Archive for February, 2008
Notes from the Foreclosure Auction
February 24, 2008
So yesterday I took several hours out of my busy schedule to go to the foreclosure auction up in San Mateo, at the event center. I’d turned my brother on to the foreclosure auction some weeks ago, and he’d actually taken the time to drive around to quite a few of the properties on offer, to verify their condition, at least visually. I was going because I wanted to see how much the six properties in Santa Cruz county would go for.
I went with my wife, and we got to the San Mateo Event Center around 11 AM. The auction was already in full swing, and they had several halls packed with potential buyers and lookie-loos. There were thousands of people there. All of the properties were numbered, and that day they started with number 627 (the auction ran for multiple days). The properties my brother had been interested in (mostly in San Jose, Daly City, South San Francisco) had mostly been auctioned off in the first couple of hours. All of them had sold a fair bit over his maximum bid price.
Of course, his bid price was set at the maximum price he could pay and be cash-flow neutral on the properties were he to rent them out. It’s a tall order to get a property that cheaply in California, where you can put just 10% down and get it to be at least cash-flow neutral. Really, this was a retail auction. I don’t think there were a lot of professional investors there. There may have been a few flippers out there, but most of the excitement seemed to come from nicer homes in the nicer Bay Area neighborhoods, and people were looking to get into the market for a bit less than full retail value.
Yeah, the death of the Bay Area Home Market is pretty exaggerated. There is still a lot of demand for real estate out there. It didn’t look to like the Bay Area homes were selling all that cheaply - especially not considering that the buyer has to pay a 5% commission on top of the auction price. Really, the prices seemed to be about the same as the MLS/REO price (I think all of these properties were previously for sale on the MLS as bank-owned real estate).
It’s hard to generalize, but I’d say that most properties went for at least twice the opening bid. The more desirable properties sometimes went for as much as three times the auction price. Factoring in that five percent add-on, and I’m not convinced that the average buyer was really saving all that much money going the auction route.
Unfortunately, I didn’t stick around til they made it to property number 789 - the first one in Santa Cruz county. We calculated that it wouldn’t be before 7 PM that they would get to that property. Maybe a lot of other people ended up losing patience and wouldn’t have been around towards the end of the auction, and could have picked up some of these Santa Cruz properties for a song. I’m going to make a note on my calendar to check the sale price of these properties in six weeks or so, to see what they actually ended up selling for. I’m really curious to know.
I took some video of the California Foreclosure Auction - if you’re curious, check it out!
Posted by SantaCruzBroker at 3:22pm
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A New Way to Get Locked Out
February 21, 2008
I showed a townhome today to some clients . “What did the listing agent tell you about this place?” they asked. “Nothing,” I replied, “he didn’t call me back.” That’s not too uncommon, I explained - listing agents have a habit of not calling people back, at least 10-20% of the time. Often times, it’s because there’s already an offer in on the house, or it’s about to be withdrawn, etc. But in this case, I think I can guess. Stuck to a couple of windows, I found this sticker:
A nice service representative from Fidelity National Field Services, Inc. had dropped by to change the locks. Actually, they only changed one lock, the side door - they removed the dead-bolt, and added a second door knob in its place (weird, didn’t get a picture of that). There was also a slip of paper on the entry way floor saying that the field rep had come by, and that the owner should contact Washington Mutual.
Well that’s a fine “Welcome Home” isn’t it?
Actually, the townhouse was vacant, so I don’t think anyone’s going to get the message. But this explains why the listing agent didn’t bother to call me back - it’s probably not really his listing anymore, but it’s still on the MLS. Looks like there’ll be another REO foreclosure listing hitting the MLS in a few weeks or months. Sigh.
Posted by SantaCruzBroker at 8:03pm
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I’m a twit(ter)(er)
February 20, 2008
Social networking. Social marketing. That’s the ticket. If you have children, you’ve probably heard of MySpace. If you’re a grown up, you’ve probably heard of Facebook, LinkedIn, and the like. There’s no shortage of Realtor Magazine articles telling Realtors that “social marketing” is the ticket - win tons of business through your Facebook page, etc. Well, I have s Facebook page, but about the only thing I get from it is “friend requests” from other Realtors, mortgage brokers, and folks in related industries who want to network with me.
I’ll be honest. I don’t send a whole lot of referrals to Raleigh-Durham. And when it comes to working with a lender, I prefer to refer my clients to someone who they can actually go and have a coffee with, sit down, and discuss face-to-face while looking at the same piece of paper how all the numbers work.
There’s a new kid on the Social Networking block, and it’s called Twitter. Have you heard of it? It’s all the rage in certain circles. It’s kind of like instant messaging, a bit, except that instead of talking to just one person, you’re talking to everyone who is following your “twitter feed.” The idea is that you send out “tweets” telling folks what you are up to. I use a Macintosh (don’t you?), and I have this cool notification plug-in called “Growl” which sends up these little, evanescent floating windows with twitter notifications from other people I’m following.
For example, tech legend Guy Kawasaki has a twitter feed, and he posts to it dozens of times a day. A lot of what he does is direct traffic back to his new web venture, Alltop (which is kind of cool, check it out). Guy has thousands of people who subscribe to his twitter feed, and they all get these little messages, all day long.
I know, “Stick with the real estate!”. So here’s an interesting thing I found on Twitter: there’s some kind of (ro)bot that sends out notifications every time there’s a new rental in Santa Cruz. Here’s a link to the Santa Cruz Rental Twitter Feed. This is pretty cool, if you are looking to find a rental in Santa Cruz - a pretty good example of what this technology might do for you.
What do I use it for? Well, for example, I just sent out a tweet: “Writing a blog entry about how I use twitter. Check it out in a few minutes.” And I gave the URL for my blog here. Hopefully, that’ll drive some traffic to my site, and maybe I’ll pick up a new blog subscriber or two. I also send out notifications when I write blog entries (usually), and also when there’s some breaking Santa Cruz news that I want everyone to be aware of.
I think twitter might be just a passing fad. Or it could be the genesis of something great - who knows what it might evolve into, one day? But for now, I enjoy seeing everyone’s tweets and posting some of my own. We’ll see what comes of it.
Meanwhile, check out my Twitter feed.
Posted by SantaCruzBroker at 9:44am
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Santa Cruz Real Estate Investment Club
February 19, 2008
Today I had the honor and privilege of making a presentation at the Santa Cruz Real Estate and Investment Club. They hold weekly meetings, every Tuesday at 6:30 PM at the 41st Avenue office of Santa Cruz Title Company. They also have a Santa Cruz Real Estate Investment Yahoo Group on-line.
I cobbled together a PowerPoint presentation, about 20 slides or so, about some market statistics and the opportunities that are there for investors in Watsonville who want to buy short sale or REO real estate. I had 30 minutes to talk, it actually ended up being closer to an hour because there were a lot of questions from the people who were there.
It’s kind of amazing how much opportunity there is for investors down in Watsonville, but there’s so few people right here in Santa Cruz who know what’s going on down there. I think it kind of speaks volumes about the schism in our beautiful little county here.
Anyway, I had fun doing the presentation, and I’m going to try to do some more such presentations at other investment clubs in the area. I’ll keep you posted.
Posted by SantaCruzBroker at 10:57pm
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It’s a Swing Thing
February 18, 2008
Ahh. It’s Monday, and it’s a holiday. It’s already 8:49 AM, and my phone hasn’t rung once so far today. I’m sipping a cup o’ Joe, reading my blogs, while I ease into my day. I stumbled upon a cool animated graphic, courtesy of CNN Money/Fortune, which I think many of you will find of interest:
It’s a Flash animation, and there is no accompanying article, so it makes for an easy read. It’s interesting to see how most of the steep market declines we’ve seen over the past 50 years have been relatively short. It’s also interesting to see how prices just keep rising over the long term.
Of course, the debate is still open as to if Real Estate is a better or worse investment than the stock market - how much of the price rise shown in the chart is due to inflation, etc.? I’ll leave that to you and your financial planner to discuss, but if the answer comes out that buying a house is an OK thing to do in a down market, with an upside looming around the corner, I’ll be here.
Posted by SantaCruzBroker at 10:00am
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