For the most part, this trial period is specific only to the federal government’s Home Affordable Modification program.  However, expect modification programs that fall outside of the federal government’s program to implement the trial period as well.

In a recent article by Marcie Geffner of Bankrate.com, she describes 10 things that a borrower needs to know about the trial period. To read more about those ten items, please click on this link, Modifying Mortgage Trial Period

Bookmark this post:

The previous appraisal process has fallen under significant scrutiny and the result is a 180 degree switch.  Appraisals are causing havoc to the real estate community in a new way.  This new appraisal mess isn’t picking sides.  Both sellers and buyers are impacted negatively.  Here is what is different.

On May 1, the Home Valuation Code of Conduct or HVCC came into affect. This changed the appraisal rules for conventional loans, Fannie Mae and Freddie Mac. The primary impact is that the loan officer no longer directly selects the appraiser and Realtors are not allowed to provide information to the appraiser that could influence the final appraised value.  For example, imagine a home pending at a contract price for $600,000 and in phenomenal condition.  It has upgrades and a great location.  Now, picture the identical floorplan that sold 30 days ago for $550,000.  This home was an REO, backed to a busy street, the appliances were stripped out of it and the condition was horrible. There is a high potential under the new rules that this home won’t appraise for what the willing buyer and seller have agreed the home is worth under an agreed upon contract.

Here may be one reason why - a problem we see resulting from the new rules is that appraisers are being selected from outside of the area where the property is located.  For example, a Manteca appraiser could be asked to appraise a property in Dublin. The result of this could be devastating.  An appraiser unfamiliar with local trends may not know enough about the comparable homes.  Couple this with the appraiser’s inability to ask the local Realtor area expert about comparables and any distinguishing factors about the home, and this could potentially stop a deal in its tracks.

In my next article, I will be describing steps to take to protect yourself, as both a buyer and a seller, in the appraisal process.

Bookmark this post:

• Snowberries
• Columbine
• Flowering Sage
• Monkeyflower
• Huckleberry
• Manzanita
• Blue Penstemon
• Redbud
• Red Larkspur
• Leopard Lily

Did you know that hummingbird’s don’t necessarily like red flowers better?  According to Las Pilitas Nursery, bees avoid red flowers, which usually means more and better nectar for hummingbirds. Happy planting!!!

Bookmark this post:

I have personally experienced this trend on a few of my listings in Dublin within the last month.  Also, many of my colleagues have reported similar circumstances.  For example, I recently received multiple offers on a listing that was very reflective of current market values.  These offers came in within 4 days of the home being on the market.  However, all of them were low balls. From a seller’s perspective, this is an insult and this aggressive strategy by buyers can backfire. Some sellers may not even want to deal with low-balling buyers in the future if they have to downwardly adjust their pricing in the future.  This is just plain and simply due to the “bad taste left in their mouths” from the initial experience.  Note to buyers:  Not all sellers have Bank Owned or Short Sale mentalities.  They are savvy people who understand the current market conditions, priced their homes to reflect these conditions and are looking for a fairly negotiated price on their home.

Some recent statements by the chief economist of NAR may steer buyers away from this low ball trend.  Despite a continuing decrease in housing prices, prospective home buyers may not want to wait much longer for the market to hit bottom, experts say.

There are a few reasons that point to why significant drops in housing prices are decreasing.  One central reason is that homeowners are becoming more realistic in listing their asking price. The latest Case-Shiller report shows that home prices in 20 cities dropped 18.6 percent in February from a year earlier. But, for the first time in 16 months, that rate of decline eased from the prior month.

In addition, it appears that the current price levels for homes for sale are drawing more buyers into the market. In fact, my open homes have been slammed the last few weeks. Three other potential contributing factors are the $8,000 tax break from the Obama Administration for qualifying buyers, historically lower interest rates, and the impact that loan modifications are having on stemming off more foreclosures and/or short sales from coming on the market.

Obviously, no one has a crystal ball to predict what holds for home prices and the real estate market. However, prospective buyers making low ball offers might find themselves in a bidding war, says NAR’s Yun. “I think some buyers are trying to steal property by offering low prices,” says Yun. “But even in those markets that plunge, buyers are coming back and making bids.”

Bookmark this post:

The first time I went to Amakara, I will admit that I was not overly impressed.  I think they were working out some kinks in their service and their food.  But, at the urging of some very good friends, I went back to give Amakara a second chance.  I am so grateful I did!

My second visit to Amakara imparted upon me an amazing sushi experience; however our waiter was a bit controlling as to how our tables were set up.  It was sort of weird and rubbed my party the wrong way.  But, no matter, the sushi made me a believer.  I officially became an Amakara devotee on that very night.

Every time since, I have had great service from the waitstaff and wonderful food.  Even when we arrive with all of our kids and friend’s kids in tow, the staff does an impeccable job of making everyone happy and routinely and pleasantly stuffed. 

The restaurant is pretty elegant inside and quite large.  The sushi bar is right in the middle of the dining room and is where all the action’s at.  The first several times I went, there wasn’t much of a crowd.  It was a cinch to get a table, even on weekends.  The last few times I’ve been, this hasn’t been the case - it’s plenty busy. 

On a recent Saturday night, we waited 15 minutes (not bad, but not nothing) for a table at about 7PM and the entire restaurant was full for most of the night. I am happy for Amakara; the word is out!  This devotee will call for reservations on future trips.

My Favorites:

Sushi Items You Cannot Go to Amakara Without Ordering: Hawaiian Delight, Spicy Sesame Seared Tuna or ask the chef to make you an original.

Non-sushi Craveables: Amakara’s gyoza is light, thin and crispy, standing out from most I’ve tasted.  I’ve heard of some who love their grilled edamame, but I would hands-down stick with the steamed.  My wife wants me to mention that Amakara offers the option of ordering white meat chicken teriyaki.  This deserves bonus points, as few folks enjoy the knobs that can make the dark stuff downright distasteful.

Bookmark this post:

I have noticed a definite increase in buyer interest, as well as seller activity, over the last few weeks in my own real estate practice. Buyers are starting to feel that this may be a great time to buy due to a combination of items: increased inventory, an increased number of value-priced homes, historically low interest rates and possible tax incentives.  I’ve also talked to sellers in the last few weeks that are looking to move up and hoping that a ready and willing buyer becomes interested quickly.  And, it seems, this is happening for some sellers.  Buyers are actively pursuing value-priced homes, including foreclosure and bank-owned properties, as well as homes that have realistic sellers willing to negotiate.  Transactions are happening!

Bookmark this post:

Bankrate.com 

• 30 Year Fixed Rate: 5.29 percent
• 30 Year Fixed Rate Jumbo: 6.88 percent
• 15 Year Fixed Rate: 4.86 percent
• 5/1 ARM (Adjustable): 5.24 percent
• 1 Year ARM (Adjustable): 5.48 percent 

Applications for mortgages increased sharply for the second straight week, according to the Mortgage Bankers Association. Refinancing activity grew by 30 percent, while applications for new purchases were up 1.5 percent.

There was also an unexpected jump in the construction of new homes for the month of February, according to the U.S. Commerce Department. Housing starts rose to a seasonally adjusted 583,000, up 22 percent from January.

Bookmark this post:

According to the Knudsen’s Ice Creamery website, Dave and Kathy Knudsen have been in the candy and ice cream business for a long while.  First in San Francisco, the Knudsen’s owned an ice cream store, and then in Hayward the couple bought and expanded The Candy Factory.  In 2004, the Knudsen’s opened Knudsen’s Ice Creamery in a Castro Valley location that was formerly a different ice cream store.  The Knudsen’s remodeled the store and also added a working candy factory. In 2005, the Knudsen’s also began to make their own ice cream (Fenton’s had served well as their ice cream supplier when they originally opened.

Located conveniently on Castro Valley Blvd. (take the Strobridge exit from the 580, head east on Castro Valley Blvd, creamery will be on the south side of the street), this family-owned and operated restaurant is a real eating experience.  When I was trying to think about why I liked my meal at Knudsen’s so much, I realized that a trip to Knudsen’s feels like you are transported to a small-town diner, where everyone knows each other and shouts a “Hi there!” when you enter the door.  It has a local vibe where everyone seems happy and content. 

Another reason to love Knudsen’s is that even though the creamery feels small-town, it has modern bonuses.  Knudsen’s take their ingredients seriously.  The Knudsen’s proudly serve Niman Ranch Black Angus All Natural Beef for their burgers and Miller’s All Beef Hot Dogs, produced in Oakland since 1910.  They also use Zero Trans Fat (ZTF) canola oil in their deep fryers, and their menu states that they are working to change over as many items as possible to ZTF.

Almost everyone in my party had burgers, and they were juicy and nicely-sized.  The kids’ meals are a good value with soda or apple juice and a side of fruit cocktail, applesauce, chips, or fries accompanying the main meal.  Next time, I would like to try their house specialty, a crab salad sandwich (made with real crab).

And then there came the ice cream!  The ice cream is homemade and so very creamy. Large mounds of ice cream arrive to a table full of smiles.  The menu states that their hot fudge is homemade, a real treat!  Don’t forget to stop by the candy counter on the way out.  You may be able to see candy in the process of being made and you can definitely purchase their unique and tasty treats.

Bookmark this post:

As a high-level overview, most 2008 Home Sales data points have ended up far below their second lowest yearly total in the last ten years, 2001.  At first glance, Dublin and even San Ramon’s Homes Sold yearly totals have held up seemingly well.  However, when thinking about the trends more deeply, it is clear that I would also need to take into account population increases in each city over a similar timeframe.  So, this got me started digging into population data for our Tri-Valley cities.  Here is a table portraying population data I reviewed:

* data retrieved from bayareacensus.ca.gov
** data retrieved from eastbayeda.org

Now, I know that these population data numbers are not from the exact same timeframe as my Home Sold data points, but they are within the same timeframe and can be a good reference.  As you can see from this chart, Dublin is the clear population growth winner, with San Ramon in second place.  So, in terms of the Homes Sold chart, Dublin and San Ramon have had big-time population growth (Dublin Ranch and Windemere in particular), which may explain why both Dublin and San Ramon’s Homes Sold totals for 2008 are close to what they were in 1999. I will be watching Dublin and San Ramon’s Homes Sold totals in the next several years to see if their Homes Sold curve will become more in line with the rest of the Tri-Valley cities. 

It is also interesting to note that Danville grew the least in population between 2000 and 2007, with Pleasanton as a close second.  Possibly congruently, while Danville and Pleasanton had the least amount of population growth during this time, both cities also had the largest drops from a strictly Homes Sold perspective from 1999 to 2008.  In 2008, Danville had 66% less homes sell than back in 1999.  Also in 2008, Pleasanton had 60% less homes sell than in 1999. For perspective, Livermore’s percentage is 43%, San Ramon’s is 30% and Dublin’s is 7% for the same statistic. (See 10 Year Trend for Tri-Valley Cities graph located above.)

As you can see when viewing the Homes Sold chart, most of the Tri-Valley cities took on a very similar linear pattern.  Here are some more specific trends within the pattern:

• Every city had a large drop in 2001, with Dublin and San Ramon as the only two cities that have not dropped a large amount past their 2001 Homes Sold data points by 2008.
• Dublin and Livermore showed an increase in the number of homes sold from 2002 to 2004.  Since 2005, the number of sold homes has declined each year.
• San Ramon showed an increase in the number of homes sold from 2002 to 2003.  Since 2004, the number of sold homes has declined each year.

I find it interesting to see the drop in sold homes from 2004 to 2005 to be larger than the drop from 2007 to 2008 for all Tri-Valley cities, however some cities by a larger percentage than others.  Last year, we all felt and heard so much about the residential real estate bubble bursting, and it is interesting to note that the decline in home sold from 2007 to 2008 was smaller in our Tri-Valley cities than a few years previously. 

Please share your thoughts with me on all of this data digging.  It is definitely interesting for me to analyze, and I hope you find it similarly thought-provoking.  If you disagree with the interpretation or the analysis, please share that with me, as well.  As always, I will continue pulling data with the hope of increased awareness and trend spotting.

Bookmark this post:

If you read the comments, and there are many (both useful and ridiculous), there are some out there in the blogosphere that disagree with some of This Old House’s recommended “tricks.”  As I read through the comments, two of the “tricks” stuck out in my mind and I wanted to do a little more research on them.

1.  This Old House Trick #7 - Turn Down the Thermostat on Your Water Heater

The DIY article recommends turning down your water heater thermostat to 120 or even 110 degrees. One “commentor” mentions that they had heard that you should never set your water heater temperature to below 130 degrees to prevent bacterial growth, such as Legionnare’s disease. I was curious, so I researched online and came across a site called naturalhandyman that had a lot of interesting information on this topic.  According to the site, the US Department of Energy has espoused that a temperature of 120 degrees at the tap is adequate for most household chores with a minimal danger of scalding and maximal energy efficiency. Naturalhandyman.com points out that the 120 degree temperature recommendation is at the tap and that the water heater tank temperature should be set at 130 degrees.  This site has other information about water heaters of all sorts and is very interesting reading. 

2.  This Old House Trick #9 - Replace Central-Air-Conditioning Filters

I have heard many times that a money-saving tip is to replace your air conditioning filters often, even once a month. And This Old House reports that a money-saving trick is to replace them once a month in the summer months.  Then, I remembered reading a supremely interesting article by Dr. Mehmet Oz in an issue of Esquire that, among other topics, stated that cleaning your home’s air filters too frequently could “spread toxins.”  His recommendation on this topic and other thought-provoking ideas are laid out in his article, Better Man 2008: Retool, Reboot, Rebuild.  Just more information to digest and ponder in our life’s quest of smart choices and myriad decisions.

Bookmark this post:

A public peek at a young wife’s undergarments is the scandal that lies at the heart of Steve Martin’s adaptation of a Carl Sternheim’s 1910 comedic play.  The fallout that this incident has on the woman in question, her husband, their marriage and their reputation makes up the rest. 

Sue Trigg directs this Role Players Ensemble’s production of The Underpants at the Village Theatre in Danville.  The remaining dates are Thursday - Sunday January 22-25 and Thursday - Sunday, January 29-1.  Thursday, Friday and Saturday performances are at 8PM and Sundays are at 2PM.

Bookmark this post:

Let’s discuss inventory numbers.  Previous year trends have usually shown a significant drop in inventory for the month of December.  This year was no different, however the drop in inventory was not as extreme as in past years.  I predicted this trend months ago in some of my articles.  I feel the central reason why we didn’t see as significant of a drop in inventory is that there are still people who are in such a financial predicament that they must sell.  These individuals can’t afford to pull their home off the market and wait until a “better” time to sell. Traditionally for most, the better time is after the first of the year.   With this being said, I also do expect to see more inventory coming on the market during the second half of January and into February. 

Bookmark this post:

• The world’s deepest living coral reef exhibit
• A four-story rainforest
• A 20 member African penguin colony
• A 21^st Century planetarium
• A reinvented natural history museum
• The living roof

My uncle had heard that the museum gets very crowded (and may even sell out) and to buy our tickets online before we got there.  This route is highly recommended!  It is so easy and really saved the day for us.  The line to purchase tickets was pretty long (even the parking garage was extremely crowded that day), but we simply went up to the employee standing at a podium who was able to print our tickets for us at the steps.  We didn’t have to wait in line at all and just walked right up to the ticket-taker. 

The museum was so full, but we managed our way through a lot of their amazing exhibits.  The kids very much enjoyed the Philippine Coral Reef and the many smaller free-standing exhibits, including Altered State: Climate Change in California.  A big-time hit with both my daughter and son was a game that was housed near the line to the planetarium.  The player holds a “net” and tries to catch butterflies (or various creepy crawlies) on the screen.  Many turns were taken at this station!  We also decided to get our passes early to the 3-D movie all about bugs.  It was an interesting movie about the life cycle of a caterpillar and a praying mantis.  Watch out for the sad, but realistic ending!  Unfortunately, we didn’t get to see all that we wanted - there was just so much to explore.  With little ones, I think that we will try to avoid weekends next time and make sure to get to the Academy right when it opens.  It all works out, though… we get to make a second trip and spend another wonderful day at the California Academy of Sciences.

If you decide to go, make sure to also direct some of your curiosity towards the building itself.  I understand that it is the “World’s Greenest Museum.”  Stated in their brochure, “Designed by award-winning architect, Renzo Piano, the California Academy of Sciences sets a new standard for sustainable architecture.  Supported by recycled steel, insulated with recycled blue jeans, powered in part by solar panels, and topped with a living roof, the building is the epitome of energy-efficient design.”  It was a remarkable building, perfectly suited for the remarkable experiences housed within.

Bookmark this post:

The following reasons may have contributed to the high percentage of second time delinquencies.  First off, many of the modifications performed were on mortgages with adjustable rates. The borrowers attached to these adjustable rate mortgages were already having difficulty making their existing payment. Compounding the issue is that these adjustable rates were scheduled to reset at a higher rate, thus increasing the total monthly payment due. Unfortunately, the modification solution for many of these mortgages was to freeze the rate at the original interest rate.  Essentially, the modification had little or no impact and only delayed the problem.

A second component leading to the repeat of delinquencies involves forbearance and repayment plans.  Basically, these two options allow a homeowner to delay payment of their mortgage and catch-up on their payment schedule for a certain time period. Under certain circumstances, these two options may be viable for many people.  However, the central problem with forbearance and repayment plans is that the mortgage payment that is not made during the agreed upon time period is typically tacked on to the existing mortgage balance. Once the delay of payment is removed, the payment is typically the same or higher due to the increased mortgage balance which creates a worse circumstance. If this solution is not worked in conjunction with an interest rate reduction, the result could be disastrous for the borrower.

A third reason could be attributed to fly-by-night loan modification businesses that are popping up all over the industry. It seems that many of these places are interested in earning a quick buck and not that concerned about truly helping people stay in their homes and playing a central role in helping fix the economy.  A primary concern would be that these companies are not doing the due diligence to understand a client’s total financial picture and then effectively presenting that scenario to the lender when negotiating a loan modification.

Bookmark this post: