Yesterday, driving home from the office, I caught a quick interview on KNX1070 radio that stated there were only 800 active listings for San Fernando Valley.

800 seemed like a lot of homes for sale, until I realized the Valley has more than 1.75 million people.  So I did a quick look this morning in our area to see what Ventura and Oxnard look like, compared to a couple of years ago.

Today Ventura has 80 single family homes for sale including just one bank owned home (REO) and only four short sales.  In 2010 Ventura had a range of 150 to just over 200.

Oxnard has 102 total single family homes for sale which include four REO homes and 2 short sale homes. In 2010 Oxnard had an inventory range from 142 to 219.

There’s been a sharp falloff in short sales and foreclosures this year leading to shrinking inventory levels. There are still many short sale deals in the pipeline (backup/contingent deals and pendings), but once those deals close escrow in the next few months there simply won’t be a lot of those deals out there to hold down the market.

The major obstacle to buyers (other than low inventory) are the appraisals. Appraisals look backwards in time (solds) whereas the market is forward looking. There are now substantial gaps between the offered price and the appraisal and buyers must make up that difference in cash.

The KNX1070 interviewer yesterday stated “Don’t offer the listed price – you’ll have to offer more” if you want to get the home.

Leslie just listed this beautiful home in Oxnard close to St. John’s hospital and had an open house yesterday – crazy number of people came through.

It’s now 24 hours later and Leslie has 14 offers – all over asking price. A Realtor called this morning who didn’t make the open house and asked if she could show the home (no lockbox) and I said “No”…

I laughed and said “That wasn’t nice of me was it”! I told her about all the activity and she understood. Why? There’s very limited inventory now – too many buyers (and investors) and not enough homes for sale, especially in the under $400k market.

It’s discouraging for home buyers (vice investors) and a roller coaster ride of emotions as they submit offer after offer that aren’t accepted. But I encourage them to stay in the game because the market place always changes and their time will come and they’ll end up with that perfect home.

I was somewhat amused this morning looking at our Sunday LA Times and seeing the blaring headline – “Bidding wars are back in tight market”.

Previous blogs and a comment I made in our June newsletter about an investor’s all cash offer (not successful) last week has already alluded to the fierce competition for homes – especially correctly priced entry level homes and condos.

So what does it all mean?

For buyers – it means investors are seeing exceptional, generational, value in residential real estate. Rents are strong, the economy will ultimately heal itself (despite Washington) and they anticipate superior appreciation in the coming years – vice investing in stocks (equity) or bonds (debt).

For sellers – it means there are good, strong buyers waiting to make an offer on your home – as long as it is priced at 2012 prices – not 2007 prices.

When a homeowner misses one payment, they are technically in default on that loan. Does the lender immediately start a foreclosure (as they are legally entitled to do)? Of course not – they try to work it out with the homeowner, have the homeowner pay some late fees and get a ding on their credit record. But what happens when several payments are missed? Now what?

In today’s world, this is the common starting point for the homeowner who starts trying to get a loan mod.  There seems to be a pervasive sense that once I’ve start to apply for a loan mod, the lender won’t foreclosure on me. WRONG! Read the rest of this article »

Click on the picture to view a video PowerPoint about the U.S. Treasury Department’s just announced streamlined short sale process for homeowners struggling under their mortgage payments.

The government has tried stemming the flood of foreclosures – primarily through the HAMP program – but it’s only been marginally successful. To avoid foreclosure, thousands of homeowners have attempted to do short sales, but that process has been cumbersome, time consuming for both buyers, sellers and agents, and highly frustrating for all parties.

To solve those problems, the HAFA program provides a clear path for homeowners to do a pre-approved short sale. Listen to this video PowerPoint for an overview of the program.