What I Learned About Real Estate in 2009

I want to start by thanking all of you who have read my blog. So far no corporation has contacted me to ask to advertise on my site because of my incredible readership, but enough of you are reading and commenting to make me feel as if my efforts are worthwhile, so thank you very much.

2009 has been quite a year for real estate. Silicon Valley has seen some changes that many people never saw coming. While some cities were not hit by huge waves of foreclosures or short sales, no place was immune from a drop in value. At the start of the year mortgages, particularly jumbo mortgages were hard to get, but that has passed. While we will never go back to the days where the qualification to get a mortgage was a pulse, there is money available for people with provable income, down payment, and credit. In many areas a flood of foreclosures caused a huge drop in value, followed by a wave of cash rich investors buying up property and the return of multiple offers for well priced homes. In Palo Alto we saw a slower drop in prices, a big increase in inventory, followed by a drop in inventory and now a more balanced market.

I have personally experienced a very different kind of buyer and seller this year, and a change in what is expected of an agent. Some of my personal encounters with buyers:

1. Buyers are better educated than ever before and pay a lot of attention to numbers, values, and market trends. The home of my dream concept has often been replaced by the deal of my dream.

2. Buyers will go to web sites like Zillow and Redfin for information, but many still want the extra help that a local agent can give them to determine value.

3. There is an increase in buyers in think they know enough to attempt to buy a home without using an agent.

4. Buyers who find me on the internet trust me more than buyers I meet at open houses. This is the fact I find more interesting than anything else I have encountered this year. I guess that my writing makes people feel they know me, which I think is a good thing.

My personal encounters with sellers:

1. While selling a home where a bank is involved, ie a REO, has a level of frustration unequaled by any other type of sale, you can be assured that the house is going to be sold at whatever price the market will bear. The bank will not withdraw the listing just because they can not get their expected price.

2. Last Jan short sales had about a 10% chance of closing. I do not know the national average for closings, but most banks are allowing the process to proceed and eventually closing many of short sales rather than foreclosing.

3. Estate sales, whether they are trusts or probates also close. The estate has to sell and will do it at market value and not throw a hissy fit and go home if they do not get what they want. Well, they may throw a hissy fit, but eventually they still make the sale.

4. Individual sellers are still often unrealistic and think their home is worth more than a buyer thinks it is worth. This is nothing new, but what is new is that these sellers now have competition from the above three types of sales so very often an individual seller will just not sell if he or she does not like the market value.

What has not changed for me this year is my belief that real estate is a wonderful long term wealth builder and if you buy a home, pay it off, and have it to live in, rent out, or give to your heirs, it is a smart way to spend your money. I also still believe in the home of your dreams, even if many of my clients do not.

Thank you all for your support and your disagreements, I learn from both.

Marcy Moyer

Intero Real Estate

D.R.E. 01191194

marcy@marcymoyer.com

www.marcymoyer.com

650-619-9285

Palo Alto Market Update, November 21st: Single Family Homes

As of today this is the snapshot of the Palo Alto single family home market:

73 Active listings

49 Pending sales

So, active listings continue to decrease while the number of pending sales have remained the same. The decrease in active listings is pretty typical for this time of year. I do not expect to see an increase in listings until January. If the pending sales stay the same or increase we will end the year with a strong housing demand that is not being adequately met in the bottom half of the price range in Palo Alto. Here are the interesting numbers for this week:

Under 1.5 million:

Active 27

Pending 38

There are more pending sales than active listings in this group and the gap is growing. That is an extremely healthy segment of the market.

2 million to 2.5 million:

5 active and 4 pending sales. This is also a very healthy segment.

Over 2.5 million:

23 active listings and 4 pending sales. There are now 2 pending sales over 2.6 million, one of which is 3.2 so this is a little better than last week., but in general nothing much is going on over 2.5 million.

Again, my prediction for the upper end market is still the same as last week, and the previous week, and the months before that. I think that we are going to start to see some short sales if the seller’s have overleveraged their homes and need to sell. Banks are starting to streamline the short sale process and the credit hit is not nearly as severe as a foreclosure. Added to that is the fact that the debt relief is not taxed by the feds leads me to believe that we will not see a wave of foreclosures in Palo Alto, but maybe a trickle of short sales if the employment picture does not pick up or if a homeowner needs to leave the area.

If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Palo Alto Market Update, November 13th: Single Family Homes

As of today this is the snapshot of the Palo Alto single family home market:

83 Active listings

49 Pending sales

So, active listings continue to decrease. Pending sales are also down a little, but only 3 less than the decrease in active listings. Here are the interesting numbers for this week:

Under 1.5 million: Active 31 Pending 37 There are more pending sales than active listings in this group. That is an extremely healthy segment of the market.

2 million to 2.5 million: 5 active and 5 pending sales. This is also a very healthy segment.

Over 2.5 million: 21 active listings and two pending sales. The highest price pending sale is 2.6 million so there are still no pending sales over 2.6 million. This continues the pattern that the high end of the Palo Alto market is dead. There is no arguing this fact, so do not try. Sure, there may be a few off market sales, but in general nothing much is going on over 2.5 million.

My prediction for the upper end market is still the same as last week, and the previous week, and the months before that. I think that we are going to start to see some short sales if the seller’s have overleveraged their homes and need to sell. Banks are starting to streamline the short sale process and the credit hit is not nearly as severe as a foreclosure. Added to that is the fact that the debt relief is not taxed by the feds leads me to believe that we will not see a wave of foreclosures in Palo Alto, but maybe a trickle of short sales if the employment picture does not pick up or if a homeowner needs to leave the area.

· If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Confessions of an REO Buyer's Agent

One of the great things about being a realtor is that the profession is always changing. Every year I try to figure out what is on the horizon for this world and how I can get involved in what is new. Despite the relatively few number of REO properties in my market area, they do exist and I have had clients interested in properties that are REO, banked owned and being sold through the multiple listing service. This has lead me into a world that is sometimes more bizarre than Wonderland and definitely harder to understand than astro-physics. But as I said, I love learning new things, and this past year has been nothing if not educational. So here is a summary of what I have learned.

1. Most new buyers have absolutely no idea how to go about buying a bank owned property and have the unsubstantiated notion that the bank will be so grateful to have any offer they will go 30% less than list price, regardless of how low the property is originally listed. Here is my version of the story: Banks generally list the properties 10-20% below similar properties in the neighborhood with the hopes of getting multiple offers. Most of the REO homes in the bay area sell between 5% under and 20% over list. Many of the properties that sell under list price have been purchased by all cash buyers even if there was a higher offer with a loan contingency.

2. Speaking of contingencies here is the order of preference from the bank for financing: cash, conventional loans, FHA, VA loans. No loan contingency will get the banks attention. I did manage to get my VA buyer an offer accepted but he lost out on a number of properties first because of cash offers. Also, the condition of the property requirements for FHA and VA loans are so stringent that many REO properties do not qualify. It is a little easier to get a condo or town home to get thru the condition contingency, but the owner occupancy rate and delinquency rates sometimes derail the process.

3. Inspection contingencies were always the norm because the banks provide no disclosures or reports. Unfortunately this lead to a very high percentage of transaction falling through. Banks definitely prefer no inspection contingencies, so a buyer who inspects before making an offer will have an advantage. This means if you find a home you really want that is bank owned it is a good idea to give the most generous offer you are comfortable with and inspect the house ahead of time. It cost some money, but it is important if you are in a multiple offer situation. I had clients beat out 12 other offers on a very rare bank owned property in Palo Alto by presenting an offer with not loan or property contingencies since they did their inspections before making the offer.

4. If you do need to get a loan many of the banks will ask you to get pre-qualified with their own bank or with a preferred lender. It is almost impossible to use a mortgage broker for your pre-approval letter so be sure to have a pre-approval from a direct lender and then get the pre-qual from the bank’s preferred lender. Some banks, like Bank of America or Chase will give the buyer some incentives if they use that bank to purchase the house. I had one client who was buying a foreclosure from Countrywide. They agreed to use Countrywide for their loan and when it came time for the appraisal, the appraiser said Countrywide could not lend on the house that they had just foreclosed on because it needed a new roof. I know it seems ridiculous, but I promise I am not making this up. The good news for my clients was that since they could not buy the house from Countrywide with a Countrywide loan without a new roof, Countrywide agreed to put a new roof on the house. Not only that, but the Countrywide appraiser said their house was worth less than my clients had offered and less than what the previous Countrywide appraiser said, so Countrywide agreed to lower the price. I am not convinced any of this would have gone my client’s way if they had used a different lender.

5. Patience is a virtue. You may hear something in a few days and it may be a few weeks after you submit an offer. If you do not get your offer accepted you may never hear back from the listing agent. It is unlikely there will be any phone calls unless your offer is accepted. E-mail is the best way to communicate with an REO listing agent. Some REO agents are using Twitter to update the status of a listing, but I have not found that to necessarily really be up to date. One Friday afternoon I got a call from a listing agent telling me my client’s offer had been received and he thought we would get an answer on Mon. This was a home that had received 13 offers, but I knew if he called me it meant we had a very competitive offer. If you do hear back the first contact may be a “counter” which is just a worksheet asking if you want to make your offer better. You can do that, or re-submit your original price and terms. After that, if your offer is “accepted” it just means they have accepted your offering price. You will get an addendum that negates most if not all of the terms you wrote into your offer and changes them to the terms the bank wants. You can accept the addendum or counter things out. If you are in a multiple offer situation and you counter out some of the terms in the addendum another offer may be considered, or they may stick it out with you.

6. Once in contract the listing office will generally stop treating you like Public Enemy Number 1 and the staff will take over. At this point it is in everyone’s best interest to get the deal closed so they tend to be pretty co-operative. The most important thing is to follow the timelines for contingency removals and closing. If closing is delayed the buyer will have to pay a per diem charge, usually $100-$150 a day. It is not worth fighting it, you won’t win, and the addendum will say the bank can cancel the contract at any time for any reason. I had a transaction where the title company delayed the close by 4 days because they could not get the HUD 1 statement right. This was a title company chosen by the bank, but my client had to pay for them so my client had to pay the 4 day late fee.

So if you still think an REO is for you I say go for it. You can get a house for less than market value in some neighborhoods, and in others REO’s may be one of the only options. Just go in with your eyes open, thick skin, and a lot of good humor and patience.

If you have any questions or just want to commiserate feel free to contact me.
Marcy Moyer
Intero Real Estate Services
marcy@marcymoyer.com
www.marcymoyer.com
650-619-9285
D.R.E 01191194

Palo Alto Market Update, Single Family Homes: November 3rd

Here is today's snapshot of the Palo Alto market for single family homes:

86 Active listings

56 Pending sales

So, active listings continue to decrease. Pending sales are also down a little, but not as much as active listings have decreased.

Here are the interesting numbers for this week:

Under 2 million: Active 59 Pending 45 a great ratio!

Over 2 million 27 active and 11 pending which on the face is not bad but there is more:

Over 2.6 million: 20 active listings and ZERO pending sales. This will probably change in the next week, but the pattern of the upper end of the market being slow has not changed.

2 million t 2.6 million: 7 active listings 11 pending sales This is a very healthy segment right now.

My prediction for the upper end market is still the same as last week. I think that we are going to start to see some short sales if the seller’s have overleveraged their homes and need to sell. Banks are starting to streamline the short sale process and the credit hit is not nearly as severe as a foreclosure. Added to that is the fact that the debt relief is not taxed by the feds leads me to believe that we will not see a wave of foreclosures in Palo Alto, but maybe a trickle of short sales if the employment picture does not pick up or if a homeowner needs to leave the area.

• If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

A Better Way to Do a Short Sale

In the past few years short sales have been long, frustrating, and undependable. The sellers had to prove they were desperate and often had to stop making payments in order to qualify for a short sale. The listing agent had to spend hours trying to figure out who was able to make the decision and whether or not the documents were even received. They buyer’s agent had to wait endlessly for an answer while his or her buyer threatened every day to bail. The closing statistics for short sales have been estimated at 10-30%. Many people felt why bother?

So why should you bother? For some reason banks are getting on board with the idea that allowing a seller to do a short sale is a better deal for them than foreclosure. In general banks get 45 cents on the dollar for a foreclosed home and 75 cents on the dollar for a short sale. It has taken a long time for the banks to get on board with short sale approvals, but short sales are now getting approved and some banks have started trying to make the process more efficient.

Bank of America, who has taken over Countrywide, is now using a platform called REOtrans for their short sales. This platform started as a method for asset managers to process bank owned properties with realtors and is a very effective method for all parties, as they can see in real time where the file is and what else needs to be done. As anyone knows who has dealt with a Bank of America or Countrywide short sale, it can take a month after an agent faxes the short sale package to the bank for the bank to upload it onto their system. Now it is uploaded directly on the site and everyone knows it is there. Everyone will always know where they are in the process so no more allocating 3 hours a week for follow up per file.

Wachovia wins the prize for the best short sale system. Twenty five percent of Wachovia loans are 60 days or more past due, so they have decided to encourage more short sales. They have a system that will get the sale approved and closed in 45 days or less, and do not care if the seller has hardship, or just made the decision that they would rather give up a home than pay for a home for 10-20 years before they are no longer underwater. Underwater means that more is owned on the home than the home is worth. Some estimates put the number of underwater homes in this country as high as 50%. Given those stats Wachovia has made a decision that if someone wants to sell short they will facilitate it. This is not to say they will just give a home away, but if a home has $700,000 of loans on it, and it is now worth $500,000, Wachovia will let someone buy it for close to $500,000 and forgive the other $200,000 debt, and do it in a reasonable amount of time. Plus, they will even give the seller up to $5000 for moving expenses.

Wachovia bought World Savings so this applies to World Savings loans as well. Wachovia was acquired by Wells Fargo but as of now Wells is not doing the same thing with short sales. Hopefully this program with Wachovia will work well and spread to not only Wells Fargo, but to other banks as well.

If you have any questions about short sales, or other real estate related questions please feel free to contact me.

Marcy Moyer

Intero Real Estate Services

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

D.R.E. 01191194

Steve Papapietro's Mortgage Bulletin: For the Week of Nov 2nd

LAST WEEK IN REVIEW "Don't believe the hype!" The words from Public Enemy's hit song title rang true once again last week when the Commerce Department reported the Gross Domestic Product (GDP) for the 3rd Quarter. As you can see from the chart below, GDP rose by 3.5% for the first gain in a year and the strongest reading in two years. While most media outlets were giddy about the news and started the hype that the recession is behind us, it's important to remember that there's more to the economic data than just the headlines. The temporary "Cash for Clunkers" program has now expired, but was a big part of last quarter's GDP gain. If we remove it from the total, the reading would have been a more modest 1.9%. But there is even more to the rise in the latest GDP number that is just temporary... Also bolstering the economy has been the $8,000 first-time homebuyer tax credit - which is set to expire at the end of this month. Many home buyers have been taking advantage of this program - and wisely so. ----------------------- Chart: US Gross Domestic Product (By Quarter) New Home Sales were reported last week, showing a 7.5-month supply of inventory. While that number is slightly worse than last month's 7.3 reading, it's still a big improvement from where we were in January. Back in January, inventory levels reached a high of 12.4-month supply! The improvement in housing inventories has been due in large part to the $8,000 First Time Homebuyer Tax Credit, which is set to expire on November 30. There is a real possibility of an extension of this program through a proposed Bill, but it is not yet a certainty. The extension Bill still must be reconciled between the House and Senate, and then voted on for final approval. Under the current extension proposal, sales with signed purchase agreements by April 30th that close before June 30th, 2010 would qualify for the credit. Another positive element would be the possible addition of $6,500 tax credit for other primary home purchasers, meaning the tax credit would no longer be limited only to first-time homebuyers. There is also a possibility that qualifying income limits could increase from $75,000 to $125,000 for singles, and from $150,000 to $250,000 for joint tax filers. I will be keeping an eye on this for you, so stay tuned. After all last week's news and movement in the markets, Bonds and rates ended the week slightly better than where they began. DON'T FORGET: THIS WEEKEND MARKS THE END OF DAYLIGHT SAVING TIME. SO MAKE SURE YOU SET YOUR CLOCKS BACK TO AVOID UNEXPECTED PROBLEMS...LIKE THE KIND DESCRIBED IN THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW!

FORECAST FOR THE WEEK

	This week brings us new employment numbers...and a chance to see if the labor market is showing signs of recovery. The employment news begins Wednesday with the ADP National Employment Report. Sandwiched between that report and Friday's Jobs Report, is the Initial Jobless Claims report on Thursday. The big news comes on Friday, when the all-important Jobs Report will be released. Last month's report underscored the struggling labor market, as the Labor Department reported 263,000 jobs lost in September and an increase in the unemployment rate to 9.8%. The report due out this week is expected to show 166,000 jobs lost in October, which would be significantly better than the previous month if it happens. However, the Unemployment Rate is expected to continue its climb to 9.9%. In addition to employment news, we'll also see the ISM Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector. Finally, the Federal Open Market Committee (FOMC) holds its two-day meeting this week, with an announcement of the Fed Rate Decision and Policy Statement due on Wednesday at 2:15 p.m. (ET). Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Mortgage Bonds were able to bounce back last week with help from weakness in the Stock markets. Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Oct 30, 2009)

THE MORTGAGE MARKET VIEW

	Turning Back the Hands of Time This weekend, the sun set on another season of Daylight Saving Time. The extra daylight we now enjoy was actually the result of the Energy Policy Act, which was enacted by Congress back in 2005. But did you know that throughout its long history, Daylight Saving Time has had a remarkable and sometimes unexpected impact? A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date--which had a much higher draft lottery number - and he was able to avoid being drafted. In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs - but misunderstood the time change - and the bombs exploded early, killing the terrorists themselves, rather than the intended victims - two busloads of innocent citizens. In the 1950s and 60s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St. Paul - which are considered one metropolitan area - didn't agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles! To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks "fall back" in the fall, all trains that are running on time actually stop at 2 am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time. So Daylight Saving Time sure can have some unexpected impact. As we enter the first week of Daylight Saving Time, be sure to double-check all of your electronic devices and confirm that the time is correct. Although you may be accustomed to your computer and maybe even your digital clock in your car automatically updating, the recent change of dates for Daylight Saving Time may require that these devices be manually changed, as they now may NOT be ready to update to the correct time on the correct date!

THE WEEK'S ECONOMIC INDICATOR CALENDAR

	Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of November 02 - November 06 Date ET Economic Report For Estimate Actual Prior Impact Mon. November 02 10:00 ISM Index Oct 53.0 52.6 HIGH Mon. November 02 10:00 Pending Home Sales Sept 0.4% 6.4% Moderate Wed. November 04 10:30 Crude Inventories 10/30 NA 0.78M Moderate Wed. November 04 08:15 ADP National Employment Report Oct -190K -254K HIGH Wed. November 04 02:15 FOMC Meeting 11/4 unch .25% HIGH Wed. November 04 10:00 ISM Services Index Oct 51.5 50.9 Moderate Thu. November 05 08:30 Productivity Q3 5.8% 6.6% Moderate Thu. November 05 08:30 Jobless Claims (Initial) 10/31 520K 530K Moderate Fri. November 06 08:30 Average Work Week Oct 33.1 33.0 HIGH Fri. November 06 08:30 Hourly Earnings Oct 0.1% 0.1% HIGH Fri. November 06 08:30 Non-farm Payrolls Oct -175K -263K HIGH Fri. November 06 08:30 Unemployment Rate Oct 9.9% 9.8% HIGH

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors. As your trusted advisor, I am sending you the MetLife newsletter because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: spapapietro@metlife.com If you prefer to send your removal request by mail the address is: Steve Papapietro 4300 El Camino Real Suite 100 Los Altos, CA 94022 Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose. MetLife Home Loans is a division of MetLife Bank, N.A.