And Now a Message from the California Association of Realtors

Posted on June 1, 2009 by Minda Reves

In April, California home sales were up and prices were down, and C.A.R. has the stats to prove it, “Home sales increased 49.2 percent in April in California compared with the same period a year ago, while the median price of an existing home declined 36.5 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.” Orange County is listed on the C.A.R. chart to the right.

Message From California Association Realtors

Now is the time to snap up a short sale and trust me you aren’t the only person in the state thinking about it, James Liptak, C.A.R. President, says, “The dramatic difference in inventory exemplifies how the low end of the market is attracting more first-time buyers and investors, creating a shortage of distressed properties for sale.” A SHORTAGE. When was the last time you heard that word used when talking about homes for sale?!  C.A.R.’s Chief Economist, Leslie Appleton-Young, is sounding eerily similar to what Lawerence Yun, NAR Chief Economist, was quoted saying in the WSJ (See: New Neighbors). Appleton-Young says,

Favorable home prices in many parts of the state have led to an increase in affordability for first-time buyers. In the first quarter of 2009, affordability rose to 69 percent, enabling many to take advantage of first-time buyer programs and near record-low interest rates,” said Appleton-Young. The jumbo loan market, however, continues to be starved for financing, constraining sales for the high-end segment.

If that’s not enough to get you going and you’re still not sure if you want to seek out a short sale check out some of the homes up for grabs and see how little of your hard earned cash you’d need to take a short sale property from distressed home to home-sweet-home.

Minda Reves is a freelance blogger for SHORTsense.com

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What the Glink Are You Talking About?

Posted on May 29, 2009 by Minda Reves

Ilyce Glink over on CBS Money Watch’s MoneyWatch.com blog is bellyaching that home prices are still falling. While, this is not the best news, it has increased affordability and made it possible for many young families to buy their first homes. In these tough times, short sales are one
way an individual can up their socioeconomic standing.

Even Glink’s own anecdotes seem to contradict her feelings on falling home prices. She tells the story of an elderly woman who penny pinched her entire life, so that one day she’d be able to retire in her own home. And with the help of the $8,000 tax credit offered by the Obama administration, she was finally able to purchase a foreclosed home.

She also tells the story of a doctor, who lost his shirt in the stock market, so he teamed up with a Realtor and now rents out investment properties he will turn around and sell once the market bounces back, Glink describes this as a “no lose formula.” I definitely know a few Orange County area plastic surgeons that could use this tactic to make up for a loss in
patient volume!

Lawrence Yun, NAR chief economist, who Glink quotes in her blog post says, “Fortunately, home buyers are being attracted to deeply discounted prices and are bidding up many foreclosed listings, particularly in California, Nevada, and Florida –this will set the stage for healthy market conditions going forward.”

So, while the current housing market is not ideal, especially since it comes bundled with a rise in unemployment and a disastrous financial market, foreclosed homes and short sales are providing opportunities to first time home buyers and seniors and allowing investors to recoup some of the funds they have lost in stocks.

Ms. Glink, short sales are the ever-present silver lining in a market full of cloudy days.

Minda Reves is a freelance blogger for SHORTsense.com

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Almost 1-in-2 of All New Neighbors Bought a Bargain!

Posted on May 28, 2009 by Minda Reves

1 in 2 neighbors bough real estate bargain
The Wall Street Journal had this interesting factoid in its latest article on
home sales, “About 45% of the 4.68 million in April sales were foreclosures and short sales.” So, that means if any families recent moved onto your street, the odds are good they got a great deal on their new home! 

According to NAR economist Lawrence Yun, “Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the mid-price ranges, but high-end home sales remain sluggish.” Which means people are more likely to purchase a bargain home in Santa Ana or Anaheim than they are ritzier parts of town like Laguna Beach or Irvine.

The WSJ goes on to outline all the reasons it’s easier to buy a home now, than has ever been before:

“Lower prices, combined with historically low borrowing costs, have increased affordability. The average 30-year mortgage rate was 4.81% in April, down from 5.00% in March, Freddie Mac data show.  Realtors also hope demand is stirred by the $8,000 tax credit for first-time home buyers included in the Obama administration’s economic stimulus package.”

So, what are you waiting for?  Contact a HAFA certified short sale agent now!

Minda Reves is a freelance writer for SHORTsense.com

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Short Sale and Foreclosure “Homes Almost 20% Cheaper”

Posted on May 26, 2009 by Minda Reves

Short Sale Foreclosure Homes Almost 20 Percent Cheaper The reports are in and CNNMoney.com has this to say about the first quarter of 2009’s housing market, “the
S&P/Case-Shiller National Home Price index, a bellwether of real-estate market direction, plunged a record 19.1% during the quarter compared with the first three months of 2008.” Los Angeles and San Diego are among the 20-cities tracked in the Case-Shiller Index and both were down about 22%. Mike Larson, a
real estate analyst for Weiss Research, said this was not the news he expected, “[Foreclosures] used to be anomalies,” said Larson. “Now, when sales are dominated by foreclosures, where they represent 50% or more of [transactions], they are the market.” The real estate game has shifted drastically. The recent increases in home sales directly reflect homebuyer’s taking advantage of bank-owned properties and short sales, so even though buying is up, home prices
are still staying low.  www.shortsense.com is great place to get started if you’re interested in snapping up one of the bargains available in the current housing market.

Minda Reves is a freelance writer for SHORTsense.com

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Don’t Bank On It: Banks Struggle to Sell Properties in Cali

Posted on May 22, 2009 by Minda Reves


Bank Foreclosure This probably isn’t news to our devoted Orange County readers, but I’ll put it out there anyway, Mathew Padilla over at the OC Register’s Mortgage Insider is reporting “bank owned homes sell slowly on the coast.” He lists a few reasons for this, one of them being that the loans on these homes are much larger, so banks are not
gung-ho about letting these homes go for bargain basement prices, “in other words, a bank takes a bigger loss if it knocks 10% off a $1 million-plus REO in Laguna Beach, than say 10% off a $300,000 REO in Fullerton.”

These same banks are also feeling stingier about offering financing on these pricier homes—Hasn’t anyone told the banks that they can’t have their cake and eat it too?  Banks just aren’t well equipped for the business of selling homes; I’ll take an agent specializing in short sales over dealing directly with the banks any day. Not sure how to spot a great short sale?  Our short sale site makes it easy to search by map, city or zip code.

Minda Reves is a freelance writer for SHORTsense.com

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A New Wave of Short Sales Coming

Posted on May 21, 2009 by ShortSense

New Wave Of Short Sales ComingThere have been a lot of articles written lately about the coming wave of option ARM resets that are set to occur mostly between 2010-2012 (investment bank Credit Suisse has a detailed research report available for clients). The Option ARMs that were underwritten on these loans occurred mainly on homes that were not conforming loans, but Alt-A jumbos.  If you add in another 6-12 months after the NOD, there could realistically be a healthy supply of higher-end short sale properties coming to market into 2014. Take a look at what Zacks analyst and CFA Dirk van Dijk had to say:

So you think we are out of the foreclosure woods? Don’t bet on it. Take a look at the chart below, created by Credit Suisse (CS; a larger version can be viewed at and  is available at http://www.calculatedriskblog.com/).
It shows the date of first reset or recast of various classes of adjustable-rate mortgages (ARMs). A reset refers to a change in the interest rate, a recast refers to a change in the payment.

For most “plain vanilla” ARM’s they are the same thing, but for Option ARM’s the payment can change without a change in the interest rate.  Option ARM’s (the yellow part of the bars) allow the borrower to pay less than the amount of interest on the loan early in the mortgage life, with the difference being added to the principal of the mortgage.  Even in a flat housing price environment, this would cause the loan-to-value (LTV) ratio to rise over time. In a falling home price environment, with both the loan growing and the value falling, it happens much more quickly.

Dirk goes on to say that the recasts are relatively small right now at about $1 billion per month, but that number is set grow dramaticially to over $8 billion per month in the fall of 2011.  So start saving your gunpowder for that down payment on your Laguna Beach short sale.

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Current Orange County Market is a First Time Homebuyers’ Paradise

Posted on May 19, 2009 by Minda Reves

Orange County Market First Time Homebuyer Paradise

MSNBC spoke to the CEO of RealtyTrac, James Saccaccio, located in our own backyard of Irvine, California. What’d James have to say? “Sales activity appears to be increasing in some of these hard hit markets as home prices have fallen to levels that are attractive to first-time homebuyers and investors.” First-timers are in an ideal position to purchase a home now, mainly because price levels have dropped back to around 2003 levels, not to mention the $8000 tax credit which is currently available until December 1st of 2009.

Newbies to the buying game are seeking out bank-owned property and
short sales. 24-year old Albert Ko, an Orange County resident interviewed in the article, is seeking a home that he can live in now and rent out later. He’s finding the prices on homes in the Irvine market haven been slashed in half since he moved to Orange County two years ago. Here at SHORTsense.com, we find it refreshing that short sales are giving younger families their lucky break in the housing market, since they certainly won’t find themselves as lucky in the job market! 

Minda Reves is a freelance writer for SHORTsense.com

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Sluggish Market Spurred by Uptick in Home Improvement Stock

Posted on May 18, 2009 by Minda Reves

Sluggish Market Spurred Uptick Home Improvement Stock In the optimistically titled article, “Wall
Street throws a house party,” CNN reports that Lowe’s CEO, Robert Niblock,
sees an end in sight to the housing decline,  “In recent weeks we have seen consumer confidence improve, housing turnover show signs of a bottom in certain markets, and home prices slow their decline.” But while Lowe’s earnings are up, high-end homebuilders, like Toll Brothers, are down. The market may be picking up, but it hasn’t picked up enough steam for a return of the McMansion. It seems that individuals are more concerned about investing in properties that they can fix up themselves with a little bit of paint and a few new counter-tops and are shopping a bit more sensibly when seeking to purchase a home.

“’Mortgage rates are low. Home prices are low.  Affordability is high. It’s at the point in most markets where it might be a good time to buy,’ said Kurt Karl, chief U.S. economist with Swiss Re.


But people still need to be cautious. In order to really make the case that the real estate market, and hence the economy, is getting better, housing prices need to stabilize and the spate of foreclosures that has plagued many markets needs to stop.”


Hmm… Interesting.

So, what could slow or stop the “spate of foreclosures” mentioned above? What alternative could be less damaging to a homeowner’s credit and better for surrounding property values? What option could prevent a house from lingering on the market too long AND make it more alluring to prospective buyers? If you answered “A short sale!!,” you would be correct.  A short sale can help you avoid a foreclosure, so you don’t find yourself in the same position as these fine folks in Laguna Beach or these down-on-their-luck people in Huntington Beach or any of the families across Orange County who’s home recently hit
the auction block.

Minda Reves is a freelance writer for SHORTsense.com

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Can a Short Sale be Your Snorkel?

Posted on May 16, 2009 by Minda Reves

Short Sale SnorkelZillow.com has some disheartening news to share, “In California, 32% percent of homes are worth less than what’s owed on them…
Nationally, 22% of all homes are underwater…” And just in case you can’t take a company with a fluffy name seriously, Zillow knows what they’re talking about.  They make it their business to provide individuals with accurate information concerning the worth of their home and Bloomberg has used their stats in its
articles. Curious about Orange County, surf on over to Zillow.com (after you’re done here, of course!) and plug in your zip code. You may be surprised by what you find out.


If you’re the one in the one-in-three Californians struggling for air in the latest wave of the housing crisis, maybe a short sale can be your snorkel. You see, if banks foreclose on too many homes then they may find THEMSELVES underwater… well even deep underwater than they already are. A short sale evens the scales by allowing you to request that the bank accept your home for what it’s worth now, versus what it was worth when you purchased it in an attempt to avoid a foreclosure by making your home more attractive to potential buyers. Now, doesn’t that feel like a breath of fresh air?

Minda Reves is a freelance writer for SHORTsense.com

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Breaking the Bank: Paving the Way for Shorter Short Sales

Posted on May 15, 2009 by Minda Reves

Shorter Short Sales Real Estate agents, homeowners, buyers and communities across the nation just can’t make sense of it, if a short sale is more beneficial to everyone involved, including the banks, then why are foreclosures more prevalent in the marketplace? Trust me, the banks aren’t doing you any favors by granting you a short sale, by accepting a short sale banks are avoiding the legal fees associated with foreclosure, avoiding an auction and maintaining the existing value of the property. The longer a property sits vacant the less it will be worth by the time it actually sells. The Huffington Post reports, “According to one analysis, short sales resulted in loan losses of only 19 percent, compared with an average loss of 40 percent on homes sold after foreclosure.”

In the same article, the Huffington Post reports on the launch of Fannie Mae’s newest pilot program,” Fannie Mae just wrapped up a pilot program to test a process for streamlining short sales by partnering with local listing providers in Arizona and Florida to pre-approve 400 properties for short sales.” Those are our government bailout dollars at work! Because the program is gaining positive results, Fannie Mae is set to expand it to other areas in the coming year. Homeowners and realtors in Orange County where default rates have steadily increased in the past two years could find true relief in a speedier short sale process, so here’s hoping the OC tops that expansion list!

Minda Reves is a freelance writer for SHORTsense.com

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