Tag Archives: short sale

The Cosmic Tumblers Fall Into Place

A fortuitous week  wandered by this week.  Just when I needed it.  Just when everything I thought I knew about real estate seemed so ill-conceived and out-of-touch.

What a pleasant surprise. That once-familiar feeling of all the cosmic tumblers falling into place.  The window opening.  A fresh ocean breeze blowing in off the Bay.  Reminding me why I love living and working here.  For one brief moment, the biorhythms of the entire planet all jogging peacefully together along the road of life – in complete and utter sync.

Yes, Virginia.  There is a profession called Real Estate.   And it can be a beautiful one.  It is alive and…well…sorta finding its way.  Occasionally Santa does show up in Santa Cruz to bestow the gift of  mindfulness on some of us needy souls effected by the sonorous fugue that’s straining  the collective real estate of mind psyche.

There it was. A blast from the past.  An actual win-win transaction where everybody was ceremoniously left standing, relaxed and happy. Instead of reaching for their blood pressure medication, enrolling in anger-management classes or taking an enforced sabbatical in a decompression chamber or sensory deprivation tank.

We’ve all gotten used to existence in a lose-lose market.  Not even a win-lose market where Buyers are satisfied and Sellers aren’t. Or even a lose-win market that has Sellers doing cartwheels over properties littered with the remains of would-be Buyers.

Nope, this is the market where no matter what a property sells for, Buyers feel like they paid too  much.  And  Sellers?  They got too little no matter what they got.

Lose-lose.  If you’re down long enough, it starts looking like up.  You begin defining good news as the absence of bad news. Like unemployment rising at a slower pace.   Or prices falling less precipitously than they were.

So…yep. This was one transaction where no one lost their home.  There was no pall cast over the proceedings by months and months of some suddenly poor someone struggling to hang onto their crumbling dream castle.

There was no eerie sense of displacement oozing out of the pores in the sheetrock.  That  anti-feng shui effect that washes over you when you visit a home and almost every single thing has lost its sense of place? Leaves a creepy set of karmic cooties in its wake. Even the pest control guys haven’t figured out how to treat them yet.

There was no tortuous short sale subplot here.  No detached first lienholder trying to force a squirrely second lienholder into submission.  No short sale negotiator having to navigate the minefields of a broken system with exacting precision and numbing patience.

No Buyer wrestling their own lender in an exhausting steel cage death match.  The Buyer and Seller agreed on a price and the out of town Appraiser found comps and agreed with them.  It used to be called market value.  Not even a review appraisal. Or a remote viewing desk appraisal from some cube farm in the Midwest populated by men who stare at comps.

The escrow folks were relaxed. No mad rush to tie up loose ends. No strange title twists. No friction between agents.  No odd what-ifs popping up in the inspections.  No litigation in the Homeowners Association.

Everybody was just happy.  I confess to being a little out of sorts.  I was gearing up for another knock down drag out.  Gritting my teeth.  Trying to get into the painful grin and bear it mode that passes for real estate zen these days.

But the Buyer and the Seller each, almost perfectly seamlessly, got to where they were trying to get to. Namely the next stage in their lives.  You know, like in the old fairy tale world of real estate.  People making life transitions – moving up, moving down, changing jobs, getting older, having twins, getting married.

The Buyers had to compete but they didn’t mind because they had 7 offers on their house. And the Buyer for their place had just taken a great new job in Silicon Valley and got the house he wanted in the right school district.

So let’s see…  there was the Buyer of the Buyer’s house.  The Buyer. The Seller .  The house the Seller bought.  The Seller of that house. And the  Seller of the house that that Seller bought. If we aren’t careful,  this kind of thing could catch on.  Like some kind of benevolent virus or something.   Infecting the market with all kinds of positive momentum.  Before you know it…everyone could be buying and selling houses

I’m not one of those agents who thinks that the entire market has turned around just because they closed one escrow that week. But indulge me please. Let me ride the short term high for just another few days or so.


Entering the Twilight Zone

Funny what we Realtors stumble across while we’re out there making the rounds on our regular house calls.  Neither rain, nor sea-level snow, nor gloom of market, nor $4 a gallon gas staying us from the completion of our appointed showings.

Funny ha-ha. Funny-weird. Funny-sad. Funny-ironic. It’s all there.   All grist for the mill.  All constant reminder that surely there must be some lesson in this.  Something of value that can be dredged up out of the murky depths of the underwater housing milieu we are swimming around in.

Even if it isn’t going to be home value for the time being.  And even if it isn’t clear what else on earth it could possibly be.

I was previewing a new listing the other day. Another short sale that just came on. One of those places that sold way, way back (further back than we know) in 2005.  The peak of the market that has subsequently flip-flopped to become such a huge black hole for so many.

Specially now that home prices have supposedly regressed all the way back to  2000.  Flipping houses indeed.

Sometimes it feels like the perfect plot twist for an old Twilight Zone Episode.  All that build up to Y2K.  The millennium bug.  In the end, the end of the world that we speculated about and imagined for ourselves just kind of fizzled out with a whimper. Became a no-show. Missed us by a million miles. Far worse than the Comet Kohoutek ever did in 1973.  New Years Eve struck and there was barely a glitch in the stitch of time.

Except now, I gotta go back and ask the question. Did all those computers controlling the planetary alarm clock really get screwed up after all?  Do we actually have our dates all wrong? Did we oversleep and just dream the whole first decade of the new millennium?  Did any of this really ever happen in the first place? Are we just now waking up with a hell of a hang-over after partying like it was 1999? Somehow thinking there was no tomorrow?  (Play Twilight Zone Theme Song App.)

Sorry, my real estate of mind tends to wander to obscure locales while my body is traveling en route and in rote between houses.

Anyway, I was on my way to preview this place. The MLS printout said the owner’s name was Rich. And the comments mentioned that Rich had pumped a lot of additional money into the property after he bought it.   Making repairs. Upgrading features. Customizing the architecture of his original vision.

Insult to injury.  An all-too common story these days.  One that should be getting old  but isn’t.

I arrived at the house. Parked.  Respectfully knocked to see if there was anyone home, before going to get the key out of the lockbox anchored to the hose-bib.  Just as I was fumbling with the knob,  getting ready to enter,  the door swung open slowly, hesitantly.  The barest hint of an ominous creaking sound.

And there, standing in front of me in the entryway, was a tall, sad looking 40- something fellow  holding a cardboard box stuffed full with a mish-mash of discombobulated lamps and picture frames.   Clearly he was on his way out.

Momentarily surprised, not wanting to seem like one of those pushy Realtors invading someone else’s private space, knowing that short sale situations are lose-lose and ofttimes tenuous , I blurted out in my best, smooth-talking, real estate agent voice:  “Are you Rich?”

Right on cue, without missing a beat, no hesitation to speak of, with perfect comedic timing of the rare but subtle gallows-humor sort,  he said without blinking:  “Not anymore. I used to be rich.”

And all I could respond with was silence. One of those occasions when a word is actually worth a thousand pictures.  Specially when it so eloquently sums up all those short sales continuing to flood the market.


There Ain’t No Cure?

Here we are. All Quiet on the Western Front. And just about every other inch of frontage along the Maginot Line of the marketplace too. Way quiet.

In the softening fog of our Mid Summer’s Dream we’re running around like chickens. We don’t know where we’re headed but we’re staying busy, hurrying up and waiting. Waiting for Good Dough to arrive. All addressed up with nowhere to go. We’ve made our lists and checked them twice. At what point do we just Puck the whole thing, a la Shakespeare Santa Cruz, and observe with self-induced irony: “What fools we mortals be”?

What’s next? If more market doesn’t show up soon we’re likely to find ourselves moving in even slower motion, in the middle of the Doggier Days of August. And if that happens, we’ll probably end up migrating towards the fall, tails between our legs, feeling both snake-bit and flea-bit – by the sheer indignity of it all.

Who knows? Suffice to say, all those cars backed-up, bumper-to-bumper towards Scotts Valley, aren’t waves of weekend buyers streaming into town to search for perfect little beach-blanket bungalows. Most of them are coming to ride the roller coaster. The real one at the Boardwalk – not the real estate one on the Monopoly Board that has gone south for the summer.

Yes, it is true that more homes sell in the summertime. And this summer probably won’t be an exception. But conventional wisdom obscures another unconventional truth residing in darker shadows cast by the sun. That truth is: There are always more homes that don’t sell in the summertime too. Think about it. If 20 more homes go into escrow this month, does that balance out the 120 new ones that come on and jump on top of the mounting pile of un-sold properties sitting idly by, twiddling their thumbs and thumbing their noses at their Sellers’ best laid plans and aspirations.

Looking back over the ups and downs of these past months…March came in looking like it might be a lion. A glimmer was there that was hard to grab hold of – but it felt good. Hope was ready to spring eternal. We set our internal clocks ahead towards a brighter future. It wasn’t exactly multiple-offer mania fueled by steroids and liars’ loans, but it seemed like enough buyers were chugging enough extra cups of caffeine to register a more detectable pulse on the market’s shaky Richter scale.

But not enough fools were rushing into the market by the first of April . Too many were holding back. Fearing to tread. They were taxed. Not by the IRS. Rather, by their own what-ifs and worst-case scenarios. And sure enough towards the end of April the market was already going out like a lamb. Exit stage left.

In May, we all crossed our fingers and shouted MAYBE! As de facto Tauruses, we were bullish. The market would grab itself by the horns, carpe the dinero and find a way to get much better, much faster. We trotted out stats to prove how much better-er it was all getting. Of course, most of the sold data we materialized was already old news – trailing indicators from transactions that had started in and around, oh, say March or so.

Then there was June. About all that rhymes with June as far as the real estate market is concerned is SWOON. We may have been polishing those shiny new listings with hype and filling our open house balloons with helium but the majority of those million dollar listings are glistening like jewels of denial right now and the air is slowly going out of the inflated list prices those balloons can’t seem to hold up.

As for July – I’m just going to ask WHY. Why aren’t buyers beating down doors to get at the huge window of opportunity that has opened, with interest rates about as low as they can go, here in limbo land? This is everyone’s chance to dance. Get in and get under the bar set by their fears. Three or four months ago, there wasn’t a mortgage broker alive who thought we’d see rates under 5% again.

So maybe we’ll be singing the Summertime Blues for awhile. I hope I’m wrong and that all the smiley-faced spinmeisters are right. As the new real estate blues song says: “If it wasn’t for short sales, we wouldn’t have no sales at all.” Just our luck – a market defined by a double oxymoron. Short sales aren’t short. And so far, very few have actually sold. They are simply homes stuck in the pipeline with no sunlight shining at the end of the tunnel.


My Brain on Real Estate

It’s not even noon yet and my synapses are already misfiring on all cylinders.  The steady stream of data coming in feels like a bunch of square pegs trying to shove themselves into a dart board full of small, round, empty holes.  My right and left hemispheres might as well be ships passing in the night of day because my deepest gut instincts are in direct disconnect with the spin of information  orbiting a world that’s already wobbling woozily around on its own axis in full tilt boogie.

There’s an image of Adam Smith’s invisible hand of the marketplace, looming large on a video screen inside my head.  It keeps cracking eggs open into a sizzling frying pan while the voice-over in my inner ear keeps saying …”This is your brain on real estate…Any questions?”

Well…yeah. I’ve got some questions.  A  lot of questions.  That’s probably all I do have at the moment. Thank you very much.

Like…what happens when the bottom of the market is going up and the top of the market is coming down at the same time?  What do we call that? And how do we explain that to our clients? Do more and more people and places just get stuffed into a never-ending zone of price and property compression somewhere north of low and south of high?

How dense can it get in that space before the gravity of the situation gives – in one direction or the other?  Can the stirrings at the bottom of the market push the top back up? Or will the weight of all those pie’s hovering in the sky eventually get so heavy, they’ll force a carefully crafted façade of positive perception to fall to earth?

Is there a second dip coming to top off the cone of silence surrounding the shadow inventory of bank-owned properties getting held off the market? Not to mention the shadowier  inventory of  loan modifications not getting done, notices of default not getting foreclosed on, delinquent payments not getting issued notices of default and the next cycle of 5/1 Arm’s getting set (and reset) to appear right around the corner?

Why has the Mortgage Application Index (google it) fallen so abruptly at the same time interest  rates have dropped so remarkably low?  Money at 4.5%?!!  Weren’t they just warning us that rates were going to go up when the Fed Mortgage Purchase Program ended?

Shouldn’t the ranks of eager purchasers lining up to get their pre-approval letters be growing by leaps and bounds?  Aren’t more buyers out there chomping at the bit as summer inventory begins to expand right in middle of their very own buyer’s market?

And while we are asking the questions…even though it is probably true that the market is seasonal and the sellin’ is easiest in the summer when the catfish are jumpin’ and the cotton is high…isn’t it also true that more homes (as in a larger percentage of properties that are actually listed) don’t sell in the summer too? So which is it? Do more homes sell in the summer? Or do more homes not sell in the summer? Or both?

Is this just all about the end of the tax credit for first time buyers that expired on April 30th?   Would first time buyers  really have waited until the second or third week in April to get their loan applications in? Wouldn’t most of them have started their processes sooner?  Did we just move the time horizon up on purchases that would have otherwise happened later?  Like a cash for clunker homes program?  Was this just another version of all of us collectively kicking the can down the road to see if something else might happen in the meantime to pull our asses out of the fire?

Will the real, real estate market ever stand on it’s own again without huge transfusions coming from the Feds?  Or without interest rates being propped artificially down?  Will the private sector be able to make its own rain again? Without a house of cards built on liars loans and credit default swaps.?  Can it pick up the loose reins of laissez -faire even if it feels  very laissez-unfair in the short term?

Is there some secret escape route on the horizon the helps us get out of the Pavlovian Paradigm where we can’t help robbing Peter to pay Paul with yet one more hail Mary pass that leaves the answers blowing in the wind for future generations to figure out?

Time will tell. But not any time soon.  In the meantime, I’ve signed up to have my brain frozen at the cryogenics lab. Wake me up when we get there.


Bigger and Better and More April Fools

* (Read to the end and receive your free gift for playing the game)

It’s no secret. We’re living it. Real estate can fool ya’ in a New York minute. Some of the time. Most of the time. All of the time. Just when you think there’s a fastball coming right down the middle of the plate, the invisible hand of the marketplace alters it’s grip on the seams and throws you one of those really nasty curveballs instead. Even when your eyes are focused clearly on the pitch, you can still miss by a mile on occasion.
It’s April Fools week folks. Real estate is buzzing with a crazy kind of trickster energy that has us doubting established truths, looking over our shoulders, questioning everything getting tossed in our direction. Since baseball’s opening day is also coming up, you are all invited to step into the batter’s box while I step up on the pitcher’s mound. I’m going to check the dream catcher’s signs, take my wind up and deliver a few patented knuckleballs your way – in true trickster fashion.
Decide whether each of the following pitches is true or false and then log onto my blog (real-estate-of-mind.com) to see what your batting average is. Everyone will be rewarded with a take home souvenir just for playing the game.
•    To encourage consumer confidence, the Obama Administration considered calling this spring’s time change – Daylight Spending Time. False

•    A Homeowner has officially been redefined to mean someone with more than 51% equity in their home. False

•    A Million Mortgage March is being planned for mid May. Throngs of angry mortgagees are expected to descend on Washington to present the White House and both Houses of Congress with ceremonial Notices of Default. False

•    More than 35% of the homes in both inland and coastal California are now considered underwater. True

•    Recordings of Rush Limbaugh have been used to kill termites in heavily infested progressive regions of the Country. True and False

•    A disgruntled winner of a $2 million dollar Dream House Raffle sued a Bay Area non-profit recently after an independent appraisal proved the home was only worth $1.2 million. False

•    Enterprising Agents are buying midget-sized statues of the patron saint of homes, St. Joseph, and burying them upside down outside of their short sale listings in the belief that it will make those oh so tedious bank processes move a lot faster. True and False

•    The median income in Santa Cruz County only allows a buyer to purchase a home for $350,000 assuming they could actually scrounge up a 20% down payment and that they could actually  survive the rigors of a full doc loan qualifying process. True

•    Using credit scores to determine a borrower’s loan qualifications has been declared unconstitutional and a discriminatory lending practice aimed at redlining people who don’t pay their bills. False

•    The EPA has declared the Orlando and Las Vegas real estate markets Superfund Hazard Sites in a bold new move to jumpstart remediation efforts to clean up toxic assets all across America. False

•    Disney’s California Adventure Park plans to open a new attraction featuring an underwater McMansion Ride. Thrill seekers will attempt to get out of homes turned upside down by an unexpected rogue tsunami. It is loosely based on the hit 70’s disaster movie – The Poseidon Adventure.  False

•    Locally, more notices of default have been issued in the first three months of 2010 than there have been sales. True

•    Nobel Prize winning Economists have declared it impossible for multiple offers with buyers competing against other buyers to exist in a buyers’ market. True and False

•    The housing market is being called “the Vietnam War of the American economy” and a new syndrome called PTDSD (Post Traumatic Distress Sale Disorder) has been identified in a high percentage of former foreclosure and short sale participants. True and False

•    Unemployed actors in Southern California are being hired to occupy vacant homes and coached to go through the motions of being “real” Sellers to help “psychologically stage” and market Bank-Owned listings. True

•    A host of new online real estate courses are being offered for enterprising Agents anxious to earn flashy new professional designations. In addition to CDPE ( Certified Distressed Property Expert), new webinars are focusing on GGC (Greed and Grief Counselor) and CYA (Liability Aversion Specialist) accreditation. True and False
Your Reward for Taking the April Fools Test: A free ride on the real estate market roller coaster…have fun and hang on! CLICK HERE