As has become very evident, the number of local homes for sale is not nearly enough to meet the current demand. In fact, the inventory level is below four months at the current rate of sales, which indicates this to be a strong “seller’s market”. In last month’s article we reviewed the several reasons why the surprising shift from “buyer’s market” to “seller’s market” occurred.
Pacific Palisades Housing Market: Looking Back... and Forward
As we begin 2013, the number of homes available for sale in Pacific Palisades is as low as it has been since the end of 2004. There are only 52 homes on the market, which is 28 percent less supply than at the beginning of last year.
The local real estate market has been steadily improving since the beginning of 2012. However, it has also been experiencing increasing difficulties with appraisal and financing of the home purchases. Some of these issues are directly related to stringent lender guidelines, and many escrows are challenged by problems because of the appraisal process. The appraisal process is often slower than it used to be, which has delayed escrows beyond the closing date.
For several months, the Westside real estate market has experienced a steady recovery with both average list and sales prices increasing by more than 4%. The inventory level of homes available has dropped significantly over the past year, resulting in increasing frustration for buyers who are well qualified but unable to find a suitable home.
A few weeks ago we observed there were some indications that the Palisades housing market may have begun to turn in favor of sellers. With the benefit of two complete months of home sales records available now, we are able to verify that indeed a market shift may be in progress. The number of sales for the first two months of 2012 were identical to the same period last year, but the time it has taken to sell them is 13% less this year.
As we enter the final quarter of 2011, and take a look at the Palisades market so far this year, some noteworthy observations can be made. There have been some recent articles in different publications that report “another dip in home prices due to high foreclosure rates and weak demand.” Another suggested that, “home prices in a majority of the nation’s largest metropolitan areas posted fresh lows” earlier this year, but that in many areas prices appeared to be somewhat more stable.
As of May 31st, there were 126 single-family Palisades residences listed in the Multiple Listing Service (M.L.S.), which is nine percent lowerthan this time last year. So far this year 91 Palisades homes have sold (which is four percent lower than this time last year), and there are now 48 homes in escrow in the Palisades.
Accomplishing a Successful Short Pay Sale: The Final Phases - Part 4 of 4
Some real estate agents do not prefer to take the time to do the short sale negotiating themselves and hire a “third party negotiator”. There are several issues arising in this case, namely whether the third party negotiator is a California licensed real estate agent who is authorized to do such work and also whether they have signed an agency disclosure with the seller.
Accomplishing a Successful Short Pay Sale: Procedures Involved - Part 3 of 4
The key to successfully completing the process is to be both prepared and available to furnish whatever next documents or explanation letter the short sale negotiator or investor will require. This would be the time to put your property on the market. In order for you to accomplish your goal of short paying the loan balance, and especially if you are already in default on the loan, the property must be aggressively priced and marketed.
Accomplishing a Successful Short Pay Sale: What the Lenders Will Require - Part 2 of 4
In order to successfully negotiate a short pay, without having a promissory note on the balance of the loan amount, you will have to demonstrate that the probability of a foreclosure in your case is high. If it is, then the bank may consider you a candidate for a short pay when they consider other factors.
Current Financial Pressures on Homeowners & Some Available Solutions
We have recently been asked more and more frequently what alternatives there are for people to try to maintain their homeownership under tremendously stressful situations. Correspondingly, many prospective buyers are “looking for a deal”, and think that it may be found in all situations where a home is being marketed as a short-sale.The short-sale of property occurs when the market value is less than the loan currently owed by the owner. The issues are complex and not simple to explain. The following gives an overall picture of the current market conditions.
Accomplishing a Successful Short Pay Sale: Part 1 of 4
A short pay is when an owner pays off a loan by paying less than what is currently owed on it. A short sale is the sale of a property such that it results in a loan being short paid by the owner. Both occur when the property is sold and the sale price is less than the loan currently owed by the owner.
The lending industry has changed dramatically over the past few years. Standards and practices that had long been widely accepted are now totally transformed. Gone are the days of careless or loose loan underwriting approvals.
The big question is whether the market correction has run its course, or if owners are likely to still experience a continued diminishment of local home values. While there is no crystal ball which can be relied upon in answering this question, a couple of observations may help in establishing some perspective.
Now that we may be seeing the light at the end of this tunnel following a 2-year nightmare in the housing industry, it may be helpful to evaluate both buying and selling strategies. Observing both buyers and sellers, it is evident that this difficult market has presented challenges in the decision making process.
As we enter a new decade, buyers who have hesitated are increasingly discovering that there are some very compelling reasons to make the move now. After an initial shift from a “seller’s market” to a “buyer’s market” at the end of 2007, home sale prices weakened considerably in 2008. Single-family home sale prices in the Palisades have dropped another 17-20% in 2009, although at a much slower rate in the fourth quarter.
An encumbrance is a legal right or interest in land that affects or limits ownership and control over property. It may be in various forms, such as mortgages, liens, easement rights, zoning ordinances, restrictive covenants, unpaid taxes, etc. Although many encumbrances may not prevent the transfer of property, it can diminish its value. A preliminary title search will almost certainly reveal any encumbrances.