Oakland Condo Prices Hitting Bottom?

There continues to be a lot of confusion and disappointment in the buying public in the bay area as we hear of record lows in values across the country but competing offers for properties here. Asking prices sometimes seem random, but closed sales, even though they might be over asking, tell the real story. Those closed prices continue to trend down when compared to similar closed sales last year. It is the wide variation in asking prices that is frustrating buyers. It's like the difference between settlement demands and jury verdicts. Both provide sets of numbers, but only one provides real guidance about the value of a case.
I just generated two charts for some of my buyer clients. They track closed sales prices, meaning real value, only; not the asking prices which are really only marketing ideas. The charts show the trend of median prices for condos in zip codes 94610, 94611, and 94612 (basically the areas Piedmont Ave., Grand Ave., Adams Point, Lake Merritt, and down town). The point of these charts is not the values because it includes all condos, but the change over time. On the two year trend we see an 18% decline, but the one year trend is basically flat with no decline between April 2008 and April 2009.
I can't predict what will happen next month or next year, but these charts might be the first pictures of the bottom of this market. E mail me and I will be happy to share these charts, or create others that pinpoint your particular interests.

$8,000 Federal Tax Credit

Some Additional Protection for Abandoned Animals

A new law went in to effect on the first of this year requiring that abandoned animals discovered at a property that has been taken back by way of foreclosure, eviction, or termination of a lease, be turned over to the local animal care and control agency. People aren't the only ones left homeless by this crisis.

This actually happened to me a few years ago in Maxwell Park. My clients finally had to evict the non-paying tenants from their elderly parents home. They needed to sell it in order to pay for expenses of the assisted living facility where the parents were living. They gave me a set of keys so that I could enter and assess the situation as soon as the tenants were out. The place was a mess, as expected, but the worst of it was the frightened pit bull I encountered when I walked down in to the basement laundry room. The dog, as it turned out, had been there for a few days without food or water. Although it growled at us, a neighbor assisted me with putting out some kibble and water for it while we waited for animal care & control to take the dog to the shelter. I hope the dog eventually found a home better than his last situation.

Preventing Foreclosure Blight

There are two recent developments that might help to reduce the number of vacant and vandalized homes that have been through the foreclosure process.
Fannie Mae has developed a rental policy on its own foreclosure properties. It will offer new month to month leases for qualified tenants. http://www.fanniemae.com/index.jhtml

Appealing to a smaller and exclusive segment of the market, Designer HomeTending is offering a new wrinkle on house-sitting. Pre-qualified renters with the high end home furnishings are allowed to occupy otherwise vacant properties. They have to agree to keep the house in tip-top showing condition, get out of the way when the property is being shown, take care of the utility bills to keep the lights on, and leave when the property is sold. I don't expect this to have a big impact on the real estate market, but every little bit helps. I certainly shows creativity and "win-win" thinking. http://www.designerhometending.comt

When Things Fall Apart

An article in the March 2009 issues of REALTOR Magazine (The 11th-Hour Back Out by Robert Freedman) recounts a phenomenon that many of us in the profession are dealing with: transactions that fall apart before closing. Freedman cites statistics showing a increasing gap between "pending" deals and "closed" sales. What's happening? The article points to two major issues: failure to obtain financing and the high number of short sales that are never consummated, but instead proceed to foreclosure. Locally we rarely see a loan fail to go through due to the property not appraising, but standards are tightening and I just encountered on this week. Loans more often fail due to stricter credit requirements by lenders. While this is generally a good thing for everyone, it presents a serious problem for the parties and professionals involved when the standards change between the time an offer is accepted and the expected close of escrow. Other incidents that I have seen recently and locally reflect the overall problems in the economy: the buyer loses a job, the buyers line of credit on another property is cancelled or reduced, the sale of the buyer's other property failed to close, and the buyer found another property while waiting several months for a short sale to be approved. Our office recently experienced a situation where the failure of one transaction in New York resulted in four other deals falling out as each was dependent on the other and the transactions tumbled down like dominoes in a row. The moral of the story: be very attentive to your contingency clauses and keep them in effect for as long as possible.

A different way to lose your home

Here is a new wrinkle on the continuing sad news of people losing their homes. This poor man was in the process of fixing up a dilapidated house in Detroit only to drive up one day and find that the city had demolished it. Poor guy! Here's hoping that the city recognizes its error and helps this man get his house up again.