The news about real estate seems to be less than positive these days.  If you live in Michigan where the state is shrinking in population, that is a long term concern (I'm originally from Michigan by the way).  If you live in many areas in California the news is a concern if you have to sell.  If you don't have to sell than what happens in the short term to the real estate market is irrevelant.   What scares me more than the short term issues of the economy here in California is that according the the US Census, the current population of California is 37 million people (more than all of Canada) and by the year 2025 is projected to be at 50 million people.  That is a scary number.  Luckily in Humboldt County behind the Redwood Curtain the population is currently at around 130,000 people over an area covering 3400 square miles and won't grow significantly.  Compare that to Orange County, 800 square miles and over 3 million souls fighting for space.  The point is people will always need somewhere to live and unless someone finds a way to grow land in the Pacific Ocean, the short term pain the real estate market is experiencing will have long term gains due to the increase in the population.

There was one house in Eureka that came on the market last week, a bank repo, and within 3 days there were 7 - count 'em - seven offers...just like 2004 redux, so don't tell me buyers aren't hovering looking for deals.  Talk to agents including myself whose buyers have lost deals on multiple offer situations recently or talk to buyers.  My short sale deal in escrow (still hanging in there and we are now in the process of renegotiating the deal) - the phone is ringing off the hook, people inquiring about that property.

Here is a pitch to see my website www.humboldthouses.com for some interesting deals.   Thanks for reading my blog.  Comments and feedback is appreciated.

It has been awhile since I last posted an entry because it has been awhile since anything progressed even one step.   The seller had been assigned a "negotiator" and was given a laundry list of items to submit to Countrywide, including tax returns, bank statements, hardship letter, comparable sales info.  Some of those items had previously been submitted to Countrywide but apparently one department does not talk to the other.  I had questions for the negotiator who is based out of Plano, Texas (remember no one goes to school to become a short sale negotiator).  After calling and leaving a message, I waited a few days, no return call back.  I know they are probably inundated so I e-mailed the questions.....wait a few more days....no e-mail....e-mailed questions again...no e-mail response.  Call seller who still does not have everything they need to submit to Countrywide.  call buyers agent...buyers getting antsy....in a nutshell this deal has been under contract since around the end of January - with the exception of getting a negotiator assigned to the property, we are no closer to closing this deal than we were 2 months ago.  I'll keep y'all posted on this deal.

I have had some people who read the blog e-mail me about their frustrations about this process.....I understand....let me tell you my frustrations:  I have been selling real estate since 1986.  I survived the horrible market in southern California in the 1990's (stay alive in '95).  Short sales were common then, too.  You would think with the advent of the internet and technology since that time, these imbicile lenders would be better prepared to deal with the situation as it presently exists in most markets in this country.  It is 1992-1996 deja vu all over again.  None of the lenders were seemingly prepared for the eventual "crisis" (by the way, fewer than 5% of mortgages are in default).  From my experience back then banks were not set up to deal with short sales.   They are better prepared to deal with foreclosed or Real Estate Owned (REO) properties.  Big difference.

If you are a buyer reading this and want to get involved in a short sale, my advice is if you find a property you like, wait for it to actually become foreclosed on (REO).  This way you avoid the short sale process, its a much cleaner deal because at that point, you get clear title and the bank has already eaten the loan and any back taxes and they (the bank) OWN the property instead of a short sale where the bank DOES NOT own the property but is calling the shots.  There are ways to track the property throughout the foreclosure process (in California you have a 90 day notice of default (NOD) and a 21 day notice of Trustee Sale). Plus you can likely get a better deal after the bank owns the property. Plus you know what the house looks like and the condition since the former owners would be gone at that point, having been foreclosed on and possibly evicted.  Another important point to ponder, since most short sales the sellers are walking away with zero cash and their credit gets screwed anyway, what is their motivation to go through all the hoops and bells they are being asked to go through in order to cooperate with a short sale?  Since in most cases they are probably not making payments, its in their interest to drag out the process and live payment free in the house as long as possible. Also make sure your agent can explain the nuts and bolts pros and cons of a short sale and is not just looking for a sale.  Most agents don't know what they need to know to advice their clients about the risks of a short sale if they have been in the real estate business less than 10 years.

Other points I want to make and for the buying public to consider: From a buyers perspective, I could see absolutely no benefit to playing the waiting game hoping to close a short sale.  If you wait, you risk losing other opportunities or perhaps interest rates going up.  You also don't know what the house will look like (assuming you are able to close a short sale) at the end of a short sale since its not a happy move for the seller.  Let me put in more bluntly:  I have sold real estate 21 years.  I have sold hundreds of properties over the years. I have bought plenty of real estate for myself.  I know the ins and outs.  I know the game.  I worked REO's in the 1990's with Freddie Mac, GE Capital, and others.... If I was looking to purchase a property I would NEVER get involved in the purchase of a short sale, and that is given my level of experience!  Its dirty real estate.  Each lender is different and the frustration level may vary depending on the lender involved.  Best advice is:  Find a seller with equity who is motivated to sell.  That is the key to getting deals in this market.  I don't recommend lease options or assume existing seller loans...stay away from those "creative" approaches....big time risks....those topics will be for another blog.

This area is called the "Redwood Curtain" the reason is the distance (and some would say isolation) from the large metropolitan areas.  Because of that, the real estate market here, while not without its issues and problems (like anywhere), the market here is much smaller and therefore not as impacted bu the high foreclosure numbers seen in other parts of this state.  I went to a seminar recently and 5 of the 10 cities with the highest foreclosure numbers were in California, including Sacramento (300 miles from Eureka), Stockton (even further), and various places in southern California.  All 5 of those high foreslosure cities had the same thing in common - massive amounts of new construction driving down prices.  There is very little new construction in this area and while prices have dropped, certain areas like Arcata which is home to Humboldt State U. have held their value, and that is typically true of college towns and coastal areas.   Eureka, Arcata, McKinleyville are coastal areas.  There are also many older houses that could be bought and with sweat equity and some work upside value increased....you won't find many fixer upper opportunities in newer areas.  I have sold several properties recently that had multiple offers, something buyers are surprised to learn.   The median home price here is around $300,000, way less than other parts of the state, and as someone who moved here from Orange County, a much better place to live and raise a family (in my opinion).

FYI - there are direct flights to this area from LA on Horizon/Alaska Airlines.  The curtain is open!

Find out more about Humboldt County by going to www.humguide.com or view more real estate at www.humboldthouses.com