Steve Holderfield's Real Estate Blog

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Did you know that if you are upside down on your home and process a short sale, that the amount that the bank forgives is scheduled to become taxable in 2013?  That means that, for example, if the bank forgives say, $100,000 in order for you to sell you home, that $100,000 would be taxed at your tax rate.  For a person in the 25% tax bracket that means they would owe $25,000 to Uncle Sam.  If you are having trouble making your payments, I can think of no better reason to do a short sale in 2012.  Contact us today.  You do have options!

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For the fifth consecutive year, Nevada continues to have the highest foreclosure rate in the country, despite a 31 percent drop in the state’s foreclosure activity from 2010 to 2011, RealtyTrac reports.

Several states continue to see a large amount of foreclosures, which are putting downward pressure on overall home prices.

The states with the highest foreclosure rates for 2011 are:

1. Nevada: 6 percent (1 in 16 housing units received at least one foreclosure filing in 2011)

2. Arizona: 4.14 percent (or 1 in 24)

3. California: 3.19 percent (or 1 in 31)

4. Georgia: 2.71 percent (or 1 in 37)

5. Utah: 2.32 percent (or 1 in 43)

6. Michigan: 2.21 percent

7. Florida: 2.06 percent

8. Illinois: 1.95 percent

9. Colorado: 1.78 percent

10. Idaho: 1.77 percent

Nationwide, 1 in 69 housing units or 1.45 percent of home owners received at least one foreclosure filing during 2011, which is down from 2.23 percent in 2010, RealtyTrac reports.

Source: RealtyTrac

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This is really good news… a private company backing the purchase of residential mortgages packaged as an investment. This “secondary market” due to the collpase of the housing market has all but dried up. This missing element to our market is one of the reasons that we all have been fearing an increase in interest rates which would be devastating to an already weak market. If there is no vehicle for banks to sell the loans they make, there is no source to re-capture the capital needed to make additional loans. Unless there is an active secondary market, the only ultimate solution for banks to sell their loans would be to enhance the desirebility of these investments through increasing the yeild through higher interest rates… not a great solution for consumers. Read on here: http://www.dsnews.com/articles/redwood-trust-readies-first-private-label-rmbs-deal-in-two-years-2010-04-22

The banks are back in the business of foreclosure, Remember last year that many banks had voluntarily instituted moratoriums on foreclosing on homeowners. Well this moritoriums have now pretty much expired and we have a surge in foreclsoure activity. Read more: http://www.dsnews.com/articles/california-foreclosure-sales-soar-in-march-2010-04-19.

So what do you do if you feeling that distress is approaching and you are worried that you can’t continue making your mortgage payment? To make matter worse, you may have discovered that you owe more on your home tham its worth in today’s market. Well you do have options. Consider having us negotiate a short sale with your lender. To find out more go to www.morethanashortsale.info. We have successfully negoatiated short sales with most major lenders and can help you. Remember, you do have options and the quicker you act the better the outcome will be. Contact us today if you need help.

We all have been reeling from the tumult we have had here in the California real estate market. Values in most markets have dropped 40% or more in recent years. With the massive federal debt that has been created in an attempt to improve our markets we all have been fearing the inevitable rise in our interest rates, perhaps to higher than acceptable levels to most buyers. We in the real estate community have feared a huge increase in our interest rates which would stall any recovery in the market. We have received some recent good news about interest rates which is really welcomed. Read on… http://www.dsnews.com/articles/upward-climb-comes-to-halt-as-mortgage-rates-ease-2010-04-15

Time will tell if this trend will hold. If you are on the fence… my advice is to buy now as we have the lowest values in years and more importantly you can still get a mortgage at historically low levels … around 6%!

I have written that our real estate recovery will be an up and down trip resulting in several seemingly positive moves followed by a turn to the negative side of things. We have some evidence of this from recent foreclosure activity as compared to a year earlier:

http://www.dsnews.com/articles/loss-mitigation-efforts-arent-keeping-pace-with-loan-defaults-lps-2010-04-12

http://www.dsnews.com/articles/white-house-to-announce-plans-cut-mortgage-principals-2010-03-25

More government means less freedom and unintended consequences that are hard to predict. I’m not saying that the government intends to do harm… it just seems that they can’t predict what the results of their actions will be.  When it comes to the government, in my opinion, less is really more.   It seems to me that the more they try to fix things the longer we have to deal with this financial crisis. I say, let’s let the 100% effective law of natural consequences do it’s good work. There is nothing more sure to affect human behavior in a positive way than letting somebody have to deal with the natural consequences of making a mistake.

Previously I have said that the Real Estate Market will continue like a roller coaster with many ups and downs… here’s more proof of what I’m saying when I say that this crazy market is not over yet: Texas Posts Nation’s Largest Monthly Foreclosure Increase: Study… http://www.dsnews.com/articles/texas-posts-nations-largest-monthly-foreclosure-increase-study-2010-03-25

My advice is to grab onto all those old common sense behaviors that used to be so typical of our country…

• don’t spend what you can’t pay for
• live a little below your means
• save some for a rainy day
• say what you mean and mean what you say
• take responsibility for yourself… Don’t expect others or the
• overnment or anybody else to pay for your needs
• sacrifice for the worthwhile things you want and need

Basically, if I were a little younger I guess I would say, “Quit your whining and Man up!” These are times that require that old work ethic… work first and play later as I used to tell my kids. It is only through these kinds of conservative behaviors that we will survive this mountain of individual and Governtment debt that we have amassed as a nation. Success will only come from working hard… for a long time. Consistency is the key to our future success. We can’t get to the destination we desire over night. It will take some time, hard work and our corporate the refussal to quit.

We just can’t seem to keep home sales rolling. It will continue to be a roller coaster ride… watch for many ups and downs going forward as far as home sales and values.   Houses have become homes again and the quicker we all realize that homes should never have been treated like a credit card the better off we’ll all be. Read on:

http://www.dsnews.com/articles/existing-home-sales-fall-again-in-february-nar-2010-03-23