Archive for June, 2008
Monday Morning Coffee Break: Ventura County Real Estate Doing’s for Week Ending June 28, 2008
June 29th, 2008 Categories: Weekly Real Estate Activity In Ventura County
It has been only a week but there are some hints of a retraction occurring in the Ventura County real estate market. What does it mean?
First it could be a simple aberration. It is summer and things do slow down during the summer months. People have other things to do and selling a home is not a high priority.
People are of the mind set to hold and wait to see what the overall economy is going to do.
There are some major financial adjustments happening with family budgets.
More funds have to be redirected to basic necessities such as food and fuel. With the rains and flooding in the farm country, many crops destroyed, food prices will start increasing rapidly due to the shortages of corn and other basic crops.
As an aside—- this action of Mother Nature is having people re-think oil drilling, coal conversion to fuel and nuclear plants. As prices for gasoline zips past $ 5 per gallon, upward to $ 10 per gallon, there will be a rapid out cry for the United States to start drilling.
Europe has many nuclear plants. America is looking and asking why not us?
Also, there is a slogan now taking root “Drill Now!, Drill Here!”
It will not be long for the political astute to sense the change (if they haven’t already) and then we will see drilling. But it is going to take time. The change however has taken place…..we will have drilling.
Politicians being politicians want to be re-elected and many things will be done to appease the public regarding soaring prices for both fuel and food. Unfortunately the political forces end up doing the wrong thing and the problem becomes bigger. Today the political course is to say one thing and be working on doing something else.
OK….back to real estate. The bottom of the market has been set and people will start seeing prices going upward within a few months. There have been a few properties, not many, that have revised their list price upward.
As shown in the top of the chart below, the appreciation rate for Ventura County over the next 12 months will be about 5.5% and will increase to 24+% (or more) within 36 months.
Add to the mix the fact that sellers are not willing to part with their property without getting the value they think it has. The pendulum appears to be swinging back in favor of sellers. We will know in a few more weeks.
The total number of listings were down for the week, meaning that inventory is being reduced, which is good and will favor higher prices.
Expirations over the last month or so has been down. These homes are sitting in the back ground just waiting for the time and price to come up to sellers expectations. Also the variance of homes sold list price to the actual sales price dropped significantly over the last week. Homes that are selling tend to be around $ 500,000 or less price range.
I do know that people are looking and most are looking for a deal. But the “deals” are getting leaner as sellers begin to dig in for their price. I do know this for a fact. Just this past week two clients that had planned to sell a few years ago and didn’t, wanted to know what their properties were worth now. When told they just looked at me and said “I’ll wait”.
Keep in mind none of this means much unless buyers are qualify to buy. Good income, good debt ratios and good FICO scores have come back into vogue. Those that can qualify for VA loans should take advantage of the opportunity offered by the VA.
It is readily apparent that the neighborhood banks in general are hesitant to make mortgage loans (they are looking for less risky ventures). So buyers will seek out lenders such as Provident Funding and other type real estate only lenders who by the way tend to be far better with rates than banks.
The areas with the steepest decrease of listings in Ventura County over the last week occurred in the Conejo Valley. Fillmore is still in a downward spiral but it appears that it has abated somewhat and things should at least flatten out.
However areas such as Fillmore have to settle the flood plains issue. If they don’t their growth as a city and the building of homes and attracting industry in general will be hampered.
Let me leave you with a mid-year, 6 months comparison between 2007 and 2008 of Ventura County.
For 2007 (January 1 thru June 29) there were 3,529 homes that had sold; the average list price for sold homes averaged $ 722,009; the homes sales price averaged $ 699,077 for a variance of 3.3%. These sold homes were on the market for an average of 76 days.
For 2008 (January 1 thru June 28) there have been 2828 homes sold (a decrease of 25% for similar period in 2007). The average listing price for sold homes this year for this period was $ 703,304 (about the same as 2007). The average sales price of sold home is $ 555,877 this year. The variance between sold homes list price and sales price is down 26.5%. Sold homes are taking 92 days now compared to 76 days in 2007.
On that sobering note I will talk to you next week. Yes the market has bottomed and is headed upward. Good news is starting to be printed about Ventura County real estate. It began with the University of California annual report last month and positive news will continue.
One more item…….cities will be the place that real estate will grow the fastest. Read Is $5 or $10 Per Gallon Gasoline Going To Kill Real Estate In Ventura County? Or Any Other Place. Driving to work from suburbia will lose its luster because of the high gas prices. This will be offset somewhat with many professionals working from home.
Your comments are welcomed.
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Acquiring Real Estate Properties.
June 24th, 2008 Categories: Real Estate 101
The purchase (sale) of a property is the usual way of obtaining real estate properties. However there are other methods one can acquire or transfer real estate.
These other methods are:
1. By Deed: All deeds must have a “granting” clause in order for an act to transfer a property.
- Grant deeds transfer title, again with the action word being “grant”.
- Quitclaim deeds convey all the present rights or interest that a person may have in a property. A quitclaim deed gives absolute ownership or only such titles as one may hold.
Subsets of a grant or quitclaim deeds are:
- gift deed: given as a gift; no other consideration is necessary but can be revoked if done to defraud creditors.
- tax deed: given if property is sold as payment for past due taxes.
- administrator’s deed: given to the purchaser of the deceased person’s real property.
- sheriff’s deed: granted to the purchaser of a court ordered sale.
- trustee’s deed: given to the purchaser of property at a trust deed foreclosure sale.
- guardian’s deed: used by a guardian to transfer the real property of minors or incompetents.
- land patent: used by the government to grant public land to an individual.
2. By Transfer via Will: this written document outlines how a person’s is to be conveyed or distributed upon their death.
- The will can be witnessed (typed) is generally prepared by an attorney, dated, signed by the property owner and declared to be a will by at least two witnesses.
- A holographic will is entirely handwritten by the owner, dated and signed.
3. By Probate Transfer: is a superior court procedure to determine a will’s validity, any creditors’ claims and establish the identity of the beneficiaries.
4. By “No Will” Transfer: this procedure can be complex. If no heirs the property goes to the state. If descendant leaves a wife and child the property is divided 50/50; if there is a surviving spouse and two or more children 1/3 of the property goes to the spouse and 2/3 goes to the children. If no surviving spouse the property is divided equally amongst the children.
5. By Accession: This occurs when there is an addition to the property by natural cause. For example: If one lives near a stream or river (waterway) and over the years there is an accumulation or addition to the land, this accumulation becomes real property of the landowner who holds title to the river bank.
6. By Occupancy: this occurs through abandonment; adverse possession or prescription (by use).
- Abandonment is the relinquishing of a right or interest with the intention of never again reclaiming it. Court action is required to gain title.
- Adverse possession: title is acquired to another’s property through continuous and notorious occupancy under a claim of title. Courts require substantial proof before a title insurance company can insure a property with a clear title. This is often called a “quiet title” action.
- Prescription: is an easement, or the right to use another’s land, which can be obtained through five years of continuous use. Prescription is the “use” of a property, not a title.
7. By Dedication: is a gift of land, by its owner, for some public use. To be fully dedicated the land must be accepted by the authorized public officials.
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Have A Great Vacation But While You Are Away…..
June 23rd, 2008 Categories: Neighbor Helping Neighbor
Vacation time is a lot of fun and one would like to keep it that way.
Listed below are some suggestions from www.burglaryprevention.org that can help to protect your home while you are away.
- Ask police to check your home and patrol your neighborhood more closely while you are away.
- Stop mail and newspaper deliveries or have a trusted neighbor collect them while you are away.
- Ask a neighbor to remove any advertising fliers deposited in your mailbox or around your door, driveway or lawn.
- Secure all doors, windows, pet entrances and garage doors.
- Place timers on indoor lamps and appliances to illuminate your home at night.
- Set timer to turn on radios and televisions randomly during the day.
- Check that no bulbs are burned out on your indoor lamps, outdoor lighting fixtures or low-voltage lighting system.
- Arrange to have your lawn mowed.
- Keep some shades and blinds up and curtains open to maintain a normal appearance.
- Have one trusted friend check you home, inside and out, each day.
- Remove messages from your telephone answering machine daily so that the “beep” is always short.
- Don’t indicate on your outgoing message that you are on vacation.
Have a great vacation.
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Real Estate Ownership.
June 22nd, 2008 Categories: Real Estate 101
Listed below are the types of ownership (estates) that one may have, the methods of holding title and methods of transferring the property.
Ownership is the interest, share, right or equity that has and varies say from the rights of a renter. Ownership gives full maximum rights of a full owner.
Fee Simple. Fee simple is the greatest interest one can hold in a property. It is perptual, freely transferable and inheritable.
Conditions can be placed on fee simple estates by the grantor. For example a condition may be imposed on a property donated to the State on the condition that the State agrees to build a college on the site. If the State disagrees, the transfer does not take place. Technically this condition describes a condition precedent. An action must be performed before title is transferred.
A condition subsequent gives the grantor (giver) the right to terminate if no action has occurred in a designated time frame. For example if the condition stipulated that the State had to start the building of a college in five years and no action has been taken in the building, the property goes back to the grantor.
A Fee Simple Determinable is when it is determined that a certain act has to be carried out. If the property owner donates the land to the State “so long as” the land is used for a college. If the State uses the land for some other purpose it automatically goes back to the grantor.
Life Estate. This represents an ownership that only exists for the life of a designated person(s). The intent usually is to provide a lifetime residence for an individual. For example I know of a husband and wife who granted a life estate to a very close friend. Upon their death their daughter inherited the property but the parents in a will designated that their friend have the right to live in the residence until her death. At the friends death it goes back to the daughter.
The person holding a life estate cannot grant more rights than they hold. The life tenant:
- has the right of physical possession of the property;
- has the right to rents and profits, but this terminates when the life estate holder dies;
- can usually lease, sell or finance the property, but not beyond the time frame of the life estate;
- is obligated to keep the property in good repair. The person is not required to make improvements;
- may not damage or destroy any permanent part of the property to the detreiment of succeeding interests; and
- is usually responsible for all annual costs and expenses. In the example of the parents, their friend was responsible for all real estate property taxes, insurance and the normal expenses faced by a home owner (not the daughter).
Data Source: California Principles by Walt Huber.
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Ok–So You Own The Property. But– Hey! There Are Others Using It! How Can That Be?
June 22nd, 2008 Categories: Real Estate 101
You own the property but others may and do use it. This use may be legal or illegal.
How does this come about? Access to your property may be by easements (generally legal), building restrictions, zoning (generally legal) and encroachment (may at times be illegal).
And who are these other people that can have access your property? They may be people reading meters or the telephone company checking lines.
How does this happened? Again by easements, zoning (and building restrictions) and encroachment. A brief glimpse as to what these mean is summarized below.
Easements onto your property are the most common.
Basically an easement is the right to use another’s land. It is an interest in another’s land owned by another person consisting in the right to use or control the land, or an area above or below it, for a specific, limited purpose. An easement is not a lien. When there is an easement it is considered encumbered.
One kind of easement is an Easements that run with the land (appurtenant). This means the easement belongs to or runs with the property and when sold the new owner has the same rights to the easement as the seller.
Generally an appurtenant easement is created for and benefits the owner of adjoining or attached land.
Example: A neighbor works or lives behind your property and uses your driveway. The owner of the front parcel cannot block or hinder the right to the property of this neighbor. This easement is created for and benefits the adjoining property (neighbors property).
Easements are created by grant (writing); implication by law; and long use (called perscription).
- Grant easements have to be notarized and recorded to be effective (considered as an easement).
- Implication by law, ie., the right to use land for the extracting minerals, oil implies that you have the right of surface entry in order to extract the minerals.
- Long use (gain by perscription) can be obtained after 5 years of uninterrupted use of another’s land; no confrontation or property tax payments required. Long use necessitates the following:
- Open and notorious use
- Uninterrupted use for 5 years
- Without permission of the owner (called hostile)
- Under a claim of right.
2. Building Restrictions and Zoning.
These easements are usually included in the deed at the time the property is subdivided, or may be created by a written contract.
Their main purpose is to keep use of the land uniform throughout certain tracts (or areas) of land. Subdivisions and condominiums usually include deed restrictions as a method to promote the aesthetics and economics of the project.
These (private) deed restrictions and bylaws are usually recorded separately and are only referenced in the original grant deeds.
3. Encroachment
Encroachment is the wrongful, unauthorized placement of improvements or permanent fixtures on property by an non-owner of the property. If someone encroaches on your land, they are limiting you the use of your property. When this violation is recognized the owner has up to three years to act to correct the encroachment.
Items that generally fall under encroachments often are fences, walls or building that extend over recognized boundary lines.
Basic source for information: Real Estate Principles by Walt Huber
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If Your Personal ID Can Be Stolen Why Not Your Home?
June 22nd, 2008 Categories: Pre-Paid Legal Services
It was reported in the Sunday Los Angeles Times (June 22, 2008: author-Lew Sichelman) that homes and home equity are being stolen by identity thieves.
It appears that one goes hand in hand with the other. If a person can steal your identity why can’t they steal your home.
How is this being done?
By stealing your name, personal identifying information and credit history thieves can readily apply for a home line of equity on your home or re-finance your home. Of importance is that the information is being retrieved from businesses and not individuals (per the United States Secret Service).
As of November 1 the so called red flag rider to the Fair and Accurate Credit Transactions Act (of 2003), will require financial institutions, creditors and others who handle personal identifying documents to develop a program to prevent identity theft.
But how can a con artist steal a house? In house stealing the con artist picks a home (say a vacation home) and assumes the owner’s identity to create fake identification, social security cards and whatever else is needed to perpetuate his disguise.
Then the con artist gets the required forms to transfer the property, forges the owner’s signature and files the papers with the proper authorities. Often targeted are empty homes but lived-in homes are exposed to this scam.
The Motor Vehicles Department is a prime source of getting information. When individual files a name change or address change (as is required in all states) con artist have access to this information.
It is becoming mandatory for individuals to secure insurance (such as pre-paid-legal-services) for the nominal $ 11 to $ 12 per month to make certain that their identity is not being stolen. This fee is cheap if you stop someone from stealing your identity and home.
No one loves you more than yourself. Protect yourself with a little insurance and be happy that you did. The consequences are not very pleasant.
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Monday Morning Coffee Break: Ventura County Real Estate Doing’s for Week Ending June 21, 2008
June 22nd, 2008 Categories: Weekly Real Estate Activity In Ventura County
This past week’s activities is a continuation of the base building that is on-going in the Ventura County real estate market.
The action is BORING and will continue this way through the summer months.
As reflected in the chart below, weekly sales continue to rise; the number of days sold homes were on the market decreased; the variance between homes sold listed price and the eventual sales price remains high at 6%.
The price range that is being discounted the-most appears to be between $ 750,000 to properties valued above 1 million dollars.
Homes in the price range of $ 200,000 thru $ 450,000 are being discounted at about 2.5% (variance between list price and sales price).
The general economy is mixed. Unemployment has gone up; everyday living prices continue to go up; conditions brought on by Mother Nature in the farm belt will add to higher food prices. Purchases are being re-directed to higher food and fuel prices at the expense of auto purchases, home purchases, clothing and entertainment.
Travel will be limited because of higher fuel prices.
In Ventura County unemployment eased upward slightly and this is due in part to the slow real estate market and lay offs in the County’s large companies such as Amgen.
There are people looking for properties (to build homes) and looking to purchase a home. As mentioned over the last several weeks sellers are now digging in and are not yielding to the low offers presented by potential buyers.
Most sellers realize value in their properties and are willing to wait the market out. Buyers (and their agents) who are looking for a steal will soon realize they may have to act or miss this market completely.
Foreclosures are still high. Auctions appear not to be yielding the results that most sellers thought. Homes are not selling in the auction arena.
Mortgage interest rates have increased significantly over the last several weeks. Also be mindful that FHA is now decreasing (soon to eliminate) down payment gifts.
Loans made on the basis of someone providing gift monies for a downpayment tend to default (foreclose) 3 to 4 times higher than market average.
Now I wonder why that is surprising. If an individual has no money of their own in a property why is it surprising to lenders when that person walks away from the property when the monthly payments get to high or become unreasonable, based on their take home pay.
These people view monthly payments as rent and when the rent gets to high they simply will look for a cheaper home to rent.
Your comments are welcomed.
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Measurements Used In Real Estate.
June 21st, 2008 Categories: Real Estate 101
Math and the associated discussion of measurements may become a problem for people only because they are not exposed, nor need this information in their day to day lives.
Listed below are the terms, measurements and conversion factors which a person can use when discussing or trying to figure out some real estate math.
Linear measures:
- 12 inches = 1 foot
- 1 yard = 3 feet
- 1 mile = 5,280 ft = 1,760 yards
Square
- 1 sq. ft. = 144 sq. inches
- 1 acre = 43,560 sq. ft. = 4,840 sq. yds.
- 1 sq. yd. = 9 sq. ft.
Cubic
- 1 cu. ft. = 1,728 cu. in.
- 1 cu. yd. = 27 cu. ft.
- 1 broad foot = 144 cu. in. (1 foot x 1 ft. 1 inch = 144 cu. in.)
Other
- 1 township contains 36 sections or 36 square miles or is 6 miles on a side or has 24 miles on its perimeter. (Perimeter is the distance measured around the outside of a geometric shape such as a square or rectangle).
- Setback is the distance between the street and the front of the building (home) that must exist to comply with local ordinances.
- Side yard setback is the distance between the property ine and the edge of the building that must exist to comply with local ordinances.
- Front footage is the width of a lot fronting on the designated street, and is used as a means to value lots.
- Contiguous are lots that adjoin, touch, or abut to each other which includes adjacent lots (touching at the corners).
Conversion factors:
- To convert feet to inches, multiply the number of feet by 12 (ex. 1 ft x 12 in. = 12 in)
- To convert inches to feet, divide the number of inches by 12.
- To convert yards to feet, multiply the number of yards by 3.
- To convert feet to yards, divide the number of yards by 3.
- To convert square feet to square feet, divide the number of square inches by 144.
- To convert square yards to square feet, multiply the number of square yards by 9.
- To convert square feet to square yards, divide the number of square feet by 9.
Time
- Annual = once per year.
- Bimonthly = every two months (6 times per year)
- Biennial = every two years
- 1 year = 12 months
- 1 month = (generally) 30 days but mortgages are based on actual days.
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Want To Split A Lot or Land Parcel?
June 18th, 2008 Categories: Buyer and Seller Knowledge Center
Lot splitting is simply the division of any parcel into two or more lots for the purpose of sale, lease, or financing.
It can be costly therefore talk to someone before acting. Often the starting point is the designated areas Planning Department.
The people in the Planning Department will more than likely re-direct you to someone else but do not do anything without knowing who you have to talk with, what steps need to be taken and with whom, what has to be documented and what is the cost.
Do not assume. There are differences in area requirements and these differences can be measurable and costly.
Yes, lot splits have to be approved and the authority for this approval stems from the Map Act of 1907 which was created to encourage orderly community development and to prevent fraud in real estate dealings.
General guidelines and some key questions that have to be considered, discussed and documented with the various agencies may include the following and more. But this list is a start as to what needs to be addressed.
- Is the proposed split consistent with the County (City or Parish) General Plan?
- Is the proposed split consistent with Zoning Code standards, such as minimum lot size?
- Is the topography and other site conditions suitable for development?
- Are there any geological hazards (faults lines, land slides or water hazards)? What action or steps will be taken to nullify these hazards?
- Can the County (Parish) design and layout lot standards be met….are the proposed lots usable?
- Can Fire Department, Public Works or essential services minimum road requirements be met?
- Is sufficient quality water available? Is there enough water for Fire Department standards?
- Can lots be served by a sewer system or a septic system?
- Are other public services available such as storm drains, utilities, etc. that need to be viewed?
- Is the project compatible with nearby existing and proposed land use?
- Are there any special environmental factors (noise, archaeology, flors/fauna, air quality, water quality) that would adversely be affected?
- Are there easements that may affect the proposed split?
The steps and permits needed to split a lot (or land)
- Request a pre-submittal evaluation of proposal. Go over the essentials at this meeting and collect the names of people (and phone numbers) of who you talk with. Keep a log of all discussions and contacts. If in doubt, document.
- Obtain and prepare application package and plan meeting(s) with the essential departments whose approval you will need.
Application review and environmental evaluation and associated fees
review to determine adequacy of the application
review for completeness or incompleteness of application
determination of environmental documentation needed
- environmental preparation and review
- final determination
- final map or parcel map prepared, submittal and recording with County clerk, zoning and other departments.
In between do not forget that you will have to get a survey of the split lots so ask who will undertake this task.
When everything is done ask for a Lot Determination Letter for each lot from the County or Parish. This will be a very handy document to have when selling the new lots.
Your comments are welcomed.
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Monday Morning Coffee Break: Ventura County Real Estate Doing’s for Week Ending June 14, 2008
June 15th, 2008 Categories: Weekly Real Estate Activity In Ventura County
Since November, 2007 Monday Morning Coffee Break has been beating the drums over the fact that Ventura County’s real estate market was very good. I felt like I was swimming against the tide.
Validation.
This past Friday (June 13, 2008) at the Marriott Ventura Beach Hotel, Bill Watkins, an economic forecaster and director of the UC Santa Barbara Economic Forecast Project told the Chamber of Commerce gathering that Ventura County is and will continue to do extremely well.
He pointed out that single family homes in Ventura County haven’t declined as much as homes in other areas such as San Bernardino and Riverside.
In the Ventura County area he confirmed that job prospects were up. The economy is up. The negative news that we see and read is still up. But negative news is what sells newspapers and keep TV watchers.
At this point in time Ventura County is in its’ own cocoon and is protected more-so than surrounding communities and is certainly far better off than many counties in California.
There are multiple reasons for this but suffice to say whatever the main reasons are it is good for Ventura County.
Each week the data is the same. Boring yes; but good for the County since it reflects an upward trend.
The market is up. Sales continue a trend upward. Inventory is going down. The variance between list and sales price is still above the norm as is the number of days sold homes had been on the market.
Banks are the fly in the ointment. They continue to make it difficult for first time home buyers and self employed to get financing. This will continue especially in light of increase credit cards and auto (and other) loans defaults.
Outside of California it now appears that Las Vegas real estate is starting to pick up. I talked to some agents Friday and they are now starting to get excited about their market. Building is booming both on the strip and in surrounding areas of Henderson and other sectors.
So it appears that real estate throughout the United States and in California in particular is on the upswing.
Please forward your comments to this update.
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