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With prices continuing to decline in the Fresno Real Estate Market buyers are shuffling into the market. Anyone who has read my blog in the past (say since this time last year) knows that I have advised extreme caution and repeatedly stated I believed prices were going lower.

At this time last year sales were abysmal, inventory was peaking (it actually hit a peak in Sept of 07) and prices were substantially higher.

Here are couple of graphs taken from the FAR Grapevine that will help you to see what is taking place in the Fresno Market.

I don’t think anyone really knows where the bottom is with respect to prices but statistics indicate to me — AGAIN, as I have previously stated in other blogs — we are bouncing along a bottom. The only thing I dont know is if this is THE bottom. I certainly hope that it is and that the market is able to mend from here.

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I think the most significant aspect of lower prices is that for the first time in many years I am seeing homes that would actually pencil out as rentals and give the buyer a return on investment. If the bank cant attract a retail buyer for a particular property, or the property is in such poor condition that banks will not lend on it, then the bank is forced to sell to an investor and the smart investor does not want to buy unless he can get a decent return on his money invested.

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Anyone who knows anything about the Fresno Ca real estate market knows that we have substantial supply of lender owner properties for sale. Here is one listed by Lazarus Realty that just had a substantial price reduction. The ask price was 118,500 and was recently reduced by the lender to $95,900.

If you would like to preview this home or make an offer on it - Call me @ 559-301-1647

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Sunday’s Fresno Bee reported that home sales in Fresno are indeed picking up. I read the news and intended to comment on it but even if you ARE the blogging broker you still only have 24 hours in a day. Then last night ABC 30 did segment on the market. Unfortunately, I’m not able to embed the video into my blog but you can go here and see/read the story.

I will add that besides the sales being UP as they mention, the *MSI (months supply of inventory) is WAY DOWN from what it was in the fall of last year when I began reporting the numbers. In September of 2007 the MSI was at 20.2 months. In April the MSI was down to 6.3 months. What an improvement!

As I’ve stated before, the numbers show we hit a bottom in November of 2007 - and AGAIN - whether or not this is THE bottom I can’t tell you. But the numbers are improving and it would be nice to see things continue like this.

Lazarus will be out showing homes this evening and hopes to write and OFFER THAT STICKS

If you are looking to area, call me, Lazarus @ 559-301-1647

*The MSI is calculated by taking the number of properties listed on the last day of the month and dividing it by the number of solds in that month

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The aforementioned slashing of prices by the lenders, which has only just begun, is bringing out the “investors”; bottom feeders who seek to profit from plunging prices. Personally, I would be happy to have a balanced market where buyers and sellers play an even hand. This sign is posted at the corner of Bullard and Fruit, in my neighborhood. The market weakness is arousing the passions of the “get rich quick” crowd. NOT GOOD imo.

If you would like to make an offer on an Foreclosed property in the Fresno / Clovis area contact me. Lazarus @ 559-301-1647

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…is how Miss Manners title would this blog. What I really want to say is:

HEY YOU DUMB S.O.B. WTF ARE YOU WASTING MY TIME?

SO, you might get the idea that I’m a little pissed. I AM.

I called an agent today to check availability on a home. He just happened to be the SAME agent that had the home listed in this blog so I wasnt going to show the home unless I knew for sure it was available. I called both his office and his cell and only got his voice mail - so I left a message asking availability. For whatever reason my phone did not ring when he called back so he left a voice message telling me ONLY that the home is ACTIVE.

My client and his wife are first time home buyers approved for an FHA loan and looking really hard to find something in their budget. They brought this particular home to my attention and they read the same single-line marketing description that I did:

“3 bed 2 bath in estabished neighborhood. Great starter home or investment.”

Ok — nothing in the Agent Remarks to warn me about what I am about to take my clients into. Nothing in his voice mail prepared me for it either. The house is TOTAL DISASTER. Grafitti in every single room. Graffiti on the counters, graffiti on the stove, graffiti on every cabinet door (the ones still attached). Every back window boarded (I think they were all broken). Holes punched in the walls. Sleeping bag(s) in one of the rooms as evidence that transients had been using it for shelter. By far the WORST REO I have ever seen. I wish I had my camera with me so I could show you what I saw.

Why would you say that it’s a “Great starter home”???

Who would finance that home. It wont appraise for anywhere NEAR the ask price. WTF— cant you just let the public and other agents know THE TRUTH? Is that too much to ask? Is truthful dealing and uprightness beyond you? APPARENTLY SO!

CONGRATULATIONS! You succeeded in getting another showing of our property which you can now report to your lender in your weekly communique. But at what expense? You further damage your reputation with me. I have to believe that every agent who has believed your one-liner LIE feels exactly the same as me.

My friend Stan Tucker who who encouraged me to get into this business (he died last year of brain cancer) told me your agency was EVIL. We are not supposed to speak of other agencies in this way — but I BELIEVE HIM.

A POX ON ALL YOUR ESCROWS!

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Here are a few factoids gleaned from the Grapevine which is the weekly publication put out by the Fresno Association of Realtors.

Total sold properties has gone up every month since November 2007 (with the exception of February).

The November low was 254  closed transaction

March 2008 there were 299 closed transactions

Of the first 191 closed transaction in April - 38% were REOs

Here’s a little secret.  the F.A.R. website is for Fresno Realtors however if you go to the website and look in the upper left hand corner you will see a link to download the Grapevine in PDF format. Just click the link and you too can say you “HEARD IT THROUGH THE GRAPVINE”.

And dont forget to subscribe to my blog, just enter your email in the “subscribe’ box in the upper right hand quadrant of this page.

And PLEASE, by all means, dont forget to call Lazarus when you need help buying and selling real estate in the Fresno - Clovis area.

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Not long ago I gave the bleak statistics on closing of SHORT SALES on our Fresno MLS.  Yesterday I spoke with an agent at another brokerage and he told me that he submitted an offer on a Short Sale in February and was recently told by the lender that they still haven’t assigned an asset manager to review the file.  He just made another offer on a Short Sale property and spoke with that lender and was told it would likely be about 3 months before the file would be reviewed and more months after that to finalize paperwork if it was accepted.

The majority of offers on Short  Sales are simply a waste of time.   If you’re an investor looking for a bargain don’t even waste your time on a short sale; spend it looking at REOs or properties in which the owners have a significant equity position.

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Lately I have had the unpleasant opportunity of speaking with people who are in the process of losing their homes, some of these people are Realtors®.  In most cases their credit has been completely destroyed and they will have to rebuild/repair it.

This evening I read a blog by Aaron Gordon, a Home Loan Consultant in Las Vegas Nevada that addresses this issue and I asked his permission to republish his content on my blog.  Here is what Aaron had to say:

People ask me weekly, “If I let my home go into foreclosure or sell it in a short sale, how long until I can buy again?”  

The answer is…. a long time.   Plan on a minimum of three years and as many as seven or more.

Fannie Mae, the largest backer of mortgages in the world, recently sent a harsh message to borrowers for walkaways and other foreclosure situations.    

Plan on waiting five years and then having good credit and a nice sized down payment.

The walkaway trend is popular here in Clark County (Las Vegas) and other areas where many homeowners find themselves upside down on their loans.  These people owe tens of thousands more than the current market value of their houses.  

In some cases, they are upside down by hundreds of thousands.

Some homeowners, who put little to no money down, think they may be throwing good money after bad. So, even if they can still afford the payments, they are simply choosing to walk away.

Fannie Mae will now prohibit foreclosed borrowers from getting another mortgage through them for five years, unless there are “documented extenuating circumstances.”  In those rare cases, you can buy again after three years.

No word on if this is the same on “settled” accounts like short sales, but most experts say to expect the same guideline.

Extenuating circumstances are life events that are “out of your control” that create a financial crisis, like death of the primary wage earner, medical-related illness to the primary wage earner or, sometimes job loss of the primary wage earner.

Extenuating circumstances are judged on a case-by-case basis and are challenging to prove.  You will have to document this tragedy through death certificates, medical records, letters from the former employer, and you will have to prove that this event, and this event alone, this led to your financial demise.   

It’s not a common exception and underwriters are usually pretty skeptical when faced with it.   Be prepared to provide an extensive paper trail of documentation.

Getting in a bad adjustable rate mortgage or the market turning downward is not an extenuating circumstance.

Even after five years, Fannie Mae will require borrowers with foreclosures to make at least a 10 percent down payment.  They will need a minimum FICO credit score of 680 for a new loan.

Freddie Mac counts foreclosures for seven years.   FHA is currently at three years but it is expected they will increase this soon as well.

The bottom line, once again, as I keep preaching, is to avoid foreclosure and short selling when possible.  There is nothing positive accomplished from either strategy.   Note modification is the way to go.

If there is no way to avoid the foreclosure or short sale, plan on renting, leasing or leasing-to-own for the next three to seven years

____________

If you are considering a Short Sale on your home and would like some help CALL ME - I’m not an expert (I don’t know any agents that are) but I will do my best to help you.

Lazarus @ 559-301-1647

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Back in January I said to be prepared to see your lender reduce or freeze your HELOC (home equity line of credit) altogether. This morning I’m reading an article that says that Wachovia and other lenders are doing just that. They estimate that there’s about a trillion dollars of this “rainy day money” that hasnt been tapped and that if homeowners do tap into it could mean more problems.

I also read that foreclosures filings jumped in March and that the worst is not over with respect to the resets on adjustable rate mortgages.

For those reading my blog - perhaps for the first time - I want you to know I am only relaying the news and the market conditions - I AM IN NO WAY GLOATING OVER THE MISERY AND SUFFERING OF OTHERS. I find no joy in reading bad news about our economy.

Looking to buy in Fresno or Clovis - Call Lazarus @ 559.301.1647

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