Chico CA Real Estate: On the Sunny Side!
May 24th, 2008 Categories: Chico CA Real Estate News
by Mike Wiegert
Last week at the National Association of Realtors (NAR) Midyear Legislative Meetings and Trade Expo, chief economist Lawrence Yun stated that home sales and prices throughout most of the country are poised for improvement in the second half of 2008 and that recovery will vary by market. Yun went on to blame the softening of the housing market last year on the “subprime mess”. Unqualified borrowers with scanty credit were given access to subprime financing with little or no equities. As these adjustable rate loans are being reset, borrowers find themselves unable to make the adjusted payments on the loans and subsequent foreclosures result. “In fact, if you look at where home prices fell the most, it’s the markets where subprime loans were prevalent,” Yun said. Cities with a high percentage of subprime lending are where the markets suffered the biggest downturns, he explained.
With these foreclosure sales thrown into the mix or data used to determine comparable sales in the market, the apparent market value of homes is pushed downward. An interesting twist to that situation is we’re now starting to see Chico homebuyers and investors competing for foreclosed homes. As a result, a sharp decrease in the margin between asking price and actual sales price is becoming evident.
Mmmm… let’s do the math: increased demand for foreclosure sales + increasing sales prices on foreclosure sales + market stabilization in the non-foreclosure market = market prices beginning to rise.
Is this all poppycock? Not at all! Many areas around the country are recently posting modest increases in sales prices. These areas include many portions of New York State, North Carolina, Washington State, Oregon, Wyoming and Utah. In fact, according to the Office of Federal Housing Enterprise Oversight (OFHEO) from January 2008 and February 2008 (month over month reports) overall U.S. prices were up 0.6 percent and 77 percent of the Metropolitan Statistical Areas in the U.S. reported price increases. Several markets that have seen price declines of 20 percent or so are turning around, Yun said, pointing to San Diego, Detroit and Fort Myers, Fla. Yun continued by forecasting that many mid-America cities such as Cincinnati, Milwaukee and Kansas City, MO are likely to experience home price gains in the 20 to 30 percent range over the next five years. Active markets like Miami, Las Vegas and Phoenix could go up as much as 50 percent in that time period.
Although the negative news-bearers continue to report what seems to be the overdone and worn-out stories of declining prices, there definitely appears to be a new day dawning.
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Foreclosures: What you should know BEFORE you make an offer, Part 2
November 16th, 2007 Categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Foreclosure Listings
This is part 2 in a series of helpful hints to purchasing foreclosures in Chico, CA.
Did you miss part 1? Read here.
Bank-owned property (REO) is some of the most sought-after Chico CA real estate of all time. In a market where many buyers are sitting on the fence waiting for the bottom to fall out, savvy investors are picking up REO‘s as fast as Chico Realtors can churn them out!
It is important, should you be considering purchasing a bank-owned (REO) listing, that you understand up front what exactly you’re getting yourself into. For the uninitiated, a look into the world of REO can be quite surprising. (In case you’re wondering, I don’t necessarily mean that in a good way.)
Before offering on a Chico, CA REO property, you should know:
1. Most REO property won’t leave you feeling all warm and fuzzy.
First time home-buyers are often gleeful when they get their first look at the home they will eventually buy. “It’s just so CUTE!” they declare. They oooh and aaah over the carefully groomed, staged and scented home visualizing Thanksgiving Dinners and Christmas trees.
REO property often takes a little more imagination. You have to try to pretend that the yard is not dead, the house isn’t lime green, the walls don’t have holes in them, the kitchen appliances and fixtures are actually there, and the flooring isn’t all torn up. That is, if you can get past the unbelievable stench and filth of lives gone horribly wrong.
To be fair, there are nice, clean Chico REO properties to be had- there are. But oftentimes, an REO house is one that shows evidence of severe neglect and outright abuse on the part of an angry or desperate previous owner.
2. Don’t expect the bank to pretty it all up for you!
The banks usually prefer to sell “as is.” Minimally, they will do an initial “trash out” to remove the belongings left in or on the property. In addition, they will re-key, board up windows, and winterize. It is unlikely that measures will be taken to add appeal- if the sinks, lights, appliances and windows are missing, they are likely to stay that way. Exception: if the buyer’s lender requires a repair (or 10) to fund the loan, the bank may negotiate the cost of the repairs. In a competitive REO market, however, they won’t need to do any repairs- a cash buyer will snatch it right up in it’s current condition.
3. The bank won’t tell you what’s wrong with the house, because they don’t know.
A traditional seller is required to provide you with a laundry list of everything they know to be wrong with the property. In the case of an REO property, the seller has never even seen the property, let alone lived in it. The bank has no idea if the handrail is loose, if there are barking dogs next door, or if meth was manufactured in the second bedroom. Make sure that you do any inspections necessary to ensure that you have a good grasp on the condition of the property- very little information will be provided to you by the seller.
Coming soon! What you should know BEFORE you make an offer, Part 3.
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By the way, if you like the yellow house in the picture…. it can be yours for ONLY $79,900! That is $55,000 less than any other stick built home in Paradise CA!!
Give me a call right away 530-864-5407– it’ll be gone quick.
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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