So let me tell you if it is real and how much there really might be based on credible sources.

First off, yes it is real. When Bank of America started getting questioned for wrongfully foreclosing on homes as a result of “Robo-Signing”, the process of working through the inventory yielded. Let me take a minute to say that this accusation against B of A was an absolute joke. Maybe the paperwork wasn’t processed correctly, but these individuals weren’t paying their mortgage! This is a trustee state! Anyway it slowed things down. Since then inventory has been building. Try to imagine a toll booth on a major interstate. All of a sudden, they start only letting one person through every 15 minutes instead of every 15 seconds. The booths are the banks and the cars are individuals not paying their mortgage.

What is happening with inventory right now in today’s market? Here is one example. On Thursday approximately 300 homes were scheduled to be sold at the court house steps (Auction, Trustee Sale, Sheriff’s Sale, whatever you want to call it). Out of those, 26 actually made it to bid and only a handful, maybe 7 sold. Do the math, that means that 274 people are still at the toll booth, not paying their mortgage and hiding in the shadow inventory. That is one day people!!!!

So, how many cars are backed up at the toll booth, when will the traffic jam break, how fast will it go and what will be the end result? Here is the view point from two of my best anonymous resources for inside information.

REO Asset manager for Wells Fargo: Right now there are 6 million people who have a Notice of Default filed against their properties. Basically, 6 million people are facing foreclosure and are backed up at the toll booth. This manager who moved 4300 foreclosures last year, who has been in the business for decades feels that a day will come when the wheel barrel dumps and all of the properties hit the market at one time. This would hypothetically drop the market by 25% overnight. I am not so sure that I agree with his wheel barrel dumping theory, but I do trust his inventory assessment.

Asset Manager for 182 banking institutions: Before 2013, there will be 25 million more foreclosures. This inventory is in the projected shadows should unemployment stay high and asset values depreciate. Basically, if we stay in the same slumped economy with little improvement, we are going to get body slammed. Let’s multiply each home by 2 people. That is 50 million people without homes who can’t buy again for 3-7 years depending on the product they choose to purchase. That is almost 17 times the amount of people living today in Orange County, which has more people than the entire state of Ohio.

I don’t believe, even though it is hard not to based on credibility that the shadow inventory will dump like a wheel barrel. I feel the banks will continue to balance their check books absorbing liability at a sustainable rate and selling it at a sustainable rate. This will keep the market pretty flat to mild softening for several years (maybe 5?).

The given here is inventory. The unknown variables are: Government rescue programs, jobs and interest rates.

My advice is that you buy when you find a house you really love and can afford. It may not be the bottom, but it will be a great deal. In the long haul you will make money. Watch the 10 year bond which is an inverse of the stock market. The 10 year bond parallels interest rates. If the stock market gets bullish, the 10 year bond rates go up. If the 10 year goes up so do rates. Last week’s bullish stock market hiked interest rates in the short term. The fact is, even if you wait for lower prices, which is likely, you may miss interest rates. Overall, rates will affect your affordability index and home price index options the most. If you can lock up a 4% give or take on a 30 year fixed today, do it. You will make money. You will only know when the market hits bottom when you are looking back.

As you may know, Labor Day pays tribute to the contributions and achievements of American workers. It was created by the labor movement in the late 19th century and became a federal holiday in 1894.
As I began my own ‘day off from Labor’ this morning, I was curious and wanted to know more, wondering EXACTLY how this holiday originated. I found lots of insightful reading. I’d like to share if you are interested. Enclosed is a link to the full article from History.com, ( the folks behind the History channel). I found this one to be the most complete plus it had great related stories and video too!

Since Labor Day often also symbolizes the end of Summer & start of Fall, Philip, Brian and I express our best to you and your families as we enter the new season.

Labor Day at HB State Beach click to see all CA. State Beaches

Showing properties 1 - 7 of 83. See more Downtown HB.
(all data current as of 2/22/2012)

1. $309,900 : 4561 Warner Ave 302, Huntington Beach
   
   3 beds, 1 full, 1 part baths

   Home size: 1,320 sq ft

   Year built: 1989

   Parking spots: 4

   Days on market: 12
2. $309,900 : 4676 Marea Dr 66C, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,100 sq ft

   Lot size: 1,112 sq ft

   Year built: 1973

   Parking spots: 1

   Days on market: 14
3. $323,990 : 4682 Warner Ave A110, Huntington Beach
   
   2 beds, 2 full, 1 part baths

   Home size: 1,220 sq ft

   Year built: 1981

   Parking spots: 1

   Days on market: 19
4. $325,000 : 4978 Marlin Dr, Huntington Beach
   
   3 beds, 1 full, 1 part baths

   Home size: 1,350 sq ft

   Year built: 1974

   Parking spots: 4

   Days on market: 43
5. $325,000 : 17058 Bluewater Ln, Huntington Beach
   
   1 bed, 1 full bath

   Home size: 718 sq ft

   Year built: 1975

   Parking spots: 2

   Days on market: 135
6. $329,890 : 4675 N Pinecrest Cir 21, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,054 sq ft

   Lot size: 1 sq ft

   Year built: 1976

   Parking spots: 2

   Days on market: 143
7. $339,900 : 4681 Pinecrest Cir 19, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,054 sq ft

   Year built: 1976

   Parking spots: 2

   Days on market: 46

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Official page for NIKE US SURF OPEN 2011

Check out what’s for sale near the Huntington Beach pier.

Showing properties 1 - 9 of 83. See more Downtown HB.
(all data current as of 2/22/2012)

1. $309,900 : 4561 Warner Ave 302, Huntington Beach
   
   3 beds, 1 full, 1 part baths

   Home size: 1,320 sq ft
2. $309,900 : 4676 Marea Dr 66C, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,100 sq ft

   Lot size: 1,112 sq ft
3. $323,990 : 4682 Warner Ave A110, Huntington Beach
   
   2 beds, 2 full, 1 part baths

   Home size: 1,220 sq ft
4. $325,000 : 4978 Marlin Dr, Huntington Beach
   
   3 beds, 1 full, 1 part baths

   Home size: 1,350 sq ft
5. $329,890 : 4675 N Pinecrest Cir 21, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,054 sq ft

   Lot size: 1 sq ft
6. $339,900 : 4681 Pinecrest Cir 19, Huntington Beach
   
   2 beds, 1 full, 1 part baths

   Home size: 1,054 sq ft
7. $345,000 : 4438 Shorebird Dr 3, Huntington Beach
   
   2 beds, 2 full, 1 part baths

   Home size: 1,680 sq ft
8. $355,000 : 16912 Sims Ln 210, Huntington Beach
   
   2 beds, 2 full baths

   Home size: 1,200 sq ft

   Lot size: 1,201 sq ft
9. $430,000 : 16291 Countess Dr 315, Huntington Beach
   
   2 beds, 2 full baths

   Home size: 1,197 sq ft

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Those of us who are actually in the market 24/7 should be reporting more often. Not those who report the same news about Casey Anthony. So allow me to dissect what the experts in the industry are seeing, that includes us.

The Wall Street Journal recently posted an article that home sales in Orange County CA actually saw an increase in the median home price over the past few months. This is not the compelling aspect of the artice. Anyone worth their salt will respond correspodingly “It’s the summer selling season skewing the numbers and median has very little statistical weight.” I would agree with that statement. What is more interesting is the report that 25% of purchases were made by investors. The fact is, large corporations are doing well and the private sector is making money, they just don’t need any additional employees to run their businesses. Those with cash are getting richer and are eating up these Real Estate and Financing opportunities (4.5% Fixed 30 year loans with 0 points or underwriting fees). So much so, that they boosted the median numbers. I know what you are thinking “Separation of classes” absolutely.

Now let’s address the second and probably the most significant element determining the stabilization of Real Estate, inventory. What everyone is saying “The banks are holding all of this inventory and they are going to let it all go.” Why would they do that? All of the big banks are showing earnings and have learned to balance their books with distressed property as a liability. I can only speculate, but it seems that the bank chooses based on how much they can absorb monthly which properties to foreclose on. This is why some people hang out for 2 years without making payments and others get tagged in 3 months. It appears to be random, but I cannot confirm that. It is a simple system of checks and balances. It is working! Banks are profitable. Furthermore, and this I can confirm, banks have developed much more efficient systems for the short sale and foreclosure process. Banks are sending out multiple appraisals in some cases to determine the values of short sales before they approve them. Meaning, the smoking deals and huge losses by banks are eroding almost completely. Short sales used to take 6 months, we just closed 3 in under 90 days. Foreclosures are flying off the shelves as they come on. Everyone knows that a foreclosure is going to be fairly easy to negotiate, the banks set the price off the bat! Pay this get this! It is simple, fast and there are some good deals as a result of the risk taken for “As Is” no disclosure.

The wrap up is that there are buyers and the banks have become efficient liability balancing, short sale and foreclosure processing machines. Before you say “The banks are going to foreclose in 2012 in drones” ask yourself. Why would the banks disrupt their check books?

These two elements, supply and demand and lack of buyers has destabilized our market for the past 4 years. The changes in the market that I have addressed in this blog are what lead me to believe that the market is stabilizing.

Your Thoughts?

According to the Amigos de Bolsa Chica, a volunteer group who is partially responsible for the bounty of land and wildlife we see at the wetlands: “The Bolsa Chica includes over 1,200 acres of undeveloped wetlands, lowlands and lower mesa.  This area is rich with history beginning with the Native Americans who lived atop the mesas to the oil production in the twentieth century.  The Bolsa Chica is also an important stop for migratory birds along the Pacific Flyway, including some endangered species and threatened species.”   Click here to check out the “First Saturday” Walk schedule.

http://www.amigosdebolsachica.org/tours.htm

They have many walks available that showcase the diversity of this amazing natural wonderland that’s right in Huntington Beach’s own backyard!

Hey, if Saturday is already booked, you are in luck! The Bolsa Chica Land Trust conducts tours of their own every third Sunday.

Check them out:  http://www.bolsachicalandtrust.org/tour.html

If you do nothing else, take a few minutes to read about these two organizations that have helped restore and preserve a piece of our local history. We are lucky to have this open space in an increasing urban environment.

It is pretty amazing, and I’m grateful I can enjoy this beauty every day on my way to and from the office.

Like the Wetlands? How about checking out some of the homes that back up to this natural beauty. Click here to see what the ”Bolsa Landmark” neighborhood is like:

Showing properties 1 - 7 of 7. See more HB Bolsa Landmark.
(all data current as of 2/22/2012)

1. $709,000 : 17901 Bluegate Ln, Huntington Beach
   
   4 beds, 1 full, 2 part baths

   Home size: 2,198 sq ft

   Lot size: 7,000 sq ft
2. $705,000 : 6091 Hamshire Dr, Huntington Beach
   
   4 beds, 2 full, 1 part baths

   Home size: 1,958 sq ft

   Lot size: 6,400 sq ft
3. $719,900 : 17982 Hallcroft, Huntington Beach
   
   4 beds, 3 full baths

   Home size: 2,200 sq ft

   Lot size: 7,154 sq ft
4. $775,000 : 6161 Norbrook Dr, Huntington Beach
   
   4 beds, 2 full, 1 part baths

   Home size: 2,385 sq ft

   Lot size: 6,000 sq ft
5. $774,000 : 18111 S Lakepoint Ln, Huntington Beach
   
   4 beds, 1 full, 2 part baths

   Home size: 2,071 sq ft

   Lot size: 6,000 sq ft
6. $829,900 : 5772 Bellfield Ln, Huntington Beach
   
   4 beds, 3 full baths

   Home size: 2,405 sq ft

   Lot size: 6,270 sq ft
7. $829,900 : 6011 Kenwick Cir, Huntington Beach
   
   4 beds, 2 full, 1 part baths

   Home size: 2,617 sq ft

   Lot size: 6,100 sq ft

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Ask yourself these 10 questions:                                                                                                                            

1 ) Was there enough objective data (Closed Sales) to support my price?

2 ) Am I willing to admit that subjective value only goes so far in today’s market?

3 ) Even if I got my asking price, would it appraise for that amount? If it doesn’t appraise, what are the chances that someone will boot cash to make up the difference in the worst recession in recent history?

4 ) Did my Agent tell me they would list my house for more than the market would bear because they were weak and I asked them to?  Knowing this was not in my best interest?

5 ) What is my motivation to sell and is it more important to move on then sell? 

6 ) If purchasing up or down, have I looked at the relative move I’m making? What I will lose by selling today financially if I sell low but by low as well, with a better interest rate?

7 ) Have I seen my listing in the MLS?  Is the description and media just the way I would want it to capture the most agent interest?  What is my online exposure, since after all, 93% of buyers are online?

8 ) Did I properly prepare my house before going on the market knowing how much competition I have?  Did I have assistance?

9 ) Have I chased the market going down?  If so, how do I get ahead of the market now to be next in line to sell?

10 ) Do I have the Right Real Estate Agent?