Radio Show–October 29th–Trick or Treat time!! Is this our New Market?
October 29th, 2006 . by Mike KellyHappy almost Halloween! Our current market is full of Tricks AND Treats!! The tricks are those folks who bought at the last moment of our Bull market and now find themselves over their heads! How? Paying way to much to get the property as was the case in some of the “feeding frenzy” which was the height of the market and then adding even more in order to obtain credit back for closing costs. They then took the “option ARM” loan program and are now paying Negative Amortization loans (see my separate post on this!) and are paying the least expensive “option” of less than interest only. 
What happened? The market has declined a solid 8-10% in price since those go-go days. They have been making payments which don’t even cover the interest only part of the loan; hence they have been accruing the unpaid interest onto the principal amount (loan balance). Couple this with a 3 year “pre-payment” penalty, re-casting of credit cards at the turn of 2006 (increasing their debt burden) and you find someone who’s probably out trick or treating to get a meal!!
Our topic on the show today was all about declining values, sales and price appreciation expectations. The California Association of Realtors (CAR) has realized their prediction of dramatic sales declines. How about 31% over this time last year!! Our medium in Sonoma County has dropped from $590,000 in October of 2005 to $560,000 for October 2006. Sales are off in excess of 30% also. Time to sell a house in this market? Now at 90 days on the market. Not the usual put it on the market and wait a week for the offers to pile up! Now I’m having my SELLERS writing letters to a prospective buyer as to why their home should be considered by them. Pendulum swings like a pendulum do!
We also had Keller Williams Realtor, Grace Lucero, on the show today. She lives and works in Cloverdale and works the North County area. She sells commercial, residential, land and estate properties. We just closed a lovely property in the Dry Creek Valley for $1,700,000. It was on the market for over a year and had been first listed at $3,500,000!!! She has a historic home on the market now in Cloverdale; The summer residence of Colonel Armstrong. Think Armstrong Redwoods Park. Price is $1,300,000 and has 3 parcels in total and 3 residences. Grace can be reached at 888-2649. Hope you enjoyed the show!! Please post a reply or give us some feedback. Oh by the way, Temple finally won a football game!! Our big blowout College football score of the week did NOT have them on the loosing side for once! They broke a 20 game loosing streak!! Now let’s try and turn this market around. Hear me next week and if you wish to chat about YOUR real estate needs—707-322-8503 or Toll Free in the nation: 800-959-7244.
