Mark Wisterman's Paradise & Lake Oroville Real Estate Blog

As a reader of this blog you know that the market guidance I give for the Lake Oroville real estate market and Paradise real estate market is intended to provide a forward looking perspective to where the market is going.

Attempting to take into consideration all the factors that affect the market and trying to provide accurate guidance into the future is a balancing act to say the least. The biggest challenge in trying to do this is in separating the hype from reality.

Every day you hear the hype but rarely the reality.

I think the reason this Lake Oroville real estate blog is so popular is that readers have realized that the perspective and advice I give is based solely what I see the realities of the market to be. For example, if you go back to some of my previous blog posts you will see that I was maybe the only REALTOR you heard saying that the tax credits would not help the market in the long term; that the market cannot recover until we find a way to get some of the 8 million or so who have been foreclosed on back into the market; and that government “purchase incentives” will only prolong the pain homeowners and sellers are going through with regards to home values.

My contact with two separate buyers in the Lake Oroville real estate market over the past couple of weeks has led me to believe that we are about to see the very small beginnings of a truly sustainable recovery in home sales and home values.

This belief is based on the fact that each of these buyers were coming to me following their homes being foreclosed upon in late 2007 and early 2008.  With FHA lending standards allowing a borrower to get a loan with a foreclosure of 3 or more years old on their credit report, these buyers are poised to get back into the market and find another home to purchase.

With the first big wave of foreclosures rolling through the real estate market in 2008 it stands to reason that there should be the beginnings of an uptick in real estate transactions sometime in the middle of 2011 as many of those who lost their homes may possibly qualify again for a loan.

And as corny as this may sound, with the much lower prices and the almost free, fixed interest rates, many of these buyers may look back on their foreclosure with fond memories as it enabled them to get out of a house they most likely over paid for and which they financed with an adjustable loan with a top rate that would make a loan shark blush.

Time is a great healer, isn’t it?

This just came across the wires and I wanted to make sure all of you in the Lake Oroville and Paradise Ca real estate markets hear it here first:

(June 29, 2010)—The United States House of Representatives has just passed HR 5623, the Homebuyer Assistance and Improvement Act of 2010, by a vote of 409-5. This bill extends the deadline for closing tax credit eligible transactions from June 30 to September 30, 2010. The bill moves to the Senate where the outcome is much less certain. I will continue to update you as the events move forward.

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• U.S. House Extends Closing Deadline for Homebuyer Tax Credit  businessweek.com)

The United States Senate failed to pass a bill yesterday that, among other things, would have extended the home buyer tax credit until September 30, 2010.

The bill, H.R. 4123, included an amendment allowing home buyers the three-month extension on the tax credit. The extension, though, only applied to buyers who signed purchasing contracts before the original April 30 deadline.

With a backlog of transactions waiting to be processed, and in danger of not closing by the required deadline of June 30, 2010,  the National Association of REALTORS®, as well a mortgage lender groups, had urged Congress to extend the time for escrow closings to the proposed September time frame.

Unfortunately for those of you in the Lake Oroville real estate market and the Paradise real estate market in danger of not closing your transaction on time, the provision for the extension was added as an aside to an unemployment bill that had become a political hot potato.

Why Congress can’t do the common sense thing, (oh wait, my English teacher told me never to use the words Congress and common sense in the same sentence), and vote on these unrelated issue separately is beyond me.

If you are in danger of missing this deadline you might want to turn up the heat on your loan officer, as loan processors and underwriters could really care less about your time frame

There is still an outside chance that this extension amendment and be added to another bill or simply be voted on on its own merits. My advise though is don’t assume anything.

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Senate OKs new tax credit closing deadline

Congress is riding to the rescue for all of you in the Lake Oroville and Paradise California real estate markets who have qualified for the first time home buyer tax credit  by having a home purchase contract in place before the April 30, 2010 deadline, and are in danger of not being able to get the purchase closed by the deadline of June 30, 2010 because your lender is overwhelmed by the backlog of paperwork created by the frenzy.

With just two weeks before the expiration of the tax credit program ,an amendment to HR 4213 was added which, if signed by the President, will  extend the closing deadline to September 30, 2010. The extension was requested by the mortgage industry will allow a backlog of over 180,000 purchase transactions that were begun before the April 30th deadline to be completed. While this is a wise, and fair move on the part of Congress to agree to extend this deadline, it is important to understand that it THE EXTENSION IS NOT YET OFFICIAL.

With only 2 weeks to go before the original expiration date of the program, it is important for you, if you are one of these 180,000 transactions that has not closed, to keep pressure on your lender to get your loan done.  In this political environment it would be foolish to think that the proposed deadline extension of September 30th is a done deal. 

I will keep you updated as new information becomes available.

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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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• See the HUD Site

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