For those of you unfamiliar with Kelly Ridge, it is a nice community overlooking Lake Oroville and Bidwell Marina; with a 9 hole golf course intertwined among many of the homes. For the most part it is a quiet neighborhood and pride of ownership is evident as you drive through the community’s winding roads.

As with nearly all subdivisions of this nature, there is an active homeowners’ association (HOA) there, as well as a document called Conditions, Covenants, and Restrictions. (CC&R’s) recorded on each lot in the subdivsion. These CC&R’s are basically a set of rules established as a means of insuring a certain conformity among the homes in the subdivision, which in turn protects the integrity of the subdivision and helps in maintaining property values. For example, most CC& R’s that I have read over the years set minimum lot sizes, minimum square footage requirements, prohibit livestock, require that your RV be parked out of view of the street, and so on. For the most part, the CC&R’s in this area are not as restrictive as they are in the more urban areas, but are just restrictive enough to do the job they were intended to do.

The enforcement mechanism in these CC&R’s is generally the homeowners of  the subdivision. If a homeowner notes a violation then he/she can normally take action to enforce the correction of the violation. In cases where there is also a homeowners association in place, the association itself can usually act to enforce the CC&R’s.  If the violator fails to take corrective action, the complaining party, through a civil action, can ask a judge to force the violator to comply. As human nature would have it, there are sometimes instances in associations such as these where some get “too big for their britches, ” (as my parents used to say)  and, in their own mind, become “Mayor” of the subdivision. Fortunately for the Lake Oroville real estate market, there are  not many HOA’s in the area, but the 2 or three that we do have, have demonstrated, for the most part, a fairly reasonable approach in the administration of their duties.

But, as they say, the times they are a changin’.

The most recent newletter published by the Kelly Ridge Estates Owners’ Association (KREOA) contains what I view is a very disconcerting column regarding a new enforcement program they are implementing to address CC&R violations.

Now, before I continue, I want to be clear here that I am in total support of  homeowners that want to see their neighborhood properly maintained. It is, after all, in everyone’s best interest that this be so. I just think this may be a heavy-handed approach that has the potential of causing a lot of unnecessary strife.

According to the newsletter, KREOA,

 “……will contract with a person who will do as complete exterior inspection as possible,” to “identify CC&R violations on homes listed for sale and foreclosed homes owned by banks.”

“Both buyer and seller are to be notified that escrow will not close until corrections are complete.”  “…..the notification letter will be sent to the escrow company handling the  sale advising that they are not to close until we verify that corrections have been made.” 

Sounds harmless and reasonable you say?

Maybe it is. But I do not think so.

Look who KREOA is targeting with this: “homes listed for sale and foreclosed homes owned by the banks.”  Why are they not targeting ALL violators? Why are they engaging in discrimination in their enforcement of their rules? I will tell you why….because it is an easy target.  But will it accomplish their goal or just prolong the process of getting the neighborhood in compliance?

For example:

What happens to the elderly widow who is trying to sell her house in order that she can move to an assisted living facility and needs every penny she can get out of her home in order to pay for her care?  Let’s say she has her house on the market and has a buyer for her home who is willing to comply with any repairs that KREOA insists on being done. Because it is inadvisable that a buyer make repairs to a home that the buyer does not yet own, and the seller simply has no funds to pay for the required repairs,  the repairs can’t get done  and the house cannot sell. So the transaction dies, the widow takes the house off the market, and because the focus of  KREOA is only homes listed for sale, the repairs never get done! Are you following me on this???

Here is another thing that KREOA is getting ready to do: They intend to hire someone to go out to the County of Butte Building Department and research building permits to see which homeowners have not pulled the proper permits when repairing their homes. Shades of Big Brother??????

It seems that KREOA has decided it is in the best interest of the neighborhood if they establish their own informal Kelly Ridge Association Patrol force (my words, not theirs)

Over reaction you say? I thought that too when I first reacted to the newsletter. Until I read  this sentence in the newsletter that I think portends a coming conflict:

“If you have a problem with a neighbor leave a message at  589-**** and it will be handled by one of the Directors.”

In other words, if you don’t like something your neighbor is doing, like, as the newlstter says, leaving, “excessive amounts of dog poop in a yard constituting a health hazards (and driving neighbors off their decks to in homes with windows shut), call what I am now calling the Kelly Ridge Association Patrol People  (K.R.A.P.P.) and it will be handled- whatever that means!

I wonder if all of the Director’s homes are in compliance? If not, I wonder how they are going to ”handle” it when they find K.R.A.P P. on their doorsteps. Or do they only intend to send a bunch of K.R.A.P.P.  their neighbors way!!!!!

There goes the neighborhood? I certainly hope not! 

But during my number crunching I realized that it  has been a while since I had updated my charts that I have been using to track the monthly and annual Lake Oroville home sales. 

After updating these charts I noticed an interesting long term trend in one of the charts that I thought you needed to see. From past blog posts, you all know that I do not take the  month to month numbers that are released into the media on an ongoing basis as important as what has happened over longer periods of time. I think the media is far too focused on what this month did compared to that month, which in turn has focused the consumer on the very same thing.  This narrow focus is what I believe is going to cause many buyers to miss  the great opportunities that currently abound in the marketplace as far as prices and interest rates are concerned. 

Now before you get excited, thinking this is another one of those real estate blogs posts that tells you to BUY NOW!!!!, let me tell that it is not. This market is going to provide great buying opportunities, for those of you that still have jobs in this economy, for the foreseeable future.   What I am telling you is to look at this chart and see for yourself what this Lake Oroville real estate market is whispering to you. When looking at a chart like this most people look at the peaks to see how high things have gone. What I suggest that you look at here is the lower side of this chart. The former stock broker in me says ignore what is happening in the high side and pay close attention to what is happening on the low side. In the stock broker world a stock that showed a trend of higher lows was one to pay attention to and was a good signal that the stock was poised to move to higher highs.  (Click Here or on the Chart to Enlarge)

As indicated on this chart, the number of homes sold on a monthly basis in the Lake Oroville real estate market have been setting higher overall lows since 2008. The indication here is that, as far as the number of Oroville homes sold is concerned, the worst appears to be over and if this trend continues we will eventually begin selling units at a higher pace than the pace at which new listings are coming to market.  It will be this difference between supply and demand that will result in an increase in values and prices. Let’s be clear here. We have a LONG way to go before any appreciable change in prices and values. The current state of our local, state, and national economies are now the main cause of the drag on the market. Unemployment has now surpassed the loan scandals of the past few years as the culprit for this ugly market.  

Hopefully, information like this will keep you from being surprised while thinks SLOOOOOOOOWWWWWLLLLLLY gets better. 

 Now, normally I would proclaim to all of you in the Lake Oroville real estate market that all real estate is local and that it is much more important to stay in tune with the local home sales numbers as opposed to general reports on the market. While this is still my philosophy, I do not think it is at all wise to IGNORE reports on the broader markets. After all, it is the broader markets that get the media coverage when it comes to just about anything real estate these days. Like it or not the media has a lot of influence on the consumer’s psyche that helps in creating the mindset that consumers are using when making decisions on whether to buy or sell a home.  If you are a regular reader of this blog site that serves the real estate housing markets of Oroville, Chico, Paradise, Yuba City, and Marysville California you know that I do not believe any improvement will occur in this housing market until we have two things: Employment and consumer confidence.

It is becuase of the latter of these two vital ingredients that I want to share excerpts from the article posted on DQNews.com.

The number of California homes that went into foreclosure fell to a four-year low last quarter, the result of a more stable housing market as well as policy changes in the mortgage servicing industry, a real estate information service reported.

Last quarter’s activity was the lowest for any quarter since 53,493 NoDs were recorded in the second quarter of 2007. It was well below half the record 135,431 default notices recorded in the first quarter of 2009.

A total of 56,633 Notices of Default (NoDs) were recorded at county recorders offices during the April-to-June period. That was down 17.0 percent from 68,239 for the prior quarter, and down 19.2 percent from 70,051 in second-quarter 2010, according to San Diego-based DataQuick.

Mortgages were least likely to go into default in San Francisco, Marin and San Mateo counties. The probability was highest in Kings, Sutter and Yuba counties.

Trustees Deeds recorded (TDs), or the actual loss of a home to foreclosure, totaled 42,465 during the second quarter. That was down 1.4 percent from 43,052 for the prior quarter, and down 10.9 percent from 47,669 for second-quarter 2010. The all-time peak was 79,511 in third-quarter 2008.

Last quarter’s trustees deeds total was the lowest since 35,431 were filed in fourth quarter 2010, and the second-lowest since fourth quarter 2007, when 31,676 were filed.

Now, let’s be clear here. Even with this “encouraging” news, we have a long long way to go until the real estate market is healthy again. But it is important to understand, especially for you buyers out there who are still waiting for things to go lower, that this market is so beat up right now that, if this type of news consistently continues over the next two or three quarters, it is very possible to see some firming up of prices and maybe even some very modest price increases.  Just food for thought.

 It is good to see the sales volume for Oroville homes sold to break through the $1 million mark. Inventories are holding steady but remain at nearly a 2 year low.  Unfortunately, for Oroville sellers, bank-owned properties, as a percentage of total Lake Oroville listings, are still the highest they have been since I began tracking these numbers.

You can also access this weekly report at my facebook page: REALTYWORLD.CA

The Federal Housing Administration (FHA) is extending the waiver to the onerous rules that prohibit FHA insured loans from being used for the purchase of homes that sold within 90 days of being acquired by the seller.

Under the rule, if a seller has owned the home for less than 90 days and the sales price is more than 20% higher than what the seller originally paid for it, then FHA would refuse to insure a loan for it.  Apparently FHA feels that it is “predatory” sales practice to make a profit on the sale of a property that you may have purchased at an opportune price.

With home sales sagging FHA decided last year to mostly waive the restriction on the practice of “flipping” through January 31, 2011. In other words, they decided that through January 31, 2011 they would allow the free market to work.

In a very smart move, with the expiration date of the waiver looming, FHA has extended the waiver for the balance of 2011. While there are still parts of the regulation which hinder the sales of flipped homes, the extension of the waiver is a wise decision and the FHA is to be applauded for its effort to free up the free market.

If the agency would prefer a standing ovation over simple applause, it should do the right thing by getting rid of the silly rule all together.

Related articles

• Relaxed FHA ‘flip’ rules prove no flop (seattletimes.nwsource.com)
• Rehab Flips Making a Comeback During the Housing Bust? (seattlebubble.com)
• Doing Flips Without Falling Down (homeloans.org)

Related articles by Zemanta

• Existing Home Sales Settling Down (seekingalpha.com)
• February real estate sales up sharply (cbc.ca)

If the current activity in the office of our Oroville market is any indication we may soon be seeing a change in these sales numbers. Our Oroville agents have been very busy this week showing property and writing offers. It is good to see that maybe the spring-like weather is bringing buyers out.

If you are thinking of selling, now might be the time to get your home on the market.

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