Mark Wisterman's Paradise & Lake Oroville Real Estate Blog

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 »

Well, another year is behind us here in the Lake Oroville real estate market and it is time for the obligatory look back over the past year.

However, to look at only a snapshot of this past year does not provide the perspective that you have become accustomed to expect from this blog. So what I have done to provide this perspective is to go back as far as our multiple listing database goes and extract monthly data for the median home prices as well as the number of home sales that occurred dating back to October 2005.

To get a better look at these charts you can either click on the links below or click on the individual graph.

Oroville Monthly Median Price

Oroville Monthly Home Sales

Before moving on, let’s be sure we all know what median prices are. The median of any set up numbers is the number in the middle of the set where 1/2 of the numbers is lower and 1/2 of the numbers is higher than the median number. Here is an example: Read the rest of this entry »

Earlier this week I read an article from Inman News reporting that Freddie Mac’s quarterly national Conventional Home Price Index (CMHPI) Purchase-Only Series showed that home prices has risen for the second quarter in a row this year.

 According to the article, the index showed a price growth of .9 percent last quarter to go along with a 2% increase in the previous quarter.

I like this Home Price index over some other home valuation estimates because the index is constructed from observations of actual sales prices or appraised values of the same homes over time. It just seems to me that this is a much more accurate way of gauging the direction of the market.

The Inman article contains many quotes from Freddie Mac’s chief economist, and vice-president Frank Nothaft.  Here are a few quotes that caught my attention.

Seven of the nine U.S. Census divisions saw increases in prices in the third quarter, although “prices are still down relative to their peaks in most markets,” Nothaft said.

“Values in the New England, East North Central and Pacific divisions are at 2004 levels, on average, and the South Atlantic, West North Central, and Mountain states’ home values are at 2005 levels.”

“In contrast, average values in the West South Central area have tied their previous peak from the third quarter of 2008, while average home values in the Middle Atlantic and East South Central states have reached 2006 and 2007 levels.”

The first of these quotes is the purpose for writing this blog post. It seems that the current condition of this real estate market, whether it be the Lake Oroville real estate market, or any other market in the country, is constantly being measured by how close or far away were are from the peak values of 2006. 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 »

Weekly sales of homes in the Oroville real estate market made a good comeback last week as the effects of the first time homebuyers tax credit continues to drive the number of sales.  Unfortunately for sellers, the tax credit is doing nothing to boost home values, as nearly 50% of sales are for “distressed” properties.

See Expanded Chart

Oroville Homes for sale, chico listings, paradise properties, gridley homes for sales, lake oroville homes

As part of a package of 8 other real estate related bills recently signed into law by California’s Governor, AB 260 provides further protections to those borrowers who are worthy of borrowing money to buy a home, but may be a notch or two below the coveted prime borrower status.

Whether you are a borrower in the Oroville real estate market, or looking at homes for sale in Chico, or have decided that its time to start looking through property listing in Paradise or any other area of Butte County this information is important to know.

The new law places certain limits and prohibitions on what is now being called “higher-priced mortgage loans.”  Directly excerpted from the text of the new law, a higher priced mortgage is defined as:  

(a) Higher-priced mortgage loans —(1) For purposes of this section, a higher-priced mortgage loan is a consumer credit transaction secured by the consumer’s principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction as of the date the interest rate is set by 1.5 or more percentage points for loans secured by a first lien on a dwelling, or by 3.5 or more percentage points for loans secured by a subordinate lien on a dwelling.

(2) “Average prime offer rate” means an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low-risk pricing characteristics. The Board publishes average prime offer rates for a broad range of types of transactions in a table updated at least weekly as well as the methodology the Board uses to derive these rates.

To help with the explanation of this I did a little online research and found the published average prime offer rate for 30 year fixed rate mortgage to be 5.06% last week. Based on the newly established definition, a 30 year fixed rate loan on a first mortgage with a rate of 6.56% or more would be considered a higher priced mortgage loan.

If you find yourself in a situation where you only qualify for one of these loans here are the new resrtictions being placed on your lender:  Read the rest of this entry »

After pausing for a couple of weeks, sales of homes in the Oroville real estate market returned to its previous trend. 

Prices continue to jump all over the board due to the large disparity is prices of homes sold each week. As an example the lowest priced home sale of the week was $35,000 and the highest priced home sale for the week in the greater Oroville area was a sale completed by our own Christi Nelson for $186,000. Great job Christi.

See More By Clicking Here

With the controversy over the Lake Oroville Area Public Utility District’s (LOAPUD) decision to unfairly place nearly the entire burden of repairing a major portion of the sewer system infrastructure solely on the backs of home sellers who have their Oroville homes in escrow still brewing, I want to be sure that you have the most up to date information available to you in the event LOAPUD fails to see the light and insists on moving forward with their program in its current state. It will be at that time that I will be calling ALL customers of the district to show up at the district’s next Board of Directors meeting. 

For now though, here is what is happening:

The Oroville Association of REALTORS® (OAR) is actively involved in the struggle to make LOAPUD understand that, while we agree on the need to have a properly functioning sewer system, we highly disagree with the district’s repair plan as it will ABSOLUTELY NOT address what they seem to be saying is an imminent threat to public safety. Depending on how you calculate the numbers it could take between 30 and 50 years to correct the deficiencies in the system that the district is attempting to correct with requiring repairs at the Point of Sale.

If this sounds a tad inefficient that’s because IT IS. Even if sales of homes in the District DOUBLED it would still take 15-25 years to address the problem, assuming all homes in the district sell at least once in this time frame, which they won’t.

If there is such an urgent need to get these repairs made, why is the district willing to wait over 30 years to get it done. This simply makes no sense, or does it? Could this actually be political maneuvering on the part of the district?

Everyone put on your speculation cap now and follow this logic:

Not that long ago the sewage treatment plant became overrun with sewage inflows. It was apparently so bad that there came the possibility that untreated sewage would spill from the plant, creating a potential for contamination of the local waterways. (Here’s the speculation part) Upon hearing of this, the State of California threatens LOAPUD with possible sanctions or fines if they don’t submit some sort of plan to mitigate the potential of a spill at the undersized treatment plant. The State doesn’t much care what the plan is, or even if it will be effective. They just want a plan that they can file away in case the EPA or some other FEDERAL agency wants to check up on the State’s waste water treatment plans.

Again, speculation on my part. But, if true, it explains why LOAPUD is bent on pushing this ordinance through.  Why else would otherwise intelligent people be so willing to brush aside the facts. 

Your Association of REALTORS® is going to do anything and everything that it can to stop this ordinance from being implemented in its current form. Resources from OAR, neighboring Realtor Associations, the California Association of REALTORS®, and the National Association of REALTORS® have either been pledged, or soon will be pledged, in order  to fight this; and will be used if necessary. We will not stand silently by and watch your property rights being trampled upon.

We now need you, the citizens, to be prepared to mobilize in the event diplomacy does not work. A working committee of REALTORS® will be meeting with LOAPUD officials this week to once again state our case on your behalf. If that does not work, it is going to be up to you to roll up your sleeves, with help from your REALTOR® friends, to get it stopped.

OROVILLE REAL ESTATE OROVILLE HOME FOR SALE CHICO HOMES PARADISE HOMES GRIDLEY HOMES OROVILLE LISTINGS OROVILLE PROPERTIES BUTTE HOMES

 As is always the case, the extended Labor Day weekend affected the Oroville home sales numbers for the week.

Of  note in this week’s review is the number of homes currently listed for sale has once again dipped. This number is the lowest it has been since I began tracking these numbers for you, and represents a 5.8 month supply of homes for sale in the Oroville real estate market. In just 2 1/2 months the inventory of Oroville listings has shrunk over 12%.

I expect this number to continue to work its way lower as the coming “panic” among buyers to beat the clock to the $8,000  federal tax credit continues to emerge.

More Data

OROVILLE PROPERTIES GRIDLEY HOMES CHICO HOMES PARADISE HOMES LISTINGS FOR SALE