Continuing from the article I wrote last week about the 7 Most Dangerous Short Sale Myths, here’s the last 3 for your education.  I am here to assist you in helping you prevent a short sale of your property.  But if it is necessary to go that route, let a CDPE expert help you.

5. Listing my Home as a Short Sale is an Embarrassment

It is understandable that you may have reservations about letting the world know that you owe more on your home that it is worth however, understand that according to recent estimates, 1 out 5 homeowners in the US is in this situation.

With 40 to 60% of the sales in the US predicted to be Short Sales or Foreclosures you are not alone.

6. The Banks Would Rather Foreclose than Bother with a Short Sale

We know you have heard this; you may have even heard it from an overzealous collection agent working for a lender.  The reality is that banks do not want to foreclose on your property.  Banks, investors and even the federal government have all publicly said that if a person is qualified for a Short Sale the deal needs to be considered.

The qualifications are:

A.   Financial Hardship – There is a situation that is causing you to have trouble affording your mortgage.

B.     Monthly Income Shortfall - You have more month than money!  A lender will want to see that you cannot afford or will not be able to afford your mortgage soon.

C.    Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

7.         There is not Enough Time to Negotiate a Short Sale before My Foreclosure

This is a myth that probably hurts homeowners the most.  Many don’t realize that foreclosure is a process and there is time.

The foreclosing party (in most cases a lender) can stall a foreclosure up to the final day of the process.  These days many lenders will stall a foreclosure with as little as a phone call from you letting them know that you are trying to sell.  Almost all lenders will stall a foreclosure with a legitimate sales contract, in our view there is time until the foreclosure process is complete.

If you need more information, call or e-mail me today for an appointment to see what options you have and get on the path to recovery, there are options and I can help!

Come back next week for more information on Short Sales and Distressed properties or simply subscribe to our Blog.

When we begin to slice and dice data about the City of San Mateo’s real estate we do it by zip code rather than the real estate areas.  I go deeper for some neighborhoods but today is the 94401 Zip Code’s turn.  This area sits around downtown and then runs across 101 east to Shoreview with Coyote Point at the north and south to about Kehoe.  These are mostly small, entry level single family homes.  Last week the 94401 area had 39 houses for sale and 2 sales.  The least expensive house, really a tear down, is listed at $299,000 and yes, it is a Short Sale.  The most expensive house was listed at $1,550,000 and is a historical mansion near downtown.  The Median Priced house was $549,900 and the Average Priced was $629,027.  It’s now taking a little less than it has been recently for a house to sell in this zip, 138 days.  What do you get for this money?  It’s a 3 bedroom 1 bath house built about 60 years ago on a 5000 foot lot.  It’s often in need of repair, updating or other issues as this was ground zero for Short Sales and Bank Owned real estate for San Mateo all last year and still has the most for the city, 9 short sales and 5 Bank Owned.

All research that I get from Altos Research provides Quartile dicing and even this zip, 94401, is divided into Quartiles.  The Top Quartile, 1, has the most expensive houses and these are a mixed bag of houses.  Besides the 102 year old mansion, are two newly built houses on a shared lot, and a couple of older houses that have been improved dramatically for their neighborhoods and nothing sold in this Quartile last week.  Quartile 2 and Quartile 3 have houses about the same size, bedrooms, bathrooms and lot sizes but location affects price and saw only 1 sale in Quartile 2.  The final Quartile, 4, has the smallest and oldest houses in the 94401 zip and they had one sale last week.

Last year was the peak year for sales in 94401 and now the inventory has dropped to about 40 houses each week, a few more or less but the inventory has been declining all year.  That’s a good sign and means the neighborhoods are going to stabilize.

Along with the decline in inventory we’re seeing a rise in price due to the lack of bank owned sales here and hopefully, the market will remain improved.  If you were one of those people out there trying to time the market for bottom, it’s too bad because you can clearly see that happened around the turn of the year, when it is always the time of the year we see the lowest prices.

Now here’s the good news, 94401 is now a Cool Buyer’s market and that’s the first of the San Mateo zip codes to move up to that in almost 2 years.  Whoo Hoo!!  Altos Research tells me this zip code is now at sitting at 20 in the Market Action Index.  The red line, sitting squarely at 30, is the delineator between a Buyer’s or a Seller’s market.  Keep watching this zip code because it might be the weathervane indicating how the market is doing in San Mateo overall.

Tomorrow come back for 94402.

The City of San Mateo is the largest city in our immediate area with a population of about 92,000 people and it also covers the most land.  Therefore it’s obvious the spread of homes and their prices is vast.  Last week there were 182 single family houses for sale in San Mateo and 17 sales.  This was an increase in the number of houses for sale.  The price range for houses went from a low of $299,000 to a high of $2,795,000 and the Median Priced house was $847,000.  This house likely sits on about a 5500 foot lot, is about 1700 square feet in size, has 3 bedrooms, 2 baths, and is about 60 years old, built after WWII when there was rapid construction for returning soldiers and their growing families.  The good thing is there is a trend downward in the median price in San Mateo.

An easy way to see the spread of the market is by dividing it in Quartiles.  Number 1 offers the top priced tier of homes, those in San Mateo Park, Baywood, Baywood Knolls, and Aragon.  There were 45 of these for sale last week with a Median Price of $1,529,500.  These are the oldest homes in San Mateo, the largest homes and have the largest lots.  We saw 4 sales last week and 2 listings.

Quartile 2 has homes all over the city, but most are in the hills.  They’re smaller in comparison to Quartile 1, the Median Price was $975,000 last week, with 5 sold and 2 new listings.

Quartile 3 has more modest homes, smaller in size, and could be in the flatlands west of 101 or just east.  These saw 4 sold, 3 listed, and a Median Price of $689,000.

The last, Quartile 4, offers the entry level house with a Median Price of $499,450 these are the smallest houses, often needing updating and are generally either north San Mateo or in North or South Shoreview.  There were 4 sold last week and 5 listed.

A picture is always worth a thousand words and looking at the chart for price is always interesting.  We are always talking to people waiting for the bottom of the market, and mid-year is never, ever when that happens.  If you’re interested in buying at the lowest price, always pick New Year’s week.  Prices go up after that and San Mateo is no exception.  Some of the reason for prices diving at year end has to due with inventory — we generally have little at that time — and mid-year we generally have lots to choose from.  There is no exception about this today.  We’re right up there and in comparison to the peak of the real estate market in 2007, prices are somewhat stable for San Mateo.

The second most interesting picture is that showing the inventory of housing and we’re not as high as last year at this time, but considerably higher than the past 4 years.  Why is this?  I suspect many people have their houses for sale to try and beat the loan reset they expect to see, especially if they bought their house within the past 3 to 5 years when many Alt-A loans are now due to reset.  What does this mean to you if you’re thinking of buying a new house this year?  Does it mean you have more negotiating room?  That’s hard to say. If the seller want to sell and still have some money left over to pay commissions, they won’t negotiate much, if at all.  Many seller’s are just “above water” and trying not to have a short sale on their credit record.

The Market Action Index devised by Altos Research, shows San Mateo is moving up a little and is a Cold Buyer’s Market but sits at 19 in this index.  If it is able to move up just a little bit, it become a Buyer’s Market and shows that San Mateo may be turning the corner.  Only time will tell on this one and if you’re interested in following this, let me know and I’ll set you up with your own reports coming to your email box.

Tomorrow I’ll talk about the 3 zip codes of San Mateo real estate. Each one is unique.

Last week Burlingame had 80 houses for sale with a prices ranging from a low of $540,000 to a high of $3,295,000.  The Median Priced home last week was $1,386,500 and this house is about 71 years old with 3 bedrooms and 2 baths.  The Average Price for a house in Burlingame last week was $1,537,536.  We are still in a Cold Buyer’s market in Burlingame and buyers have much to choose from as these homes are sitting an average of 101 days.  Prices are dropping since almost half of all listings are seeing price reductions yet Burlingame hasn’t figured it out.  Prices have come down almost everywhere and these houses will need to be reduced in price, too, if the seller’s are serious about selling.

The Altos Research chart above shows the inventory of housing stock (yes, just like cattle it’s referred to as “stock”) and it’s at a high for the year which isn’t unusual for mid-summer it was like this last year, too.  Burlingame offers a wonderful community with good public schools so people from San Francisco tend to flock down 101 to buy here.  But, only 6 houses sold last week so what’s stopping the sales?  Could it be PRICE?

Prices have been running about the same for over a year and a half with ups and downs but mostly little change.  Is there something about homeowners in Burlingame that makes them think that they are immune to price reductions like other parts of the bay area?  We’re seeing them in Marin.  We’re seeing them in San Francisco but not too much in Burlingame.  When we only see about 8% of all available houses selling, price may be the reason.  Maybe.  Then again, maybe not.  Are people worried about buying right now?  With the median priced house in the jumbo-jumbo loan range, one needs about 30% down to qualify yet the most expensive homes appear to be the ones selling in the shortest amount of time.

Dividing the market into quartiles gives us a clear picture of what priced houses are selling, and what priced houses are not.  One would assume that the least expensive houses would sell before the most expensive but that is not the case.  The inventory of houses is evenly split between the quartiles making it even simpler to see the stats.

Burlingame has bounced along the bottom of the market for almost 2 years.  It’s been a strong Buyer’s Market for some time now.  I think Burlingame is one of the prettiest cities on the Peninsula.  It’s called the City of Trees and one knows they’ve arrived in Burlingame if they’re driving on El Camino Real, as trees line the roadway.  The downtown is quaint and has a high walking score.  Commuting from Burlingame is easy as public transit goes both to San Jose and San Francisco.  SFO is a hop skip and a jump away.  I think there are some great opportunities out there for serious buyers interested in living in Burlingame.  Call us and we’ll help you find the right one for your needs.

I do want to mention that pricing a home is not an exact science.  If it were we would never see price reductions.  We look at the most recent houses that have sold in the immediate area when pricing a house.  With so few houses selling right now, it is very hard to price accurately.  This comment is made to help you understand that if the agent is given the opportunity to price the home we generally do a better job than the seller does because the seller doesn’t have their finger on the market.  If you have a house to sell, don’t get upset when you hear the suggested listing price.  If you want to sell your house for the most money in the shortest time, list to us.  We know best.

When times get tough, marriages often crack due to the strain of job loss and the ramifications around that.  If you are thinking of getting a divorce, or have a friend or family member who is, take a minute and watch this video to learn how I may be able to help you.  I am Certified as an RCS-D, a Real Estate Certified Specialist in Divorce and am available to help you get through the minefield that divorce can present to your largest asset, your house.  I am able to work with both spouses to make sure when the final decree is presented, you are not only divorced from your marriage but also from your joint finances.  You need to Divorce Your House and Your Spouse not just your Spouse.

Surprisingly, most attorney’s don’t understand the financial pitfalls waiting for you in dividing your real estate.    They don’t understand how to divide real estate to truly make it equitable for both parties and prevent surprises that can affect a FICO score for up to 10 years, if one is forced into bankruptcy.  They don’t realize that there could be issues hidden from one spouse or the other through their property.

It’s never a good idea to try to keep the family home during and after a divorce.  In our neck of the woods that I lovingly call Fantasy Island, it’s pretty hard to buy a house without two incomes.  If a divorce happens how can you keep the house?  Take a minute and watch this little video explain what can go wrong and then,  if you need me, you know where to find me.  It’s so easy to prevent surprises if you don’t do it after your settlement has been signed.  Once you make that agreement it’s a binding contract.  This is one thing you may not want to do yourself.

If you want more information don’t hesitate to ask me.  I’m here for you.