What's on the market in Journey's End?

What's on the market in Journey's End?
Click on the photo above and see the homes for sale in Journey's End


StreetInsider.com - Schiff: Look Out Below! Home Prices to Fall Additional 20%

A ‘Happy New Year’ news story from Peter Schiff…one of the earliest predictors of the ‘pop’ of the housing bubble.

December 30, 2010 10:50 AM EST

According to Peter Schiff, the recent drop in home prices  is unnerving, but there is still another 20% drop to go before we reach a historical trend line. (emphasis mine)

Schiff notes that some economists anticipate a further correction, but most don't believe that the vicious correction of 2007 and 2008 could return. To counter, Schiff notes that many underestimate how distorted the market had become.

From the start of 1998 through the middle of 2006, arguably at the peak of the market, the Case-Shiller 10-City Index rose an astounding 173% at 19.2% per year. Schiff notes that we now know that the gains had little to do with fundamentals and more to do with "distortionary government policies that mandated  loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit."

One of the co-founders of the Case-Shiller index, Robert Shiller, contends that home prices, from 1900 - 2000, followed a more muted 3.35% average growth rate, which included the Great Depression, post-war eras, and the boom of the 90's.

So, Schiff notes that in 1998, the Case-Shiller index was at 82.7. Following the 3.35% average annual price increase predicted by Shiller lands us at a point of 126.7 in October 2010. However, the Case-Shiller Index came in at 159.0, suggesting an additional 20.3% decline in the index to get it back to more normalized levels.

Schiff continues that no one is making a case that fundamentals have gained traction, and most point to government intervention as an artificial stop to the free fall. Programs like "the home buyer's tax credit, record low mortgage rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business" have put the kibosh on falling prices for now.

But, contends Schiff, with "bloated inventories, 9.8% unemployment (and much higher REAL unemployment), a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line?" He argues that they will overshoot to the downside.

So what's the outcome? A major market correction in the next year.
Schiff thinks not, rather that there may be potential for an additional 10% dip below the 100-year trendline in the next five years, especially if mortgage rates continue upwards to more historical rates of 6% or more. He notes that that would put the index at 114.02, or about 28.3% below where were at now. Even a 5% dip would put the index at 120.36, about 24.3% below current levels.

Concluding, Schiff comments that, "In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."



A little Christmas gift for all of my blog readers in Journeys End

I have put together a report...a quick read...with many interesting stories and details regarding the origins of contemporary Christmas Traditions. Click on the image and read or download the entire booklet if you like. Feel free to pass it along to others too!


Recent closed sales in Journeys End

Below is a recap of the closed sales in Journey's End from August 1st until today:
  1. Pecos - Pool - Lake, 1 story, 2400 sq ft:, 2 car gargage: $290k
  2. Yuma - No pool/lake, 2 story 2800 sq ft, 3 car garage: $290k
  3. Santa Fe - Pool - Lake, 2 story, 3000 sq ft, 3 car gargae, BANK OWNED: $295k
  4. Kensington - Pool - Lake, 3700 sq ft, 2 story, guest house, 2 car garage, SHORT SALE: $335k
  5. Santa Fe - Pool - Lake, 2 story, 3000 sq ft, 3 car garage: $360k
  6. Versailles -  Pool - Lake, 2 story, 3200 sq ft, 3 car garage: $395k
  7. Kensington - Lake - 2 story, 3700 sq ft, 2 story guest house, 1/3 acre: $416k
Also, there is a very unusual and interesting, (troubling) statistic...there are currently NO Journey's End/Grande Estates homes under contract.


Has anyone seen my $3.3 Trillion?

Now, you and I might lose track of where we spent that $20 bill we had in our pocket...but Mr. Bernake can't seem to remember where he spent (our) $3.3 TRILLION! Courtesy of my friends, Brian and Frank, at Think Big, Work Small


Journey' End foreclosures, Foreclosures in Journeys End

As of December 4th, 2010 there are 35 Journey's End homes in some stage of foreclosure. This doesn't mean that there are 35 bank-owned homes in Journey's End, but these 35 have had a Lis Pendens filed, perhaps had a sale date set (courthouse sale) or have actually been sold at a foreclosure (courthouse) sale but have not yet been placed on the market.

Below I will identify these properties by street:
  • Bither - 3
  • C Durham - 8
  • Ethan - 1
  • Eugene - 1
  • Finamore - 8
  • Houlton - 8
  • Jessica - 1
  • Kevin - 1
  • Kirsten - 1
  • Nikki - 2
  • Wilbur - 1
Doing some further research reveals that only one of the 35 properties is 'under contract' attempting a short sale. Perhaps some of the other 34 have short sale contracts in at the bank already but their home is no longer listed in the MLS, are attempting to negotiate a loan modification, forebearance agreement, deed-in lieu, or some other solution. But I have found that mostly, homeowners in default tend to ignore the issue until it is too late to have a good, workable, solution available.

Click on the image above to order our free report


A Thanksgiving wish


Finally! One of the big franchises ADMITS IT!

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...

And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo.

 I don't think many realty companies, large or small, make ANY promise to the consumer other than vague platitudes "we are the biggest/we sell the most etc., nothing like "we hire only the most highly skilled/we fire the bad agents...you know what I mean. And the ones that do make consumer based promises often do absolutely nothing to actually KEEP AND ENFORCE that promise, from recruiting, to rules, to marketing, to service standards.

But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company.

All of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.


There's no free lunch

I have started to see this being promoted recently by mail and on the radio.
"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door.  But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves. 

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc., Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:
  • Must purchase one of the agents listings...or at least buy a 'full commission' home with them
  • Seller must still pay a full commission on the 'guaranteed' sale
  • Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
  • "Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
  • Original list price 5% below comparables
  • Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100%  for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
  • Sign the listing agreement first...then the guaranteed purchase details come later
  • May be a maximum allowable program price
  • Restrictions on home condition
  • Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price
If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:
  • With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
  • If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
  • Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
  • Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today.

Thanks for reading


Nobody likes an 'I told you so'...but


"Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen."

John Carney, CNBC--"When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS...

Now it appears that Congress may attempt to prevent any MERS' meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines...And be subject to court challenges on mortgage ownership by foreclosure defense attorneys.

Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

Remember, this is the SAME Congress that "almost" passed the "Notarization Act" by voice vote and it reached Obama's desk. We will never know who voted for it, as a voice vote is not recorded, and it flew threw BOTH House and Senate.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimize mortgage transfers conducted through MERS' private database...."

Just look at my post of 10/26 on my Winston Trails blog at www.WinstonTrails.info ...this is EXACTLY what I feared would happen. Too big to fail also means too big to have to comply with the laws I guess. When was the last time you broke the law and then had legislation passed on your behalf?  I don't want to turn this into a politcal blog...but...


That one heck of a 5 o’clock shadow

Standard & Poor’s, known as a leader of financial market intelligence, has revised estimates for when we can expect this much-talked-about shadow inventory to clear up. S&P now estimates that it will take 41 months—or nearly three and a half years—to get through and sell off all that shadow inventory lurking in the national real estate market background.

This number is up drastically from it’s assessment a year ago when it estimated it would take 33 months to complete this process…(That’s 25% longer than their last estimate and these guys are the “leader in financial market intelligence”?) S&P’s report states that the growth in the nation’s shadow inventory is affecting the housing market in three ways.

First, low liquidation rates are artificially skewing the visible supply of these distressed properties on the market. Second, this ever-growing inventory is having a negative affect on existing home prices. And finally, home prices will only begin to stabilize once this shadow inventory backlogged is cleared out.


Check out my video-tip blog....lots of helpful info

Just click on the image above


Foreclosures gone wild...the trilogy.

Rather than repeat the entirety of all three recent posts that attempt to explain this recent foreclosure mess/fraud...here are the links to the actual posts over on my Winston Trails blog.

Foreclosures Gone Wild 1

Foreclosures Gone Wild 2

Foreclosures Gone Wild 3


Finally, Jon Stewart gets to the bottom of this foreclosure fraud thing...

Be forewarned...this IS a Jon Stewart video...make sure no one easily offended is watching over your shoulder!


U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market…
“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”…
Fannie Mae Forecast
Fannie Mae, the largest U.S. mortgage finance company, today lowered its forecast for home sales this year, projecting a 7 percent decline from 2009. A drop in demand after the April 30 tax credit expiration “suggests weakening home prices” in the third quarter, according to Fannie Mae…
8 Million
Douglas Duncan, chief economist for Washington-based Fannie Mae, said in a Bloomberg Radio interview last week that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley’s Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million…
In addition to the as many as 8 million properties vacant or in foreclosure, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are “very likely” to put their properties on the market within six months if there is improvement, according to a survey</a> by Seattle-based Zillow.
“This has the potential to create a sawtooth pattern along the bottom,” Stan Humphries, Zillow’s chief economist, said in a telephone interview. “Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.” …
The Obama administration’s effort to help mortgage holders, HAMP, is another source of future inventory as owners with new loan terms re- default, Ritholtz said. About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department…

Read the full article by clicking the link below…(if you dare)
U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg



A local attorney who counsels many of our clients, Richard Zaretsky, has just posted this excellent article on his blog. It answers the very common, but perplexing question posed above.

Do We All Have A Common Goal?  Do all short sellers cooperate with the short sale process?  The answer is a resounding NO.  The short seller is typically living in the house "for free" and is not all that interested in moving out and paying rent.  Therefore, short sellers are notoriously delay oriented. Banks believe this to be a fact.

I Want To Stay!  Loan Modification borrowers are in a somewhat different boat.  They don't have any plan to move out of the house as they want to modify the loan to something more affordable.

They Want WHAT!?!@?  Short Sellers and Loan Modification borrowers have something in common - they have to accept the lender's terms of the short sale or loan modification or face loss of the home through foreclosure.  The alternative of the loss of the house in foreclosure is usually not an desirable option.  The lender can never be sure that (a) the buyer in a short sale is not going to walk away from the sale at the last minute, (b) the seller will accept the demands the lender conditions the short sale approval upon, or (c) the borrower will accept the loan modification terms offered by the lender (if any are offered at all).

Hurry Up and Wait?  So knowing or believing all the above, if you were the lender and you knew that from start to finish the mortgage foreclosure process was going to take 300 to 700 days and the short sale or modification may or may not end up successful, would you wait 3 or 5 months for a short sale contract or for the borrower to submit complete loan modification information - BEFORE you started the clock on the foreclosure process?  OF COURSE NOT!  Therefore, even if you have a good faith intention to proceed with a short sale or loan modification, the lender will NOT stop a pending suit or delay filing an otherwise ripe suit for foreclosure.  The result is one hand of the lender pursues solutions with the borrower and the other hand of the lender pursues solutions against the borrower - all at the same time.

Remind Me To Stop Before I Drive Off the Cliff!   Even the HAFA and HAMP programs have guidelines for participating lenders that state that the lender will not have to stop the foreclosure process - but only that if a borrower is accepted into the processing of under HAFA or HAMP, the lender will not actually have the foreclosure sale!  But they can go all the way to getting a foreclosure sale date set!

So if you are trying a short sale or modification, don't be surprised when the Sheriff rings your doorbell at 6 a.m. with a subpoena and summons and complaint for foreclosure even though the nice people at the bank are helping you in your "solution".  If you are 90 days or more late (typically), you should expect that visit and introduction to your foreclosure complaint very very soon.  And once you get served BE SURE TO IMMEDIATELY CONTACT YOUR ATTORNEY TO DISCUSS THE FORECLOSURE AND WHAT SHOULD BE DONE ABOUT IT.



Freddie Mac estimates home sales to fall another 23% in 3Q

Below are a few of today’s housing industry headlines:

  1. Freddie Mac expects 4 million new and existing home sales in the third quarter, a possible 20.7% decline from last year and 23% drop from the previous quarter.
  2. Kondaur (distressed note buyer) chief executive Jon Daurio joined Moody's Investors Service analysts saying he expects prices to fall another 20%…Daurio said he expects the drop to occur over the next three years.

You can read the article here: Freddie Mac estimates home sales to fall another 23% in 3Q « HousingWire


Thinking about pursuing a loan modification? In the middle of a loan modification negotiation? Read this...

Working on the inside of this industry, it is easy to see through the smoke and mirrors being used by the TBTF (too big too fail) lenders when it comes to "extend and pretend". They will do what is in THEIR best interests regardless of public statements to the contrary.

I have seen too many borrowers taken advantage of when attempting to negotiate a forebearance or loan mod without professional and legal assistance. The banks are no better than low-life debt collectors that will say anything to get some more money out of someone. But now, people have had enough and it is getting some national press...consumers are suing the banks for not following through on loan mod committments.

Read the full article from today's USA today HERE

If you have ANY questions regarding your loan, please give me a call. I promise that if I don't know the answer or solution right away, I will find out or point you in the direction of the person who does know. My direct line is 561-602-1258.

Thanks for reading


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Experts and news outlets surprised: Home sales plunge!

But if you read this blog…YOU shouldn’t have been surprised at all. I have been counseling my sellers for many months now…you want to be the NEXT home to sell!

Here are some snippets from some of today's press releases:

1) Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.

July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

2) With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.

Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.

Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.

Existing home sales

Chart of existing home sales…watch out for that falling knife!

"....Purchases of existing homes plunged 27.2 percent to a 3.83 million...Estimates in the Bloomberg survey of 74 economists ranged from 3.96 million to 5.3 million..." Good job experts

Still want to listen to the ‘experts’?

If you are even thinking that you may want/need to sell anytime in the near and not-so-near future…please give me a call so we can have a lively discussion regarding my recommendations. My direct line is 561-602-1258

Thanks for reading,



Foreclosure report for Journeys End as of 8/4/10

Lots foreclosures in Journeys End...and lots more to come.

Now, just because I report them as "foreclosures" does not mean that they are owned by the bank and are for sale for pennies on the dollar....at least not yet. What it means is that these homes have a Lis Pendens filed on them. From Nolo Law Dictionary: Lis Pendens: Latin for "a suit pending." A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it.

There are currently 35 Journeys End homes reported to be in foreclosure as of today. A few of the ones on this list have already been taken back by the bank at the courthouse sale. Below I will report them by street, alphabetically.
  • Bither - 3
  • C Durham - 9
  • Eugene - 1
  • Finamore - 5
  • Houlton - 11
  • Kaleb - 1
  • Kevin - 1
  • Kirsten - 1
  • Melissa - 1
  • Nikki - 1
  • Wilbur - 1
If you are 1 of these 35 homes, or if you may be on this list next month...PLEASE call me today so you can learn what options you have and which is the best one for your particular situation. Don't ignore the issue...it won't just go away, and "letting the bank take it" is most likely the worst option you have. Here is my direct line: 561-602-1258


Inflation? Deflation?

Every day, from cable news to the local paper, we are told that inflation is coming...then the next expert says we are in a deflationary spiral...what does it all mean and whom do we believe?

It would seem that everyone is right...here is the best and easiest to explain/understand definition/comparison-contrast of inflation and deflation:

I've seen some quotes equating to deflation as the things you own, and inflation as the things you need. Close, but the real explanation is more like this:

Price declines are occuring in goods/services sectors backed by debt resulting from contracting credit...things that you would normally use a loan/credit to buy (deflation). Price increases are occurring in goods/services sectors acquired with money resulting from increasing money supply (inflation), (things like food, utilities, gas for the car, etc ).

Ben can print money 'til the cows come home, showering every citizen with $10k, $100k, $1m per year/quarter/month. All that will happen is a direct escalation in prices of assets not backed by debt. Price increases for items backed by debt will not resume/recur until there is an underlying organic demand for credit and a corresponding easing in credit terms (inflation). That is, the so-called final (ie private) demand.

And there you have it...


Mortgage applications at a 13 year low...so why is that important?

The Mortgage Bankers Association reported that demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates. Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the Mortgage Bankers Assn. said....Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance.

Take a look at this statistic and chart below: The refinance share of mortgage activity remained constant at 78.7 percent of total applications…so, at a 13 year low number, only 21% of the mortgage applications were for new purchases! On an unadjusted basis, the volume of purchase applications is 43% lower than the same week last year!


If even at sub-5% rates buyers are not interested, what’s going to happen to buying interest if (when) rates go up?
  • Unemployed people do not buy homes.
  • People who have had their hours or salary reduced 20-30% do not buy homes.
  • People with a credit score of 599 or less (25% of the population) do not qualify to buy a home.
  • People who lost 30% of their home equity can not sell their existing home to buy a new one.
Where I see the most activity (and a lot of multiple offer situations) is in the sub $150k range…where you can buy and have payments less than a comparable rental. Maybe this is what will happen going forward in all price ranges…activity and competition will greatly increase when the home price/mortgage rate equation delivers monthly payments at or close to what it would cost to rent a comparable home. And, it does not, necessarily have to come from lower prices or lower interest rates….if rental rates increase, that will be the ‘flip side’ of the equation. Rising rental rates, in my humble opinion, are quite possible given the scary statistic of sub 599 credit score Americans. Going forward I can see many, many more people throwing in the “credit score towel”…we will have a decade of renters (and this could raise rental rates)…income reduction, job loss, foreclosures, bankruptcy…some times up to ten years to clear/restore your credit without taking affirmative credit restoration steps.

If you’d like to discuss how this all affects your plans to sell or buy, please give me a call on my direct line at 561-602-1258.

Thanks for reading,
Steve Jackson


A 4th of July gift for you...

How about starting a 4th of July family tradition that doesn't include eating meat cooked outdoors or lighting fireworks?

Below I have given you 4 links to 4 very important documents.

Why not get the family/friends together and read and discuss what is actually behind this holiday. Certainly not all 4 at once...but maybe read the short Declaration of Independence before everyone starts dinner?

  1. The Declaration of Independence
  2. Constitution
  3. Bill of Rights
  4. Amendments to the Constitution
Enjoy the holiday...and be safe!

And here is a beautiful acapella version of the national anthem

Steve Jackson


Disastrous home sales report - July 1, 2010

The experts expected home sales to drop once the homebuyer tax credit lapsed at the end of April, but the depth of the decrease was shocking (only to the “experts”).

According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It's even off 15.9% from a year ago when the nation was barely emerging from the recession.

The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."

(As expected)…Lawrence Yun, NAR's chief economist, downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up. "If jobs come back as expected, the pace of home sales should pick up later this year," said Yun, "and reach a sustainable level of activity given very favorable affordability conditions."

The question is when -- or if -- the job market will ever bounce back.

"We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems."

Disastrous home sales report - Jul. 1, 2010


The 'experts' wrong?...what a shock!

May existing home sales plunged far below expectations, coming in at an annualized -2.2% rate, compared to consensus expectation of +6.0%...This is the second worst monthly drop in history, and shows just how very wrong economists are, and how they will all have to revise their outlooks lower...

Also, in the 1st quarter of this year, 96% of originations were backed by one of the GSE's (Fannie/Freddie). i.e. there is still no viable mortgage securitization market outside of the government.



San Messina beauty...


Journeys End market activity...and some other stats

Only 2 reported sales the past 30 days....
  1. 6946 Houlton...Kensington, Short Sale: $310k
  2. 6995 Houlton...Buckingham, Short Sale: $299k
Here is what is currently 'under contract'...3 homes currently...some have been under contract for a long time as they are short sales, and these negitiations can take anywhere from 60 days to over a year in some cases!

  1. A Laredo on C Durham...Short Sale, has been under contract since Dec. 9th, 2009
  2. A Kensington on Houlton...Short Sale...went under contract for the 4th time on April 5th
  3. A Pecos on C Durham...not a short sale or bank owned...went under contract on April 30th
There are 19 homes currently on the market.
7 Short Sales
1 bank Owned
11 traditional sales

Looking at the sales figures for the previous 12 months - 24 total sales. If we were to apply this rate of sales to the current 'for sale' inventory, we arrive at an absorbtion rate of 9.5 months to liquidate the current inventory on the market in Journeys End.

Thanks again for taking the time to read our blog. If there is a subject you would like us to post on, please send us an email.

Steve and Jackie Jackson


What is everyone searching for?

Recently there has been a ton of good news being reported in the real estate segment. Resale home sales were up huge...new home sales were up big too...every talking head is predicting the end of the housing slump. Not so fast. I have done some research regarding some little publicized web traffic statistics, and that tells us..The Rest Of The Story!

The company, Hitwise, a web-traffic analysis company, recently published the following trend chart:

What this chart reveals is that year-over-year visits to websites in the Real Estate category are down 22% for April 2010...that is 11 consecutive months of traffic decline for visits to Real Estate For Sale sites! It is painfuly obvious that buyer interest is declining. Now, lets look at another Hitwise chart:

The above chart from Hitwise reports that visits to “Home and Apt Rental” websites are up 45% in April 2010 year-over-year, and that represents the tenth consecutive month of increases!

Finally, Hitwise reports: “The most popular term ranked by the overall share of search clicks is ‘apartments for rent’, which has increased 162% for the 4 weeks ending May 8, 2010 when compared to the same time period 2 years ago.” For the Home and Apt Rental websites, visits have increased year-over-year for the past 10 months. 

Now, every real estate agent will tell you that 90% or more of all homebuyers use the Internet during the home purchase process... So, a 22% decline for traffic to real estate sites, combined with 45% increase for rentals suggests that the market demand for housing sales might be a whole lot softer, and headed in a different direction, than widely reported economic data indicates.

People will choose to rent for 2 main reasons...they can't buy a home or they don't want to buy a home.
A large number of people today who CAN'T buy fall into a two categories: 1) No job/job or income instability, 2) credit issues. Hopefully, the job situation will improve consistently going forward, but the number of people with credit issues will most likely continue to rise. Think about the statistic in this following chart: (look at the very left bar in the graph)

The state with the greatest percentage of people at least 30 days late on their mortgage is...FLORIDA! Over 1 out of every 4 people with a mortgage is 30 or more days behind.
It is common knowledge that missing mortgage payments will deliver a pretty significant hit to ones credit score. And with the abject failure of the Govt. HAMP (loan modification) program, it is a fairly safe bet that a large number of people currently behind on their mortgage will end up eventually either losing their home in a foreclosure action or successfully completing a short sale (the much better alternative). In either case, these folks will not be purchasing a homeduring the next 2 years, or more. These are ones who can't buy a home.
Then you have large segment who still believe that it is not a good time to buy..they are renters by choice, and their numbers are growing daily.
Now, I personally know that many investors are plowing money into the real estate market, although they are very selective and are making decisions that factor in NO appreciation for 5 or more years. And, there are still buyers out there. They are balancing the historically low interest rates, low home prices and reduced competition against the chance that home values will decline further. But most of my buyers today have a long enough time horizon to give them the confidence that the combo of interest rate and home prices makes it a good time to buy.
Any homeowners reading this who are considering moving in the next 24 months or so should seriously consider getting your home on the market sooner, rather than later. Sell, get you money in the bank now, and rent for a while if you need to. It may be a bit inconvenient, but it appears that this may be the smartest move.


Journeys End Foreclosure Report

May 25th, 2010

As of today, there are 35 Journeys End homes in some stage of foreclosure. (On 4/1/10 there were 31)

>11 on C. Durham

>10 on Houlton Cir

>7 on Finamore Cir

>1 on Kaleb

>2 on Melissa

> 2 on Bither Way

>1 on Nikki

>1 on Eugene Ct



Sold in the last 60 days - Journeys End

1) Houlton Circle - Buckingham, pool - $365,000
2) C Durham - Short Sale Taos - $333,000
3) Ethan - Yuma - $315,000
4) Kaleb - Bank Owned Taos, pool - $365,500


CBS The Early Show...Rebecca Jarvis; Selecting a real estate agent

Yesterday, Rebecca Jarvis on CBS The Early show did a piece on how to avoid the common mistakes in selling real estate...her #1 mistake: Picking a bad agent

But, through lack of research or lack of expeirence she failed to give any concrete advice on how to judge if you are picking a good agent or a bad agent. The best advice is be diligent and careful when hiring an agent...you won't know you hired the wrong one until it is too late.

Personally, I have seen sellers select an agent because (in their own words) "they send me postcards all the time". Others have selected neighbors, friends, church associates etc. as their agent with no other qualifying criteria. Still others pick the agent that tells the the highest listing price.

A recent development is the "mega agent" who advertises under their name but actually has less experienced "team members" handle just about all aspects of a transaction, all the time selling the client on how this is good for them. The "mega agent" doesn't meet with the client, doesn't write or negotiate the contracts, doesn't interact with the buyers agent and may not ever speak with the client...they are involved in the clients transaction in name only.

While this is just my opinion and there may be no way to prove this, I would argue that the best agents occupy the "80th to 90th percentile" of a bell curve of relative real estate production. I say this because my years in the business have led me to believe that the absolute "top" agents in terms of total # of homes sold tend to be focused primarily on SALES and SELF-PROMOTION and most of the actual work is delegated to other individuals, while the agents just below that tend to be more client-centric and personally involved in the clients transaction.


It's time to get a CLUE

It's time to get a CLUE


HAFA...all the benefits of a regular short sale...hafa the headaches!

Monday, April 5th, was the 1st day, officially, of the new government sponsored intiative, HAFA: Home Affordable Foreclosure Alternatives. HAFA was introduced to simplify and streamline the short sale process and to provide incentives for the homeowner, loan servicer and lender/investor.

We have already received specialized, in depth training on this new program and will briefly summarize the features and benefits below:

Qualifying Factors

  • Must be HAMP eligible
  • Principal residence only (must be living there, with 1 allowable exception)
  • 1st lien mortgage originated prior to 2009
  • Mortgage balance less than $729,750
  • Mortgage payment exceeds 31% of monthly gross income
  • NOT a Fannie Mae or Freddie Mac backed loan

Here are the Fannie and Freddie loan look-up tools:
Fannie Mae Loan Lookup
Freddie Mac Loan Lookup

How is the HAFA program different or better than what is being done now?
The main problem, for both sellers and buyers, with traditional short sales was that they took too long and the process was wholly unpredictable. It was always difficult to keep buyers interested in, and committed to, the process. The HAFA program was designed to speed up and standardize the short sale process and give incentives for each short sale completed. During a non-HAFA short sale, there is no government incentive for banks to help you. Also, a VERY important benefit to homeowners is the requirement that participating lenders release you of any further libility for the deficiency amount!

What are the incentives?
  • As a qualifying homeowner, you would be entitled to a $3000 "relocation" incentive payment at the time of closing and funding of your short sale.
  • Servicers participating in the program will receive $1,500 for a completed short sale
  • Investors (lenders) can receive up to $2,000 for payments made to junior lienholders
  • Junior lienholders can receive up to $6000
Do I have to hire a real estate professional for a HAFA short sale?

Yes, but it won't cost you anything. Under HAFA, our fee will be deducted from the sale proceeds and paid by the lender. It is a requirement of a HAFA short sale that you work with a real estate professional throughout the HAFA short sale process. The Jackson Realty Group is now the areas HAFA specialists, having received the most up-to-date training available on the HAFA program.

Also, any time there is a new program announced, there are people who set up scams based upon the publics ignorance of the details, and the HAFA program will be no different. Other than an attorney you may hire to assist with a pending foreclosure or associated issue, beware of anyone requesting "up front fees" to assist you in processing a HAFA short sale. MakingHomeAffordable.gov (MHA) provides the following guidelines:

• Beware of anyone who asks you to pay a fee in exchange for counseling service or modification of a delinquent loan.

• Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes.

• Beware of people who pressure you to sign papers immediately, or who try to convince you that they can "save" your home if you sign paperwork or transfer over the deed to your house.

• Never make a mortgage payment to anyone other than your mortgage company without their approval.

• Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

If you would like to meet with me to discuss if you may qualify for this program and to review the process as well as your options, please call me at 561-602-1258 or CLICK HERE and send me an email with your contact information.



Foreclosures in Journeys End...breaking down the numbers

As of 4-1-10, there were 33 homes in some stage of foreclosure in Journeys End.
  • 11 on C. Durham
  • 8 on Houlton Cir
  • 7 on Finamore Cir
  • 1 on Kaleb
  • 2 on Melissa
  • 2 on Bither Way
  • 1 on Nikki
  • 1 on Eugene Ct
Below is the map of the properties with a Lis Pendens, color coded as follows:
Yellow=scheduled for auction
Green=Bank Owned
Red=Pre Foreclosure

1 on Melissa is set for auction on April 19th...2 others were set for auction but had Short Sale contracts pending so the foreclosure auction my have been postponed.

Don't let the bank foreclose...do a short sale

By Les Christie, staff writer March 29, 2010: 2:30 PM ET

NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks and months, when the government starts handing out cash to encourage lenders to close these deals.

"In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete," said Chris Saitta, CEO of Equator, which produces short sale software. "Things would just fall into a black hole and not come out again".

But, recently, a few things have happened: 1) the banks have finally begun to get an organized, trained staff and 2) the banks may be realizing that they lose less money in a short sale as opposed to a foreclosure 3) the govt has just come out with the HAFA program that incentivizes the lender, the investor and the homeowner when they complete a short sale according to HAFA guidelines. Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 "relocation incentive" and servicers will get $1,500 for handling a short sale. And the investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days. Also, not mentioned in the article was the requirement that the lienholder release the homeowner of any deficiency.

If you are behind on your mortgage, or believe that you will fall behind soon and your home is worth less than you owe...please call me 561-602-1258. Or email me with your contact information if you prefer. Just don't ignore the situation, get in front of it and get your lender working with you, not against you.


Foreclosures: Housing defaults soar in Palm Beach County

Foreclosures in Palm Beach County were up 63% from January to February.
Click here to read the full article


Recent market activity update

There are currently 12 homes on the market in Journeys End.

Asking prices range from $264,000 to $450,000.

3 of the 12 are being marketed as short sale...with maybe 4 more that would be short sales if they were listed at market value.

A few of the homes have been on the market only a week or 2...but then you have 3 of them on the market 400+ days, 1 at 500+ days and one OVER 800 days on the market!!

Under Contract Homes: currently there are 6 homes with a pending contract on them. Asking prices on the six range from $249k to $365k

4 of the 6 are short sales.
The SOLD properties for the previous 90 days are as follows:
  1. Windsor/Lake/Pool - $415,000
  2. Windsor/Canal/Pool - $369,000
  3. Kensington/Lake/Pool - $345,000
  4. Taos - $340,000
  5. Biltmore/Lake/Pool - $335,000
  6. Santa Fe - $327,500
  7. Santa Fe- $325,000
  8. Santa Fe/Lake/Pool - $300,000


CNN Money reports 25% home price decline ahead for our area!!

Take a look at this eye-opening post on our Winston Trails blog...If you're a home owner, you NEED to read it. Just click right here


New credit card rules to take effect soon...H.R. 627

The Credit Card Act of 2009 phases in, with the majority of consumer protections kicking in Feb. 22, 2010. If you are into reading lengthy government documents, click on the blog post title ( or the link below) and you will be redirected to the 33 page, HR 627 document entitled: ‘‘Credit Card Accountability Responsibility and Disclosure Act of 2009’’

If you'd rather just see a brief summary... here you go:
Sec. 101. Prior notice of rate increases required. Prohibits increase in APR without 45 days= notice. Prohibits applying rate increases retroactively to existing balances. Requires clear notice of right to cancel credit card when APR is raised.

Sec. 102. Freeze on interest rate terms and fees on canceled cards. Prevents APR from being raised, or repayment terms being cancelled, if a cardholder cancels a card.

Sec. 103. Limits on fees and interest charges.

< Prohibits double cycle billing: Prohibits credit card issuers imposing interest charges on any portion of a balance that is paid by the due date.

< Over-the-limit fee restrictions: Cardholders must be given the option of having a fixed credit limit that cannot be exceeded, and card companies cannot charge overlimit fees on cardholders with fixed limits. Cardholders may elect to prohibit the creditor from completing overlimit transactions that will result in a fee or constitute a default under the credit agreement. Overlimit charges can only be charged when an extension of credit, rather than a fee or interest charge, causes the credit limit to be exceeded. Overlimit charges can only be applied once during a billing cycle.

< Prohibits charging interest on fees: Prohibits the charging of interest on credit card transaction fees, such as late fees and overlimit fees.

< Limits on charging certain fees: Prohibits credit card issuers from charging a fee to allow a credit card holder to pay a credit card debt, whether payment is by mail, telephone, electronic transfer, or otherwise. Requires fees to be reasonably related to cost. Foreign currency exchange fees may only be imposed in an account transaction if the fee reasonably reflects costs incurred by the creditor and the creditor publicly discloses its method for calculating the fee.

Sec. 104. Consumer right to reject card before notice is provided of open account. Gives cardholders who get preapproved the right to reject the card up until they activate it without having their credit adversely affected.

Sec. 105. Use of terms clarified. Prevents card companies from using the terms fixed rate and prime rate in a misleading way by establishing a single definition.

Sec. 106. Application of card payments. Prohibits credit card companies from setting early deadlines for credit card payments. Requires payments to be applied first to the credit card balance with the highest rate of interest, and to minimize finance charges. Prohibits late fees if the card issuer delayed crediting the payment. Prohibits card companies from charging late fees when a cardholder presents proof of mailing payment within 7 days of the due date.

Sec. 107. Length of billing period. Requires credit card statements to be mailed a least 21 days before the bill is due (current requirement is 14 days).

Sec. 108. Prohibition on universal default and unilateral changes to cardholder agreements. Prevents credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholders behavior with respect to that card. Prevents credit card issuers from changing the terms of a credit card contract for the length of the card agreement. Allows penalty rate increases only for specific, material actions or omissions of the consumer specified in the card agreement. Requires issuers to lower penalty rates that have been imposed on a cardholder after 6 months if the cardholder commits no further violations.


Sec. 201. Payoff timing disclosures. Requires credit card issuers to provide individual consumer account information and to disclose the period of time it will take the cardholder to pay off the card balance if only minimum monthly payments are made. Also requires issuers to disclose the total amount of interest the cardholder will pay to pay off the card balance if only minimum monthly payments are made.

Sec. 202. Requirements relating to late payment deadlines and penalties. Requires full disclosure in billing statements of required payment due dates and applicable late payment penalties. Requires that cardholders be given a reasonable period to make payment. Requires that payment at local branches be credited same-day.

The above summary only details a small portion of what the bill regulates...if you have any credit cards (and who doesn't), it may pay to print out and read the entire bill.

I hope this is helpful to you.


The next chapter in the book entitled: The housing crisis..what they DON"T want you to know!

On our main blog, I just posted a startling entry which details the reasoning behind the likelihood of a "second leg down" in local home values...rather than duplicate the entire post here, just click here or on the post title to read the entire post.

Thanks...Steve Jackson


Kensington short sale...SOLD after 653 days on the market!

A Kensington model on Houlton Circle that had been on the market since April of 2008 has finally sold for $345,000.

The original agent placed it on the market at $549,000, eventually reducing it to $410,000. After 269 days on the market, the owner switched agents. The new agent priced it at $400,000, had it on the market for over a year, and eventually sold it for $345,000. A selling price over $200,000 less than the original asking price...think someone made a pricing error here?

I see this too often, where wrong pricing, whomever is at fault (agent, owner, or both) ends up costing the seller tens of thousands..and in this case hundreds of thousands of dollars...as well as a great deal of time and stress.


Journeys End homes currently under contract...a very informative breakdown

There are currently 8 Journeys End homes under contract...which is good news.

But...look at the map graphic below for "the rest of the story"

There are only three homes (of 8 total) that are NOT Short Sales

This does not bode well for property values going forward as short sales typically sell at a discount to non short sales. And with the ratio being 5 "under contract" homes being short sales and only 3 being non short sales, this could cause an appriasal problem with sales later this year...this is an excellent graphic backing up the advice that I have been giving to sellers/potential sellers in Journeys End lately: the window of opportunity is small, try to get on the market, under contract, and sold in the next 3-5 months.

Thanks for reading,

Steve Jackson

Journeys End sales the previous 60 days...map view

There were 6 recorded sales in Journeys End in the previous 60 days...only 1 of them was a short sale.
  1. Santa Fe...short sale...$300,000...pool/lakeview
  2. Biltmore...$335,000...lake/pool
  3. Windsor...$415,000...lake/pool
  4. Santa Fe...$327,500
  5. Biltmore...$315,000...pool
  6. Windsor...$369,000...pool/canal 


Journeys End Foreclosure details

As of 1/15/10 there were 26 Journeys End homes in some stage of the foreclosure process...below is a breakdown by street:
  • C Durham - 7
  • Houlton Circle - 6
  • Finamore - 4
  • Bither - 2
  • Nikki - 2
  • Kaleb - 1
  • Jessica - 1
  • Eamlyn - 1
  • Eugene - 1
  • Wilbur - 1


Buckingham under contract....

The extended Buckingham with a pool that went on the market a month ago at $365,000 has gone under contract.

The current owners purchased the home for $387,500 in 2003.

This is the basic Buckingham floorplan...I believe the original owners had the builder make the covered patio a part of the home.


Industry insiders expect market to resume fall...

NEW YORK (CNNMoney.com) -- After four months of gains, home prices flattened in October. Worse yet, industry insiders think that they'll soon start to fall.Prices have risen more than 3% since May, according to S&P/Case-Shiller. But most forecasts predict price declines in 2010, with possible losses ranging from anywhere from 3% on up.

Fiserv Lending Solutions, a financial analytics firm, forecasts that prices will fall in all but 39 of the 381 markets it covers, with an average drop of 11.3%."We've seen recent price stabilization because of low mortgage interest rates and the impact of the first-time homebuyers tax credit," said Pat Newport of IHS Global Research. "But there are really good reasons to think prices will now start going down."

There are three main reasons for the reversal: a coming flood of foreclosures, rising interest rates and the eventual end of the tax credits.

The above is a snippet of a CNNmoney.com article from Friday, January 1st.

Take a look at this mortgage interest rate comparison I've done:
4.5% on a $400k loan = 2025.19/mo
8% on a $276k loan = 2026.74/mo

Right now...we are at about a 5%+ average mortgage rate...it has risen the past 3 weeks, and that is with the feds direct involvement with the rate mechanism. If the feds "backs away" from direct involvement some time this year, rates will surely increase. It is not too inconceivable that rates could rise to 8%, which, in the example above, reduces the buying power of the representative buyer $124,000!

If the "blame" for the housing bubble has been "low interest rates and loose lending standards" what effect will the opposite have? Couple higher rates, extremely tight/restrictive lending standards, the end of buyer tax credits and a wave of bank-owned homes...It's not a pretty picture being painted.
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