Barry Noble's Blog

If you have a mortgage that's anywhere up to 30% higher than the estimated Current Market Value, (accurate, from a local appraiser or Real estate Agent's estimate), for Heaven's sake don't rush into short selling or walking away from the home and losing it to foreclosure - destroying your credit for many years.

REMEMBER the real estate Market is CYCLICAL and we are in the bottom of the Value Curve, and will be going up again soon. 

As in all other cycles, barring a natural disaster, the Market Values have always curved back up and they'll rise higher than the last high values or (this time) 2005/2006. 

HANG IN THERE - WORK OUT A FIXED RATE MORTGAGE IF YOU ARE STILL STUCK WITH AN ADJUSTABLE, KEEP THE PAYMENTS GOING AND WAIT OUT THE NEXT CYCLE UP TICK.

You won't be sorry - you'll save your credit, save your home and later be able to sell it for a moderate or higher increase in value (equity).

The Market is Cyclical - and we are about to go into the rise - don't be panicked by the Media or other negative news. It's just like the rush to sell gold jewelry.  The Gold dealers are making a killing paying 20 to 40% of the value of your gold jewelry - so they can resell it or melt it into new jewelry, and sell it at almost unbelievable super-profits, with gold over $1000/ounce and rising.  Don't also be fooled into that panic advertising. 

Questions - call or email me for one time response - no obligation. I'm here to help if you need an appraisal or offer my opinion or advice.

©2010 Barry Noble

bnoble@dc.rr.com

760 992-9523

Check my home page for other good advice and assistance.

http://www.MyPropertyIsWorth.com

Southern California Desert Resort Cities - Palm Springs and the 7 Other Resort Cities of the Coachella Valley

As far as the home you own or are thinking of selling or buying: 2010 PredictionValues won’t rise at any notable rate this year – we are, State wide and Locally, still in a general but slower decline, so don’t be surprised by reports of rising sales and rising “Median Values” as both do not affect individual ranges of values (see below), as some agents would have you "automatically" believe..

The Median Values fluctuate up and down the most, depending on how many very low end and very high end homes sell, especially the high valued homes,  in a given period (usually reported by the month). If the high end homes have a “hot” sales week, the Median Value will seem to jump notably higher over the month before, even though there have been multiple dropping-value sales in the lower end. Average values are equally misleading. He only way to understand how your home or the home you wish to buy is faring in the Current Market, is to find the average or median value for just that limited price range. Maybe this will help.

At this time, lower end valued homes have dropped the highest percentage of their 2005 values and are almost at their bottom of the current Market Cycle, Cycle means they rise and lower in a period cycle, so, yes, the values will rise again and may in the next few years surpass the 2005 values, so for the lower priced family housing in most Coachella Valley cities, NOW may be an excellent time to buy, because within 2-3 years, you should have a sizable equity increase in value.

Medium to medium-high valued homes are still dropping in values, though more slowly than in 2008 and 2009. This will continue through most of 2010, there should be a notable increase in foreclosure and short-sales activity in this value range, so they haven’t “bottomed out” yet, and you need to be wary buying in this value range, unless a super buy comes along. Seek real good, local help before buying in this range.

High to higher valued homes ($1M to $3M) were late to the bankruptcy and short sales party – so they are still experiencing sharp value drops, and many people who bought these properties at inflated values in 2004,2005 and even 2006 are now experiencing severe cuts in equity and foreclosures will be more notable in this value range in 2010. Be careful.

The highest valued homes ($4M and up) have seen a drop in values, but this market hasn’t been as severely affected as other value ranges of homes as of yet, and they may be much less affected even through 2010, so just get real help in buying the home – someone who really knows local values and is also a Broker and can help you properly price a home to sell or secure the best price to buy.

Some areas are affected differently, too. Desert Hot Springs saw a heavy handed drop in property values in most sectors of the city. On the other hand, Rancho Mirage seems nearly impervious to radical change. I doesn't rise fast nor drop fast in the Market Cycle. It is one of the most stable of the desert resort cities.

Barry Noble
Working with and predicting the
local RE Market for 20 years
Coachella Valley-wide
State of California Licensed Broker
And Certified Residential Appraiser
http://www.MyPropertyIsWorth.com

With the residential real estate market hit so hard by sub-prime and foolish loan practices (to put it mildly) - the High End Residential Real Estate Market, for Buyers, is also offering excellent bargains for current and near future buyers.  

Allow me to offer Appraisal valuation services for the purchase, refinance or other estate and tax purposes , for custom, high valued estate properties throughout the Desert Desert Resort cities of the Coachella Valley and in all of the finest private communities, from Palm Springs to La Quinta and beyond. I offer the finest services, to match the very best of my peers, for accuracy and detail.  

I have been appraising over 22 years, am a State Of California Certified Residential Appraiser and also long term Broker - and offer the combined experience with over 18 years here in Palm Springs, providing services to many communities and Southern California's finest properties. 

I will be commenting on the local markets again soon. In the meatime check out my blog for the Desert Sun newspaper  www.mydesert.com - I'm number 3 on the other blogs list. barrynoblesblog.

Simply put: If the price of gas hasn’t made you sit up and cry out, what will happen when home values drop another 25%, many thousands more are laid off, gasoline rises to $6 or more a gallon and even a full loaf of bread, a pound of rice, a dozen eggs and a gallon of milk, an ordinary cup of coffee and simple over the counter aspirin will be too expensive for the majority to retain as a normal household or lifestyle staple staple. An exaggeration? Do nothing, and just wait and see. Maybe this is an oversimplification, but it may come sadly true – much faster than you can imagine. So what are you sitting there reading this for? Speak Up and Speak Out. Get hold of your local city, county, State and National area representatives – and make your needs, wants and expectations abundantly clear, and do it today. It is part of the rights and privileges of citizenry. You need look no further than the Desert Sun for the names of and how to reach your representatives.

Barry Noble Appraiser/Broker Palm Springs www.mypropertyisworth.com

Since my last post 4/23/08 I have appraised a number of local properties in the Coachella Valley and note the downward trend for Current Market Values continues, but is now more noticeable in the previously less affected of our more famous cities in the Coachella Valley. An example, a residence that sold in the mid six hundred thousands range late last year, selling in the low three hundred thousands and others in similar short sale or post foreclosure status. 

At least the banks involved are being sensible and letting the properties find their Current Market Value, given the high volume of available properties for sale. Still, there remain hundreds of properties listed way over their now, dramatically lower Current Market Values, as sellers do not or will not believe what is happening in the marketplace, and are holding out for values they saw as prevalent in early 2007.

Typically the Real Estate Market is cyclical. Unfortunately both home owners and real estate agents get blinded in a Market upswing, and some don't believe what goes up will come down.  This is not altogether negative, because what goes down - typically does rise again, and if it keeps to past models, the values go higher than the last high point,  each time the up cycle reaches its  next upswing peak. If you are sitting in your primary or second home, with a relatively low fixed rate mortgage - there is nothing to worry about. It should be pointed out, the greater majority of home owners are unaffected by the market down turn. The majority of home owners are living in homes with low or no mortgages, without the need or desire to move on. However, I cannot stress enough - if you are one of those home owners paying a short term, teaser low rate with and Adjustable rate just around the corner (within the next 12+ months), you had better be negotiating a fixed rate with your current mortgage bank or another lender.  Values continue to drop, and will for quite some time, many homes purchased within the last 3 years are already worth less than their current mortgages owed, and the ability to refinence homes may become harder and harder. If you can sit tight and weather the storm, you should be A-Ok. If you believe you will be in trouble with rising adjustable rates on mortgage payments, act now. You may need to short sell or discuss other options including anything from just asking the lender to drop the mortgage (it has been done rather than their taking back the property) or deeding the property back to the lender in lieu of foreclosure. 

This isn't a short term problem, The last notable down cycle started after values were so inflated in 1989, and declined sharply in 1990 and 1991, and continued down to, and stabilized in, the period 1995-1996.  Even the professionals have been caught up in this current mess.  There are a number of loan and RE agents trying to sell their homes or in short sales and even some in foreclosure. 

Add to the misery, the gasoline prices going through the roof, food prices and everything associated with gasoline delivery costs, rising sharply, and many of the investment homes and apartment buildings, purchased over the past 5 years, as they go into foreclosure, renters are finding themselves out of their homes and facing rising rental rates elsewhere. I watched in horror just today, one sad example of life today, on the TV news, a cluster of some dozen women living together in their respective cars in a parking lot at night, for security, with all their possessions and pets in tow, using what public facilities they could find to wash and such. Many had day jobs or were semi-retired but couldn't afford to rent an apartment.  Wow, this is America in 2008, or have we reverted to the thirties? 

In a change of thought, however, this is a near perfect market for some. Perfect?  Canadians and Brits are amazed with their super rates of exchange against the dollar, and when they also see the values of homes dropping sharply here, in the perfect resort area in America,  they are buying up the short sales and foreclosures for what seems to them, pennies on the dollar.  A number are cash sales.

Investment purchasing will be a hot potato in about 9 to 12+ months from now.  (I may expand that out a few months later. There are many factors to consider still).  It all depends on what happens after the election, whether or not we have any natural disasters and how deep and long is the current recession.  But what do I know, I predicted this to all who would listen nearly three years ago and was told to bide my tongue (a polite way of saying what people really said to me).  I would just like to be able to help people cope and if there is anything this RE appraiser and Broker can do? You can email me and check out my blog. By the way, I appreciate your comments, both positive and negative.

Face it. This cyclical downward trend has just started in California. Just as California is the last of the States to rise in value in a typical cyclical Residential Real estate upswing, so is California the last to be affected when the Market turns back down.

No, the Market is not going to “correct” during the Summer off-season here in the Valley and start rising again in the Fall. No, this is not going to be a short downswing. As California follows the Market Cycles that start their up or down swings on the East Coast and spread across the country to the West, so does Southern California follow San Francisco and Seattle’s several months behind Northern California.

This Market Cycle is typical, has been evolving over the decades and is fairly predictable. It just can be a moderate cycle up or down, or a real bear, and this one is an angry bear. The mortgage debacle is but one of the side problems that has us in and heading further into a harsh recession, and the foreclosures, as frightening as they sound now, are moderate to what they most probably will be over the next 12 months. There are so many people heading into teaser fixed rates change-over to fast rising adjustables, and they are not doing something about it NOW. They think the Market will turn back up in a few months and all will be well before their adjustables kick in. WRONG.

The Real estate Profession is a hard one to predict with truth and honesty – no one wants to hear the truth, or a common sense predictions. Most Real Estate agents live on hope that the Market will for ever rise and the bad-mouthing I get for these predictions or advice is unbelievable.

Again, I can’t stress it enough. If you have bought a home in the Coachella Valley within the past 5 years, are still on or just changing from a reasonable “teaser” fixed rate to an adjustable rate, and you have been “just able” to cover the fixed rate mortgage - contact your lender NOW. The fast and sharp rise in mortgage rates will put you behind the eight ball before you will be able to say “What Happened?”

If you have a low fixed rate, plan to live in your home for at least another five years, then sit back and relax. You’ll notice your home value may drop dramatically over the next 12 to 18 months – but in your position, who cares? You don’t need to be looking for a refinance cash out mortgage in this negative Market, just sit tight, and when the next Market Cyclical upswing happens, and it will, the values will recover – and typically will rise higher than the previous Cycle upswing peak (late 2006).

If you purchased in the past 3 years – there is a good chance your value has already dropped below its purchase price – and thus you are being taxed on a higher value than it is worth. You can call me if you want a drive by appraisal and accurate comparison study to submit to the County to appeal your home value, and hopefully secure a lower value on which to base future property taxes. Remember this is not retroactive, so the sooner you do it the faster there might be a lowering of your property taxes. You can also contact me for listing value, Broker and Appraisal consulting. If you are sitting on the Market month after month with a listing price well over the local current market value, you are wasting both your time and that of your agent. If you don’t have a knowledgeable Broker in this type of Market, you are just plain wasting time. Barry Noble, Palm Springs. barry@FastAppraisalValue.com www.FastAppraisalValue.com

OK back to the Current Mortgage Crisis

If you purchased a residence anywhere in the Coachella Valley, Palm Springs to Thermal within the past 2 years, it has most probably dropped significantly in value. The Residential Real Estate Market typically evolves in an up and down cycle of values, and we reached the high point of the current Cycle in the second quarter of 2007 and now are heading down, fueled also by the debacle of teaser mortgage rates followed by the frightening, rising adjustable rates and the resultant plethora of Foreclosures.

If you purchased your home using a reasonable fixed rate mortgage, everything is fine. The good thing about Residential Real Estate Market Cycles is the fact they have so far ALWAYS turned back up, and they typically ALWAYS rise to higher values than the former upswing. You just have to sit it out. For the next rise, then sell when it is half to three quarters of the way up the Rise. I help clients understand the Market Cycles and know when to buy or sell, and have been 18 years in this Market area.

If you bought your house with a fixed, short term, Teaser Rate, and have since refinanced to a fixed rate. You are also OK.

If you are still in the Teaser Rate period and haven’t yet refinanced, and are hoping the Market will turn around and start back up, say, this Summer – you are in a dream world and should get off the proverbial tomorrow, and contact your lender or another reliable lender, to refinance to a fixed rate.

The little that has been done to try to “fix” the problems in the residential real estate market is too little, too late and insignificant in the massive mess that has been created in the mortgage industry.

To get back to the loss in value on most houses purchased within the last 2 to 3 years. As an Appraiser, may I recommend you contact an appraiser to provide a professional opinion of the estimated Current Market Value of the property? Then, you may petition Riverside County to reduce the assessed value of your property, for tax purposes. It is typically around the amount you last paid for the property, If you paid in late 2006, say, $495,000 and it now appraises at $380,000 that may be a significant cut in property taxes. In some areas that value may have dropped as low as $200,000. Wow! Then the tax assessment adjustment would really help you save money. The sooner you file for an adjustment, the better, as it is not retroactive. You may obtain the form from the County, on line, and file a Petition to reduce the Assess Value for Tax Purposes, with appropriate proof of the reduction. Using an Appraiser, you can be assured of comparable more recent sales that are the closest in comparison to your property, allowing for all available points of assessed value depreciation. If the decline in property values continues, in a year, you may wish to again petition for a lowering of the assessed value. It is predicted residential values may continue declining well into 2009 and perhaps longer. The number of foreclosures is rising each month and there are hundreds of thousands of properties facing potential foreclosure over the next 18 months. If I can help, e-mail or contact me through my website. www.FastAppraisalValue.com

If you are an investor and are looking for properties to take over and resell, NOW is not the time. If you, however, want to buy properties in foreclosure or in a short-sale situation, to spruce up and rent for 12 to 24 months, now may be the right time in some areas, but not all. Example, Hemet, Coachella, Thermal and Indio are starting to be bargain areas for newer construction tracts – but the value decline has not, by any means, reached the bottom of the cycle. Hemet has 2-3 year old 2 story houses that were previously sold in the $395,000-495,000 ranges now listing as foreclosure sales starting in the $169,000-189,000 range – but multiple offers are pushing up the accepted values in the $200,000-225,000 range. That area hasn’t reached bottom yet. Expect similar sales offers in Indio, Coachella and Thermal for new construction.

Whatever your situation – take a close look at where you stand with your mortgage(s). Most people are comfortable with low to moderate mortgages, with good fixed rates and are not threatened. Those who are already in trouble or may about to be facing problems – the time to act and find out what to do, is NOW. Waiting only makes it worse.

Barry Noble    RE Appraiser and Broker