business call 9-1-1.

So far, in 2010, San Bruno real estate inventory is low making it a great new environment for homeowners who have been thinking of selling! Currently there are only 30 homes for sale ranging from $299,000 for a small one bedroom home to $1,000,000 brand spanking new homes in a new developement! Md range is about $550,000-$600,000.

With interest rates still teetering between 5 and 6%, home buyers are out in full force looking for good deals before the rates hike up!

What we are seeing is pretty quick sales of homes in the lower and mid ranges while the high end homes are taking awhile. They are selling though! It took quite a few months but the new homes in the Skycrest Develoment next to Lunardi’s have all sold! One most recently at $918,000!

 FHA loans are popular with a low amount of 3.5% down but many homebuyers are purchasing with 10-20% down that has been saved or come from equity lines on a home meaning that many of our buyers these days are move up buyers who have managed to build equity in their first homes! That’s great news!

The competition in the low and mid ranges are still bank owned homes and short sales but there are some regular sales out there amongst them!

As I walk the neighborhoods placing neighborhood newsletters and notepads on people’s doorsteps, I notice that most people are staying put. People who own homes or rent them for that matter like where they live here in San Bruno and don’t plan on selling anytime in the near future unless a fantastic job opportunity comes along, a new family grows out of a small home, or an senior downsizes. I don’t blame them. I live here, too, and I enjoy my neighborhood in Huntington Park. I like that I am walking distance to everything, even though I choose to drive. I imagine that’s how a lot of people feel.

At this point of my life with my kids in elementary school and taking part in all that San Bruno Park and Rec has to offer, I am here as a San Bruno neighborhood resource. If you want to know what’s going on in the park, Chamber of Commerce, real estate, or anything else, chances are I can help you. I also help people buy and sell houses in San Bruno and other parts of the peninsula. Please visit my website and check out my videos at: www.KarinCunningham.com

Your friend,

Karin