Remember from my July 18, 2009 post “Napa Valley Real Estate, a Tale of Two Times Two Markets“ was the number of distressed sales (in foreclosure, a short sale or a bank owned property, REO) increasing for homes priced $800,000 to $2,000,000, especially up valley. By up valley I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville. Today, there are 10 distressed sales of 71 active listings in this price range, compared to 8 of 78on October 1st. At 10.26%, this is the first time thie number has every been above 10%. Keep tuning in for this as a new monthly stat I will regularly tract from now own. Next look January 1st.

Just before I wrote this post, I decided to look at another source for distressed sales and bank owned (REO, Real Estate Owned) properties I have available to me in my MLS, Realist Tax records compiled by Corelogic. The one difference here is Realist doesn’t allow me to perform a search by sales price so I just did so on all properties in Realist which are listed as “Preforclosure, Auction and Bank Owned”. Preforclosure meaning a Notice of Default has been filed, Auction a notice of Sale has been filed and Bank Owned obviously the bank has foreclosed and owns the property.

The totals  for the cities and town listed above in BAREIS, my MLS, and Realist were 33 distressed properties of 211 for sale in BAREIS and 105 distressed properties in Realist with 63 being Preforeclosure or Auction and 42 bank owned. Realist does not show whether a property is for sale. 

When comparing 33 in BAREIS to 105 in Realist, this is a BIG difference and was a bit of a surprise to me. I would have thought that most of the distressed properties would be on the market for sale and would not expected such a large number of properties not showing up in my MLS. In the past I have checked with the recorder and have found that 90% plus of all the sales in the Napa Valley were listed in my MLS. Maybe this has changed and is worth taking another look at. The breakdown for the Realist numbers by location are below.

                                         Preforeclosure          Auction           Bank Owned

Yountville                               4                               3                           1

Oakville                                   0                                0                           0

Rutherford                               0                              0                           0

St. Helena                                9                              12                         15                 

Calistoga                                  14                            17                         20

Deer Park                                  0                             0                          0

Angwin                                     2                               2                          6

I find it hard to believe that after nearly three years of this housing crisis that over 80% of all the properties in Las Vegas are still underwater. There is no doubt in my mind that if it was anybody else besides Sharron Angle, Harry Reid would not be returning to the Senate next year. I wonder if he will every get it as will any of his cohorts.

Top 10 Cities With Most Underwater Homes in America

1. Las Vegas, Nevada          80.2%
2. Phoenix, Arizona            68.4%
3. Reno, Nevada                 64.4%
4. Orlando, Florida              64.2%
5. Stockton, California        57.5%
6. El Centro, California        55.0%
7. Modesto, California         53.9%
8. Lakeland, Florida             53.7%
9. Port St. Lucie Florida      52.0%
10. Fort Myers, Florida          51.6%

The list was compiled by Business Insider with data by Zillow

By now, I am certain any reader of this blog has heard the horror stories about purchasing a “short sale” property. In this Sundays Napa Register, the lead story taking up 1/2 the front page is one of the best I have read from the buyer’s perspective. First-time homebuyers surmont challenges to buy in Napa by Jennifer Huffman has written an in depth article which I feel any short sale buyer, especially first time buyers, should read. Here a few excerpts from her article.

Back in August 2008, when the median price for a Napa home was $472,000, the idea of owning a home in Napa seemed far out of their reach. Katie Stith is a probation officer for the County of Napa. Her husband, Phil Stith, is an EMT for Piner’s Ambulance.

“We both figured that we would possibly have to move out of county, get some equity and try and move back,” to Napa, Katie Stith said.

But when home prices started falling in 2009, the Stiths began to realize that maybe, just maybe, they could afford a home in Napa after all….

Over the next couple months, the couple made offers on several homes but each was rejected. Because many of the homes the Stiths looked at were “short sales” (the home is listed for sale for less than the seller owes on the mortgage) and foreclosures, the couple realized they were also competing against yet another group of buyers — investors paying all cash for a home…..

The couple qualified for a Federal Housing Administration loan, allowing just a 3 percent down payment. But with that lower down payment came additional scrutiny from FHA lenders.

Often, homes in the most affordable price range had been altered without city building permits, a big sticking point for FHA underwriters, Katie Stith said…. 

“It took quite a while,” Katie Stith said. “It was nail biting for us because at that point it was completely out of our hands. They weren’t looking at us as buyers. They were looking at what was best for them in a business sense. There was nothing we could do about that.”

More than seven weeks later, the holder of both loans, which happened to be the same company, approved the short sale.

Next, the Stiths began moving forward with their own loan approval process, including the appraisal, which became yet another stumbling block. Because the garage had been converted to an unpermitted living space, an initial appraisal came back at below the selling price of the home…. 

Yet obstacles continued to pop up for the couple. During all the negotiations and appraisals, the foreclosure process on the home continued. The home was scheduled to be sold on the courthouse steps, regardless of the Stiths’ offer….

“We had almost every hurdle thrown our way,” including a short sale with two loans on the property, critical time frames and a foreclosure sale right around the corner, she said. “You are racing around the clock, yet your hands are tied.” …

Hope you enjoyed reading this as much as I did and for someone trying to buy a short sale, it helped prepare you for what is to come.

Remember from my July 18, 2009 post “Napa Valley Real Estate, a Tale of Two Times Two Markets“ was the number of distressed sales (in foreclosure, a short sale or a bank owned property, REO) increasing for homes priced $800,000 to $2,000,000, especially up valley. By up valley I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville. Today, there are 6 distressed sales of 86 active listings in this price range, compared to 6 of 90 on September 1st. Keep tuning in for this as a new monthly stat I will regularly tract from now own. Next look November 1st.

Two well known Napa Valley Commercial Landmarks will be sold at Napa County courthouse steps. The former Pometta’s Deli at the intersection og Highway 29 and Oakville Grade plus the former Red Hen on Highway 29 half way between Napa and Yountville will be sold at auction on October 6 th  and this Wednesday respectively.  Here is part of article from the yesterdays Napa Valley Register.

The grand plans of a developer for two Napa County commercial landmarks have collapsed, leaving the properties’ futures up for grabs. Kathy Smith made waves this past decade when she snapped up Pometta’s Deli on Oakville Grade and the original Red Hen complex on Solano Avenue north of Napa. At the Pometta’s site, Smith announced plans to build an upscale restaurant and deli to entice both locals and visitors. “I want to have a good place for people to have fun,” she said in 2005. At the 3.5-acre former Red Hen site, which once held a sprawling antique store, Smith envisioned a destination evoking Disneyland’s Main Street or a scene from the “Music Man.” 

She floated plans for two restaurants, retail stores, a possible 50-room hotel, even a carousel. “I have a lot of dreams for it,” Smith said in a 2005 interview. Those dreams are now dashed. In an attempt to satisfy a civil court judgment against Smith, the former Pometta’s Deli lot will be sold at auction on the Napa County courthouse steps on Oct. 6. There is no minimum bid amount. 

The former Red Hen site has entered foreclosure proceedings and is scheduled to be auctioned off Wednesday at the courthouse. There is no minimum bid amount. The default amount is listed as $4.1 million. 

In addition, Smith has lost the Napa Smith Brewery property near the Napa County airport and is in the process of losing three Upvalley homes.

I can remember eating at the original Red Hen in the late seventies which served fried chicken in those red plastic baskets. It was very tasty and quite reasonable. As for Pometta’s Deli, it too was another favorite site for many locals. It is sad to see them end up this way. Maybe a sign of the times and maybe a sign of the down turn for commercial real estate I keep reading about?

Remember from my July 18th post “Napa Valley Real Estate, a Tale of Two Times Two Markets“ was the number of distressed sales (in foreclosure, a short sale or a bank owned property, REO) increasing for homes priced $800,000 to $2,000,000, especially up valley. By up valley I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville. Today, there are 4 distressed sales of 82 active listings in this price range, compared to 3 of 87 on June 2nd. (Sorry but I was gone for July) Keep tuning in for this as a new monthly stat I will regularly tract from now own. Next look September 1st. Seems like my comments in last months post about the supposed shadow inventory of distressed properties in this price range in the Napa Valley is just not happening??? Even the Wall Street Journal is speaking out about this, “Debate Rages Over Supply of Foreclosed Homes“.

This all started from my July 18, 2009 post “Napa Valley Real Estate, a Tale of Two Times Two Markets“ tracking the number of distressed sales (in foreclosure, a short sale or a bank owned property, REO) for homes priced $800,000 to $2,000,000, in the upper part of the Napa Valley. By upper I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville. Today, there are 3 distressed sales of 87 active listings in this price range, compared to 4 of 82 on May 1st. Keep tuning in for this as a new monthly stat I will regularly tract from now own. Next look will be August 1st for I will be at a family reunion on July 1st. 

Again, it seems the shadow inventory of distressed properties in this price range in the Napa Valley is just not happening??? It must be happening elsewhere for the press continues with the opposite story. This weeks story of foreclosure woe in  upper end properties is from Carolyn Said in the San Francisco Chronicle, “Foreclosures shifting to affluent ZIP codes“.

All I can say, maybe the Napa Valley is truly a bit of heaven and we will see less of this happening here. At least my statistics continue to confirm this. Stay tuned.

I have often heard stories about quite a few home owners stopping payment on their mortgages and remaining in the home for over a year before the dreaded foreclosure actually happens but have not seen a better article giving facts than David Streitfeld’s “Owners Stop Paying Mortgages, and Stop Fretting” in The New York Times. Here are a few excerpts:

Foreclosure procedures have been initiated against 1.7 million of the nation’s households.

The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics.

More than 650,000 households had not paid in 18 months, LPS calculated earlier this year. With 19 percent of those homes, the lender had not even begun to take action to repossess the property — double the rate of a year earlier.

In Pinellas and Pasco counties, which include St. Petersburg and the suburbs to the north, there are 34,000 open foreclosure cases, said J. Thomas McGrady, chief judge of the Pinellas-Pasco Circuit. Ten years ago, the average was about 4,000.

In Florida, the average property spends 518 days in foreclosure, second only to New York’s 561 days.

Though I don’t have factual information to confirm this, another Realtor who I respect told me recently he has one client who has been in the home for 27 months without making a payment. Even though in a recent California Association of Realtors newsletter I recently read in which it stated nearly 70% of home owners in distress will continue to pay their mortgages, the above facts gives me pause. How do you feel about this?

California median home price increases, sales decrease in April
Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, according to C.A.R.’s April sales and price report.

Delinquencies, foreclosure starts increase in first quarter
The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 10.06 percent of all loans outstanding in the first quarter, up 59 basis points from the fourth quarter, and up 94 basis points from one year ago, according to the recently released Mortgage Bankers Association’s (MBA) National Delinquency Survey.  

The delinquency rate includes loans that are at least one payment past due, but does not include loans in the process of foreclosure.  The percentage of loans in the foreclosure process at the end of the first quarter was 4.63 percent, an increase of five basis points compared with the fourth quarter of 2009 and 78 basis points from one year ago.

Taken in total from the California Association of Realtors newsletter, Newsline:

Nearly 60 percent of homeowners with a mortgage say they would not consider strategically defaulting on their home regardless of the amount they still owe, according to an ongoing survey tracking home buyers’ attitudes toward foreclosures.  The survey, conducted by Trulia.com and RealtyTrac, also found 45 percent of U.S. adults age 18 and older are at least somewhat likely to consider purchasing a foreclosed home in the future, compared with 55 percent a year ago.

The survey also found the likelihood to consider purchasing a foreclosure decreases with age: 65 percent of renters ages 18-34; 63 percent of renters between the ages of 35 and 44; and 54 percent of renters ages 45-54 said they are at least somewhat likely to consider purchasing a foreclosure, compared with 31 percent of renters 55 years and older.

Nearly 20 percent of U.S. adults expect bank-owned homes to offer a realistic price discount of less than 25 percent off the value of a similar home that was not in foreclosure. However, 36 percent say they expect to receive a discount of 50 percent or more when purchasing a bank-owned property, according to the survey.