Palm Springs Market Statistics 2014

Short sales and Foreclosures Drop - Equity Sales Increase

PRICES RISE year over year in the Coachella Valley

Market statistics for May 2014 have been compiled and published.  It shows some interesting facts and a decided change in the Real Estate market in Palm Springs. If displayed on a graph it would also show a steady line up. The trends we are about to discuss below have been steadily developing this entire year, with no retreat.

• First, the number of homes being sold as foreclosures or short sales has taken another big drop. This category is down 50% from May 2013 when 18% of homes were in this category.


• Secondly, the number of available homes is rising with about 90 more condos and 90 more homes on average – available each month. This is a wake- up call for sellers because the number of homes selling is dropping in each category and each city.


• Third and most important however is the marked increase in price. The median sales price for single family homes is now $455,100 whereas in 2013 it was $368,100 and for condos the median price is now at $232,222 VS. the 2013 figure of $182,000.

With these type numbers Pam Springs and the Coachella Valley are outpacing the Riverside County wide statistics, where a higher percentage of homes are still in foreclosure or short sale and the median price  remains over $100,000 less than Pam Springs.

Obviously, the number of properties selling will drop as prices rise.  The prices will rise as the supply of foreclosed and short sale homes drops.  Notwithstanding that obvious equation - there is no doubt that the market in Palm Springs has returned to a more stabilized mode.

See More Information about the Palm Springs Market Area

Keeping Your Home Will Get Easier For Some...

Effective July 1st 2013

New options coming for homeowners who want to stay in their homes and avoid Short sales or foreclosures. The key here is your loan must be a Fannie Mae or Freddie Mac backed loan.

Fannie and Freddie will begin implementing sweeping new loan modifications guidelines. Lenders and loan servicers will be required to send a "Streamlined Modification Solicitation Offer" to borrowers who are at least 90 days delinquent and meet the initiative’s eligibility requirements.

See if Freddie Mac Owns Your loan here.
See if Fannie Mae owns your loan here.

It differs from previous efforts: Borrowers will not be required to document their hardship or financial situation, but will be able to accept a “Streamlined Modification Offer” by simply making the trial period payments and agreeing to the terms of the mod.

There are some requirements, one is that you must be 3 months delinquent! I don't really like that but it is the way this program is set up

UPDATE:  

It is 2018 now and these rules have changed. There are many things that will be different. If you live in California please go to this website for more information about keeping your home out of Foreclosure.

Foreclosure Terms Defined

Foreclosed, Foreclosure, In Foreclosure, Bank Owned, REO.....

WHAT DOES IT ALL MEAN? - A Quick Guide

As an active Real Estate agent with a myriad of listing types I field dozens and dozens of phone calls each day from buyers and sellers. The level of confusion out there is staggering! Starting in 2007 when we began to experience a record number of mortgage defaults and with that change came a whole new vocabulary to learn. As a buyer you need to understand what type of property you are looking at.

Know Your Terminology: to try and clarify this issue I submit the following guideline to terms for the buyer on the open market. These are the commonly used terms, at least in the Southern California Market. If you know of another term in your are best check it out with a local trusted resource.

Short Sale: Seller is still in control of the property. Often still living in it. They are looking for an offer so that they can try to get the bank to accept that and release them from the balance of the loan. At any point during your attempt to purchase the property in this way it could fall into foreclosure. Your agent should stay on top of the sellers situation and watch for the filing of any default notices.

In Foreclosure: This is the period after the bank has issued the notice of default and the owner may or may not still be in the property. In California this is a 120 day process from notice of default* to foreclosed. This is the biggest limbo period. Owners may work out something with the bank, have a relative rescue them, ignore everything and let the house go to foreclosure, do a deed in lieu (basically cooperate with handing the house back to the bank to avoid foreclosure) - essentially anything.  Different rules apply depending on what type of mortgage the homeowner had.  As a buyer this is a risky time to be dealing with the owner. They are under a great deal of stress and truthfully anything can happen. In California there are also laws about purchasing any equity the owner may have if you are an investor and not buying it as a primary residence. So caution is the rule of the day.

Foreclosed: This is a home that the bank or an investor now owns. They have completed the foreclosure and they are now the legal owner. The bank typically hires a realtor to list the home and get it sold. However, you may see the home go to another investor for sale or the house may be put in an auction.

Bank owned - REO: Two terms that mean essentially the same thing. The bank or some lender (sometimes a private party) owns the property.

The fastest way to purchase a property is in this stage:  once the bank has foreclosed and they are the owner of record. It may take a little while to get it on the open market but once it is you can typically proceed with a purchase pretty quickly.

Auctions: Many people ask about buying a foreclosure on the courthouse steps. This is still done. As the final step of the foreclosure the bank schedules the auction. Lists are available online or through title companies.  I can't imagine buying a property this way unless you are very certain that the value is there and have some idea of the condition of the property. Some properties receive no bids and the bank sends their representative to the sale and they buy the property back for the amount they foreclosed on - those properties typically come back on the market with a real estate agent.

There are also several large private companies working in a bunch of loose partnerships with the banks. They will get a block of properties and schedule an auction - either on line or at a hotel ballroom or convention center. Usually, they have a preview weekend to go look at the properties and then hold the auction. Be wary of these as often times there is a "Buyer Premium" that can be any amount but typically I see them around $5,000.  If you do not know values in the neighborhoods you are buying the chance of overpaying is very high. I have personally seen properties in my market go to auction and sell for more than they had been listed for the previous month when no savvy local buyer would pay that much.

* The notice of default is the official notice to the homeowner that foreclosure proceedings have begun

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To Read more on Short Sales please visit our Short Sale Page

 Search Homes For Sale In Palm Springs CA 

Recovery...Really, Is This The Best Time To Sell?

The last three or four months in California (well most of the state anyway) have been a heady return to the days of multiple offers. Declining inventories have lead to a mini frenzy on many properties. Prices have started to inch up. Don't worry, no one is going to get whiplash from the speed that they are rising but they are indeed rising a little. Homes that are in tip top shape sell first, followed by homes that need just a little work followed by great buys on big fixers in good areas.

[caption id="attachment_2151" align="aligncenter" width="300"] Sales Surge In California[/caption]

This trend has bypassed  properties with high Homeowners fees, it has also excluded most condos - Single Family homes are the darlings of the current market.  Great prices on homes/condos have had the negative effect of making the HOA fees really jump up and hit buyers in the face.  Ironically, it is the best priced condos that often have the worst time of it. While many people will take a closer look at a nice condo for a mere $100-115 thousand they hit the pause button upon finding out that the monthly dues are over $400. At todays' historically low interest rate that is almost as much as the mortgage.

Many reports on the state of Real Estate focus endlessly on the numbers 49%-55% decreases in inventories year over year, and as mentioned earlier the modest surge in prices.  It would be easy to interpret this as a positive sign of a rejuvenated housing market.  Underlying these trends though some economists are pointing out, are the harder facts. Only about half of the homes purchased are being bought by primary home owners. That means the other half are being bought by investors that want to fix and flip or fix and rent.  The economist say this points to low demand despite record low interest rates consumers are not flocking to buy homes. The underlying economic conditions of growth in the economy and lack of jobs is holding the average home buyer back even with 3.5% interest rates!

The point here is not to say that all is lost. Movement in the market is still good. Banks still have years of work to do to reduce their foreclosed inventory. It is debatable how they will do that but that is for another blog post. Some new construction is starting to spring up or get restarted.  Inventory levels could change depending on these two segments alone.  It has been talked about lately, that the banks may start selling off their inventory in bulk sales. That could change the market drastically. Also, investors could shift gears. If they are unable to find tenants or buyers for their flips they won't be buying more. The economy could improve the only constant here is the fact that things will change.

This leads me to the point that I don't think should be missed. If you are in a position where you know you want to sell your home in the next 6 months, do not wait. Now is the time - seize the moment and do it now.  After almost 12 years in the business I can personally attest to the fact that in every market condition the market tends to shifts about every six months.  The shift could be availability of financing - inventory levels - consumer confidence or something as mundane as popular price points but it will shift.  We are drawing close to that six month window, sellers now is your moment.

Tenant Rights In A Foreclosed Property

We have written before about the need to be very careful when renting an apartment or home in todays market. There are many scams and just because someone has the keys to a property does not mean that they own it or have the authority to rent it. You can read our whole post about Rental Scams here however, the most important thing you can do to protect yourself is get ID from the person renting the home to you and find out if they even own the property. Typically you can do this at your local county tax office or a friend in the Real Estate, Title or Banking Industries can often check that for you.

This blog post is about what happens when you have already paid, moved in and settled only to find out your landlord is not paying the mortgage. Tenant Rights In A Foreclosed Property.

Foreclosure is looming and you are stressed out worried about  what will become of your lease. Sadly, there are many scenarios where you may never know it is coming unless there is a notice posted on the property. Closer to the actual auction sale date you may see people driving by and checking out the property. A few brave ones may even ring the doorbell. These are typically investors that want to see what the property looks like in advance of the foreclosure auction. Many will have no idea that you are a tenant and not the owner. You do not have to talk to them and you probably would be better off referring them to your landlord.

So what are your Tenant Rights in a Foreclosed Property? These rights changed with passage, in 2009, of the Protecting Tenants at Foreclosure Act (PTFA) this law say that any bona fide lease entered into prior to the notice of foreclosure remains in place when the owner-by-foreclosure (OBF) purchases the property to be used for any purpose other than as a primary residence. Yes, you read that right.. a real lease that is in place prior to the notice of Foreclosure ..has to be honored by the new owner as long as they did not buy it to use as their principal residence.

There is another criteria that must be met as well. The lease must be for fair market value. The PFTA is very vague however, and it does not really spell out any set way that this can be determined. I would suggest that a copy of current rental ads should be pretty strong evidence that your rent is at market value.

So what if the new owner wants to use the property as their principle residence? Well, In this case you can be given a 90 day notice to vacate the property. Sort of a worse case scenario yes, but you cannot be forced out without adequate time to find a new place.

This Act is in effect until The end of 2014.

Again, use caution when leasing any property. Make sure you know who you are dealing with and if the worst thing happens - know your rights.

Non Judicial Foreclosure What Is It?

In California the main way that homes are foreclosed is called A Non-judicial Foreclosure.

This is the technical process that enables the bank to use the foreclosure process. The way to understand this process is to understand the basic framework used by lenders to secure loans to borrowers.

Two Kinds:
There are two (2) basic types of foreclosure in California. In a judicial foreclosure, a court action is commenced to foreclose the mortgage or deed of trust that secures the loan. This mode of foreclosure is really a lawsuit, and because of that is governed by the Rules of Civil Procedure and Rules of Evidence applicable to legal actions. The other type of foreclosure is the non-judicial foreclosure, sometimes called a trustee's sale under the procedures set forth in Civil Code. This mode of foreclosure is only available, however, if the deed of trust (or mortgage) contains what is called a power-of-sale clause.

You May Be Able To Sell Your Home as A Short Sale More Information.

HowThis Gets Set Up:
In a typical loan transaction, a promissory note, which spells out the dollar amount loaned, along with the interest rate and payment terms, is signed by the borrower to show the debt. The borrower then also executes a deed of trust in favor of the lender, this makes the property the security for the loan. It also spells out the specific duties of the borrower, and the lender's rights if the duties are not met. In addition to the borrower and the lender, the deed of trust will also name someone to act as trustee.

What Is A Trustee?:
This can get a little confusing for people not involved in real estate everyday because a trustee under a deed of trust is not a true trustee. At least not in the sense most people think of. The Job of a trustee under a deed of trust is either to do the foreclosure under the lender's direction, or to reconvey the trust deed once the obligation has been satisfied in full. So when you sell the house or finally pay off the mortgage the deed is "reconveyed" The beneficiary is allowed to substitute in another trustee should it want to do so.

What Triggers Foreclosure:
In most cases there are just two of things that will entitle a beneficiary or as most people say the bank to start foreclosure: Nonpayment of the principal, interest and impounds (if any), or non payment of a Balloon Payment. Much less well known and seldom used is the Nonmonetary Default: Failure to preserve the property physically and/or financially, by maintaining insurance, taxes and the non voluntary lien-free status established at the time of the loan. Note: The lender must advance funds to cure a non-monetary default and/or may demand proof of cure as a condition of reinstatement. When a default occurs and an institutional lender is involved, the lender will ordinarily complete any preforeclosure servicing prescribed by various loan guidelines in order to attempt a resolution of the default. Should the borrower either fail to respond, however, or fail to perform under an agreement to resolve the default, the lender may refer the loan to the trustee for foreclosure.

Documents Required to Foreclose:
The lender will provide the trustee with the Note, Deed of Trust, Assignments, Modification Agreements, Subordinations, etc., plus a Declaration of Default and Demand for Sale detailing the breach information. The lender would also execute a Substitution of Trustee, naming the new trustee, at this time if they choose to do so. The trustee is who will formally institute the foreclosure process by preparing, executing and recording the Notice of Default. A Trustee's Sale Guaranty (TSG) will be ordered to assure that the lender and trustee are made aware of necessary information regarding the present condition of title and proper addresses for notices to all parties of interest.

Once the Notice of Default is recorded, the title company will confirm the recording, in writing, to the trustee. Receipt of confirmation will signal the trustee to mail the Notice to all parties entitled to a ten (10) day notice under C.C. Sec. 2924b. Depending on specifics of the loan or local rules the trustee may also be required to post or publish the notice.

How Much Time Do I Have:
The Notice of Default is for three (3) calendar months. This time is often referred to as the redemption period, during which the borrower or junior lienholder and beneficiary may explore ways to cure the default. If the default has not been resolved during this period, however, the trustee will continue the process by requesting a title update in order to secure information which may affect the ability to grant clear title after the sale. A Notice of Sale or Notice of Trustees Sale will be drawn, posted and published, mailings prepared and the Notice sent for recordation. Each of these activities must be performed as prescribed under Sec. 2924 et. seq. to assure validity of the Trustee's Deed upon sale, the insurability of the property upon conclusion of the foreclosure process, and subsequent liquidation by either the beneficiary or a third party.

Can I Pay Off The Debt And Keep My Property?:
The right of the borrower or junior lienholder (except in cases where the balloon payment is due) to reinstate the loan is good up to five (5) business days prior to the sale. The beneficiary must accept reinstatement until this period has expired. Within 5 days of the sale the beneficiary may use its discretion as to whether or not to accept reinstatement.

The Auction Process:
Approximately twenty-four (24) hours prior to sale, the trustee will request an additional title update, to be delivered prior to sale time on the day of sale. If the status of title is shows that there is no impediment to the sale (such as a bankruptcy, city or county notice indicating an environmental or safety hazard, or DEH ATF/IRS seizure), the sale may be held as scheduled. The beneficiary will provide the trustee with their instructions regarding the bid price for sale. The trustee will review the bid, audit the foreclosure file, and provide the auctioneer with instructions for the sale. The auctioneer then conducts the sale as instructed, and reports back to the trustee.

After The Property Sells At Auction:
The trustee will notify the beneficiary and prepare the Trustee's Deed, which will vest title into the name of the successful bidder. If a third party is the successful bidder, the trustee will also be responsible to distribute the proceeds of the sale.

If the auctioneer receives no bids for the property which exceed the opening bid, the property will revert to the beneficiary (the bank), who will take title under the Trustee's Deed. These are typically the homes that wind up on the market as "Foreclosed homes" or "Bank Owned" homes.

Finally:
Unlike a judicial foreclosure, there is no statutory right of redemption following a non-judicial private sale.

While this blog outlines the basics of the timeline there is no substitute for qualified help. Feel free to call us or give your attorney a call if you have further questions about your particular situation.

Learn More About Foreclosure.

Real Help For Homeowners Fighting Foreclosure

We are always told to watch out for something that seems too good to be true, because it probably isn't!  You will have to suspend your disbelief in this case however, because NACA.com is the real deal.  It is a nonprofit organization, founded in 1988,  that is designed to help homeowners secure fixed rate financing with no games gimmicks or tricks. It also has helped thousands of homeowners negotiate with the banks that hold their mortgages to get permanent rate and principle reductions. NACA can also provide you with valuable credit counseling service to help understand your mortgage loan and what you will be able to afford.  Perfect credit is not required to obtain financing though NACA.

Watch the CNN video about the founder of of NACA

The best part - beyond the real help you can receive from NACA?  It is totally, 100% free!

What do you have to do?  You will have to organize your finances before you go to them. Paycheck stubs, tax returns, current mortgage coupons and a monthly household budget should be at the ready.

How to Start: Go to the NACA website and click on the button that applies to you - looking for a fixed rate loan to purchase a home? Looking to find a solution to stay in your home?  It is that easy.

NACA has events and office throughout the country and you will be able to find them on their website. NACA has agreements with most of the major banks and the banks even come to NACA events to help you on site.

Currently - February 2012 - NACA is offering fixed rate 30 year financing at 3.875%

Be sure to let anyone you know that is having trouble with their mortgage about this truly free, truly helpful organization.

Foreclosure, Foreclosed, Foreclose…..Now Lets Conjugate “short sale”!

Short sales, REO’s, Foreclosures, Auctions and…….

It is a little confusing out there these days for the lay person who does not know all the “new” vocabulary in real estate.  It might seem like word soup or you might think you are back in foreign language class conjugating verbs. Actually, most of this vocabulary is not really new but so much of

it was never or hardly used in the last ten years. Well it is back now and it helps to understand what you are looking at.

Here is a quick guide for you:

Short Sale: This happens when the owner wishes to sell their home for less than the amount that the bank is owed. Everything happens just like a normal sale right up until a buyer submits an offer. Then there is a process of getting the lender to accept the deficiency or shortage between what they are owed and what they will actually receive. This process can take up to 120 days and usually the seller will remain in the home until it is finished.

REO: This stands for Real Estate Owned by Lender. This is the status of a property after the full foreclosure happens and the bank has physically taken the property back. Realtors will often use this term and you may see it in advertising though the term bank owned is much more common.

Foreclosure: The process by which the bank takes back a house after the payments have not been made as agreed. In our market here the process usually starts after 3 months of no payments. Confusion comes about when people talk about properties being “in foreclosure” a home can be in that state for many months before it is actually foreclosed and thus bank or investor owned.

Auctions: Confusion with this word usually centers around the auctions you see advertised at hotel ballrooms and convention centers vs the auction that takes place on the courthouse steps as the final phase of the banks foreclosure on a property. The first type of auction is usually investors or banks who have grouped a bunch of properties together and are trying to move them as quickly as possible. The courthouse steps type of auction is reserved for the properties that are in that very last phase of the foreclosure process.