ARE YOU GETTING RIPPED OFF?

Across the country, people who need to have their locks changed go to hire a locksmith – and they are actually being ripped off. Here’s one example in Sandy Springs, GA. This has become a very serious problem and I want to make sure you and your family and friends don’t fall into this trap.

http://communitylock.us2.list-manage1.com/track/click?u=35eaa7ce272aaf29e09911071&id=43c0f1c83a&e=bac0d3238d

Here’s what’s happening: consumers are looking up locksmiths in the yellow pages or online. They think they are calling a reputable business when actually the number is routed to somewhere else, like New York or Florida. These people (who usually don’t have any license or special training) show up at your house to replace your lock. They typically quote 4 or 5 times as much as the current market prices.

The quality of work is sub par, and a lot of times the lock will need to be replaced because they are cheap locks, cylinders, and keys. Dozens of these “companies” are using fake addresses so that they can’t be traced and found, and their numbers get disconnected once any suspicion is aroused.

Fortunately, just being armed with this information is the most important way to make sure that it doesn’t happen to you or your friends and family.

Here’s how you can keep yourself safe:

• If you are in need of a locksmith, get a referral from someone you trust.
• If you can’t find a good referral, do some research and make sure that the address and company checks out. The police are not allowed to give referrals or recommendations, however the local chamber of commerce can.
• When you decide on a locksmith, make sure to get their license number and double check it with the California State Contractors License Board to make sure it is valid.
• If the deal doesn’t feel right, call it off.
• If you live in or near Anaheim, call Community Lock Safe & Service for your needs. Our locksmiths are licensed and have proudly served our community for over 30 years. It’s our job to help you keep your home and business safe.

Call me today if you have any questions.

HOMEOWNERSHIP: REPORTS OF ITS DEATH ARE EXAGGERATED

This headline was posted by the KCM Crew, authors of a blog for a real estate website called, "Keeping Current Matters."  It's a great name for a blog, because in real estate, keeping current does indeed... matter.  The above mentioned article randomly addresses the many negative articles regarding real estate, many of which have been published in local southern California papers.  This newsletter, although not political, strongly disagrees with scare tactics and negative ploys designed solely to sell papers.  After numerous recent articles all playing on the word, "scary", a pun on the Halloween holiday, let's level the playing field with some real numbers and let you, the discerning and intelligent reader, make up your own mind. 
 
Local papers would have you believe that the sky is, in fact, falling; real estate will never recover and will never be the same. More on that later, with some real numbers that are a little sobering.  But first, homeownership itself; is it dwindling?  Is it, "on its way out?"  Hardly.  In fact, pick up a copy of the recently released Fannie Mae 2011 3rd quarter National Housing Survey.  Both Generation Y (birthday mid-1970's to mid-1990's) and Generation X (mid-1960's to mid-1970's) have stronger beliefs in the importance of homeownership than those of the general population... yes that would be the boomers, and boomers have loved real estate.  It seems clear that as the economy improves, so will housing demand.

BUT DON'T BELIEVE THAT THERE IS NO DEMAND FOR HOUSING NOW

In fact, local associations of Realtors and Multiple Listing Data indicate that inventory is quite low.  Part of the reason sales have slowed is there simply isn't enough saleable product out there.   In this type of market, there will always be properties on the market that are technically available inventory, but simply have too many problems to overcome.  They need a particular type of buyer.  These properties can make it appear there is more inventory than is actually "saleable."  Frankly, it is surprising that people who can buy, have chosen to back away from the market because of predictions of a triple dip.  It's a "cost vs. buy" analysis.  If you believe in home ownership, its tax deductions, its features of durability and stability for yourself and your family, then prices coupled with interest rates should make for a fairly attractive picture.  Yes, prices could go down, but what it actually costs you, may never be better.  Also loan programs could change and availability could change, since lending has been very volatile.  But what won't change is the historic and undeniable return on investment that occurs in real estate every 10 years.  Sometimes the cycle is shorter; sometimes the downturns (such as this one) are annoying.  But check on a property, any property, and see what it sold for in 2000, and what its value is today, in the midst of our worst downturn.  REMEMBER THE PROMISE OF MORE ON THE TOPIC, "REAL ESTATE WILL NEVER RECOVER?..."
 

            REAL ESTATE AS A LONGER TERM INVESTMENT SINCE 2000

        DOW +6.7%          S&P -12%        NASDAQ -30%          REAL ESTATE +43%

THE SHIP APPEARS TO BE TURNING, OR HOUSE PRICES TO FALL OVER NEXT SIX MONTHS

Well, both are true.  October 31st, CNN Money reported: "Home prices headed for triple dip."  Fiserv (a financial analytics company), has predicted a 3.6% fall in prices on a national basis by next summer.  Now remember, southern California is a very different place than Las Vegas or Florida.  But still, nationally it means that the Case-Shiller Home Price Index is going to fall to 35% below its peak in 2006.  But what Ken Johnson, Ph.D. (Florida International University and Editor of the Journal of Housing Research) points out, is that the dip depends on circumstances being in place to lessen the impact that market anxiety causes.  What circumstances?  According to Johnson they are sometimes referred to as "housing affordability measures, and some of them are:  1) Price of income to the house 2) mortgage payment to income  3) buy versus rent analysis for various markets that encourage buying.  Did you know that the payments to income ratios are at a 30-year low in all 50 states?  Why haven't the local papers reported that?  The downturn in prices will bring more affordability factors into play for more people, especially the Gen Xers and Gen Yers, which is where the pent up demand is going to come from in the first place.

Also of interest locally to southern California is the best prognosis for recovery you can have: skilled labor, desirable location, and economic resiliency.

CENTURY 21 AWARD FEATURED IN THE NOVEMBER 2011 REAL ESTATE MAGAZINE

Have you seen David Romero's exclusive interview with RISMedia's Real Estate Magazine? Read our President and CEO's thoughts about a new brand of real estate professionalism and the hope for a better, stronger America:

"We understand that every customer has different needs, different goals, and differing communication preferences. Our job is to provide the best and most current insights and information for every buy and seller, and to be there fr them in every way along the journey." - David Romero

Click here for the entire article

HOME SALES PERK UP & PRICES FALL...NOT AS MUCH AS YOU MIGHT THINK

Orange County home prices rose 9.5% in August (the latest full month available) and that’s good news, no matter how the papers try to spoil it.  The papers posted that prices dipped to their lowest in 5 months, but that is a misleading quote.  Did prices go down? No.  Did the median price go down?  Yes.  There is a difference.  When you have nearly 400 more sales in one month, and the number of sales under $400,000 is nearly 4 to 1 to home sales over $700,000, your median price is going to fall.  It does not mean that prices dipped nearly 5% as recent headlines read.  In fact, even as prices fell in some areas by 1-3%, other prices rose depending on location, condition, and competition.  Homes that are in prime condition and properly staged to represent a home a buyer could picture themselves living in, are likely to garner over list price, especially if they are equity sales.  If the recent market has taught us nothing else, it is that buyers everywhere are tiring of the, “patience equity” achieved by hanging around for months during a short sale escrow.  They can last 3 months to a year.  Buyers are showing up in droves for properties that are in an equity position, prepared to pay a premium to be able to close in 30 to 45 days.  Sellers that are in that position, may well be in the driver’s seat, especially if the only competition in their neighborhood is distressed properties.  The exact numbers will be featured in a later paragraph, but here are some big numbers for the state: there were 37,734 new and resale houses and condos sold statewide in August.  The number of sales typically does increase from July to August, but to give it some context, the lowest July is 29,764 in 1992 and a high arrived in 2005 of 73,285.  It is easy to see we’re way above the low, but nowhere near  the high.  In fact the average is 48,344.  We do have a ways to go, but for some who remember the sting only California really felt in the early 90’s, it’s not your imagination, it was worse then,  than it is now.

HOME MAINTENANCE TIPS FOR FALL

As summer fades into fall, see our checklist to preserve the health of your home.

1. Clean the gutters: As you clear leaves, dirt, and pine needles from gutters, examine downspouts for damage. Check the flashing around your chimney and look for damage to the roof that may lead to leaks.
2. Change the filters: Change the air filter in your central air conditioning system or if you have a window air conditioning unit, remove from the window or place a waterproof cover over it to prevent damage. Change filters in stove vents, clothes dryers and room fans if applicable.
3. Drafty days: Evaluate the seal and caulking around the window frames to prevent losing heat in the winter.
4. Fix leaky faucets: Avoid broken pipes in cold winter months and repair leaky faucets in your kitchen, baths, and laundry room now.
5. Clean sweep: Examine and clean your fireplace damper and ensure the flue is operating correctly. A professional chimney sweep may be necessary.
6. In hot water: Often, if you live in an area with hard water, extra amounts of sediments build up in your hot water heater. Drain and make sure rust is not developing.

TOP PRIORITIES FOR FIRST TIME HOME BUYERS

It’s easy for first-time homebuyers to become overwhelmed as they begin their home search. Often, buyers get distracted by a newly renovated kitchen or finished basement, and lose sight the big picture when choosing a home. See below for three factors that should be a priority as you navigate the home buying process.

1. Pricey proposition - Set a price point BEFORE you start looking for homes. It is important to talk with your REALTOR® about your budget so he/she can focus on homes within your price range. It’s helpful to leave yourself a financial cushion when deciding on what to spend. Factor in closing costs, repairs, down payment and even unexpected expenses to help you find a price you feel comfortable with.

2. Location, location, location - This is one of the few things you absolutely cannot change about your property. If you need to be in close proximity to mass transit or within a specific school district, only view homes that fall within this area. Is it really your dream home if you are out of your desired commuting distance? Also, be aware of the condition of the neighborhood. Is it safe for you to live or desirable should you decide to sell down the line?

3. Room to grow - Remember to ask yourself how long you plan on staying in your new home. Will the one-bedroom loft or two-bedroom cottage work for you in five years?

HOMEBUILDING HIBERNATION ENDS

This was the headline of the Orange County Register on Sunday May 22nd.  The entire real estate section was focused on all the housing developments that are picking up steam by most So Cal builders.  The California division president of Fieldstone communities delivered the following quote, "It makes sense (to build) again.  We can deliver a product where there's demand.”  This column has been emphasizing for a few months, that the lapse in building over this fairly prolonged period of time, will result in heavy pressure on the resale market.  That's good for homeowners who have hung in there, despite the odds, and have stayed current on payments and are riding out this temporary loss of equity.  Why do I say temporary?  Let's look at investments for the last ten years.  There is not enough space here to do a comparison chart, but do your own.  Take a look at the S & P 500, the Dow Jones, Nasdaq, and Real Estate.  Let's see which one, held from 2000 to 2010 (the worst decade, all agree, in real estate) and see which investment fared best.  The short cut answer: real estate.  Also, with that investment, you managed to leverage your money and buy something somewhere between 10 X's and 5 X's your investment, depending on your down payment.  You more than likely fixed your housing cost, unlike renting, and if you didn't use your home like an ATM, you have built equity.  Let's not forget one of the best tax breaks for the middle class, interest deduction.  Buying real estate doesn't sound so bad... No wonder they're building again.  All agree building has been in the tank.  This column has reported how low permits and percentages have been off.  So after nearly 2 years of a blank in the building department, 28 developments have started the building process in one way or another.  According to Irvine-based housing consultant John Burns, "builders are coming out of hibernation."  The projects together include approximately 3,000 homes and townhouses and duplexes.  Compare that to the paltry 1,600 of 2008-09.  But catch up doesn't happen overnight.  Short sales and foreclosures will continue to be a part of the market mix for several years to come, and certain buyers will be drawn to them for either "patience equity" or investors looking to rehab and sell.  Equity, or standard sales, will continue to rule the qualified buyer who can afford to pay market rate for a turnkey property.

ORANGE COUNTY JOBLESS RATE AT 2 YEAR LOW

Sometimes people want good news so badly, that they massage the numbers to get what they want.  This is not the case with this month's job report.  The unemployment rate fairly plunged from 9.1% to 8.6%.  When dealing with such big numbers, this half a point drop surely signifies a lot of jobs.  The national outlook has been equally positive with large orders up for most companies and jobs being offered are of a substantial nature, i.e., not just service industries. Leisure and hospitality added jobs, as did professional and business services.  Manufacturing was fairly flat with a loss of 800 jobs.  Look to see jobs continue to make certain inroads as 2011 continues.

CALIFORNIA HOME SALES AND PRICES FALL IN APRIL, BUT BOUNCE UP IN MAY

There is no doubt in anyone's mind, who works in real estate full time, that 2011 has had an uneven edge to it.  One month sales seem solid, the next, it sputters.  The real culprit in this is not affordability; it's at an all time high.  It's not selection, there is ample inventory, and it's not a lack of qualified buyers or motivated sellers.  The real culprit is the impression that the media has given as to the availability of money.  Many people think it's tighter than ever.  Getting a loan is difficult.  Actually, that's not true.  So if you are a buyer who has been staying away because you think you can't get a loan unless you have a 740 FICO and 20% down, go start looking for your dream home, because that's not the truth.  Do you have to be qualified?  Yes.  Do you have to have a job?   Yes.  Can you get a stated income loan?  No.  Can you get a fully documented FHA, VA, or Conventional loan?  YES!!

FINALLY, A NOTE ON MORTGAGE DEBT AND SHORT SALES

There was a great article in USA Today that reported that mortgage debt is falling at a record pace.  Attributed to low interest, mainly, and also refinancing, and frankly, defaults, have freed up more than $100 billion.  To put this in perspective-- it's comparable to all unemployment benefits for one year or this year's Social Security payroll tax cut.  Nicolas Carroll, a journalist on consumer finance had this to say, "This is a form of economic stimulus that goes to Main Street rather than Wall Street."  Homeowners have trimmed interest payments alone by 11% -- or $67 billion a year.  Remember what was said earlier about getting a loan.  This includes refinancing to better your interest rate or your terms.  You could qualify.  A final note on short sales.  They should be called long sales, on that we can all agree.  The banks are very fussy and make buyers and the sellers go to great lengths to successfully close these transactions.  Often times you are dealing with a second and third lender who must also agree to the terms of the sale and make requests for partial payment.  They are the most difficult of the 3 types of sales mentioned in the "numbers" paragraph.  Do your homework, do everything the lender asks, and make sure you have help.  Maybe a lot of help... See you next month.

SOUTHERN CALIFORNIA REAL ESTATE IS A WILD RIDE, BUT ORANGE COUNTY LOOKS BEST

Maybe there is truly no comfort for any type of investment in these uncertain economic times, but probably for the first time for the newer generations, it really is hard to predict what’s coming next.  Having said that, real estate, taken the beating that it has, may still be the most resilient product out there.  Why say that?  Take a property purchased in 1990 at $260,000.  That property peaked in 2006 at $830,000.  The market indeed crashed and that same property plummeted in value to $630,000.  Now let’s look at the value left in that property, through the worst downturn in the history of California real estate, and see how the initial investment value of $260,000 is looking.  It is still nearly 2 1/2 times in value what it started at.  Let’s also remember that the owner leveraged their money by putting only 20% down in their own cash investment to achieve those returns.  Let’s also remember that the owner lived in the property and wrote off the interest on the loan.   How do you think this investment has fared over 20 years compared to an initial investment of $52,000 in a dot com or Internet stock that fell on the bubble burst we  all experienced a few years ago?  Most of those investments that were victim of that bubble are completely gone, not worth the paper on which they were written.  This makes for a centering point, one which we all can rally around.  Real estate is a sound investment.  With prices still stabilizing, which will end as we ride out this year, there are opportunities galore.  And don’t think the low interest rates will last forever... ever hear of a word called “deficit?”  Watch what the billionaires are doing, and think about what you want to do. (Figures are from public record documents and sales comparables for value.)

ELIMINATION OF HOME INTEREST DEDUCTIONIS IN THE SIGHTS OF CONGRESS

If you care about your right to own property, if  you believe in the last true deduction for the middle class that amounts to more than a hill of beans, this should be a cause you that catches your attention.   Eliminating home interest deduction is definitely part of the deficit reduction conversation, and it shouldn’t be.  For those of us who are not wealthy, and cannot take part in the many loop holes that keep corporations and individuals from paying their fair share, this is our best deduction.  Please contact your federal senators and congress persons and make your voice heard.  If we don’t take a stand as homeowners, they will take it for us.  Fight for your right to the American Dream and to an honest deduction that should be a matter of course.

CONSIDER THIS WHEN CHOOSING THE BEST HOME FFOR YOUR NEEDS

When selecting a property there are several major factors to consider. Compromise is expected in the home buying process. You can always upgrade laminate countertops to granite or factory cabinets to custom, but be aware of the essentials you need in a property before you buy.Location, location, location. This is one thing that you cannot change! Where you buy will most likely be at the top of your necessity list. Do you need easy access to highways for your commute to work? Perhaps you need to be near public transportation because you do not have a vehicle. Save yourself time and money by focusing only on areas that work for you.

1. Education. Public schools dictate enrollment according to school district boundaries. You may be surprised to find where lines are drawn. Are you trying to move, or stay in, a highly
   rated district? You may wish to visit area schools to get a feel for which place is best for your family.
   
2. Crime doesn’t pay. Research the local crime rates. Some neighborhoods experience higher levels of crime, both violent and petty. Safety to you and property are valid considerations.
   
3. Be neighbor conscious. Your property value is affected by the condition of the prospective neighborhood. Be sure to drive up and down adjacent streets. Are homes and yards in good repair? You want neighborhoods that reflect care and attention.
    
4. Size matters. Take the lot size into consideration; if you need more living space is there room to expand? Check local zoning laws to verify you can build up or out.

SHORT SALES CONTINUE TO DOMINATE MUCH OF ORANGE COUNTY

According to recent figures about 46% of Orange County sales are distressed.  Short sales then have an additional obstacle to overcome.  Recent statistics suggest about 43% of those won't close because of bank delays.  There is a new term in today's market, "patience equity."  For those buyers who can weather the storms and delays, they may be rewarded with a great price on a home in a great neighborhood.  There still is no standardized method for processing short sales and there are many irregularities within the same departments of many banks.  But still, this market has produced and will continue to produce many opportunities.  Investors already know this and that accounts for many all cash transactions.  As jobs continue to strengthen, the housing market should mirror that slow but steady progress.  See you next month. 

U.S. ADDS 216,000 JOBS & U.S. LAYOFFS LOWEST SINCE 1995

These were a couple of very encouraging headlines starting out the second quarter of 2011.  Not only were these figures higher than expected, but unemployment also dipped to its lowest level since 2008.  In a recent article OC Register writer Jonathan Lansner had a similar headline, "Job Growth Could Cure Ailing Market."  The gist of the article is really found in the Beacon Economics updated housing forecast for California.  Research manager Jordan Levine finds some optimism that is driven by, "rising employment and incomes, which we project to grow by between 4% and 6% on the income side and 2% to 3% on the employment side."  In other words, people really do need jobs to buy a house.  And their income needs to be proportional to the price.  Something the sub-prime and stated loan programs seemed to forget.  The other encouraging things was that these jobs were "real" jobs; not seasonal, not minimum wage, but substantial jobs in technology, import, service, management, and manufacturing.  Originally the Fed thought job recovery would be 5 complete years.  Statistics now suggest that job recovery will happen by installment, both in types of jobs and location.  Remember, it is projected (see last month for details) that California may be a little slower than some parts of the country, since we were hit so hard by the loan meltdown, but Southern California, specifically Orange County, was projected to emerge first.

DEMAND FOR HOMES REACHES 7 MONTH HIGH

There are also articles stating the opposite.  "Winter Doldrums Worsen, Defying Usual Pattern," was seen on March 16th.  It was published just as demand was taking off.  More on the actual numbers later, but they are down compared to both the month before and the year over year.  But remember, a year ago we had a federal tax credit that was driving thousands of buyers into the market.  This year that is gone, and so the numbers we have may not be quite as high, but they reflect the true market and the true level of recovery.  According to the Orange County Home Inventory Report from Steven Thomas, pending sales at the beginning of the year were1,856.  Since then, it has increased by 61%.  What may be more interesting is a look at "market time" which is how many days on the market it takes a property to sell.  You take that number and combine it with how many properties are available and you get your "market inventory."  In other words, if not another home came on the market starting today, how many months would it take to sell everything we've got, at our current pace.  A seller's market is said to be under 6 months, an even market about 6 months, and a buyer's market at more than 6 months.  Well, right now, believe it or not, that number is under 6 months.  And yet prices are falling.  We may never see this exact market phenomenon again.  Buyers are sensing that there are some very good deals on the market.  But because financing is tight and because there is much competition from REO (real estate owned by banks), cash is king and cash can generally get a lower price.  But, having said all that, it is not uncommon right now to see multiple offers on in demand properties in good locations in the right price range.

FORECLOSURE SOLUTIONS

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Yorba Linda-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:


Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

• Benefit: Does not require the mortgage company or lender's approval.
• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

• Benefit: Allows the homeowner to make back payments over time.
• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
• Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

• Benefit: Allows homeowner to keep property indefinitely.
• Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

• Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
• Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

• Benefit: Does not require lender approval.
• Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every  seven years.

Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

• Benefit: In some cases, this will lower payments.
• Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
• Drawback: Must be active military to qualify.

Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.

ACCORDING TO 3 REPORTS, IT MAY JUST BE BETTER IN 2011

At the end of 2010, already becoming a distant memory, were some confounding signs in the economy.  As the holidays continued, retail and durable spending was up, but how could that be in our sputtering economy?  Although the recession had supposedly officially ended, most economists agreed that recovery would be very sluggish until 2012.  At the heart of that disposition was the issue of jobs.  Where were the jobs?  Well, out on December 31st were the three reports by Chapman University, Cal State Fullerton, and UCLA, weighing in on jobs, unemployment, income growth, building permits, US GDP, and 10-year treasury.  All reports on all fronts were positive, with the most anemic growth coming in the builder sector, with very slight growth on building permits.  All three see job growth between 18,000 and 24,000 but with most improvement coming in the second half of the year.  They all see unemployment plunging below that 9% mark that has plagued any serious recovery.  Income growth will rise between 3.6% and 4.8%.  UCLA's report had an interesting comment, "Accelerating economic conditions should be observed by mid-2011 as consumers increase their spending to reload on worn-out durable goods and businesses hire more workers to meet rising demand for goods and services.  The outlook for an expansion of the workforce shows momentum building into 2012.  While the public sector remains weak, the private sector will do all the heavy lifting regarding 2011."  The gist would seem to be, expect gradual improvement, and yes, the recovery has really begun this time.  How does all this effect real estate?  

DEMAND FOR HOMES DROPS 12%...PENDING HOME SALES UP?...WHO DO YOU BELIEVE?

There was an article written by the OC Register's Jonathan Lansner that was rather pessimistic, citing that a report by Steve Thomas at Altera Real Estate, as of December 9th said, "After remaining the same for the better part of a month, demand dropped by 12% (in the past two weeks)."  My problem with this article was the headline.  If you read on in the quote by Steve Thomas, himself a real estate broker, the statement clarifies itself, "For the remainder of the year and the first few weeks of the New Year, demand will continue to drop. This is cyclically the slowest time of the year for Orange County real estate."  The headline leads you to believe that real estate is once again plunging, that things may become dire once again.  The actual article is merely talking about a cyclical moment in the market, that is experienced every year in varying degrees.  Two weeks later on December 31st, The National Association of Realtors reported that, "the number of people who signed contracts to buy homes rose in November, the fourth increase since contract signings hit a low in June. "  In fact, its index of sales agreements for previously occupied homes increased 3.5%.  So, who do you believe?  The NAR would obviously know the number of contracts being signed and that would seem to be a worthy statistic.  No one is saying the market is healthy.  But demand plunging?  It would not seem to be the case.

WHAT WERE THE ACTUAL NUMBERS

The total number of sales for Orange County in November (the most recent complete month available) was, 2,257, which was down 1.8% from October.  That is a reasonable, seasonal, decline.  It was also down 10.7% from November 2009, which seems like a lot, but if you look at the year-to-date average number of sales of 2,545, there is only a -0.7% differential.  There were 1,407 single-family resale, 614 condos, and 236 new homes.  The last statistic on new homes is worth mentioning because it is a 27.6% increase.  Why does this matter?  Building demand leads to building permits, leads to hiring in construction, the one job sector that is most sluggish in So Cal.  In other words, demand for new homes is a sign of recovery.  The lead price range is still the entry level under $400,000, which had 938 sales.  The slowest price range was from $600,000 to $700,000 with only 196 sales.  The reason for this may be as simple as there is a shortage of properties in that price range because the over $700,000 bracket was fairly healthy with 438 sales.  Notices of Default were up slightly (4.5%) over October, but still down 16.1% from November '09.  Foreclosures are way down, but this is a goofy number as banks have made it clear they have stalled the process on many of their distressed properties.  The number of distressed properties on the market (short sale, or bank owned) remains steady at approximately 39%, which is lower than the peak of the recession, when that number was as high as 56%.