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Communities in Beaumont CA

According to a real estate study conducted by USC, the Southern California commercial real estate market is on the rise, which could include the Banning CA commercial real estate market as well.

According to the article:

"The office and industrial real estate sectors continue to improve for Southern California landlords, a report said, but high office vacancy will remain common for the foreseeable future as businesses put more workers into less space.
The regional economy has strengthened the past year and enabled some businesses to hire more workers, according to USC’s annual Casden office and industrial property forecast.

That has resulted in higher occupancy and rising rent for industrial buildings, while office landlords are seeing rising occupancy and smaller declines in the amount of rent they can charge.

“We predict office market rents to stabilize in as little as six months, but a sustained recovery could be many years off,” said Casden report author Tracey Seslen.

Office occupancy probably won’t return to pre-financial crisis levels until some of the region’s office buildings are taken out of commission or converted to other uses.

“A paradigm shift in the way tenant firms use office space will force landlords and developers to rethink their investment strategies even as the economy improves,” she said.

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Or visit our website: Banning CA Commercial Real Estate

I have read several news and Blog pieces about 2012 being the bottom of the market and how the best time to purchase a home is now. In good conscious I cannot sit idly by without voicing my opinion.

The news and columnists have based their analysis on the low number of inventory currently on the market for sale and the fact that it is 22% less than this time last year. They further site a 30% increase in property searches on Realtor.com which is one of the top search websites where consumers make purchase decisions. The reporters further substantiate their point by stating that interest rates are the lowest they have been since the great depression. Well folks, I am here to let you in on a few things. I am a distressed property real estate broker and live in the numbers and happenings on the ground. Last year alone I personally closed $17 Million in real estate. More than three quarters of my sales were short sales and bank owned property sales. My job revolves around tracking properties that have defaulted on their mortgage payments and listing the property for sale before it ends up in foreclosure. When properties do end up going to foreclosure the banks also contacts me to sell the properties back into the marketplace as a bank owned property. This is also known as a REO (Real Estate Owned) property.

In dealing with the lenders on a daily basis I have the ability to see how many mortgages are current or behind in any part of California. The numbers are staggering! One in three properties in San Diego County is currently underwater (owe more than what the property is worth).
Many of you may have heard of the “Mortgage Debt Relief Act of 2007” which is set to expire at the end of 2012. This means that anyone wanting to do a short sale has until the end of this year to get it done to avoid the enormous tax and deficiency implications. As homeowners scramble to do short sales, the banks are absolutely inundated with files. Banks have increased their loss mitigation departments to handle the amount of short sale requests as the deadline draws near.

So to shed further light on the subject of a “recovery,” I would have to say that the reason there is a 22% decrease in inventory on the market for sale is due to the “Robo-signing” debacle which simply held up the foreclosure process for a few months. Furthermore, the lenders have started issuing three month extensions to foreclosure sale dates rather than the standard 30 day extensions. The numbers are artificially adjusted to modify the supply and demand ratio. Also, the news columnists have stated that the average nationwide sales price has started increasing and the market is recovering. This is not quite correct because the number of higher end distressed sales has dramatically increased. In other words, if 100 homes sell at $200K and 900 homes sell at $500K, the average home price may have increased.  However, what they are not saying is that the home that is currently selling at $500K was purchased in 2005 for $900K.  See how they are messing with the numbers. Just because the average nationwide sales price has increased, does not mean we are recovering.

So I would maybe agree that the lower end has reached the bottom whereas the middle and higher end have room to fall.  Far be it from me to state that 2012 is the “Big Housing Recovery.” New young families or recent college graduates will also add to the lower end recovery as they will need to purchase in this range.

The number of Baby Boomers now wanting to downsize will further hamper the prices of the middle and higher end as they add to the supply. There are currently 30 million Americans in this segment of the market.

The FED made an error in judgment a month ago when they stated interest rates would remain low through the end of 2014, which took away the immediate driving force to purchase now. If interest rates would remain low for an extended period of time, why would anyone be in a hurry to purchase when they know how much shadow inventory the lenders are sitting on?

As the world has become a global economy, few have shed light on the fact that China has begun their housing crisis with more than half the cities reporting huge decreases in home prices. This may have an influence on our economy further down the road as this may affect the cost of consumer goods locally.

Gas prices are at an all-time high and could further contribute to inflation and gyrations in the consumer price index.

Unemployment is still stubbornly above 8% and steam rises from the printing presses at the Fed.

I don’t know folks. Recovery 2012?  I am not so sure. And over the years I have learned that in the long run it pays to be honest rather than bending a situation for personal gain. There is a reason I am renting right now. Though the rents are higher, cash will soon be back on the thrown to be crowned King. Don’t be in any hurry to purchase unless you find a great deal.

This is my honest humble opinion.

Here are some current comments and trends which one of an industry lead online articles inspired some thoughts and feedback which you as readers repositioning your business strategies may find insightful to current local, regional, and national market conditions that we are tracking for our clients around short sales acquisition both one off and bulk asset acquisition.

I wish what you reported in your article on short sales gaining momentum was occurring in the NY Metro area? In spite of all the reports that shorts are gaining traction we are seeing the opposite. A recent interview with an investment company we are working with tied to the Treasury reported a pull through rate on short sales at a meager 7-13% of actual files in the pipeline vs approved and closed shorts.

In an environment like a Chase for example where you may have 30-50 thousand requested short sales I am not sure where the amount collection level supports the cost containment justification to cover the head count and operational cost investment to support short sales at the present level? Another area which seems to be behind so many issues sited on the SSS Site has to do with the lack of trained and qualified personnel,not to mention the readiness of the supporting team members, at all levels necessary to keep the disposition process moving. The ROI to the organization based on the sizeable investment being made to staff vs the value returned to shareholder value has to be another emerging problem and which is also not calculated in the loan losses building another case for streamline short sales to emerge- but how soon? The Short Sale scaling up trend seems to be emerging but the business metrics and pull through on closed loans seems to be one of the great mysteries of our current industy?

In spite of growing inventory we are still butting heads on appraisal value and determination of actual true distressed fair market value which is used normally to negotiate actual settlement value. In spite of slowing market conditions investors generally are looking for better then 90% settlements of inflated values which seem to be reached in a declining % of deals as buyers are being more sophisicated after making too high a buy on this first short sale acquisition that can't cash flow or be resold now that the title has become marketable.

I further asked the author on the Short Sale Trend Article tp please convey in future writing that distressed valuation and retail stated fair market value are two different and distinct values which if denied by services, common, will result in higher loan loss levels which is the baseline for hopefully more services waking up to this reality. An area where professional value create value is through the process of clearing and negotiating liens and clouds on title which is something we handle ever provide credit to investors. Without this layer in the supply chain these untold millions of properties will not be absorbed in many markets as the 1.5 million properties were absorbed in 2009.

We are also seeing the some major delegated services are in fact re-tooling to do short sales however we have not seen number of short sale approved units pop. In spite of data supporting market stability or growth many markets are on the decline partially due to clouds on title comon with transaction worked out as a short sale.

A call to one of our realtor partners in the Fort Meyer area revealed that now as oil is hitting the beach fewer people will be thinking about visiting or owning in Florida which will also add salt to the wound in the florida real estate market as yet another issue concerning declining real estate value is starting to hit the west coast of Florida coast?

What I am seeing in an increase in interest in one off note purchase transactions to avoid the delays, frustration, and head butting rampant when 3rd party negotiation company, title, realtors, or others attempt to negotiate a short sale settlement are delayed or outright fail. Education at all levels is still a problem on both the side of servicers, institutions, and agents attempting to obtain a short sale approval as advanced understanding of investor regulations is broadly unknown by most practioneers and which must change to have the same transparency that the institutions expect from the prospective buyers.

Please post your market conditions and trends you are seeing in your market so we can leverage these conditions and trends and hopefully all lobby to our local legislatures education to support better practices to help people sustain the dream of home onwership in the US which is under attack and will not be as strong without your help. Think Global and react locally. Happy Selling- Craig

T. Craig Barry

http://www.lossmitigationsvcsnj.com

LossMitigationSo@aol.com

D (614) 404-9622

F (973) 900-8798

"Your AZ, CA, FL,OH & NJ Luxury Short Sale Consultants & Property Acquisition Source