Chico Real Estate Foreclosure Hotsheet

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Chico Real Estate Foreclosure Hotsheet

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Pre-Foreclosure Listings by Chico Realtor Sandi Bauman

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Chico Real Estate Foreclosure Listings by Realtor

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Chico Real Estate Market Report April 18, 2008

 by Mike Wiegert

While the rest of the world continues to shroud itself in a cloak of doom and gloom, our Chico real estate market appears ready, able and willing to go to the 15th round.

All type of media ranging from the daily newspaper to “expert” fiscal commentaries on various internet news services to regional and local blog sites are all assuming the role of a sort of economic Edgar Allen Poe. I can’t speak for everyone, but I’m not just tired. I’m exhausted, wiped out and drained by all the tales of woe that doomsayers consider newsworthy.

It’s time to stop assuming that just because a home down the street went through a foreclosure that this is the end of Chico real estate as we know it. As pointed out in previous “moments”, foreclosure sales nationwide only amount to seven tenths of one percent of all the households in our country. Due to the reseting of adjustable rate loans and a subsequent inability to pay by the borrowers on these loans, the rate of foreclosures is certain to rise. But with all the government and banking industry sponsored programs to assist these troubled homeowners, any foreclosure rates increases are assured to be negligible.

Let’s look at some hard facts derived from statistical reporting by our Chico Association of Realtors. Historically, the first quarter of every year is a “seasonal” slow quarter as many sellers and buyers anticipate the brisk activity of the spring and summer housing markets. The first quarter of 2006 statistics revealed 178 residential sales in all of the Chico sectors. The average market sold price for these sales was $361,166 giving us a total volume of sales of $64,287,548. The 2006 first quarter is considered to be one of the most active quarters in local real estate history. The first quarter of 2008 showed us 162 residential sales with an average Chico sales price of $336,926. The total volume of sales for this quarter was $54,582,012.

So let’s crunch some numbers and interpret this data. Using these hard numbers, sales in the first quarter of this year lagged fifteen percent behind the first quarter two years ago. When comparing average sales prices of these quarters we see that the average sales price of this year’s quarter is down seven percent from the average sales price of the 2006 first quarter.

Ask ten economists how much prices have dropped and you’ll probably get eleven answers but these local quarterly statistics are as good an indicator of pricing as any.

So it’s time for all you woe-begone town criers to blow your noses, put down your Kleenex’s and stop using sensationally negative national news to harm our virile local economy. For years people have asked me, “Mike, how does your town survive with little or no industry.” My answer, “Inexplicably, it does”. Over thirty years ago when I started in the real estate business the nay-sayers were out there. I was told this town would never survive. But it has and it will continue to not only survive, but thrive. I’ve seen many down cycles locally, but our area like many, always pulls out of it and experiences safe and positive growth.

Before we know it, these problems will be a memory and we will remember just how great it is to live in a place like Chico, CA.

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Will Buyers Benefit from the New FHA Limits?

Economic Stimulus or Stagnation?

by Mike Wiegert

After months of hopes and expectations our legislative and executive branches of government have come together to approve the economic stimulus package containing higher mortgage limits for both FHA and FNMA/FHLMC mortgages. Although this is certainly a step in the right direction, what affect does the new bill really have on our local and regional real estate economy?  More directly, will Chico buyers benefit??

In many instances, particularly in California we will see that the plan will provide limited benefits to specific geographic areas. The bill sets the FHA and conforming (FNMA/FHLMC) loan limits to the lesser of $729,750 or 125% of an area’s median home sales price. If 125% of an area’s median home sales price is below the current conforming loan limit of $417,000 the current limit still applies. In other words, you will not be any worse off than you are today. The area median home price is determined by HUD and is based, in part, on the National Association of Realtors data for each Metropolitan Statistical Area (MSA). In California there are 28 MSAs. Our local MSA is Butte County. With the latest figures of median home prices at about $344,000 in the Chico area and about $294,000 county wide, we are not going to see a real benefit from the increase of mortgage limits provided in the bill. Using the county wide median price statistic will not even bring us to the current loan limit and if the Chico area median price statistic is used, that only gets us to about $430,000.

Not much help!

The FHA and conforming limit changes are meant to be temporary and are set to expire on December 31, 2008 unless extended. The new limits will apply to 30 year and 15 year fixed rate, fully amortizing mortgages. So by now many of you that are continuing to read may feel that all of this has little affect on your home buying choices, and you’d be right. But for those looking to buy their second or third home to accommodate an expanding family, the insignificant end product of this part of the economic stimulus bill can have some major affects. Why? Because jumbo loans (those above the conforming limits) carry some hefty surcharges and increased interest rates. When you consider that an extra half to three-quarter of a percent increase in interest rate on a $600,000 loan equals about $250 to $400 per month, a lot of buyers are going to be looking for solutions. Adding on a number of costs and surcharges not common to conforming loans, the end result is the new bill doesn’t really do anything to help sales of upper middle to upper priced homes.

Again, I urge you to seek counseling with your trusted mortgage or Chico real estate professional to look at options when considering purchasing a home.

Now here’s some interesting statistical reporting: In the first six weeks of 2007, the Chico MLS reported only 2 pending (under contract but not closed) homes sales and 145 sold (closed) homes sales. The first six weeks of this year reported a total of 57 pending and 60 closed home sales in the Chico area.

The obvious statement these statistics make is that lesser periods of time do not give an accurate overall view of market conditions. It’s very common to have one month of considerable market activity and the next month can be sluggish. As stated in previous posts, while market activity has shown definite signs of slowing in recent months, sales of homes in our area continue to be brisk.

Whether you believe the market has bottomed out or not, you won’t want to miss some of the great Chico real estate opportunities available today. The interest rates are phenomenal!

Chico Homes Real Estate is located at 2580 Sierra Sunrise Terrace in Chico, CA.

Call Mike 530-624-3800 or Sandi 530-864-5407 today!

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What’s All This Talk About Short Sales on Chico Homes?

By guest author Mike Wiegert, Broker, Chico Homes

For Chico, CA homeowners that can’t afford to pay their mortgage, there is an alternative to bankruptcy or foreclosure proceedings – it is called the short sale.

The short sale really begins when you finally realize that your house just isn’t worth what it was just a few short years ago.

The next realization is that if you sell your house for what it’s really worth, you’re not going to actually get any proceeds back from the sale. That’s a big pill to swallow, but after you do, you might have the final realization that you’re really just starting from scratch like you did a few years ago. Back then, you’re credit was pretty good, you had your health, all your kids were fairly normal and you had a job. So rather than losing your home in foreclosure AND ending up with a terrible credit report, you think “I wish we could just be back to where we were back then.”

It’s at this point that a “short sale” might be the answer.

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs such as property taxes, transfer taxes and commission.

In other words, what a buyer might be willing to pay for your home isn’t going to cover what you owe on it and what it’s going to cost you to sell it. Unlike a foreclosure, a short sale can keep the homeowners credit intact. The first step is to do some research a find a Chico, CA Realtor that knows the Chico real estate market and has had experience and success in the short sale process. Your Realtor will need special skills and a persistent attitude in dealing and negotiating with your lender.

Banks are not in the business of owning and marketing homes and many would much rather discount the current amount of their loans than have to go through the process of marketing and holding a property in a slower market. This lender attitude will certainly grow as the number of foreclosures and repossessions increase. Conversely, the popularity of buying in the short sale market appears to be spreading rapidly.

Be advised, before you contract with any Realtor to market your home utilizing a short sale concept, you should consult a real estate attorney for the legal implications of the short sale and an accountant about the tax liabilities involved in the short sale.

You must understand everything upfront before the short sale process begins- look to your Chico CA Realtor for assistance.

1. You must prove to your lender that you are unable to afford to pay your mortgage.

If your lender is aware that you possess certain assets such as stocks or bonds, or you have a high paying job, your lender may require you to sign a note promising to repay at a future time any discount of what you owe that they make in the short sale. If you do not possess these types of assets or your job clearly indicates that you would not be able to repay such a debt, it is possible it may be forgiven.

2. Next the lender will appraise the current market value of your home.

The lender, with the help of your Chico, CA Realtor will calculate the amount of the outstanding debt and the customary costs of selling. If the proposed short sale will bring them more money than they would get during auction, the lender will mostly likely agree to it. End result, you didn’t pull the equity out of your home that you might have thought you had, but your credit is still intact, you’re out of a mortgage payment you can’t afford and the dream of once again owning a little corner of this world still burns brightly!

If you find yourself in a situation where your payments are are becoming too much to handle, please contact us at Chico Homes! We may be able to assist you in selling your home and avoiding a credit-destroying foreclosure.

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Looking to buy or sell Chico CA Real Estate? Need a Top Producing Chico CA Realtor? Call Sandi Bauman 530-864-5407 or email [email protected] Specializing in REO, residential, relocation, investment & ag property.

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