So, not only are you not supposed to decorate your house for Halloween (it might scare buyers away!) but now you can go one step further than closing costs:

Bob and Ricki Husick came up with a more creative twist: Whoever buys their four-bedroom, 31/2-bath home on Fountain Hills Drive in Pine would get their money back after the Husicks die.

Not only that, but if the buyers are willing to care for the Husicks in their old age, they could also inherit the Husicks’ retirement home in Arizona for a total estate now worth about $500,000. The couple has no heirs.

Have a happy afterlife!

Yes, if you read my story on Friday, you might be thinking … are we all in trouble?

It seems a little like that. Read on:

A total of 72,571 notices of default, the first stage of the foreclosure process, were filed during the third quarter in the state, up 34.5 percent from the previous quarter and 166.6 percent from the third quarter of 2006 according to DataQuick Information Systems.

“We still see no sign that we’re coming up on a peak or plateau here,” said Andrew LePage, an analyst with DataQuick. “It’s continuing to build across the state in a whole lot of communities.”

Of those in default, 45.9 percent staved off foreclosure by bringing their payments current, refinancing or selling the home. A year ago it that figure was 80.9 percent.

That means now people who are in default are more likely to go straight into foreclosure. There are few remedies here. That’s the scary part. So unless lenders are willing make deals you will see the numbers continue to rise. As a realtor said:

“I’m hoping to see more loan products coming out to help people in foreclosure,” he said. “Otherwise, people are going to wonder, ‘Why should I keep paying on my $600,000 home when it’s worth $400,000? I should just walk away.’”

(Photo of “tastefully decorated home” courtesy of Ebby Halliday Realtors)

The Wall Street Journal’s RealEstateJournal seems to think scary decorations can kill your sale. Read on:

You don’t want to “spook” house hunters, real-estate agent Phyllis MacBeth of Main Street Realtors in Long Beach, Calif., says. Some might not understand the holiday, while others may find it offensive, she explains. To avoid turning off potential buyers, opt for a neutral autumn theme over ghosts and goblins, she suggests.

Try adding displays of fall leaves, colorful mums, or pumpkins — use white ceramic ones if orange clashes with your interior. “They look nice and make a house look more homey, while skeletons don’t,” she says.

Are we that much of a namby-pamby nation that a skeleton will freak us out? Apparently we are.

And just in case you thought the scariest thing to find in your little ghoulie or ghostie’s trick-or-treat bag was unwrapped candy:

Use trick or treating as an opportunity to talk up your home. One could even distribute flyers that highlight a property’s top selling points, Ms. MacBeth suggests. More potential buyers are likely to visit your house this Halloween than during any open house, she says.

I hate to say, “I told you so!” but I did. If you read this blog you know I’ve been preparing for a recession since late last year. Merrill Lynch, the investment bank, posted its first quarterly loss since 2001 — and it’s a doozy, $2.2 billion. And that’s not all. According to the Washington Post:

Some investors saw the Merrill loss as a sign that the financial industry still might not have a full grip on problems related to risky, subprime loans.

“We got it wrong,” Merrill chairman and chief executive E. Stanley O’Neal said in a morning conference call with investment analysts. “We made a mistake. There were some errors of judgment made in the business itself and in the risk management function.”

O’Neal left the door open to further write-downs, saying that the firm expected “market conditions for subprime mortgage-related assets to continue to be uncertain.”

And in the New York Times today, there was a piece suggesting that a huge damper on real estate affects real people far more than stocks:

At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.

That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.

Experts caution that these estimates are preliminary and the total costs could get bigger still. They also note that the loss of real estate wealth could prove more damaging for the general public than falling stock values because more American families own homes than own stock.

The Associated Press reported that subprime* mortgage king, Countrywide, announced that it will offer refinancing and modifications up to $16 billion in loans that are scheduled to reset in 2008:

“Unprecedented times call for unprecedented remedies,” Countrywide President and Chief Operating Officer David Sambol said in a statement. “We are determined to assist borrowers who have the willingness and wherewithal to remain in their homes, but need a little help to do it.”

The Calabasas, Calif.-based company said it would reach out to borrowers who are current on their loans but are facing an imminent rate reset to discuss options. Countrywide said it would refinance about $10 billion in loans and modify another $4 billion.

Under the initiative announced Tuesday, Countrywide plans to offer an estimated 52,000 borrowers with subprime loans refinancing into prime rate loans or federal assistance mortgage loans insured by the Federal Housing Administration.

No word from Countrywide or any report on how much they are charging their customers for a refinance or if it will be added on the back end of their loan.

*Subprime loans are loans made at a higher rate to people with less-than-stellar credit histories.

(Photo of Lake Arrowhead neighborhood on fire courtesy of Don Kelsen/Los Angeles Times.)

Leave it to MarketWatch to make the absurd leap to accentuate the positive in a tragic catastrophic fire. As fires destroy everything in their wake from Los Angeles County to the Mexican border, in this short story, “Could Calif. fires draw a line under housing crash?”, Tom Bemis writes that the fires could benefit the economy like Hurricane Katrina:

So in Southern California, one of the hardest hit housing markets in the country, the temporary reduction of available supply may not be enough to turn things around completely, but it could at least act as a brake on the housing crash.

That would be a small consolation from so wide spread a disaster, of course, and no comfort whatsoever to those who suffer losses from the fires.

But as the saying goes: “It is an ill wind that blows nobody any good.”

There are times to be pro-business and then there aren’t. I think this was one of them. Way to show sensitivity, MarketWatch!

(photo courtesy of Allen Brisson-Smith for the New York Times)
Now after I have a day to think about the Kennedy Wilson auction at the Berkeley Marina, I will say the auction was a little crazy. I forgot about the part about the bid-spotters goading bidders into bidding more more.

If you sit on the end, two or three men in suits will be in your face, “$313,000, do you want to go to $313,000? Don’t let this get away from you. It’s a great deal!”

I was reminded of it reading this NY Times article:

By 10 a.m. Saturday, more than 700 people filled a hall in the convention center here for what real estate agents say is the largest auction of foreclosed properties ever in Minnesota, with more than 300 houses or apartments for sale in two days. Opening bids ranged from $1,000 — for a three-bedroom house — to $729,000, for a five-bedroom house on 11.9 acres. The crowd was standing-room only, with more waiting to enter. Some were looking for homes, others for investments.

What they all found was a mad scene. As men in tuxedos raced around, waving their hands at bidders and goading them to bid higher, Mr. Buleziuk delivered a nearly indecipherable sales pitch, amplified to exhausting levels.

By the way, bank-owned properties rarely go for less than 30 percent of asking price. Many have a reserve that is not made public. That $1,000 bid probably was declined.

Auction Advice: Don’t sit on the end of a row, or the front row, if you don’t like high-pressure tactics.

It’s cause for celebration! And while it’s actually now my 101st post, I will say that I went to an auction selling off townhouses in San Pablo at the Doubletree Inn at the Berkeley Marina. Yes, folks, I work SIX DAYS A WEEK to provide you with all your real estate needs!

The Kennedy Wilson auction took about an hour to sell off 19 homes. The first few condos went fairly high — high was $395,000 for a furnished model. The last few went for the lowest prices, including the last lot which was a three-bedroom model that sold for $293,000.

I interviewed the winners of Lot #19, another three-bedroom model at Devon Square, a Pulte development. (If you are interested, the Chronicle went from positive puff piece to tragic home market all within a year. Same writer, too.)

Janey and Joy Madamba, 28, are twin sisters and single professionals that came to the auction hoping to find a place. They are currently paying $1,370 a month in rent for an apartment in an older building in Oakland. Both came to the auction with their parents.

“The hope was that we were going to get a sweet deal,” Joy said.

“We just kind of went for it,” Janey said.

They got their townhouse for $310,000, one of the lower-priced lots.

Congratulations!

AUCTION ADVICE: The deals seem to come at the end of the auction, not the beginning.

The next Kennedy Wilson auction will be Nov. 3 and 4 in Pinole and Benicia.

If you read my story today, you would know that times are tough. (Although I think most homeowners and more importantly, home sellers, are well-aware of that fact.) September’s lower numbers were pushed lower by the lack of lending options, namely fewer jumbo loans given by credit-shy lender wanting to alleviate risk.

Homes purchased with jumbo mortgages, or those of more than $417,000, dropped from 3,762 in August to 1,935 last month, a decline of 48.6 percent.

“There’s just not that much jumbo money out there right now,” said Andrew LePage, an analyst with DataQuick.

So now that prices are falling mortgages prices are rising, why should anyone buy? It seems like a house with a mortgage like a pretty risky investment right now. It will probably remain that way for at least the next year or whenever lenders realize that jumbo loans are necessary products in the East Bay . . . and ones that make them money.

All homes–9/06–9/07–%Chg–9/06–9/07–%Chg

Alameda 1,690 948 -43.9 $587,250 $556,000 -5.3

Contra Costa 1,784 916 -48.7 $550,000 $551,250 0.2

Solano 606 321 -47.0 $460,000 $410,000 -10.9

Bay Area 8,374 5,014 -40.1 $620,000 $625,000 0.8

Source: DataQuick Information Systems

Yes, Dublin. That suburban enclave, once dubbed “Digital Dublin,” has an average apartment rent of $1,625, up 5.7 percent from this time last year, reports RealFacts. (RealFacts keeps a database of multifamily rental communities of 100 units or larger in 15 states.)

Close on its heels is Pleasanton at $1,585/month, up 8.9 percent from last year. The biggest gainer was Walnut Creek, which jumped 11.6 percent to $1,436. Martinez rents also climbed 10 percent to $1,212!

In Solano County, where the median rent was $1,141/month rents rose only 1.3 percent. The least expensive areas were Antioch at $1,077/month and Pittsburg at $1,085. (San Leandro was close behind with $1,095.)

Here’s the Top 10 Most Expensive Places to Rent in the East Bay:

1. Dublin — $1,625
2. Pleasanton — $1,585
3. San Ramon — $1,524
4. Walnut Creek — $1,436
5. Alameda — $1,435
6. Fremont — $1,424
7. Oakland — $1,410
8. Pleasant Hill — $1,345
9. Union City — $1,311
10. Livermore — $1,253