Archive for the 'Real Estate News' Category
A Radical Proposition for Real Estate
by Roberta Murphy
I really want to talk about the effect petroleum costs will have on real estate, but first wish to tell a little story:
My grandgather, Adolph Michelson emigrated at the age of 7 with his family from Norway to Deadwood, South Dakota. It required a long, hard journey by steamship. train and wagon to arrive at their eventual home in the steep hills above Deadwood. It was there that they lived with other immigrants and Indians, sharing magnificent views and boot camp workouts as they trudged up and down that steep, steep hill to get to town for work, school, food and other supplies.
Views be damned. This was where the poor people lived.
As soon as the Michelson family could afford to do so, they moved their big family into a home in town, where shopping, school and employment were within easy walking distance. Their decision to move was not based on home features, the quality of the stove, or the number of closets–or even neighborhood amenities. It was based on that single and most basic real estate dynamic:
LOCATION
It is only since the advent of sprawling suburbias and each family having multiple automobiles that we strayed from distinct town and country living. The wealthy may have had homes in both locations, but the average family lived near employment . There were no school buses (or video games because kids had to hike through miles of rain and snow to get to school each day) and gasoline stations were pretty rare at the turn of the that other century. Which all leads me to wonder….
What might be the top priority for the home of the future when gas prices reach $6, $8, $10 or even $12 per gallon?
How about the radical choice of living walking-close to employment, shopping and schools? Or living near a bus stop or transit center where one can commute for work, school and fun?
I am eying real estate differently these days–and am coming around to my ancestor’s way of thinking. Location trumps views, walkable sidewalks trump big back yards and a bicycle pump beats a gas pump–at least for kids who drive or are driven to school (ever seen the long lines of mini vans idling outside our schools at arrival and departure times–or high school parking lots?). Might a more urban lifestyle offer some solutions that would allow for a saner lifestyle?
I am also wondering if Carol Lloyd’s prediction of suburbs turning into Slumburbia might also come true–sooner rather than later due to rising fuel costs? In her SF Gate article, she notes, “In Europe, where the cities never died, the suburbs have long been the homes of last resort for the poor and the marginalized.” This is already occurring in and around sprawling urban centers like Houston, where home prices in and close to downtown Houston are selling at a premium, while homes in once-affluent suburbs are selling at prices far below replacement costs. It is a scenario being repeated all over the country, with slightly different configurations along the coasts.
In San Diego County, where I live and work, we are anecdotally seeing a surge of buyers seeking to live within walking distance of restaurants, theaters, dry cleaners and food or farmer’s markets. They no longer want to battle freeway gridlock, and would happily trade their road warrior status for the peace of riding a train to work. They are also seeking more open communities, where neighbors stroll by and greet one another, where not so much of life is lived in and for cars–or behind mortgaged garage doors.
I am so, so tempted to join them….
read comments (8)Databases Coming Out the Wazoo?
Call this a geeky rant. Call it a blonde tirade. Call it what you want, but I just don’t know what to do about diverse databases.
I think I have them coming out the Wazoo.
If you came here seeking luxury news, you may want to click away and come back tomorrow. Right now, I am trying to sort out a database problem that honestly keeps me awake at night.
You see, I have been collecting names, addresses, email addresses and property preferences from people for centuries. And if there were a way my databases of information could talk to each other, I could be the supreme Yentl of real estate in Southern California–or the whole world.
My problem? SOAR Solutions, which for years reliably sent property information to hundreds of clients, was sold to HouseValues, who ostensibly does the same thing but charges a king’s ransom to do so. At the same time, clients who signed into SearchPoint with my ancient Realigent site, are listed there and are also receiving property updates from me.
Then there was Top Producer, which held all the contact information for existing clients–along with their birthdays and wine preferences. And now I have an account with 1ParkPlace, which also sends out listing information to clients and maintains another database.
The real problem?
None of these databases talk to one another–and I think it’s a deliberate conspiracy, HouseValues will release only the client’s name, address, telephone and email address. Forget about search parameters. They hold that information hostage and continue to charge me out the yingyang for the privilege of doing so. I would like to migrate this information to 1ParkPlace, but no can do.
Guess those tasks will have to be done one by one, keystroke by keystroke.
Then there’s the database sitting over at Realigent that is fully 8 years old. Many of these searchers have been with me since the last century. Those, too, will have to be migrated one by one, keystroke by keystroke.
The problem could probably be solved if I were an enterprise level business doing gazillions of transactions per day. If that were the case, I would just call the database gurus at ANTs Software and they could use their cool plugin and make databases like Oracle, IBM, Sybase and Microsoft relate, talk and migrate to one or the other. The Ants Compatibility Server (ACS), fortunately and unfortunately, is whizbang technology for the big guys and ANTs will probably rule the world of databases some day, but are of little help to me now.
In the meantime, I think someone could make a modest royal ransom if they could solve the Realtor’s dilemma with databases and set us free from those vendors who hold us hostage. If software could be written that would encompass not only basic information, but also our real estate client’s search parameters and wine preferences, the world’s real estate crisis might be solved.
And just for grins, remember this classic Super Bowl 2000 Commercial?
It appears that even the luxury real estate market will not fully escape the financial ravages that are taking down less-expensive neighborhoods.
Housing Wire asks: Has REO gone jumbo? To find out, they consulted with Integrated Asset Services, LLC in Colorado to see if foreclosures are moving up the real estate food chain. And though not all properties with loans in excess of the the conforming $417,000 are luxury homes, it appears that an increasing number of residences in that loftier lending arena are heading to short sale or foreclosure. In California, for example, IAS and Housing Wire saw 102 REO’s sell for more than $417,000 during April, compared to just 13 in April, 2007.
Anecdotally, we have seen a spike this past year in San Diego luxury homes that are closing as short sales (where more is owed on the property than what it is worth), or which end up as foreclosures and REO’s (real estate owned bank properties). We have also seen that it takes lenders far longer to reach an agreeable sales price compared to smaller loans–and that may be understandable.
On one hand, more money is at stake and greater care must be taken in reaching a fair valuation; on the other, carrying costs (taxes, insurance, maintenance, security and HOA fees) run far higher than ordinary REO’s. And that those are bills most lenders and services do not want to shoulder.
In a recent transaction in coastal Encinitas Ranch, Washington Mutual required two appraisals and took almost four months processing time before reaching an agreed-upon sales price. And during that time, foreclosure sale was delayed twice. The original loan amount was $1.2 million and the final sales price was $880,000. It was a major hit for the lender/investor , but costs would surely have been greater if this Encinitas home had gone to foreclosure.
We are currently involved with two other sellers who have loans exceeding $1 million and whose custom homes could end up as foreclosures if Countrywide and First Franklin investors cannot come up with pricing that reflects current San Diego market realities. Neither home is coastal (which would help prop up valuation) and neither have area comparable sales that would support pricing anywhere near what is owed on these homes.
Outside of our San Diego real estate practice with Villa Sotheby’s International Realty in Del Mar, we are hearing whispers that there will be more luxury short sales and REO’s before the real estate market recovers. And out of the confusion and delays in disposing of these luxury properties will be opportunities that luxury investors have been long awaiting.
And even the ultra-luxury real estate market appears to be experiencing some correction. In 2006, we wrote about Donald Trump’s luxury estate in Palm Beach being offered at $125 million. Recent reports say it sold at just $100 million.
What may have been painful for The Donald would have been a coup for the lucky buyer. I guess every market has silver linings–for someone.
Troubled Homeowners: Beware the Predators
The real estate predators are always there–in good times and in bad.
There are whispered stories in real estate circles of certain escrow and loan officers who, in the heady days of real estate, slipped deeds into the stacks of papers homeowners were signing as they refinanced their homes. The deed, of course, moved the property into the predator’s claws.
As the Discovery Channel shows, predators will always pick off the unsteady, the not-so-swift and the elderly because the catch is easy and the herd moves on. No different with these criminals.
But you know what’s scary?
The employers of these predators, when or if they discovered the crimes, fired the perps summarily–and kept their collective mouths shut. They didn’t want bad press, they didn’t want exposure, they didn’t want to field the possible litigation that sometimes come from predator attorneys.
It was a criminal catch and release program that spared corporations their reputations and the hassle of potential lawsuits.
As as result, it should surprise none of us that these same real estate criminals (and others who have caught onto their scams) are again preying on unsteady homeowners. This time they disguise themselves as the good guys of real estate, who are out to save stressed homeowners from foreclosure. Their lines and lead-ins go something like this:
I can save your home from foreclosure. I can save your credit. Just sign here.
Other wannabe-predators offer embarrassed and delinquent homeowners the chance to stay in their homes as renters, and then offer to buy them back when circumstances improve. Families can remain in their homes, the kids can stay in school, and neighbors will never know the difference.
The only problem is that the prices at which the homes will be eventually offered back to the former owners may be far above market value.
The true real estate predator will offer to make the foreclosure go away with a simple loan. All the distressed homeowner needs to do is sign on the marked lines (at the bottom of the promissory note and deed of trust)–which means that he and/or she have just signed over the deed to the house. These predators are really good at slipping these critical documents into big stacks of paper that need to be signed in any real estate transaction. If we recall, this is the same tactic these creeps used a few years ago and their targets remain the same: The distressed, the unsteady and the elderly–who also own homes with enough equity or opportunity to make it worth the hunt.
My advice to distressed homeowners? Immediately consult with a reputable real estate professional or attorney before signing anything offered by a real estate problem solver–and remember that the predators wouldn’t be after you if there wasn’t any meat on the target.
I attended the Inman Connect event in San Francisco last year and met lots of people I knew only from the real estate blogging world–and others who would become good friends.
Could I resist missing this event, where we can peer over the bloody edge of the envelope and see what’s in store not only for the real estate market, but in the technologies that serve and propel this economic sector?
Not a chance!
I am already calling real estate blogging buddies around the country to see if we can connect at the Connect this summer. The event will be held at the Palace Hotel–where we will be able to peer over the bloody edge of the real estate technology envelope, go to beer blogging events, and take lots of photos.
This may have little to do with Luxury Real Estate, but I hope you enjoy this rare hippie footage with Scott McKenzie singing that classic “If You Come to San Francisco.”
/0.jpg" alt="YouTube Preview Image" />
