“2009 Survey of California Home Buyers,”

I had an email today from a Sunnyvale reader, asking about the state of the local market. Just this week, the California Association of Realtors released its "2009 Survey of California Home Buyers." Although this information is statewide, it still shows some interesting trends:
Favorable home prices, record-low interest rates, and the belief that rates will rise in the near future were the primary motivators leading home buyers to purchase in 2009 compared with last year, according to C.A.R.’s survey. Sixty-eight percent of buyers said price decreases motivated them to buy a home, while 39 percent reported low interest rates helped them move to a better location. Twenty-three percent claimed the likelihood that rates will move up as the motivating factor.
“After back-to-back years of sharp declines, home sales in California rebounded in 2008 and early 2009,” said C.A.R. President James Liptak. “The increase reflected the combination of favorable prices, low mortgage rates, and home buyer tax credits, fueled primarily by sales of distressed properties that accounted for more than half of the state’s transactions. Housing affordability has improved dramatically in response to the decline in home prices along with historically low mortgage rates, creating a tremendous opportunity for home buyers in California.”
Forty-nine percent of all buyers purchased a home through a traditional market sale, while 38 percent purchased a REO/bank-owned property, according to the survey. Reflecting the difficulty in closing short sales -- properties selling for less than the loan amount -- only 13 percent of buyers purchased a short-sale property. Home buyers who purchased a REO or bank-owned property experienced the highest level of difficulty in obtaining financing, compared with a more traditional transaction. They rated the level of difficulty as 8.9 (on a scale of 1 to 10 with 10 representing the greatest level of difficulty in obtaining financing) compared with a 7.7 for home buyers with a traditional market sale and 7.6 for short-sale home buyers.

Sunnyvale Town Center Defaults Again

Just as we are entering our annual period of state budget fiascoes, we can add another default by the City Center developers to our already overflowing collection of economic problems.
Peter Pau of Sand Hill Property Company and his partners at RREEF have failed to meet the June 24 deadline for paying a $108 million dollar loan, and are not able to obtain the additional financing needed to complete the project. There's a bit of deja vu here. An earlier developer defaulted in 2003, and Pau and his partners acquired the property at the peak of the market.
They've run into a brick wall as far as financing is concerned, and now they want the city's help to get the project back on track. The Mercury News is quoting Peter Pau, the principal behind Sand Hill Property Company as wanting the city to essentially act as a co-signer to save the project. Sand Hill has several other projects in development, including Cupertino Main Street and Sunnyvale Town and Country. Meanwhile, the new Sunnyvale Target Store is on schedule to open in downtown this November.

No Teeth in Government Help for Homeowners Bills

We attended a legal seminar held by our company this morning. Interspersed in the two hours of interesting material were some rather disappointing statistics.
The "Helping Families Act of 2009" designed to keep homeowners from foreclosure has had only one documented success so far this year. This bill unfortunately includes only 'friendly suggestions' to lenders, with no real power behind them.
The California "Foreclosure Prevention Act" that began on June 15 of this year has so many limitations that it is only legislative smoke and mirrors.
And lastly, the bill that promised short sale guidelines to simplify the process and make homes more affordable is still not completed, even though it was promised for May 15 of this year.
Pretty shameful.

Real Estate Related Scams

As if there weren't enough scam artists around, we're starting to see more of them in affecting the real estate industry. I've had two warnings in my email, just in the last week.The first was for homeowners who are late in payments, doing a short sale, or a loan modifications.
This came from an agent in one of our local offices:
"I received a call from a client, who is doing a short sale, to say that a woman came to his house to request the money due to Bank of America. I called Bank of America and asked whether they would send a person to make a collection and they say NO!! I was told that the woman who came to my clients house was an impersonator and it was a SCAM!!"
The one below is a scam hitting Realtors. If you call the phone number, you're going to be charged a bunch of money on your cell phone bill. The agent who sent this went to the website listed and it's a gaming website. To: .......
Subject: property appointment
Hi there,

I am interested in viewing one of your properties, could you please call me on my foreign mobile +882 --- --- -- to set up a time. As I am travelling at the moment I am unable to pick up emails regularly so please call.

Kind regards,

L-- C-----
---------
Mobile: +882 --- --- --
Email: l...c.....@......com

Just a warning to us all to be extra vigilant.

Contrasts, Even in High-End Properties

This morning, I read a long article about the large number of foreclosures and short sales in the upscale development in the East Foothills of San Jose, called the Ranch at Silver Creek. These huge homes that sold for millions at the height of the real estate boom are now sitting neglected, with dying lawns and trees...their owners sometimes disappearing overnight. These are the same homeowners who used their dot com wealth to add tennis and basketball courts, fountains and plazas to their new homes.
On the same weekend, I waited, along with my clients, to hear if we were chosen as buyers on a well-maintained...but dated..Mountain View house priced at over $1,200,000. Despite our presenting a considerable overbid and a well written, as-is offer to the owners, we lost to another of the twelve buyers vying for the house. What a difference a few miles makes in this market!

More About those Tax Bills

What happens if you think you should have your assessment reduced, but the tax assessor disagrees? You can still file a formal appeal with the clerk of the board of supervisors up until September 15.Your chances are about 50/50 of being granted a reduction, anyway. Last year, only half of the 8000 taxpayer requests were granted.
Since your tax is about 1.2 percent of assessed value, a reduction of $170,000 would bring an average reduction of over $2000...worth fighting for, even if the savings may not continue into next year.

Property Tax Bills

I can't believe that it has been a week since my last post. I was in Long Beach for a four day national dance convention(the local papers down there are full of articles on the increase in foreclosures and bankruptcy filings) and came back to a busy work schedule.
I also found a notice from the Tax Assessor's office in my pile of junk mail , listing the assessed valuation on which they will base my property taxes this year. About one in four county residents will receive a temporary tax break this year, but if your assessed valuation is more than you think is fair, you still have a chance to request a reduction before the tax bills go out in September.
Requests for review must be received by August 15...and don't forget, the assessed value is as of January 1st, so any loss since then won't count.
The fastest way to request a review is through the County Assessor's web site, but you can also call the assessor's office at 408-299-5300.