Caveat Emptor for Watsonville Investors

They are not looking to speculate on real estate – that’s how so many people ended up getting foreclosed on in Watsonville, and in California, and in many other places throughout our glorious but fading homeland . green_eyeshades.jpg A Speculator is someone who is placing a bet – they put some money down, and there bet is that the value of whatever they buy will go up. … These clients of mine are probably not what you would call professional real estate investors – but they want to buy real estate as if they were – and after they do buy a few properties, and if they keep with it, hey, before you know it – they will be professional investors, after all, every professional has to start somewhere. … What this means for my clients is that the amount of money they can afford to pay for a property, given their higher interest rate and lower rental rates means that they can offer less for a property than they had first thought – in order to make that 10% (or near 10%, anyway) return on their investment. … And, of course, the unemployment rate in Watsonville is reported to be at 25% – that’s huge, and I think it means a lot of people are going to be sharing housing, families living with families, rather than each family having their own individual place as I’m sure they’d prefer in many cases but owing to the weak economy cannot afford to do so at the moment.

Santa Cruz at Market Bottom? Some Say Yes, I Say No

Fact is, we have been seeing multiple offers for well over a year now on these bargain-basement properties in Watsonville – and pretty much anywhere in California where bank-owned foreclosures are sold several percent cheaper than competing properties – these properties attract multiple offers and sell quickly. … Pretty much – I didn’t go into 87 Arista when it was on the market, but from what I can tell on the MLS from the pictures, the choice of paint colors and level of amenities in this home was about on par with my listing. … And then, a scant two months later, my own listing comes on with an asking price of $250,000 – that’s 3.8% less than the sale price of a very very comparable property which closed just two months earlier…and I’m on the market eight days, and I’m standing in a field of chirping crickets . … But not too far below – if in fact you were able to buy a home for 10% below true market value, you could not do a thing to the property, then turn around and sell that property to someone else the next day for 10% more than you paid for it.

Is 2009 The Year to Buy Santa Cruz Real Estate?

The Housing Crash guy says: A landlords’ rule of thumb is that a house price should be a maximum of 15 times the annual rent for that place, yet in coastal areas, houses are still selling for 30 times annual rent I think he’s got a good point there – which goes to underscore my belief that prices in Watsonville are actually very reasonable at the moment. … Looking over the ads on Craig’s List, it’s safe to say that a 3 bedroom, 2 bathroom house would rent for about $2,400 a month in Santa Cruz, assuming it was in a not-so-great location. … Let’s look at the payment for a $500,000 house – but let’s assume you’re putting down a reasonable 10% instead of the FHA minimum of 3.5% – so you’d have a $450,000 loan, again at about 5.75% because with only 10% down, you’d still need to pay mortgage insurance. … Let’s say you’re in a tax bracket of 25%, and you can figure you’d save about $640/month in federal and state taxes, bringing your effective monthly after-tax payment to about $2,519 per month, or just about $120 more than renting.

Real Estate Auction in Monterey: November 13, 2008

The auction is being held at the Hilton Garden Inn and they will be auctioning off properties from the Salinas-Monterey area. auction_gavel2.jpg As it happens, one of my own REO foreclosure listings is going up on the block – 6 Minto Road in Watsonville. … Also, the auction company is doing a whole series of auctions – for example, on November 15 at the San Ramon Mariott, they are auctioning off Bay Area properties (there are quite a few) and on November 16, they are auctioning off a good selection of properties from the Sacramento area at the Radisson Hotel Sacramento. The auction is being put on by Hudson and Marshall , and they gave me a little F.A.Q., which I think applies to all Hudson and Marshall auctions, and is similar to auctions put on by other companies, e.g. … A: You must have a photo ID, cashier’s check or cash in the amount of $5,000 Q: How much earnest money must I put down if I am the winning bidder?

Santa Cruz Median Home Price: $475,000 in Sept. ’08

Still, though – if you have a house in Santa Cruz, you’re looking at it being worth about $58,725 less than it was this time last year, if your house is something like the median house. … I looked at Sold Single Family Residences: Median Price of Sold Houses in June & July of 1999 Watsonville: $247,000 (1.0) East side Santa Cruz: $390,500 (1.58097) West side Cruz: $395,000 3/2 1486 (1.59919) Capitola: $360,000 (1.457489) Soquel: $379,000 (1.5344) Felton: $310,000 (1.2551) What this says is that back in the summer of ’99, the median-priced house in Capitola cost about 1.457 more than the median-priced home in Watsonville. Now, let’s look at sales data from September 2008: Watsonville: $352,000 (1) East Side Santa Cruz: 615,500 (1.74857) West side Santa Cruz: 702,500 (2.0468) Capitola: $711,000 (2.01988) Soquel: $610,000 (1.73295) Felton: $486,500 (1.3821) (* August 2008) You’ll notice that compared to the 1999 ratio, the sampled areas in the county appear considerably higher relative to Watsonville than they have been historically. If we use the same ratio from the summer of ’99, here’s what prices in the rest of the county should look like today: Watsonville: $352,000 East Side Santa Cruz: $556,501 West side Santa Cruz: $562,914 Capitola: $513,004 Soquel: $540,108 Felton: $441,795 What does all this mean?

Redman House Apple Annual 2008

The Redman House in Watsonville

There’s a property I’ve long been fascinated with – the so-called Redman House, just off Highway 1 outside of Watsonville, down by the Red Roof Inn. It’s a historic old Victorian farmhouse that has fallen into a sad state of disrepair, and a group of concerned citizens has banded together to save it. redman_house.jpg They’ve got big plans for the house and the acreage, of course. … – Santa Cruz has a number of historical structures, and we owe it to our children’s children to do what we can to preserve them. The Redman House Foundation is putting on its “Apple Annual 2008” – a food and wine tasting event plus, of course, the de rigeur silent auction.

Billions, Trillions and a House in Santa Cruz

Flushing Money

I should have just sat there and watched as my hard-earned dollars evaporated, sucked it up, been a man, and lost all that cash, the price to pay for participating in our capitalist system. … So let me assure you – if you want to buy a house in Santa Cruz, and you have decent credit (at least a 580 FICO Score to qualify for an FHA loan, I believe) and you have the debt-to-income ratios required by the guidelines. … Mind you, the median price these days in the county is $585,000 (as of August), so it’s getting to the point where you can actually buy a habitable structure in a somewhat central location for that kind of bread. … That would leave you with a whopping loan of $482,500 and payments (all-in, including principal, interest, property tax, and insurance) of about $3,500 a month (roughly, approximately – and that’s before your considerable mortgage interest tax deduction ).

Santa Cruz Real Estate Sales Data – April 2008

For those of you who are really interested in knowing what’s going on with real estate sales in Santa Cruz county, I want to remind you that I have a great page on my web site that gives you all kinds of ways to look at Santa Cruz Real Estate Sales Data . Also, I offer a monthly Santa Cruz Real Estate newsletter which offers an analysis of what the numbers mean, and this month’s edition just hit the inboxes of subscribers. K_tony_thumbs_up.jpg OK, maybe the numbers aren’t grrrrrrrreat! … There, we see that the median price (again, county-wide) of single-family residences is down 11.8%, and in April last year, 132 homes were sold – so about 25% fewer homes were sold this April. The numbers are considerably worse for condos, but so few condos were sold (just 19 county wide) that it’s difficult to really gauge what’s going on in that market price-wise.

California Median Price down 29% in March, down 20.9% in Santa Cruz

But check out this news from C.A.R., the California Association of Realtors: [From the California Association of Realtors – median home price fell 29 percent in March ] Home sales decreased 24.5 percent in March in California compared with the same period a year ago, while the median price of an existing home fell 29 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today. falling_man.jpg It’s a pretty interesting article, with lots of numbers to pick apart. … The C.A.R. data says otherwise – the only city it breaks out in Santa Cruz county is the City of Santa Cruz, where it reports that median home prices have dropped 17.9% since March 2007. … The bad news is that if you need or want to sell your house, C.A.R. has just provided ample proof (again) of what you might have maybe thought: now is not the time to sell your home. Also, you might want to make sure your home equity line is still available, because your lender may get wise to the fact that you probably have a lot less home equity than you thought you did.

Foreclsure News – from Santa Cruz and Beyond

And it is also better than getting woken up by the morning news, especially in these dark days. dark_clouds.jpg You may have heard this one on the drive in to work, or perhaps they were bantering about it on NBC’s Today Show or something: [From Bloomberg.com: Worldwide ] U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders. … Read on: [From Median home price drops to $650,000 – Santa Cruz Sentinel ] The switch pushed the median price of a single-family home down in March to $650,000 from $682,500 in February — but not as low as $599,000 in January, when 33 percent of homes sold for less than $500,000. … According to the article: Ganges doesn’t specifically track REOs but he found 12 of the 28 homes sold in Watsonville in January, February and March were bank-owned. … I included Watsonville and the outlying areas (but not north Monterey county), and counted houses, condos, and multi-residential properties (actually, I don’t think any multi-res sold in that time period).