Chico And Glenn County

March has ended and the sales figures do not reflect the sunny optimism of my peer group, but do mirror the unease and outright fear generated by the government in our financial and credit markets.. Explosive spending and outright usurpation of the rights of contracts and the capital markets by Congress and the administration have reduced confidence levels enough to insure a really long slow recovery.. The Keystone Cops couldn't make a bigger mess than the Beltway crowd aided and abetted by the thugs from Chicago. Housing prices continue downward, and why not, since the acceleration of the recent past had no basis in reality. Sales of single family residences in greater Chico last month totaled 52, of which 13, or 25%, were foreclosed properties, Glenn County sales totaled 25, of which 20, or 80%, were foreclosed properties. This is a really alarming situation if you're trying to sell your home, since the competition for buyers is not fairly balanced. The lenders selling foreclosed properties can better afford the loss than you can, and with the government pumping bail-out money into the financial market, (your money), it may very well be that their loss may not be a loss at all. Following the trail of an individual mortgage through to the final buy-back by AIG of a mortgage backed security is probably not even possible, so the lenders made a fortune on the front end of these bad loans, and when all is said and done, with the help of Geithner, Dodd, Frank and Obama, your tax dollars through the bounty of your government in action, they will also make out OK on the back end as well. Business losses and failure are the result of poor business decisions, but apparently if you have friends in finance, or the union, government will not permit you to lose. You don't even have to get up to try again, a benevolent government will hold you up throughout. Pelosi, Reid and Bush share in all the blame to go around, also Paulson and Bernanke. Maybe easier to just provide a roster of Congress.
Didn't mean this to be a rant but it is very difficult for a real estate or mortgage broker to offer meaningful guidance to potential clients in this environment. For those with a genuine need to sell their home, we can get it done. For those with a need to buy a home to live in, we can get that done also, and financed. For those thinking of a home as a real estate "investment", you're on your own. Anyone who offers you advice in that area is probably selling stock market tips on the side, with an equivalent probability of success.
If you enjoy logic you could say: Uncertainty causes fear, the government causes uncertainty, therefor the government causes fear. It does for me anyway.
As usual,
Thanks for visiting.

Madoff and Others

Mr. Madoff who diverted several billion dollars of other peoples money to purposes he deemed important, is now in jail. Only awaiting sentencing to be sure, but probably permanently. Meanwhile the members of our executive and legislative branches who have diverted trillions of other peoples money to purposes deemed important by them, are still running around loose. This is not to suggest that Madoff should not be in jail, simply that he should have a lot of company. The latest debacle, the $410 billion omnibus(t) bill just signed by Obama was made possible with the help of some Republicans who felt we the many should fund they the few in their pork projects. Shameful, but understandable. Ethics and integrity are not even vocabulary words for these people, let alone concepts. Obama has proven himself to be a categorical liar and certainly incapable of reasoned decisions,(how many time have we heard straight from the teleprompter,"no earmarks"), only 8500 in this bill give or take a few. With the economy in serious trouble the concentrated effort it requires to address it is being squandered on longer range plans for universal health care, federal takeover of the school system, and paying back a debt to the unions by way way of card check. Mr. Geithner has, so far, not been able to put together a group of one to act with him in Treasury, three withdrawals of potential appointees to date. He is not very impressive from a distance but he must be a disaster up close. No one wants to be in his orbit.
As for our more parochial interest in local real estate values, sales, purchase opportunities, mortgages and foreclosures, the news is not good and it it is prevented from starting the correcting process by the constant stream of mixed signals from Washington. Promises and threats of action to do something about or for the approximately 7% of Americans in trouble on their mortgages, at the expense of the 97% who are paying on time no matter the difficulty, keep the credit markets in uncertainty which equates to inaction. Nothing of substance is going to happen until the government either lays out a clear path of action, or signals that it is going to stop interfering. Government cannot manage car companies, manage banks, manage schools, manage health care, manage the post office, social security, medicare, medicaid, etc., etc.
We're running along at about 50% of normal sales in Chico, and Glenn County with about 1/3 of Chico sales described as distress, foreclosed and short sale. Glenn County runs about 70% distress sales. All this means is that for people simply wanting to sell their home they are competing on an uneven field, and determining actual value of a home is difficult. We've mentioned before, but worth repeating, a property appraisal requires sales of comparable properties between an informed seller and an informed buyer. Distress sales fail to meet that test.
This is not doom and gloom. Intelligent adults need to be realistic and as we have been here before and survived, we will survive again. I've been in this business since the middle 1970's, and while a long way from comfortable, (politicians being what they are), I think we'll find a way to thwart their ineptitude and come out OK.
As usual,
Thanks for stopping by.