131 Millrich Dr.  this Los Gatos house sold for nearly 1% less than the asking and 411 Clearview Dr., a townhome, sold for nearly 5% over the listing price !

A reminder that ’sweet spotting’ your asking price will always pay off.

The good news….neither property was a short sale.

2 Los Gatos Houses sold this week,

131 MILLRICH DR, Los Gatos 95030 (Los Gatos)Single Family Home 3 bed(s) Baths: 4|1 bath(s)   SqFt: 2,593  Lot: 9,100 sq ft

List Price: $1,449,000     Sold Price $1,332,000.00

______________________________________________________

411 CLEARVIEW DR, Los Gatos 95032 (Los Gatos)Townhouse  3 Beds, 2|1 Baths:  SqFt: 2,122 Lot: 2,220 sq ft

List Price: $749,000 Sale Price: $780,000

Assoc. Fee: $428

We see a crossroads ahead…one where the buyers in the Los Gatos Real Estate Market aren’t in the driver’s seat.    Could this mean the homes for sale are in a Seller’s market?

Remember…

Spring is coming and the end of the $8000 First time buyer’s credit is there waiting.   I wonder if will  lead to more vigorous sales?…bidding?

Create a Quip Contest!  Choose One of the Perils and Create a Quip Contest.

Pick a Peril from the list below, create a quip and post it as a comment below.  We will take a community vote at the end of the month.

The winner will have a $100.00 donation made, in their name, to their favorite charity helping the Haitian earthquake victims!

David Letterman announced where donations can be made directly.

You can text to 90999 and enter Haiti  to make a $10 donationtoo.

2 silly Contest Examples:

Why do transactions fail?

8. Applicant makes large purchase on credit before closing.

Quip: At least the store was still open.

9. Illness, injury, divorce or other financial setback during escrow.

Quip: You should know better! Mom warned you about escrowing!

Help others! Choose one of the 88 snags -below the video – and create a quip then post it in the comment section below.   It’s Easy and will help someone in need.  Do It Now!  Please.

Pick Your comment to create a quip…

Tait Ave Home Sold In Los Gatos

You can do a detailed search for homes available for  sale in the  the Los Gatos Real Estate market here.

If you have been reading my Los Gatos Real Estate musings you already know that since the program was announced in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people, but has largely failed to provide lasting relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

This fact that credit scores are affected by modifications boils my brain!  The program was meant to help!   In fact, it is hurting too many people.   How are you going to rent or lease a new home if your credit is injured?

How does renting become a component of the problem?   Selling the subject property will become the only option if the modification does not become permanent.   Where is one supposed to live?

In a rental probably.

This introduces a troubling fact of reality for troubled homeowners.  Having to sell their home.  Most will find they are going to have to apply for a short sale approval, some will be confronted with foreclosure or submitting a deed in lieu of foreclosure.   All very unattractive options and all very real.

To those of you in the midst of this debacle I would suggest you speak with a Realtor or a Property Manager as soon as possible and make inquiries as to how you may secure a property before this ridiculous negative credit reporting causes a new layer of frustration for you.

related article…

Loan modification document links

Loan servicers may be required to reimburse Fannie Mae for a loss if it turns out the original mortgage on the home did not meet its eligibility or underwriting requirements.

Fannie Mae previously allowed servicers 15 days to turn over loan files for review if there was a question over whether a mortgage on a repossessed property met Fannie Mae’s requirements. Loan servicers then had the option of trying to find a better offer for the property or buy it themselves rather than reimburse Fannie Mae for any loss.

To speed up sales of foreclosed properties, Fannie Mae says after beginning the property disposition process by obtaining opinions on the market value of a repossessed home and listing it with a real estate broker, it may now accept a purchase offer without first notifying the servicer, whether or not a final decision has been reached with respect to the review.

“If, after completion of the review, Fannie Mae determines that the mortgage loan did not meet its eligibility or underwriting requirements and Fannie Mae has incurred a loss by selling the property, the lender will be required to fully reimburse Fannie Mae for its loss,” the company said in a bulletin to loan servicers.

In its most recent quarterly report, Fannie Mae said it had 72,275 REO properties on its books at the end of September, up 7 percent from a year ago. The company acquired 98,428 homes through foreclosure during first nine months of 2009 — 40,959 in the third quarter alone — and sold 89,691.

Fannie Mae’s sister company, Freddie Mac, reported REO inventory totalling 41,140 homes at end of September, up 46 percent from a year ago. The company acquired 24,375 home during the quarter, and sold 17,941.

In its most recent monthly summary, Fannie Mae said the serious delinquency rate (loans three or more months behind in payments or in the foreclosure process) on single family home loans it owns or guarantees jumped to 4.98 percent in October, up from 1.89 percent the same time a year ago.

Additionally, Freddie Mac’s single-family portfolio delinquency rate rose to 3.72 percent in November, up from 1.52 percent in November, 2008.

This may increase foreclosure activity in the near term and help get this housing issue off the news block.

The median price of a home in California experienced its first year-to-year gain in over two years during the month of November, as the California housing market continued recent trends in terms of prices, supply, and sales. The monthly median price crossed the $300,000 threshold in November with a median of $304,520, up 2.4 percent from the October median price of $297,500 and up 5.8 percent from $287,880 a year earlier. The situation has improved greatly from a year ago during the worst of the financial crisis, when the median price had registered 41.3 percent year-to-year decline.

This supports the conclusion

After a 59 percent peak-to-trough decline, the California median price has increased 24.1 percent from a trough of $245,170 that occurred in February 2009.  The increase in price has been sustained by a combination of lean supply and high demand, the latter triggered by historically high affordability (See November article). By comparison, the NAR national median price for existing single family homes, which experienced a 29 percent peak-to-trough decline, has increased by 4.7 percent from its trough of $164,200 in January 2009 to $171,900 in November 2009.

This has been obvious in the Bay Area market, especially affluent areas such as Los Gatos and Cupertino.

Nine consecutive month-to-month increases in the California median price have been the result of the lean inventory conditions throughout the year. The MLS-based unsold inventory index for California has averaged 4.8 months since the start of the year, well below the 7 month long run average. (See the October article for an analysis of the relationship between MLS-based unsold inventory, defaults, and foreclosures). By comparison, the national unsold inventory index for single family homes has averaged 8.4 months over the year. Inventory levels in both California and the US have trended down for most of the year.

As for sales, California returned to pre-peak levels of sales in late 2008 and sustained them throughout 2009. With sales of 536,720 homes in November, the market was 4.6 percent lower than the October sales figure of 562,400, but 4.7 percent above the November 2008 figure of 512,840. Sales throughout the year have averaged 545,600, compared with the pre-peak monthly average over the 2000-2002 period of 537,300 homes. Over the 2000-2002 period, US sales of existing homes averaged 4.8 million homes, compared with the low- to mid-4 million range of sales that the national market experienced from late 2007 until late this year when sales

The year-to-year increase in the California median price is the latest sign of turnaround from the dire circumstances facing the statewide housing market a year ago. Its foreclosure problems notwithstanding, California’s housing market appears to be ahead of the national market, both in terms of hitting bottom and in demonstrating important signs of market stability and improvement.

The median price of a home sold in the county rose 9.9 percent compared to a year ago to $494,400 in November, according to MDA Dataquick, the second straight month of year-to-year increases.

The number of homes sold also rose 47.2 percent to 1,649 in Santa Clara County.

“The latest stats show just how much the Bay Area market has changed in a year,” said John Walsh, MDA DataQuick president.

The question I hear most is…”Has the market bottomed out?”

If this price trend continues for another quarter I will answer with a firm, yes.   For now,  let’s agree that the prices are not falling and the inventory is very low especially,  in the Los Gatos Real Estate Market.  This usually means higher prices, not to mention, the low 4.8% 30 year fixed mortgage rates available.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,639 last month, down from $1,665 the previous month, and down from $1,695 a year ago reports Dataquick.

That’s 52.2 percent below the current cycle’s peak in July 2007.   What a steep slide.  It’s true that more streamlined Short Sale process will balance the severely discounted REO closings to help further the trend too.

Looking forward to 2010?

related stories

Fannie Mae needs help

2008-2009 chart

Fixer Upper Fix

Selling your home because it’s a non performing asset?

Zillow is here to help.

I often compare the short selling of homes to the selling of stocks that are not delivering a fair dividend.   How does that cause a rental market you ask?

This is what’s happening…

The surge of interest in rental properties is due to the decline in housing values.  This is causing so many homeowners to walk away or to attempt a short sale of their homes.   The Los Gatos  Rental market is a glaring example.  Have you tried to find a rental here?    Those upside down sellers need housing and are searching for rentals in large numbers

It is fair to say Zillow has found a new product to peddle.

We can only hope that the lease prices are more accurate than the terrible performance of their “Zestimate” which, arguably,  has not shown to be very accurate.

Their rental zite (yes zite as a play on their ‘z’ nomenclature) provides mapping too.  If you have any experience with the search engine or results I am interested in hearing your opinion.

The rumor several banks have agreed to streamline short sales is true and will certainly make the spanking a light one.  How do I know?  When I inquired why my calls were not being returned, for a few days in October, contacts at BofA told me they were being trained for a new program to expedite…something.

This ’something’ has something to do with…

• What affect Loan Modifications have on Fannie Mae
• How does streamlining  Short Sales make any sense
• What is a  Shadow Inventory?
• How does Macro Economics play a roll?

Foreclosures are Down

From RealtyTrac.…“November was the fourth straight month that U.S. foreclosure activity has declined after hitting an all-time high for our report in July, and November foreclosure activity was at the lowest level we’ve seen since February,” says James J. Saccacio, CEO of RealtyTrac. “Loan modifications and other foreclosure prevention efforts, along with the recently extended and expanded home-buyer tax credit, are keeping a lid on the most visible symptoms of the nation’s ailing housing market — foreclosures and home value depreciation.”

But!  Loan Modifications are Failing

True, the temporary loan modification program just ended…opening the door for permanent modifications.   That is if the temporary loan mod payment schedules were met by applicants,  Right?   Yes.  That is not what is happening though.   After the inexcusable delays, lost documents and lack of communication borrowers are giving up on this failed theory.   Fannie Mae (may) be looking at a nasty spanking through increased foreclosures if alternatives aren’t implemented.

Shadow Inventory Myth or Fact

Have you heard the term  ‘Shadow Inventory’ (SI)?  The belief that banks have tons of foreclosures?  Keeping them in the ’shadows’ as inventory?   It’s true but, not the conspiracy many have theorized.  I know of several cases where people are several months past the default deadlines and still have not heard from the Sheriff (meaning they have not been officially foreclosed on in practice).  This is one way a  shadow inventory is created.

Taking into consideration that modifying loans will not help those who can’t afford their payments, unemployment numbers comes to mind,  it makes perfect sense that an expedited short sale process is the best solution.

Short Sales -  The Next Best Thing to a Spanking

Since Short Sales net more money than REOs (foreclosures) it is reasonable to expect banks to promote them by doing… something like this.

Fannie Mae insures many mortgages and subsequently gets spanked for the losses following low net REO sales.

note: Watch for legislation changes next year.   Fannie Mae holds an enormous amount of political  leverage and the mid term elections are coming!

Removing the stigma that foreclosures place on the market, through short selling,  stabilizes prices, reduces shadow inventory and improves the outlook as a whole.   Perfect!  download FHA short Sale Guidlines PDF

Macro Economics…my tiny brain version

Since you have read this far let me create a ‘big picture’ with my tiny brain.    Banks are myopic to the degree that they are in the business to make money.    Looking at Real Estate as being a single issue for the banks,  makes us myopic.

A Real Estate investment is the single largest investment a person will make. When it fails to produce dividends (equity) it affects ones entire financial situation. This is no less true for banks.

Think about it..not only mortgages…they are battling delinquent credit cards, bad car loans, signature loans etc..  All leading to huge losses and fewer potential investors.  The banks see what is on their horizon and are working to prevent it at all ‘cost’ (or loan from the taxpayer).  Better save that for another time, so…

Fannie Mae (may) get a spanking, but it may be one of affection rather than discipline if the foreclosure fears are relieved.  This can ONLY be done through the streamlining of short sales.  Think I am wrong?  Don’t bet on it.

related articles

Only 4% get long term help

Mortgage help coming slow to many

Back taxes Plague Loan Mods

No Jobs!  No Deal!

15400 VIA PALOMINO Single Family  4 bed(s) /3|1 bath(s)23,482 sq ft     Monte Sereno $2,395,000

16242 AZALEA WY Single Family  3 bed(s) /2|0 bath(s) 8,000 sq ft Los Gatos   $1,229,000

102 HOLLYCREST DR Single Family 3 bed(s) /2|0 bath(s) 7,070 sq ft  Los Gatos  $799,000

14225 LORA DR #102 Condominium 2 bed(s) /1|0 bath(s)     2,242 sq ft Los Gatos $345,000

These homes all sold for below their asking price from  High reduction of -9% for Lora Drive and low price reduction of 3% for Azelea Way.  Home sellers and agents in Los Gatos and surrounding areas should take heed of the substantial reductions made this week.    The days on market or CDOM are more relevant factors in pricing homes today than we have seen in the past few years.

This article  (here) is evidence our market is doing better than average.