Mark Wisterman's Paradise & Lake Oroville Real Estate Blog

As the interest in solar energy continues to grow in the Oroville, Ca and Paradise, Ca real estate markets a whole new set of concerns and potential problems lay in wait if owners of Oroville and Paradise homes don’t plan accordingly.

Earlier this week I received an interesting article from Lorna Joseph, the Branch Manager of our local Bidwell Title and Escrow office, that has been published by the California Land Title Association.  The article discusses some of the potential new issues that may come about as the expansion of the use of solar energy continues to grow.

Most specifically it discussess the need for solar users or potential solar users to consider the consequences of not having guaranteed access to the sun.  I know, I know, everyone has access to the sun right? All you have to do is walk outside on a clear day in the Lake Oroville or Paradise real estate markets and the sun is so bright that you gotta wear shades. While that is true for you, it may not be true for your home.

The article asks you to consider what may happen when you have your solar collectors installed to catch the most amount of light, only to have your next door neighbor plant some trees or do some home remodeling that blocks, or significantly inhibits, the sunlight from reaching the collector panels. Imagine spending $30,000 – $40,0000 for a solar energy system only to have it rendered useless by two or three big trees.

The most practical solution to this issue, according to the article would be the negotiation of easements between property owners where one property owner would receive assurances from the other that the sunlight which travels over the neighbor’s property would always be available. Of course this assurance is going to have a price attached to it. But if reasonable, the price may be more that offset in the energy saving cost realized by the solar owner.

It seems to me that this is going to be a very thorny issue going forward as more and more homes become solar equipped.  With the number of tall pines in the town of Paradise, for example, it could be nearly impossible to procure a sunlight easement as you may need 3 or 4 homeowners to grant an easement to their sunlight. Negotiating an easement with one homeowner is difficult enough. Trying to negotiate with more than one may take divine intervention.

The moral of the article: As with anything, be sure to plan ahead and consider all the pluses and minuses before moving ahead with any home project.

READ THE ENTIRE ARTICLE

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Below is a text of an e-mail I just received from the City of Oroville’s Housing Development Department regarding the availability of funds for their First Time Home Buyer program.

I thought this would be helpful to pass along to you.

FYI: The City of Oroville currently has a large amount of FTHB funds. Some of these funds must be spent prior to the end of June 2010 or our new grant could be taken from us if we can not meet the expenditure deadline for the old grant. The problem I am having is that escrows tend to be progressing much slower these days; therefore we need more people entering into escrow so that hopefully some will close soon.

Please tell your clients that the City has funds and to turn in a complete application with the City. We are still using the waiting list to keep track of complete applications that are ready to move forward and to keep track of the amount of FTHB applicants entering into escrow; however, there currently no wait period other than waiting to hear from the City the their application is complete and they may enter an escrow. Further, although we are currently allowing short sales to be purchased through the FTHB program, this could change in the near future as many short sales have excessive escrow periods and tie up funds with no assurance that the bank/lender will actually accept the contract between the buyer and seller.

Have a great weekend everyone.

The Department of Housing and Urban Development announced today that The Federal Housing Administation (FHA) is making significant changes to its loan program which will have a direct impact on a buyer’s ability to obtain an FHA backed loan.

The  result of these changes, which are anticipated to be put in place sometime between the spring and summer months, will be that buyers are going to need more upfront cash than they are required to have today.

The change that will have the greatest impact on the current conditions of the Lake Oroville real estate housing market is the reduction in the maximum amount of closing costs that a seller may pay on behalf of the buyers. The new regulations will cut the buyers allowable credit from 6% of the purchase price down to 3%. Meaning that on a $150,000 purchase a seller will only be allowed to contribute  $4,500 towards a buyer’s closing costs as opposed to the $9,000 that they are now allowed to contribute.

Another change will require that upfront charges for mortgage insurance premiums be increase fron 1.75% to 2.25% of the loan value. This charge is normally financed as part of the loan, so in most cases the effect of this new regulation will be a small increase in the amount of a buyer’s loan payment. And although small it may be, it may be enough to keep some buyer’s from qualifiying for a loan.

And the party is over for those of you with marginal credit scores. If your credit score is less than 580 you will no longer be eligible for the 3.5% down payment program. The new guidelines call for these borrowers to put 10% on their purchase. For that same $150,000 purchase in the above example you will be required to have a down payment of $15,000 vs. $5,250 that you currently are required to have.

OK, all you buyer’s who are still sitting on the fence. Let’s look at what happens if you wait so long to buy a house that you end up buying a home under these new guidelines (sometime this summer) instead of buying now.  Assuming the price of your new home is $150,000 and your credit score is less that 580.

I think you will agree that no matter how you look at it, waiting is going to be very costly.

 Oroville real estate, chico homes, Paradise listings, Gridley properties, butte county california market

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Through all the conversation and debate surrounding the condition of the housing market in this county, there is one thing I am sure we can all agreee on. The market has changed, is changing, and will continue to change going forward. Some of the change is good; some bad; some needed; some we could all do without.

A lot of what most of us would call “bad changes” for this market centers around the over zealous tightening of lending guidelines, and the knee jerk reaction of lawmakers and regulators that, so far, have inhibited the free market from working it’s “magic.”

Well, my friends, I can’t believe I am about to say this, but recently it seems that the government may have gotten something right with regards to assisting the market.

Today we invited Renee’ Jones from the local Mission Hills Mortgage office of the Lake Oroville real estate market to come to our office and give us an update on the new disclosure requirements that lenders must now make to borrowers during the loan process. Renee’ is a top notch loan officer who strives to stay on top of all the latest lending rules so I knew she would be up to speed on these new regulations.

The Department of Housing and Urban Development  recently mandated that as of January 1, 2010 all lenders must use the same prescribed format for disclosing the terms of a borrowers loan. Not only that, but the timing with which these Good Faith Estimates are to be  delivered to borrowers is also going to be more strictly enforced in order that terms and fees to a loan cannot be changed at the last minute. In fact some of the terms and fees, once disclosed, cannot change at all, safegaurding borrowers from the incompetent and/or dishonest acts that some lenders have used to increase their commissions on the loans they are selling. The new disclosure format will allow you, the borrower to more easily shop for the loan package that provides the most value for your money. Read the rest of this entry »

Those of you who know me, whether you are a client, or another REALTOR®, or a friend, know that I take the business of negotiating and successfully completing real estate transactions very seriously. You also know that I do not believe for a moment, that just because someone may have a real estate license or calls themselves a REALTOR®, means that the particular someone is competent, or educated enough to properly represent their clients best interests. Let’s face it, it is way too easy to get a real estate license in this state.

It takes more than a license or the paying of dues to the National Association of REALTORS® (NAR)  to acquire the proper level of competence to do the job. Above all else it takes education and the desire to stay informed of the latest trends, rules, laws, etc.

This is why I am very pleased to announce that each of my associates have thought it important enough to spend the time necessary to join me in completing the educational requirements set forth by NAR  in order to obtain our Short Sales & Foreclosure Resource Certification. This is the ONLY “distressed property” certification recognized by NAR. A certification that, at the time we received ours, had been attained by only 2,500 of the nearly 1 million REALTORS® nationwide.

Through the attainment of this certification we have gained valuable knowledge and have access to the resources necessary to counsel and better guide our clients through the foreclosure and short sale processes. In fact, (here comes the commercial), we are the only office in the Lake Oroville real estate market, and maybe the entire Butte County real estate market, where every associate in the office has earned the certification. Are we “experts” yet? Nope. But, knowing my associates as I do, we are going to be as close as you can possibly be as this market begins to move away from foreclosures and more into the short sale arena.

Oh, just a side note regarding “experts”  in this business. If someone calls themselves that, in most cases you should probably run away as fast as you can. Case in point-There is one REALTOR® in town that claimed in her advertising that she was a “Short Sale Expert” and yet had never, ever negotiated a short sale transaction of any kind.!!!!!!!!!!!

Neither rain, nor sleet, nor snow, nor Arizona trip, will keep me from providing you, my loyal Lake Oroville real estate market readers, with the weekly sales activity number for last week.

You heard right, I am actually taking a few days of southwest r& r. But fear not, I have not forgotten my duty to you.

I hope you all had a great and blessed Christmas day and that you are planning for a safe New Years celebration.

Sales numbers for the week were actually pretty good considering that it was a major holiday week.  I have highlighted what I believe to be the stats of the week. Average sold price has been climbing the past 4 weeks and last week was the highest it has been in the past 10 weeks. The other stat of note is, once again, the number of single family Oroville homes for sale. The is number represents the fewest number of homes on the market since I have been bringing you this particular statistic beginning June 8, 2009.

As a seller, or potential seller, this is THE number to watch going forward. Smaller inventory will eventually translate into higher prices.

Well, that is all for know. I’ve got another “busy” day scheduled tomorrow as I do more trailblazing through the Arizona  desert on my quad runner.

Click here for expanded chart

 Merry Christmas, everyone. We had a very slight sales rebound last week in the Lake Oroville real estate market, but again not much on which to comment. I think the biggest news in the current market environment  is that inventories are continuing to shrink. I have provided a chart at the bottom of this post which graphs the nature of the inventory trends.  Be sure to click on the graph for a larger view of it.  As a buyer you will want these inventories to show increases as this will keep prices more affordable. As a seller you should like the trend that has been developing since June. Shrinking inventories will result in higher prices over time. 

Click here or on chart for larger view

Click here for more stats

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I recently attended a workshop put on by the City of Oroville Housing Development Department regarding changes to the First Time Home Buyer Financing Assistance Program that the city has had in place for a number of years now. Up until about 4 years ago the program was easy to explain to buyers as it was a pretty straightforward program. The City would provide secondary financing of up to $100,000 at 3% simple interest with no payments being required on the loan. The buyer would simply pay off the loan and any accrued interest whenever the buyer decided to sell the home.

Needless to say the program has been quite popular, especially when home values were going through the roof and nearly all first time home buyer were being squeezed out of the market.

But something else happened to the program when prices started their run up. The City of Oroville got greedy and decided that they would get into the real estate business by competing against local contractors in buying up vacant city lots, constructing their own homes, and requiring that they be financed through their loan programs when they were sold.

For a while everything was working like clockwork for the city. They were buying lots on the cheap, building average quality homes, and making a lot of money while values kept escalating and they kept raising the prices. But, as with many government programs, things have since not gone well.

Just as the market was beginning to pull back, the City had a total of 9 homes in their inventory, 6 complete and 3 under construction. it was obvious that they were getting nervous about market conditions because they arranged a workshop to solicit ideas from REALTORS®, and lenders on how they could get these homes sold. Unfortunately, there was not much of a turnout for the meeting. I happened to be the only REALTOR® in attendance, as many others had decided to participate in the annual Oroville Association of REALTORS® picnic instead. In addition to me and city officials, there were three or four lenders in the room. Read the rest of this entry »

It seems that my blog posts may be being read even by Congress.

On November 14, 2009 I blogged about the financial state of The Federal Housing Administration (FHA) and the possibility of an increase in the minimum downpayment requirement from 3.5 percent to 5% in order to obtain an FHA loan to purchase a home in the Lake Oroville real estate market and beyond.

Seems that I am not the only one thinking this way. RealtyTimes.com has an article about this very thing.

CLICK HERE to read the article.

Now, before revealing my answer to kick starting this real estate market, lets do a quick review of where we are today.

Remember, in part one of this two part post I reminded you that this mortgage mess in which we find ourselves has resulted in MILLIONS of home owners (3 million this year alone) losing their homes. Also, recall that I think that a major portion of these displaced former home owners could probably qualify to buy a home today if it weren’t for the fact that their foreclosure or short sale would be reflected on their credit report for the next 3-5 years. In addition, it seems to me that it would be extremely time consuming to attempt to figure out which of these borrowers were sold a “bill of goods”, which ones had no idea what they were doing, or which ones were just plain irresponsible in handling their finances.

My request for what your ideas might be to fix this was answered by one of my most loyal readers, Steve Davis  who wrote:

“One could start the qualification on who gets help and who does not by the ones that put 20% or more down were really qualified buyers – vs the low or no down people who should have never purchased a home.”

I do agree with Steve that we could start allowing those who had originally put 20% down access to new loans. but we still have the issue of credit scores for these people too.  So what should we do? Read the rest of this entry »