MSN Real Estate came out with their version of the 10 Best Bargain Real Estate markets. The list is as (yawn!) follows:

1. Wichita, Kan.
2. Omaha, Neb. — Council Bluffs, Iowa
3. Harrisburg-Carlisle, Pa.
4. Madison, Wis.
5. San Antonio
6. Indianapolis
7. Pittsburgh
8. Dallas-Fort Worth
9. Tulsa, Okla.

Sense a theme? Yes, all places you would never, ever live. But they’re cheap!

Picture above is of Wichita at night. Maybe it’s not all bad?

 
I came across this story in the Washington Post, on a subject near and dear to my heart — the “freshened” listing.

Freshening up a listing by withdrawing it and relisting it several months later is a trick that has been used for a long time. It is particularly popular when properties have languished from one year into the next because the numbers assigned within a multiple listing service correlate to the year, and sometimes the date, the property is listed.

Primarily because new properties garner more attention, many agents/sellers pull their listing for a few months and then re-list it with a new entry date. But does that mean that’s all you need to do? Thankfully Illyce Glink does say that you may have to look more at your house when it’s not selling rather than freshening listings.

Instead, she says to stage your home — no news there, to rethink your price:

While you may believe your home is worth more (and at one time I’m sure you were right), you may have to cut your price to sell soon. If you don’t feel like competing on price, consider taking your property off the market until next year.

And finally, use the Internet to virally market your home. Either way, we both agree that “freshening” a listing isn’t the only thing holding your house back from being sold. Another look at the property and may come up with a few ideas of how to sell it faster (hint: drop the price.)

Hold onto your hats, I couldn’t believe this price either. The pictures, although showing holes in walls, don’t seem frightening but you probably would want a tour of this just to see what you’re getting into. Still, it’s in Hercules and only $99,900, so maybe it’s worth looking at? If anyone does see this, please let me know what you find! It’s 2,171 square feet, four-bedroom, three bath home with a three-car garage (it’s all about the garage for this house, isn’t it?) that was last sold a year ago for $468,948. Good luck!

A little town called Fairfax in Marin is also selling off what looks like cabins for just a hair and I mean hair below $500,000 — $499,000. Don’t know much about the area other than it’s woodsy and people who like to hike love that kind of stuff. The house doesn’t look bad, or maybe I’m immune to horror, but it’s 1,248 square feet and has a little yard. Don’t let the animals run loose because coyotes will probably eat them. Other than that, you can have a chi-chi address in Marin County

There are two “houses” in Half Moon Bay under $400,000 on St. Martin’s Beach Road. I was curious how something with an ocean view (and possibly access) could be so cheap, so I did some investigating and wondered if it was a place similar to Paradise Cove in Malibu. You know, the trailer park with million-dollar views of the Pacific. (Yes, you would be trailer-park trash, but hey.) It seems a bit more complex than that, though. Since 14 Martins Beach Road mentions the one-bed, one-bath is on leased land for $580/mo. with 13 years of a lease left, there may be much more to the story and explain the $209,000 price.

The other, 33 Martins Beach Road, seems a bit bigger, with two bedrooms, but also is on leased land. A I looked around, I found that that seemingly the whole parcel is up for sale, marketed as a  ”truly private” beach and 53-acre agricultural property. Apparently they charge $10 a car to go to the beach. Man, what a racket! Price is $48,500,000. So, I guess it’s not surprising that people want to leave since the new owner could do all sorts of things to them (like raise leasing prices!)

That concludes our post on the Cheapest Houses in the Bay Area! Come by again when we look at sea and lakeside homes to beat the summer heat.

Public transportation is back! According to various reports, the high gas prices are causing people to rethink their gas consumption — including thinking about moving closer to their jobs in urban centers. There’s even reports of people in border towns going to Mexico for gas, of course the stealing of gasoline and even Realtors dealing with the higher prices. But the Inland Empire in SoCal may be hardest hit, so says the WSJ:

Even though falling prices in California’s Inland Empire are making homes more affordable, rising gasoline prices are crushing hopes of a housing recovery in this area, east of Los Angeles.

Deutsche Bank analyst Nishu Sood estimates that gas expenditures in the Inland Empire have increased to $1,322 a month from $534 a month in 2003 among local residents who commute about 120 miles a day, round trip.

Mr. Sood says soaring gas prices are hurting home builders that generated much of their profits during the housing boom by building in the far-flung suburbs of California. But it’s also hurting builders in non-bubble markets in Texas and Atlanta with long commutes.

And from the buying $2.66 a gallon gas in Mexico story in the New York Times, where people dodge bullets from drug cartels for cheaper gas:

Mr. Terrazas, a 48-year-old maintenance worker, is among a flow of American “gas tourists” who, Mexican service stations near the border with El Paso estimate, account for a 50 percent surge in gasoline sales here over the last several months. (Similar increases are reported along the border all the way to Tijuana.) Even the Mexico Tourism Board is promoting the journey.

A few weeks ago, I talked about how Nehemiah Corp. was getting a lot of heat from the feds for getting people into homes with little if any down (by having the seller pay the down payment.) In today’s Wall Street Journal, it’s revisited again, but home builders are also being taken to task. Some, including Nehemiah Corp.’s CEO, feel all the blame on programs like his is “scapegoating.” Read on:

The FHA estimates that down payments provided by nonprofit groups account for 34% of all 200,000 loans backed by the FHA so far this year, up from 18% in all of 2003 and less than 2% in 2000. And the agency says that borrowers are two to three times as likely to default on their payments when they receive a down payment from a nonprofit.

In current versions of the FHA modernization bill, the Senate would eliminate the down-payment programs and a vote on the bill is expected this week; the House version keeps the program in place. Rep. Frank said in an interview that he believed a compromise could be reached with the Senate that would preserve the program but with tougher lending requirements. “No one is talking about leaving it untouched,” he says.

Personally, if I hear someone utter the words “They need skin in the game” I will kick them. I think that only applies to people walking away, and as I’ve said before, most people are dragged kicking and screaming from their homes. How you can afford it should be based on your salary/paycheck, not whether or not it’s morally beneficial to save $10,000.

As always, comments are always appreciated.

My colleague, Eve Mitchell, wrote about house-swapping, a new way of vacationing that may not cost you a bundle. In it, she says there is a level of trust involved, but many are happy with their decisions. A couple from San Francisco used www.homeforswap and traded for Paris digs, but even if you’re from the San Joaquin Valley, there’s still hope for you.  Read on:

Homes in famous cities are likely to get a lot of requests, but places outside of tourist meccas also attract home swappers.

Just ask Modesto resident John Mensinger, a home-swapping veteran.

“We did our first in 1997, my wife and three young children,” said Mensinger, president of American Lumber Co., a Modesto-based lumber supplier. “We’ve been to Denmark, Stockholm, Wales, England, France and the Netherlands and have been living in Modesto the entire time. You will have an advantage — without question — if you live in a well-known tourist location. Home exchange is much easier if you live in San Francisco than if you are from Stockton. But it’s also a lot easier to do a home exchange if you live in Modesto or Stockton than if you are from North or South Dakota.”

At least one San Diego realty company is offering a full gay and lesbian wedding and reception if you buy a house.

Wellsford Realty is offering to pay for the wedding reception for same sex couples married in California when purchasing a home, condo, or vacation home using their services.“It’s more than showing appreciation for our customers,” Michelle Koert of Wellsford Realty said of their Pride Promotion. “It is understanding that domestic partners married under the new Same Sex Marriage Law want all of the securities and happiness that investment in a home has to offer a couple.”

Basically, they give you 10 percent back from the house to fund the reception or honeymoon, so it’s just a typical incentive. Still, nice try to target the gay and lesbian community and get some press.

From the Hernandez Files:
Three-bedroom, two-bath, 1,700 square feet, and built in 1900? It even had the palm tree in the front yard! No air-conditioning, but I knew what I was in for with a historical property. They wanted $629,000, which was ridiculous. I could wait a few weeks. They dropped the price in February to $599,900.

I saw it with my agent and decided to make an offer. Because it was very close to ideal (ideal would have been a two-story) we swallowed and decided to bid $505K, about $10,000 more than we planned. (I sold my home near Palm Springs for a six-figure profit in late 2006/early 2007, so I’m not as well-paid as you think.) I also had one contingency  — I wanted the historic photo of the house on display in the dining room.

The sellers thought I was lowballing. So they hedged and offered $579,900 and refused to give the original photo or frame. I took that as they were not willing to work with us, so with my agent we decided to step back. (Imagine killing a sale for a stupid photo of a house you are selling?!?)  In came a couple with an offer contingent on selling their home.

Three months later we get a call from the agent asking if we wanted to make another offer. The couple with the home to sell were redoing the bid without the contingency and I was asked to, “Make your absolute best offer!” It seemed fishy, as if we were being played against the other couple and we would already be in second position.  We refused to play. The house went into escrow.

According to the agent, it closed escrow earlier this week. The price? $505,000.

All I thought was, “You could have sold that house six months earlier if you had taken our offer.”

Agent 3.0 said, “Well, you were the first offer on the table and at that time the Sellers obviously weren’t willing to acknowledge the fact that they were overpriced.”

Sigh. The search continues . . .

DataQuick came out with their sales/prices for May 2008 and, as expected, it wasn’t very good. Very low sales and dropping prices. The only bright spot? More and more sales in the foreclosure-ravaged areas of the East Bay:

The impact was greatest in inland counties: Solano County’s foreclosures were 57.6 percent of the resale market; in Contra Costa they were 43.3 percent and in Sonoma 26.6 percent. It was much different on the coast, where foreclosures resales were just 5.8 percent of the resale market in San Francisco and 10.1 percent in San Mateo counties.

The impact was greatest in inland counties: Solano County’s foreclosures were 57.6 percent of the resale market; in Contra Costa they were 43.3 percent and in Sonoma 26.6 percent. It was much different on the coast, where foreclosures resales were just 5.8 percent of the resale market in San Francisco and 10.1 percent in Marin County.In individual cities, numbers were more startling. Oakley had 46 sales in May, up 142 percent from last year with 78 percent being foreclosure resales. In Antioch (94509,) sales rose 76.2 percent, in south Antioch (94531) sales rose 41 percent, with about 80 percent of homes being foreclosures. Vallejo (94589) with 28 sales saw a 55 percent rise from last year, the majority also foreclosures.

Christopher Thornberg, an economist and founder of Beacon Economics, said that he projected the downward slide to get worse and spread to the previously blue-chip real estate of the Peninsula and San Francisco.

“You’re starting to see prices starting to slip in San Francisco and that’s going to get worse,” he said. “Everyone says, ‘Oh, not here,’ but of course, it’s obviously happening.”

Read the rest of this entry »

The WSJ again writes about the “suburban blight” journalistic trend that seems to be staying with real estate reporters. The idea is that because of the high price of gas many people want to live closer to the urban centers in smaller places with public transportation. In fact, they say that it’s the boomers and Gen Y’ers that seem to want the same kind of homes. Read on:

In recent years, a generation of young people, called the millennials, born between the late 1970s and mid-1990s, has combined with baby boomers to rekindle demand for urban living. Today, the subprime-mortgage crisis and $4-a-gallon gasoline are delivering further gut punches by blighting remote subdivisions nationwide and rendering long commutes untenable for middle-class Americans.

They profile two people, a twentysomething guy and a Boomer English guy who are living in Pasadena, a short drive to downtown Los Angeles. Kind of the equivalent of living in Oakland and commuting to SF. While this may be not too earth-shattering for people in the Bay Area, that it’s finally taking root in SoCal is a big deal.

Sounds great, right? Well, maybe not. According to The Atlantic, it means creating “suburban slums,” like those in Elk Grove’s Franklin Reserve neighborhood.

At the height of the boom, 10,000 new homes were built there in just four years. Now many are empty; renters of dubious character occupy others. Graffiti, broken windows, and other markers of decay have multiplied. Susan McDonald, president of the local residents’ association and an executive at a local bank, told the Associated Press, “There’s been gang activity. Things have really been changing, the last few years.”

This is the time where we all realize the critical importance of urban planning. Good luck!