FHA 90-DAY HOLDING PERIOD WAIVED ...

Effective February 1, 2010 the Department of Housing and Urban Development (“HUD”) Act under 24 CFR x203.37a(b)(2) is waived for a period of one-year from this date (February 1, 2010).  HUD’s change in policy will now allow an owner to resell a property without any ‘holding’ period subsequent to the original purchase (which under 24 CFR x203.37a(b)(2) was 90 days), subject to certain conditions.  Prior to this modification, the Act required that a mortgage for a property was not eligible for FHA insurance, if the contract of sale for the purchase of the property was executed within 90-days of the prior acquisition by the seller and the seller does not come under any of the specific exemptions that apply to the rule. 

The intent of this temporary waiver for eligible properties is to help address the growing foreclosure crisis by encouraging more investor sales or ‘flips’.  Specifically mentioned in the HUD determinations is that waiving the 90-day restriction for buyers will “help facilitate the return of repaired and habitable properties to the market in a timely fashion, additional exemptions to this resale restriction period must be granted for the purchase of properties by investors.  This policy change will help to sell properties that may otherwise remain vacant for up to 90 days, while offering affordable housing options to buyers wishing to use FHA-insured financing.”

The waiver of the Act is subject to three primary conditions containing several subparts.  Assuming that these conditions are satisfied, an investor may purchase a property and resell it to a new buyer (assuming no collusion and ‘arms-length’ sale) immediately without any holding period.  Investors, as well as lenders, need to familiarize themselves with the amended Act and its conditions because they require several steps be followed if certain market conditions exist in the subsequent sale.  See the HUD Policy Act for more details.

This policy change has been discussed and encouraged by several real estate industry associations and boards due to its restrictive effect on investment transactions (aka ‘flips’).  In effect this policy discouraged investors purchasing SFR for ‘flips’ because the new buyer would not be able to secure federally insured loans for the property until after the 90-day holding period expired.  Simply put … this policy seemed to be a knee jerk reaction to a certain market segment.  Penalizing investors for purchasing distressed properties, rehabbing the homes, and selling them to new buyers makes little sense; unless the intent was to restrict this segment of the market.  Was there abuse in the market … sure … but to severely curtail most ‘flip’ opportunities because of the acts of a few seems to be counter-intuitive in this market.  Hopefully when the anniversary date of the waiver approaches policymakers will recognize the flaw in the initial Act, and elect to permanently extend the waiver.

I appreciate any opportunity to serve as your realtor of choice, if you or someone you know is thinking about buying or selling real estate.  Let me know how I can be of service to you by either contacting me via email at jim@peys.net or visit us at www.coastalcommunityhomes.com.  Thank you!!  Jim Peys

The Real Deal ... Long Beach Housing Stats ...

Who are we to believe these days?  Some pundits say the market is in the tank; while the government is trying to convince us that we have seen the bottom and are climbing back.  Well maybe the market is neither spiraling out of control nor has it bottomed out.  Consider for the moment these housing statistics generated by Altos Research who tracks all California housing activity as well as selected cities throughout the Country.

Long Beach statistics as of November 22, 2009:

Median Single Family Home Price:  $387,623
Market Action Index:  20.32 (denotes a buyer's market)
Average Days on Market: 169 days
Median Price Per Sq.Ft.:  $279/sq.ft.
Housing Inventory:  986 properties on the market

These numbers would be meaningless unless you plot the trends.  Median prices in Long Beach have steadly increased since March, 2009 (from a low of $330,000 median price).  Currently the trend lines are flat which suggests that prices are leveling out at this moment (consider inventory levels and selling season being the holidays).  The Market Action Index illustrates the balance between supply and demand - the closer the number goes over 30 suggests a seller's market.  After rising dramatically in July, 2009 the number is decreasing slightly over the past thirty days.  Average days on market is currently trending down - meaning it is taking less time to market and close transactions.  Inventory levels are slightly moving upward over the past couple of weeks.

In summary the market seems to be taking a time out after a late summer of increased activity.  This is consistent to the time of year.  If you are considering buying or selling, consider me as your realtor of choice.  Let me know how I can be of service to you by either contacting me via email at jim@peys.net or visit us at www.coastalcommunityhomes.com.  Thank you!!  Jim Peys

MYSOCALTV MEDIA PLATFORM …

I have been on the road helping local Long Beach businesses create video content about their business and the markets they serve.  The Long Beach Business Professionals Association which consists of approximately seventy (70) local businesses are helping create a media platform that will eventually consist of hundreds of channels.  Each channel will serve a micro-market or niche consisting of communities that are formed based upon interests, geographic locations, businesses, community services, etc.  Each separate channel (envision a TV channels on your cable box) will consist of videos, written blogs, and audio content that delivers relevant, timely, and quality information, news, entertainment and other material.  The goal is to serve the needs of people who participate in our online communities via these channels.  The media platform members will be encouraged to add content relevant to their channel (or niche) and ultimately enable conversations within the channel.

This media platform will be an ongoing project over the several few months.  A work in process is turning into an interesting project because it affords me the opportunity to interview different residents, businesses and communities in the Long Beach area.  So be on the watch for “MySoCalTv” which will be the media platform consisting of hundreds of interesting channels.  Our goal is to serve the needs of the Long Beach area by delivering relevant, timely and informative news, entertainment, opportunities and community announcements to our members.  This media platform will be FREE to our members.

So if you are interested in providing quality content about a niche community within the Long Beach, California area please contact me at jim@peys.net.  We are actively looking for video, written and audio content that will deliver content to your community.  I hope to hear from you!  Additionally, I am interested in your feedback, insights and comments.  

In the meantime, if I can be of service to you (or any of your friends) regarding your real estate needs, please feel free to contact via email (jim@peys.net) or visit us at www.coastalcommunityhomes.com.  I would love to be of service to you or someone you know!!  Jim Peys

WHERE IS THE REAL ESTATE MARKET HEADED …

Many people ask where is the real estate market headed, and have we bottomed out?  If you bother tracking national news outlets they are divided as to the real estate market’s direction.  Some are predicting that real estate is driving a slight national economic recovery; meanwhile other people are blogging about another reality.  Who are we to believe?  Unfortunately I don’t have a crystal ball, but based upon the insights of a few sources and a look at the local MLS statistics a few trends are noticeable.  What we don’t know is if these trends are sustainable, and if so, for how long will these trends or factors impact the direction of the market.

A few factors to watch include the status of foreclosures (why … because a flood of foreclosures on the market tend to pull the market prices downward); Federal stimulus package changes (whether these policies really benefit the broader market is arguable; however the perception of these changes does cause market shifts); unemployment rates (locally and nationally will affect people’s ability to purchase and keep their homes); and longer term mortgage interest rates.

Before you can plot future trends you might want to understand where the market is currently.  The following are a few relevant residential market data points on Long Beach (source – So.Cal MLS).  The snap-shot (time period) for this information is taken between October 1^st through November 5th:

Number of closed transactions:                          220

Number of pending transactions:                       143

Number of active listings:                                  528

Average days on market:                                     61

Inventory (measured in months):                        8.65

Foreclosures (set for auction):                             99

What do these numbers suggest?  Typically when the inventory turn-over is less than 10 months that evidences a low inventory of product on the market, and a seller’s market.  I would hardly call this a seller’s market; however the low inventory has helped stabilize the market and the price free fall that has occurred since 2007.  If inventory continues to be tight and if interest rates continue to be low along with the buyer’s incentive through April 30^th ($8,000) then we might see prices level out or even rise in a few micro-markets.  This runs contrary to recent reports predicting a ten percent (10%) erosion in prices in 2010.

What are the key indicators to watch over the next six months that will affect the real estate market?  A large influx of foreclosures and short sales on the market.  This will drag prices downward.  The other two major drivers will be national and regional unemployment rates – high unemployment will jeopardize people’s ability to afford mortgages; and thus create more mortgage defaults.  The last market driver will be the status of interest rates.  There are rumors that the Feds will raise interest rates to prevent inflationary fears in 2010.  Although, interest rates probably will stay at historic lows, don’t be surprised if rates go higher after the first of the year.

The best advice I have read lately recommends that investors and buyers pay attention to local market fundamentals AND to continue looking for ‘real value’ not ‘perceived value’ or hype.  And as always, real estate is all about location, location, location and price.  So if you or someone you know is considering buying or selling real estate in the next 30-60-90 days, please contact me at jim@peys.net or just visit us at http://www.coastalcommunityhomes.com.  I would love to be of service to you!!  Jim Peys

Another Perspective On Social Media

Everyone is trying to understand the role of social media.  Is it real ... its role ... how do you monetize the media ... how does it add value in your business.  Many successful realtors and business people are quick to dismiss it.  My gut tells me that social media is more than a noisy platform for the curious but something real, tangible and is where we all will end up at the end of the day.  This will be the medium from which businesses engage in a conversation with people ... they listen and glean what it is people want.

I am interested in your feedback.  Let me know what you think.  How does social media impact your real estate and investment choices?  In between thinking about this question, check out this video by Gary Vaynerchuk.  Food for thought ...



I tend to agree with Gary's perspective.  Social media is the business of doing business by engaging in a conversation with our friends, prospects and clients.  It is about being interested AND not just interesting.  About listening to what other people want and need.  Just a thought!

If you or anyone you know is thinking about buying or selling real estate, let me know.  I would love to help you.  In the meantime, thank you for your input and consideration.  Jim Peys

Real Estate Auctions ... Real Opportunity ...

Have you ever watched a real estate foreclosure auction?  If you have attended a public real estate auction at the County you probably noticed a few (in Los Angeles) buyers with headsets walking between the 'criers' tracking several properties.  They seem comfortable with both the process and the people involved - a true 'regular' comfortable in their surroundings.

Yesterday, I visited my second real estate auction company in Los Angeles.  I was granted an in-depth look into a highly successful real estate investment company who specializes in ONLY foreclosure auction acquisitions.  They have been doing the same 'drill' for over twenty-seven (27) years in Los Angeles County.  They spend over a million dollars a day investing in auction properties in just Los Angeles County (tracking over 1,500 residential properties per day).  In the current market they typically buy in excess of 80 auction properties (residential and commercial) a month.

I was invited into the 'inner-circle' by an executive of a large nation-wide Title Company.  They are encouraging me to establish an investor network in the Long Beach and South Bay areas of Los Angeles County.  The goal is to match investors with auction properties that are being purchased between 62-65 cents on the dollar (discounted up to 38% of current market values).  After completing my due diligence and considering my background in foreclosures, investor acquisitions and REOs; I am impressed with their experience, systematic approach and detailed due diligence.  They have built an incredible machine that involves over 200 employees tracking auction sales in four locations within Ventura and Los Angeles counties.

What is the opportunity for investors?  Well we are initially assembling three investor partnerships (LLCs) with the goal to raise an initial million dollars over the next sixty days.  This initial fund will invest in three residential properties in the Long Beach area with the goal to 'turn-over' this capital three times during the first year.  The estimated proforma projects a net profit between $50,000 - $70,000 per property per investment cycle.  We are looking to acquire the properties, resolve the tenant issues, rehab the properties, market and sell the properties within 130 days from recordation of the trustee's deed.

Is it a good deal ... well that depends upon your individual investment criteria and your risk temperament.  We believe that partnering with this auction investment company significantly reduces our investment risk.  The golden rule is that you lock in your profits on the acquisition; consequently, partnering with the right acquisition model and organization will greatly reduce our initial risk.  They have the manpower, expertise, experience and systems in place to eliminate lots of the front-end risk (not all for sure).  Next we plan on controlling the tenant negotiations, remodel and sales of the properties in-house.  We have the construction crews, management, lending, escrow, transaction coordination, accounting, marketing and sales pieces in-house fully operational.  Our brokerage company has over 230 licensed agents who specialize in the local Long Beach area.  So can we eliminate all the risk - absolutely not; however, we like our plan!  Does this represent a real good opportunity - I think so.

So if you are interested in hearing more about this incredible opportunity ... contact me at jim@peys.net. For additional information and insights into this and other real estate opportunities visit us at:  www.coastalcommunityhomes.com.  Otherwise, if I can be of service to you or your friends just let me know.  Thanks.  Jim Peys

How Helping Other Companies Can Make Your Real Estate Business More Money

How Helping Other Companies Can Make Your Real Estate Business More Money

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The Opening Up Of The MLS ...

Hold on change is in the air ... Inman news reports that the FTC has ordered a Detroit MLS to open up its policies and allow greater access.  The FTC has concluded that the MLS web site policy and related requirements impose a "significant impediment" to consumer access to listings represented by limited-service brokers.  The Internet is nipping at the edges of how traditional realtors market their service and create value.  An industry that grew up "hording" information and making a living by being "gate-keepers" is changing at neck break speed caused by the evolution of the Internet, social media and the demands of the market place.  


The real value of a realtor will be measured by how effectively they interpret the massive amounts of property data; define the needs of their customers; and create an environment whereby sellers can engage with qualified and motivated buyers.  This is a dramatic shift for realtors who historically created the market for property owners and manipulated price fluctuations behind the scenes.  The next few years will be interesting by how quickly and professionally the industry and individual realtors adapt to these market pressures.  Stay tuned!!


If you are looking for a realtor who understands the demands of this market place, or you just have questions and want to explore your options, then email Jim Peys at jim@peys.net.  Let me know how I can be of service to you or a friend!  For additional information and an array of free real estate tools visit http://www.coastalcommunityhomes.com.  Thank you!!

Current Status Of The Feds Efforts To Stem Foreclosures ...

You want to know the current state of affairs regarding the housing market and the effect of foreclosures and HAMP are having on your home and the economy in general?  Then you might want to check out the following attachment:

http://cop.senate.gov/reports/library/report-100909-cop.cfm

This link contains the entire Congressional Oversight Committee's study and YouTube video released by the Congressional Committee regarding the current status of the market, foreclosures and HAMP (loan modifications program).  Definitely interesting in light of the volume of gossip currently circulating in the news.

Any questions or if you want to know how this impacts you and your investments, contact me at jim@peys.net or visit us at http://www.coastalcommunityhomes.com.

The Real Story For Fall Sellers ...

Several reports and blogs today suggest that the summer honeymoon for prices will lose momentum as we roll further into fall.  Scott Sambucci at Altos Research states that many pundits believe that the U.S. housing market is likely to reach bottom by early 2010; however, in the meantime he suggests that prices will continue to slide an additional ten percent (10%).  In support of his opinion he points to the summer season concluding, rising national unemployment rate, higher level of foreclosure-driven inventory (see L.A. Times front page article regarding FHA loan reserves and pending foreclosure risks).

What facts do we know right now about the housing market locally?  Well the 90-day rolling average of median list prices hits an 'inflection' point in early August, then it moves consistently down each week in the fall.  As of today, a ten city composite shows asking prices down about 1.25% from early August numbers.  In addition, there is a noticeable delta between the overall market median price and new sellers entering the market this Fall, especially compared to the Spring 2009.  Experts point to several factors for the current market pessimism:

1. Lagging effects of the government's HAMP program;
2. Effects of the foreclosure moratorium programs;
3. The alleged end of the first-time homebuyer tax credit of $8,000;
4. National unemployment rates;
5. FHA concerns and proposed legislative initiatives that may limit these loan programs; and
6. Interest rate pressures in the spring of 2010

What we will see in published reports (newspapers, etc.) over the short term is that the sales volume, prices and inventory will reflect a slight market rebound.  However, note that these published statistics  report on 90 day old data (i.e., S&P/Case-Shiller reports).  So later in the fall we will begin seeing what is happening in the market in the early part of October.