Contra Costa Real Estate

April 5, 2012 by Peter Maclennan Leave a Comment

Another Wave of Foreclosures?

Reuters is reporting that another wave of foreclosures is about to hit the U.S. housing market. (HT: Zerohedge via BloodhoundBlog) The robo-signing settlement paved the way for lenders to resume foreclosure on many of their delinquent loans.

The Reuters’ article reports:

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo’s rose 68 percent and Bank of America’s, including BAC Home Loans Servicing, jumped nearly seven-fold — 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Market pricing is a function of supply and demand. If a large supply of housing hits the market, pricing will will have to fall to a level that demand picks up.

I wrote just yesterday about the lack of current inventory on the market. It will be interesting to see how this plays out in Contra Costa County.

If you are interested in real estate investing, please feel free to visit our website or our blog to get more information about investing. You can call me at (925) 385-8798 to discuss current investments or future plans for investing.

April 4, 2012 by Peter Maclennan Leave a Comment

Contra Costa County Real Estate Market Stats

The Contra Costa Association of Realtors® (CCAR) publishes monthly market stats. The February numbers were quite shocking to me. Below is a graphic that illustrates the inventory of homes for sale.

Notice that the number of homes for sale under $300,000 has fallen by 52.6% from last February. Across the entire market the inventory is down 40% from February of 2011.

Now look at a graphic illustrating the months supply of inventory. This metric analyzes the number of active listings divided by the number of homes sold in that month.

In February of 2011, the market would have needed 5 months to clear the inventory of homes under $300,000. This February it would have only taken 1.7 months to clear the market of the inventory of homes under $300,000. This is a 67.2% decrease year-over-year. The entire months supply has decreased by 48% across all markets.

What it All Means

The market is very brisk at the current time. Properties under $300,000 are getting multiple offers. If you are looking to buy, you should be ready with a pre-approval and a competitive offer. If you are an investor, consider making an all cash offer. Many properties are going for at or above market price depending on the area and condition of the property.

June 2, 2011 by Peter Maclennan Leave a Comment

Why Young Professionals Should NOT Buy a House

If you are a young professional with a high paying job, you have many things working in your favor. Lots of disposable income. Lots of freedom. Lots of options.

Here are three reasons you should not buy a house/condo if you are in this stage of life:

Real Estate Ties You Down

You decide to buy a nice little home in Walnut Creek, CA. Your career starts to take off. A headhunter contacts you with your dream job in Boston. You would love to take it, but what do you do with your home? Do you sell it? Can you sell it? Do you rent it? Do you want to be a landlord on a home in California while you are in Boston?

As one radio host said, “Owning real estate is placing a stake in the ground.” It is a financial obligation that can limit your options and limits your freedom.

Your Spouse Won’t Like It

Let’s say you buy that little two bedroom house in Walnut Creek. One day while walking your dog in the Dog Park, you see the most beautiful creature on two legs. Your whirlwind romance leads to a proposal and wedding plans.

As you begin making plans for life after marriage, you are deciding on where to live. Your spouse begins to point out the deficiencies in your first house. It only has two bedrooms, where are you going to put Jack and Jill when they come along? The kitchen is too small. The bathroom only has one sink. Where are the in-laws going to stay when they visit? Why did you paint the kitchen that shade of blue?

Your options are to remodel or to sell your existing house and buy something new. Do you really want this hassle while planning a wedding?

Odds are that the person you marry won’t have the exact tastes that you do. The house you thought was ideal, is not their ideal. It is a much better decision to buy something together that you both enjoy.

It is Not the Wisest Financial Choice

Imagine a young farmer. He just bought his first plot of land. He needs to plant his fields for the harvest and he needs to build his first house. However, he only has enough capital (money) available to do one or the other. Should he buy seed for his fields or buy lumber to build the home? Which would you choose?

Hopefully, you chose the seed. Seed provides more income for the coming years. Seeds will allow the farmer to have a future in the farming business. Lumber may have provided shelter, but it didn’t produce any lasting return to the farmer.

In many ways buying a single family house is like a farmer buying lumber. It provides shelter, but the long-term benefit is mitigated.

There is another answer that makes sense for a young professional. If you would like to hear more about this solution call me at (925) 385-8798.

June 17, 2010 by Peter Maclennan Leave a Comment

Buildings in Oakland, Berkeley, and Concord Enter Foreclosure Process

The Contra Costa Times is reporting that More East Bay buildings in mortgage default.

Specifically, Jackson Center at 1111 Jackson Street in Oakland and Berkeley Tower at 2120 University Ave in Berkeley.

The bank seeks to foreclose a delinquent loan totaling $47.1 million. The affiliate of Portland, Ore.-based Scanlan Kemper Bard, commonly known as SKB, bought the buildings and the vacant lot for $61.5 million in 2007.

Ouch! That means that SKB is willing to right off almost $15 million in invested capital on these deals.

In an article from April 26, 2010 the Contra Costa Times reported that One Concord Center was also in the foreclosure process.

SKB willingly turning over the keys to the property in Oakland and Berkeley means that they do not see a resurgence in value in the near future. Expecting a near term turn around is unrealistic.

February 5, 2010 by Peter Maclennan Leave a Comment

Downtown Pittsburg Project to Resume

Vidrio Mixed Use Development in Pittsburg, CA - Architectural Design

3D Architectural Rendering of Vidrio

The Contra Costa Times is reporting Construction to resume on stalled Pittsburg project.

After 18 months of inactivity, construction on a housing and retail project regarded as the centerpiece of Pittsburg’s downtown revitalization could resume next week.

Vidrio as the project was named by developer A.F. Evans has been under construction since 2006. The developer defaulted on the original loan from Union Bank in August of 2008.

A.F. Evans filed Chapter 11 bankruptcy protection in March of 2009. A.F. Evans also developed 901 Jefferson Street in Oakland which went to foreclosure and was bought by Madison Park Financial Co.

The City of Pittsburg began negotiating with Union Bank to buy the debt in October of 2009. Escrow for the sale of the debt was just closed last week.

The Contra Costa Times article says that the City of Pittsburg has already spent $26 million towards this project.

The article indicates that the 75 units are listed for sale at an average price of $152,230 per unit, for a gross sale value of $11.4 million. Less than half the cost of the city’s investment.

This looks to be a costly investment for the City of Pittsburg.

925.385.8798

Another Wave of Foreclosures?