Real estate is local.

These are two statements that we’ve all heard, but what do they really mean?  Well, when it comes to understanding the activity within Walnut Creek and our surrounding area, it helps to put specific numbers to the question.  By looking at the quantity of sold properties each month during two very different years, we can clearly see similar trends.  Take, for example, 2005 (a year nearing the peak of the bubble) and 2009 (a year at or near the bottom of the market):

The volumes are different, but the trends are clearly the same.  Activity ramps up through the beginning of the year (January, February, March), peaks during the summer months (May, June, July) and then decreases as schools get back into session and we enter the holiday season.

Knowing this type of information typically won’t change a person’s decision to buy or sell at a given time.  However, it should be used to help set the appropriate expectations.  For example, if you are trying to sell your home during November and you’re the most expensive house in your area, if there is any doubt about justifying the price, you should be prepared for a wait before you start to get any offers.  Likewise, if you are a buyer during late Spring and early Summer, you should be prepared for some competition when you make your offers.

Understanding the environment in which you are working in can, and will, greatly reduce the stress and frustration that is all too commonly experienced by both buyers and sellers.  It’s unnecessary, though, and can be avoided by working with the right individual.  Save yourself the headache and frustration, give me a call (925.817.8428) and get the information you really need.

“Flopping” is a term starting to gain acceptance as indicating the flip of a short sale property.  The idea is that you buy a short sale property for $X from the lender, and then sell it for $Y shortly thereafter.  The spread between $X and $Y is the gain the flopper stands to make.  Put some real numbers to this: maybe you can negotiate with a bank to acquire a short sale for $100k and then turn around and sell it to another buyer for $125k just a few days later … as the flopper in this scenario, you would have just grossed $25k.  Not bad for a couple days work.

Accelerate this idea and have a buyer lined up before you actually acquire the property from the bank.  Now, you’re not waiting a few days to hopefully resell the property, but, instead, you are ensuring yourself of a buyer and able to turn the property over in a matter of hours.  This type of behavior isn’t uncommon – check out the the article “The new flipping: short sales” that highlights it being done in Florida.

The argument by those opposed of this practice is that you are defrauding the bank of the extra money that you just made off the $X/$Y spread.  Let’s say a bank holds a $150k mortgage on a property and sells it to you for $100k.  They just took a $50k hit.  Now, if you turn around and sell that property to someone else for $125k, you just made $25k … that’s $25k the bank could have potentially recouped if they had been able to sell the house to your buyer.  But, my question is, why should this be considered mortgage fraud rather than the natural course of business?

To me, business is all about matching a customer to a product at a price that the customer finds justifiable.  If the bank wasn’t OK with selling the property at $100k, then they shouldn’t have made the deal.  They should have put in the effort to find a buyer that would have paid them $125k.  That’s not the flopper’s fault – it’s the bank’s.

Think of it this way – let’s say you are shopping for a sweater and find one at Nordstrom that you like, but, unbeknown to you, the exact same sweater could be purchased for less from Macy’s.  Now, if the Nordstrom employee knows that the sweater is cheaper at Macy’s, should they be required to disclose this to you?  Of course not!  Were you just a victim of consumer fraud?  Of course not!  You lost money because you didn’t take the time and put in the effort to find the best deal … just like the bank.

Some will probably say this is an unfair comparison because the bank could be in a distressed position while the Macy’s/Nordstrom stores are not.  But, is this not part of doing business?  The bank is smart enough to understand the repercussions of agreeing to the sale of the property, and, if they’re not, they shouldn’t be in business in the first place.

I’m struggling to see how this is mortgage fraud, but would love to get clarification from anyone that has a better understanding…

Title to real property in California may be held by individuals, either in Sole Ownership or in Co-Ownership.  Co-Ownership of real property occurs when the title is held by two or more persons.  There are several variations as to how title may be held in each type of ownership.  The following brief summaries reference eight of the more common examples of Sole Ownership and Co-Ownership.

A Single Man/Woman
A man or woman who is not legally married.
Example: John Doe, a single man.
An Unmarried Man/Woman
A man or woman, who having been married is legally divorced or, a man or woman, having been in a registered domestic partnership that has been legally dissolved.
Example: John Doe, an unmarried man.
A Married Man, Woman or Registered Domestic Partner, As His/Her Sole and Separate Property
When a married man, woman or a registered domestic partner wishes to acquire title in his or her name alone, the spouse/partner must consent, by quitclaim deed or otherwise, to transfer thereby relinquishing all right, title and interest in the property.
Example: John Doe, a domestic partner, as his sole and separate property.
Community Property
The California Civil code defines community property as property acquired by husband and wife, or by either. Real property conveyed to a married man or woman is presumed to be community property, unless otherwise stated. Under community property, both spouses have the right to dispose of one half of the community property. If a spouse does not exercise his/her right to displose of one-half to someone other than his/her spouse, then the one-half will go to the surviving spouse without administration. If a spouse exercises his/her right to dispose of one-half, that half is subject to administration in the estate.
Example: John Doe & Mary Doe, husband and wife as community property.
Example: John Doe & Mary Doe, husband and wife.
Example: John Doe, a married man.
Registered domestic partners shall have the same rights and protection.
Joint Tenancy
A joint tenancy estate is defined in the Civil Code as follows: A joint interest is owned by two or more persons in equal shares, by title created by a single will or transfer, when expressly declared in the will or transfer to be joint tenancy. A chief characteristic of joint tenancy property is the right of survivorship. When a joint tenant dies, title to the property immediately vests in the surviving joint tenant(s). As a consequence, joint tenancy property is not subject to disposition by will.
Example: John Doe and Joe Smith, registered domestic partners, as joint tenants.
Tenancy In Common
Under tenancy in common, the co-owners own undivided interests; but unlike joint tenancy, these interests need not be equal in quantity or duration, and may arise at different times. There is no right of survivorship; each tenant owns an interest which, on his or her death, vests in his or her heirs or devisees.
Example: John Doe, a single man, as to an undivided 3/4ths interest, and George Smith, a single man, as to an undivided 1/4th interest, as tenants in common.
Trust
Title to real property in California may be held in a title holding trust. The trust holds legal and equitable title to the real estate. The trustee holds title for the trustor/beneficiary who retains all of the management rights and responsibilities.
Community Property With Right of Survivorship
Community Property of a husband and wife, when expressly declared in the transfer document to be community property with the right of survivorship, and which may be accepted in writing on the face of the document by a statement signed or initialed by the grantees, shall, upon the death of one of the spouses, pass to the survivor, without administration, subject to the same procedures as property held in joint tenancy. Registered domestic partners hsall have the same rights and protections.

Similar units in this complex have been renting for between $1600 and $1800 a month. Putting 25% down on an aggressive offer will present a compelling situation for some investors.

Disclaimer: I am not the listing agent on this property.  This video was created as a convenience to my clients that may have an interest in purchasing it.

Well, if you are familiar with Walnut Creek, you probably already know that the city is comprised of four separate zip codes:

• 94595: Primarily the Southern portion of the city and contains the Saranap neighborhood
• 94596: Think downtown Walnut Creek and the Walnut Heights neighborhood
• 94597: The NW corner of the city on the Pleasant Hill and Lafayette borders
• 94598: The NE portion of the city that borders Concord and Clayton

Each part of Walnut Creek has its own personality and charm that attracts a slightly different type of resident.  For the sake of this post, though, I’m not going to get into what each of those personalities are (but, if you’re thinking about relocating to the area, give me a call and I’ll be more than happy to help you choose the ideal area for your lifestyle).  What’s very interesting, however, is that the market behavior and trends are quite different in each of the zip code regions.  Take a look at the following chart that shows the median prices in each zip code over the past year for single family homes:

Walnut Creek SFH Median Price per Zip Code

Check out some of the differences.  94596 and 94597 have both remained relatively stable throughout the year … but they have a $300k price difference!  94598 has been on a steady decline from roughly $950k down to $850k … about a 10% drop.  94595, though, has been hit the hardest – going from approximately $1.025M all the way down to $800k … putting us in the +20% drop range.

Let’s go ahead and take this analysis one step further – let’s see what the zip code behavior is like when we look at the condo/townhouse market:

Walnut Creek Condo Median Price per Zip Code

All of a sudden, we’re seeing very different behavior.  The zip codes don’t rank in the same order compared to the single family home market.  And, aside from the relatively smooth decline in 94595, the zip codes seem to be reacting similarly to the market influences – which was not the case with single family homes.

At the end of the day, what does all of this mean for you?  Well, as you probably guessed, it depends!  From a very high level, I hope that it shows you the importance of never making a real estate decision based on national, or even county, trends.  It’s important to stay aware of these macro trends that are occurring, but you need to question them by looking at empirical data for the specific market you are interested in.  From a lower level, I hope that it shows you how real estate trends can vary greatly within a city.  There are microclimates throughout a city that you need to be aware of; otherwise, you run the risk of making a misinformed decision and losing money.

Looking at price trends within a city is just the tip of the iceberg when it comes to properly analyzing a market to either buy or sell a property in.  So, if you are interested in better understanding the microclimates of the Walnut Creek area, give me a call so I can help you make an educated decision to fully take advantage of today’s opportunities (925-817-8428).

Talk to you soon!