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I will be on the radio with fellow Real Estate Agent Steve Kittrell on Saturday, December 22^nd, 2007, from 9-10 AM, on station KGEO-AM 1230. If you want to comment on my blog, Bakersfield Real Estate, or anything Real Estate related, give us a call at (661) 847-1230. You can listen over the internet, in case your radio is broken, and there is a link on Steve’s website: www.SteveKittrell.com

Since Steve is a former golf pro, we will also be looking into the rumor that Tiger Woods was in town playing golf at Seven Oaks. Steve Kittrell's show is called Talkin’ Real Estate.

Merle Haggard returns to the Fox Theater February 13^th! I saw his last appearance there, and according to the review in the Californian, it was marred by rowdy fans. But though it was a tad bit annoying, it was a hometown crowd that got a little carried away expressing their admiration, and they did settle down long enough for Merle to put on an excellent show in spite of the rowdiness.

Reading the LA Times, I saw a good Real Estate related cartoon by Rob Rogers: Sweet Equity.

There was also a bill that passed in the House that would for three years erase the tax bill that many homeowners would face as they struggle with burdensome home loan payments. Read all about it here.

Under the legislation, if debt was forgiven in a foreclosure, short sale, or as part of a loan workout it will not be classified as income. What that means is if you owed $300,000 but then had a short sale and sold your house for $200,000, you wouldn’t owe taxes on the $100,000 the bank forgave you for. The IRS was considering that as income, and on top of selling your house and getting nothing at all, you were stuck with this tax bill. File it under Insult to Injury. Now, if only you could get the bank to agree to a short sale, that might help some people. Anyway, it is a start.

The Federal Reserve was also proposing new restrictions on lenders. Read all about it here.

Meanwhile, Gov. Arnold Schwarzenegger and U.S. Treasury Secretary Henry M. Paulson Jr. were in Stockton with a message of hope to the folks at a townhall meeting of about 250 homeowners. Stockton could be the epicenter of California's sub-prime mortgage crisis, as it has one of the highest foreclosure rates in the country. See my previous blog, or check out the Repo Home Tour website, about the bus tours of REO homes in Stockton. www.repohometour.com

"This crisis is not going to last," said Arnold. "It's a bump in the road." He predicted that California's declining home values would turn upward again soon. Meanwhile, he and Paulson touted new state and federal initiatives that would freeze the mortgage monthly payments for homeowners who would otherwise face a big increase. A lot of the sub-prime loans contained ARMs, or Adjustable Rate Mortgages. Buyers were not aware or didn’t understand that the rates could shoot up, and make their monthly payments impossible to maintain. And if they made their payments on time, and could qualify for a better rate if they refinanced, then they were stuck with a pre-payment penalty.

"Our economy is healthy, U.S. Treasury Secretary Paulson noted, but added, "The biggest risk to the economy right now is the housing slump." Without action, as many as 1.8 million homeowners with adjustable-rate mortgages could face foreclosure in the next two years, he warned.

"The problem is going to get much worse unless we can do something about it," said U.S. Treasury Secretary Henry M. Paulson, Jr. You can read that LA Times article here.

Even Boston Legal had to weigh in on the issue, with Alan Shore (James Spader) representing Clarance Bell in a foreclosure. He got the bank to give Clarance a fixed rate mortgage of 8% and 60 days to begin making payments. I guess he had an ARM (Adjustable Rate Mortgage). Alan Shore was arguing that a jury would sympathize with someone in this situation, and it is funny, but a similar case actually happened in Cleveland with Judge Christopher Boyko, who threw out 14 foreclosures that were packaged in a security bond with Deutsche Bank. While Alan Shore was only able to get an out of court settlement of a fixed 8% mortgage, Judge Christopher Boyko dismissed without prejudice the above captioned foreclosure motions! Truth is stranger than fiction! Read for yourself, here is the complete decision: PDF File of Judge Boyko’s decision

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Recently, I saw a segment on Nightline that got me thinking. It was called “Condo Vultures” and it aired on November 14^th, 2007: Condo Vultures Zero in on a Dwindling Market, by Jeffrey Kofman and Howard Rosenberg.

What I liked about it was the dramatic skyline of Miami, like you see on CSI: Miami, with a lot of high rise condominiums shooting up to the sky, construction going all gangbusters—but then the market peaked in October 2005, and all the investors hoping to flip the condos were stuck with upside down mortgages. In the Miami area, speculators predict that 24,000 new condos will be completed in the next two years. Against the dramatic skyline suddenly there appear vultures. Actual vultures flying over the condos. You couldn’t ask for a better metaphor of what was going on, with people seeking to capitalize on the glut of condos, the market correction, and the incredible deals they were sure to get when the market hits bottom.

Is the glass half empty, or half full? When you’re handed a lemon, make lemonade. The agent in this story couldn’t have been better cast if he had been culled from central casting, for a remake, update of Glengarry GlenRoss. Caffeine-fueled quick talker Real Estate Agent Peter Zalewski was opening up his lemonade stand, big time. A baseball statistic fanatic, he developed software to track just how desperate the sellers were—like if a property has been on the market for over 100 days and has had a price reduction of $100,000 or 10%. In one scene he is shown explaining to a potential buyer that the unfinished floor is a sign that the owner is in trouble—he has run out of money to finish the project and just wants to get out of Dodge, pronto.

Another article along similar lines was in the L.A. Times on December 13^th, 2007. This one centered on Stockton, California, which is the leading city for foreclosures, according to some analysts. If you think it is bad in Bakersfield, Stockton is actually in worse shape. This article was entitled “The Magical Misery Tour,” by Los Angeles Times staff writer Steve Chawkins, and it told of how real estate agent Cesar Dias leads a weekly Repo Home Tour, filling two 18-seat buses with prospective buyers eager to see foreclosed houses that can be snagged at dramatically reduced prices.

Dias, a native of Stockton, said that when he started the free tour in September, some residents criticized it as a tasteless marketing gimmick. But as headlines announce record foreclosures and lawns dry up in the yards of abandoned homes, their tune has changed.

“We're bringing in homeowners to get the grass green again,” he was quoted in the article. I guess the grass is always greener on the other side, but in Stockton, the pools are greener, and the lawns are browner.

Back in Bakersfield, I checked the Multiple Listing Service and found over 800 REO listings in Kern County. At our office, McKinzie Nielsen Real Estate, we have three agents listing REO, bank-owned foreclosure properties: Linda Banales, Ron Sullivan, and Dennis Fox. Mr. Fox is in the top three agents of Bakersfield REO agents. We have all noticed a lot of floor calls from buyers looking for bargains, and asking for foreclosure properties. Dave Nielsen asked me to put the REOs on his website, which I was able to do. Check out his web site to see most of the Bakersfield Real Estate that is bank-owned.

www.DaveNielsenHomes.com

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What do you do when a car crashes into a house you’re trying to sell?

First, you need to rewrite the marketing remarks: Open floor plan . . . Easy access from garage to house . . . room with a view . . .

That is not just a hypothetical question, because a car somehow managed to crash right through the garage door and smash into a house—in reverse! Yes, the car was going backwards, yet it managed to build up enough steam to destroy the garage door and crash through the wall into the house. Luckily, no one was in the house, and the driver, as far as I know, was unharmed. The house in question was a vacant bank-owned REO property at 3221 Ranchgate Drive listed by Ron Sullivan of McKinzie Nielsen Real Estate. The good news is now they will have to remodel, and the insurance will pay for it.

He is an agent at the office where I work, and he was just quoted in an article in The Bakersfield Californian about foreclosures this Friday, because he is a foreclosure specialist. He said “some buyers are on the fence these days, but good deals on bank-owned properties get snapped up quickly.” If you want to see the article, click on the link here: Defaults increase in Kern

As if that wasn’t enough publicity, I also spotted him on the TV news riding his Harley Davidson in the annual Bakersfield Toy Run and Food Drive.

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The main house and former primary residence of David Crisp was auctioned off today at 11:20 AM on the steps of City Hall, this Monday, December 3rd. The 6,666-square-foot, four-bedroom, 4.5-bath home at 10509 Newquay Court sits behind gates on nearly three-quarters of an acre of manicured lawn. There were no bids, so it was sold back to the beneficiary for 1.8 million dollars.

This means that it now becomes an REO, or bank-owned property, and will be sold through some of the agents who handle REOs. I will keep everyone posted. In other Crisp and Cole news, some of David Crisp’s partner's houses, Carl Cole's, are also being foreclosed, and David Crisp’s former office in the Town & Country plaza at Stockdale & Coffee is now occupied by Lennar homes.

The auction of the Newquay Ct home was attended by many investors, curious onlookers, Real Estate Agents, a dog, and the media. TV crews from the local affiliates of CBS, NBC, and ABC were there, though the CBS camera man had to be relieved midway because his wife was going into labor. Congratulations to him and his wife, their bundle of joy, and I hope that all goes well for this family. There were reporters from KUZZ, Kern Talk 1410, and also Vanessa Gregory from The Bakersfield Californian.

The auctioneer, wearing a blue sweatshirt from Fresno State, said that beside the Crisp house, 3 houses sold today—and that was 3 more than had sold in the previous week. On one the bidding started at 129 thousand, and it sold for 129 thousand and 1 cent, and another started at just under 100 thousand but was bid up by about seven bidders to 126 thousand.  It was exciting to see, but it wasn’t like the cattle auctions, where they almost sound like it is some kind of song or rhythmic chant. The auctioneer would read the properties off a Blackberry, check them off with a stylus, and spoke very fast. He repeated certain incantations evidently required by law to be said every time.

Last weekend I sat an open house for another property that will be auctioned off this Saturday, December 8^th, at the Fairplex in Pomona. There will be about 100 properties auctioned off, and if you are interested in buying a house at an auction, check out their website at www.quickreo.com