A FINE KETTLE OF FISH

Remember the antics of Laurel and Hardy? "A fine kettle of fish you've gotten us into Ollie" was the finger pointing line Stan used to point out some problem that Ollie had caused, and in our broad real estate and mortgage markets there are a lot of "Stans" pointing to a lot of "Ollies". The Fed, mortgage lenders, hedge fund operators, real estate agents, appraisers, government, to name a few, are responsible for the real estate market tanking, and by golly, something must be done. The flurry of activity by politicians, in this gearing up for election time period, is kind of fun to watch. The problems of course are serious, caused by greed at all levels, from the consumer expecting to turn a home into an unrealistic investment vehicle, to the real estate agent, appraiser, mortgage lender, hedge fund operator, and investor, expecting a higher than normal return for a higher than normal risk. Legislation is unlikely to provide a solution. Some of the impending moves; removing the IRS threat of taxing the forgiven amount on a loan default, (a good thing), providing some sort of government bail-out for defaulting borrowers, reminiscent of the savings and loan debacle, and not a good thing, new laws forbidding real estate agents from influencing appraisers to value property at higher than actual value, (that's always been illegal, it's called fraud), and laws designed to prevent lenders from loaning money to people who can't pay it back. Most of this activity is knee-jerk response and isn't going to have any impact. Commissions drive this industry and people will find a way to enhance their income. Fee for service such as appraisers do would resolve much of this problem, and drive many of the real estate agents and mortgage people out of the business, but the latter didn't cause this enormous problem. They took advantage of a situation, and the situation was presented by some clever designers of investment vehicles that offered significantly higher than normal returns to investors. These vehicles provided a home for mortgages of questionable value and merit, and the flood gates were open. And now here we are.
Chico sales for last month were under 50% of year previous. This month to date we're running at 65% of previous year, Paradise/Magalia is at 68% of last year. Inventories are 507 and 374 respectively. Interest rates are very favorable for all mortgage products so people buying or refinancing have a favorable climate. Underwriting standards have tightened but not unrealistically. Good credit=good loan.
Housing starts nationally for September were down 10.2% to lowest level in 14 years and building permits were also sharply lower. If you work in the construction trades, not a good thing, for the real estate market, a good thing, we'll be able to burn off some of the excess inventory and restore some stability to the market.
There is still a lot of money out there for mortgages. Our e-mail and fax machine are filled daily by lenders offering "great deals" both residential and commercial. Our problem is finding people who want to borrow some of the stuff, so if you know someone?
Our offices are enjoying pretty good activity and we keep finding new web sites for exposure of our listed properties. Pretty exciting really. We're very aggressive on the internet so when listed with us a home is exposed to the whole world, quickly and consistently.
Enough sales pitch.
As usual
Thanks for visiting.