Real Estate in 2010 - The Short Sale

This year in the real estate market we may find a different trend then the one we have grown so accustom to, an increase in short sales over foreclosures. Banks are less interested in owning property and more willing to work with owners. Lenders and sellers have been negotiating short sales, an extremely hot topic in today's real estate world.

What is a Short Sale?

A short sale occurs when a borrower can no longer afford to keep paying a mortgage and the amount owed on the property is more than the house is worth.


Why are Short Sales becoming easier now?

Traditionally short sales have been tedious and complicated. Short sales were lender specific, home value assessments were unrealistic, and both lenders and buyers frustrated with the process often walked away.

In May 2009, the Foreclosure Alternatives Program was announced by the Obama administration. This program is designed to streamline the short sale process and establish financial incentives for loan servicers, home sellers and second lien holders.

Previously, the short sale process was difficult to negotiate. Home sellers would often not hear back from lenders and there were no timelines in place to protect the rights of both parties involved in the sale. They were complicated to negotiate, navigate and close, and most agents avoided short sales completely. Many buyers pulled out of escrows due to lengthy escrows that never approved or closed. There was no continuity or process across the board. It was up to each individual bank and the negotiator handling the file.


Standardized documents such as short sale agreements and offer acceptance letters have helped streamline the short sale process. With standardized documentation, Realtors are more equipped with the knowledge of what paperwork a lender requires in order to approve a short sale.

According to realtor.org, a professional site for the education of Realtors, the HAFA (Home Affordable Foreclosure Alternatives) program will be in place by April 15 2010 to simplify the short sale process. Loan providers can begin following the guidelines early.

The HAFA program requires that all lenders have 30 days to contact the borrower requesting a short sale. Borrowers must respond to the lender within 14 days. All foreclosure proceedings are suspended during this time frame and the lender is unable to reduce commissions as written in the listing agreement.

Short sales are beneficial to the home seller because when a short sale is approved, the home seller will avoid foreclosure. Short sales are less detrimental to credit ratings and in the long run cost both the lender and borrower less money than foreclosure proceedings.

Prior to the HAFA program inception, no guidelines were in place to establish short sale negotiations, making the process complicated and time consuming. With HAFA in place, realtors are better equipped to deal with short sales and the process should begin to streamline in the near future.


Who can you call for help with your Short Sale?

McMillin Realty has trained and certified their agents through the National Association of Realtors Short Sale and Foreclosure training program and holds the designation of SFRs. McMillin's agents have a short sale guide book that has articles related to short sales: Short Sale Taxation issues, Credit Rating after a short sale, Deficiency Judgments, Deeds in Lieu of Foreclosure, a chart that compares loan modifications, short sales and foreclosure options. It is a great source of information for the seller. The company also employees a full-time short sale negotiator who works with the agents to get the short sales closed in a timely manner.

With East Chula Vista being one of the most impacted markets in short sales and foreclosures, McMillin Realty understand and has made it the company's mission to inform and educate the public of their rights and choices before losing their homes to foreclosure.

For more information of their services you can go to www.callscottforhelp.com or call 888-710-0500

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Market Summary for Otay Ranch This Week

The median sales price for homes in ZIP code 91913 in Chula Vista from Sep 09 to Nov 09 was $330,000 based on 388 sales. Compared to the same period one year ago, the median sales price increased 0.8%, or $2,500, and the number of sales decreased 4.9%. Average price per square foot for homes in 91913 was $175, a decrease of 2.2% compared to the same period last year.

There are currently 172 resale and new homes in ZIP code 91913 on Trulia, including 524 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in 91913 was $342,381 for the week ending Jan 13, which represents an increase of 4.2%, or $13,741, compared to the prior week. Popular ZIP codes in Chula Vista include 91913 and 91915, with average listing prices of $342,381 and $367,377.

91913,

The median sales price for homes in ZIP code 91913 for Sep 09 to Nov 09 was $330,000. This represents an increase of 3.4%, or $10,800, compared to the prior quarter and an increase of 0.8% compared to the prior year. Sales prices have depreciated 36.6% over the last 5 years in 91913, Chula Vista.

The median sales price of $330,000 for 91913 is 8.02% higher than the median sales price for Chula Vista CA. Average listing price for homes on Trulia in ZIP code 91913 was $342,381 for the week ending Jan 13, which represents an increase of 4.2%, or $13,741 compared to the prior week and an increase of 6.6%, or $21,279, compared to the week ending Dec 23. Average price per square foot for homes in 91913 was $175 in the most recent quarter, which is 0.57% higher than the average price per square foot for homes in Chula Vista.

91913,

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DREAM Homes & McMillin Realty Bring South County to the World

Yesterday the first edition of McMillin Realty's San Diego South County Edition of Dream Homes Magazine was published in the San Diego Edition of Dream Homes and in it's International Magazine, giving Chula Vista and it's surrounding communities worldwide exposure.

McMillin is proud of the city it has helped develop and support, and when the opportunity came to showcase our fine city in one of our industries top magazines, well, we jumped at the chance. We want the world to know what we already know. Chula Vista is the best place on earth to live!

Here is a copy of our first edition. We hope you enjoy it!

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10 Hard-Hit Housing Markets That Are Ready to Rebound - US News and World Report

10 Hard-Hit Housing Markets That Are Ready to Rebound - US News and World Report
After slumping, home prices in these 10 cities are expected to rise over the next three to five years

As the historic housing crash continues to hammer real estate prices from coast to coast, many homeowners probably can't remember the last time their property's value actually increased. But even with home prices still falling at the national level, a number of hard-hit housing markets are gearing up for a rebound. To pinpoint the cities most likely to go from slump to bump, we turned to Moody's Economy.com. Using S&P/Case-Shiller home price data, Moody's identified a handful of cities that took it on the chin during the crash—with property values dropping by more than 25 percent from peak to projected trough—but are expected to see strong home price appreciation in the relatively near future. Celia Chen, the senior director of housing economics at Moody's Economy.com, says home prices in many of these slump-to-bump cities became overvalued during the first half of the decade but have since fallen, or are in the process of falling, to extremely affordable levels. "That will encourage buyers back into the market and lift prices up," she says. Here is a look at 10 hard-hit housing markets that are ready for a rebound:

1. Tacoma, Wash.: With about 200,000 residents, Tacoma is the second-largest city in Washington's lovely Puget Sound region. The city's abundance of government jobs, bountiful outdoor activities, and proximity to Seattle—just 32 miles away—helped drive home prices higher during the first half of the decade. But as the national housing crash picked up steam, Tacoma saw its real estate market decline sharply. Home prices in Tacoma dropped 24 percent from their peaks through the first quarter of 2009. Still, Moody's Economy.com expects the market to bounce back strongly, with home prices increasing 22 percent by the first quarter of 2012 and 41 percent by the first quarter of 2014. David Graybill, president and chief executive of the Tacoma-Pierce County Chamber of Commerce, says the area's large military presence and diversified economy will help to support rising home prices going forward. "We also have one of the nation's busiest ports, the Port of Tacoma, which is an international deep-water port," Graybill says. "And although most international trade is down currently, the long-term outlook is good."

2. San Diego: Sunny San Diego was on the leading edge of the housing market's dramatic boom and bust. Residential real estate "prices started running up in San Diego faster than many other places in the nation," Chen says. But the market has since crashed, with home prices plummeting nearly 42 percent from their peaks through the first quarter of 2009. Still, San Diego's high-tech and hospitality industries will spark economic strength and rekindle home price appreciation in the coming years, Chen says. Moody's Economy.com projects home prices in San Diego will rise about 13 percent by the first quarter of 2012, and 25 percent by the first quarter of 2014. "Technology is really what will drive the economy once the recession is over," Chen says. "There are a lot of high value-added jobs that are in the metro area."

3. San Francisco: Home prices in this city are expected to bounce back solidly as well. Real estate values in San Francisco had fallen 29 percent from their peaks through the first quarter of 2009. Chen says that San Francisco will pull out of the recession sooner than most other parts of the nation, and she expects future job and population growth to support rising home values. "The types of jobs [in San Francisco] generally tend to be higher paid, and personal income growth is going to accelerate [there] quicker," Chen says. "Personal income growth really does drive home prices." Moody's Economy.com projects that home prices in San Francisco will rise about 12 percent by the first quarter of 2012 and 26 percent by the first quarter of 2014.

4. Memphis: Home prices in Memphis fell 23 percent from their peaks through the first quarter of 2009. John Moore, the president and chief executive of the Greater Memphis Chamber, says that the area's exposure to subprime loans—although limited to several specific areas—played a key role in this decline. More recently, however, foreclosures linked to subprime mortgages

have dropped, and investors have scooped up distressed properties at steep discounts, he says. In addition to its pleasant quality of life, Memphis's position as an important transportation hub will keep its economy humming and housing demand strong, Moore says. "We have the largest cargo airport in the world," he says. "We are the third-largest trucking corridor, fourth-largest inland port, and on top of that we are one of only three cities in the [United States] that is served by the five class-one railroads." In addition, Moore says that Memphis's low cost of living and strong healthcare system have made it a popular destination for retirees. Moody's Economy.com projects that home prices in Memphis will rise about 9 percent by the first quarter of 2012 and 24 percent by the first quarter of 2014.

5. Worcester, Mass.: Worcester, which has about 180,000 residents, saw its home prices fall by roughly 23 percent from their peaks through the first quarter of 2009. But Timothy Warren, CEO of the Warren Group, a New England real estate information and data provider, points to two key industries that can help drive home price appreciation. With a number of colleges and universities located there—such as the College of the Holy Cross and Clark University—higher education is an important component of Worcester's local economy. And its university-linked healthcare sector is another key provider of jobs. "Because of the medical schools, there are teaching hospitals out there as well and a lot of research that gets done," Warren says. Moody's Economy.com projects that home prices in Worcester will rise about 6 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.

6. Warren, Mich.: Like nearby Detroit, Warren's economy has been hammered by the auto industry's woes, Chen says. Home prices in Warren fell 37 percent from their peaks through the first quarter of 2009. But going forward, Moody's Economy.com projects that home prices in Warren will rise about 5 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014. These rates of appreciation may look encouraging, but they aren't exactly what they seem, says Chen. Warren, like the rest of the country, will indeed see some job growth as the economy pulls out of the recession, she says. And home prices will eventually fall far enough to attract buyers. But Moody's projection for healthy home price appreciation says more about the depth of Warren's real estate decline than anything else, Chen says. "Because prices are going to pick up off of such a low base, even a small increase in the actual dollar value of homes will look like a very strong growth rate," Chen says. Warren's long-term economic outlook remains unfavorable, she adds.

7. Boston: Home prices in Boston fell 18 percent from their peaks through the first quarter of 2009. But Timothy Warren says the city's robust higher education and healthcare sectors should help support higher home prices in the future. In addition, "the financial services sector has been hit hard recently, but it is still a strength of the Boston area," he says. "They have been hit [harder] than other industries, but I think they will probably come back." Moody's Economy.com projects home prices in Boston will rise about 3 percent by the first quarter of 2012 and 18 percent by the first quarter of 2014.

8. Lansing, Mich.: Like Warren's, Lansing's economy is struggling. Home prices there fell 28 percent from their peaks through the first quarter of 2009. Moody's Economy.com projects that home prices in Lansing will rise about 2 percent by the first quarter of 2012 and 15 percent by the first quarter of 2014. However, these increases are largely attributable to the extremely low base that real estate prices will come off of, Chen says.

9. Chicago: Home prices in Chicago fell 28 percent from their peaks through the first quarter of 2009. But David Hanna, president of the Chicago Association of Realtors, says the city's diverse economy and pleasant quality of life can help drive property values higher in the future. "The city is clean [and] it's functional," Hanna says. "The last two decades of revitalization here has spread out not only through the city but into many of the other surrounding communities." Moody's Economy.com projects that home prices in Chicago will rise about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

10. Minneapolis: Home prices in Minneapolis fell 35 percent from their peaks through the first quarter of 2009. Moody's Economy.com projects home prices there will rise about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

Here's our list of the 10 hard-hit housing markets that are ready to bounce back:

1. Tacoma, Wash.: Home prices in Tacoma are projected to increase 22 percent by the first quarter of 2012 and 41 percent by the first quarter of 2014.
2. San Diego: Home prices in San Diego are projected to increase 13 percent by the first quarter of 2012 and 25 percent by the first quarter of 2014.
3. San Francisco: Home prices in San Francisco are projected to increase about 12 percent by the first quarter of 2012 and 26 percent by the first quarter of 2014.
4. Memphis: Home prices in Memphis are projected to increase about 9 percent by the first quarter of 2012 and 24 percent by the first quarter of 2014.
5. Worcester, Mass.: Home prices in Worcester are projected to increase about 6 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.
6. Warren, Mich.: Home prices in Warren are projected to increase about 5 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.
7. Boston: Home prices in Boston are projected to increase about 3 percent by the first quarter of 2012, and 18 percent by the first quarter of 2014.
8. Lansing, Mich.: Home prices in Lansing are projected to increase about 2 percent by the first quarter of 2012 and 15 percent by the first quarter of 2014.
9. Chicago: Home prices in Chicago are projected to increase about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.
10. Minneapolis: Home prices in Minneapolis are projected to increase about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

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The future is looking Green in Otay Ranch

More to look forward to in Otay Ranch!

--The Eastern Urban Center is someday expected to be home to 7,500 in 3,000 residential units — 20 percent will be affordable units for seniors and assisted living — and the site of 10,000 jobs and 3.5 million square feet of office, retail and civic services. It will have a main street served by ground-floor retail outlets, an entertainment district, and housing and offices. The center will feature a firehouse and a two-story library taking up the first two floors of a five-story office building. Sprinkled in will be parks within a three-minute walk of residences, plazas, town squares, trails and bus rapid transit stops.-

It will take 20 years to build and its first phase will have to wait for the construction market to return.

And that’s not expected for another year or so, or possibly even three to five years.

But the 210-acre Eastern Urban Center, a planned $4 billion, mixed-use development intended to be the focal point of the Otay Ranch communities, was approved Sept. 15 by the city of Chula Vista.

When built out, it will provide a glimpse of how green urban development can produce a beautiful place to live, work and walk from place to place without having to get into a car.

The Eastern Urban Center is someday expected to be home to 7,500 in 3,000 residential units — 20 percent will be affordable units for seniors and assisted living — and the site of 10,000 jobs and 3.5 million square feet of office, retail and civic services. It will have a main street served by ground-floor retail outlets, an entertainment district, and housing and offices. The center will feature a firehouse and a two-story library taking up the first two floors of a five-story office building. Sprinkled in will be parks within a three-minute walk of residences, plazas, town squares, trails and bus rapid transit stops.

“It will be a regional destination,” said Todd Galarneau, project manager for its developer, The Corky McMillin Cos. “It’s a forward-thinking, sustainable design that brings the urban experience to Otay Ranch for the first time.”

The center’s proximity to Mexico is key, adds Galarneau. “There are a good number of buyers from Mexico,” for both permanent and vacation homes.

Green Features Galore

The project is now assembling applications for LEED Silver certification of environmental efficiency standards. That designation requires a pedestrian-friendly design, transit service and mixed housing/office development to reduce necessary car trips by 38 percent. Other green features of the project are the innovative processing of runoff water. Stormwater flowing off of buildings will be filtered through surrounding landscape and tree wells, says Galarneau. Those systems improve the quality of the runoff water, he said, and reduce the volume of water runoff into storm drains.

Nick Lee, the project’s sustainable development engineer, says the biggest challenge he faces is designing the project’s buildings to be green.

“You try to take a step back and see the economies of scale,” he said. Along with the runoff water systems mentioned by Galarneau, Lee says the project will cut typical water use with a pipe system of reclaimed water from the Otay Water District. That water, which is filtered, but not intended for consumption, will also irrigate street trees and public landscaping.

Electrical service for buildings will be designed to plug into a future “smart grid,” which allows utility customers to have wireless meter reading and a real-time look at electricity usage. The idea, says Lee, is to show customers when they are using high volumes of power and encourage them to turn off appliances to cut usage and costs. Other energy efficiencies planned for buildings include use of windows for lighting, solar energy options and insulation.

Nate Cherry, an architect with the Los Angeles office of RTKL Associates Inc., is the lead building designer for the project. He says the goal of the design is to create a mixed-use project that connects all the neighborhoods around the site as much as possible, since they were built as a series of separate, unconnected developments.

Cherry also placed the commercial hub of the project at the north end. He planned the “very important transit connection” there. For the project’s housing he put in blocks of dense housing clusters. He included design features often seen in Southern California and San Diego architecture.

“There’s use of indigenous styles so it feels like a friendly, familiar place,” said Cherry, noting the use of a lot of plaster and clay tiles for building materials, trellises, indoor and outdoor terracing, and balconies that look down onto public squares and awnings.

Variation Of Similar Theme

Gary Halbert, the city of Chula Vista’s deputy city manager and development services director, says the Eastern Urban Center is often compared to University Towne Center in San Diego.

“Frankly, I don’t think that’s a real good comparison,” said Halbert. “The Eastern Urban Center will be a high-density, mixed-use of office, hotel and residential. It will be a walkable community. Bus rapid transit will literally go right into the heart of the community. To come out of the ground with bus rapid transit feeding it from day one will be a wonderful thing.”

This project is unusual, he says, because it won entitlement approvals first, before any construction drawings were submitted for approval. He figures those will take another year to draw up.

Looking ahead, Halbert sees the tough conditions in the building market to continue for some time.

“Somewhere in the three- to five-year time frame is when I’d expect to see first-phase construction,” he says.

Eastern Urban Center

View more documents from The Corky McMillin Companies.

Mark Larson is a freelance writer for the Business Journal.

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