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Foreclosure filings were reported on 72,285 California properties in July for the highest total among the states, according to a report released Thursday. Foreclosure notices on small and medium size multifamily surged to record highs too.

RE/MAX research said California’s foreclosure activity increased 5 percent from the previous month and was up 85 percent from July 2007. On a year-over-year basis, bank repossessions in California were up 427 percent, while auction notices were up 67 percent and default notices were up 34 percent. However, default notices declined 4 percent from the previous month.

Throughout the country, foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 272,171 properties during the month, an 8 percent increase from the previous month and a 55 percent increase from July 2007. The report also shows one in every 464 U.S. households received a foreclosure filing during the month.

In actual foreclosures Nevada continued to document the nation’s highest state rate in July, with one in every 106 households receiving a foreclosure filing during the month. Foreclosure activity in Nevada was up 15 percent from the previous month and 97 percent from July 2007, pushing the total number of properties with foreclosure filings to over 10,000. Bank repossessions in Nevada were up 384 percent on a year-over-year basis, while default notices were up 59 percent and auction notices were up 31 percent.

One in every 182 California properties received a foreclosure filing in July, the nation’s second highest state actual foreclosure rate, while one in every 186 Florida properties received a foreclosure filing.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in selling just multifamily apartment investments.  My colleague Armando Lincoln 707-299-9779 part of the team handles all real estate commercial and residential that is not multifamily. Over 65% of our sold real estate deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market inventory or to learn how we work with buyers contact Mike Bolen for multifamily Mike@MikeBolen.com or 707-254-9999.  Contact Armando Lincoln 707-299-9779 for all other commercial and residential real estate opportunities, and Ken Dunbar 707-365-9070 for all commercial leasing needs.

We also work with over 25 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial real estate investment buyers than our team. Put the power of the RE/MAX Napa Valley team to work for you.

Pre-foreclosures hit record highs in July 2008 both nationally and in 14 states and the District of Columbia according to new figures from ForeclosureS.com, California-based foreclosure information specialists.

“So far this year, more than 1.25 million Americans faced the risk of loosing their homes to foreclosure, up 7.3% from June 2008, and up 88.62% from July 2007,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com.

California-based ForeclosureS.com bases its analysis on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, foreclosure auction, and/or REO (lender-owned real estate after a foreclosed property reverts back to the lender). Pre-foreclosure filings are the first initial notice and do not all end up foreclosed.

Foreclosures and short sales (selling homes for less than their loan value) make up a huge chunk of today’s sales market and those low sales prices are skewing sales values down. Now thanks to the new housing bill recently passed first time home buyers are coming into the market to grab their $7,500 tax credits, FHA reform is easing their loan process, and there is a ton of affordable housing to chose from. Plus, for the first time in a long time you can buy a near-new home for less than its replacement cost and buy multifamily with positive cash flow.

A look at a few of the July numbers from ForeclosureS.com:

-- Pre-foreclosures by region based on filings per 1,000 households

 July 2008 YTD versus July 2007 YTD 2007:

     -- Southwest, 21.4 pre-foreclosures per 1,000 households YTD vs.

      10.5 per 1,000 YTD 2007;

     -- Southeast, 24.1 per 1,000 vs. 11 per 1,000 YTD 2007;

     -- Northeast, 8.4 per 1,000 vs. 6.7 per 1,000 YTD 2007;

     -- Midwest, 11.3 per 1,000 vs. 9.3 per 1,000 YTD 2007.).

-- States with the most pre-foreclosure filings per 1,000 households

 July 2008 YTD:

     -- Nevada (59.1 per 1,000 up 126.44% from YTD 2007);

     -- Arizona (54.9 per 1,000, up 403.67% from YTD 2007);

     -- Florida (48.3 per 1,000 up 176% from YTD 2007);

     -- California (25.2 per 1,000, up 119.13% from YTD 2007).

Until the foreclosure and short sales move out of the market downward pressure will continue on small to medium size multifamily properties. Larger multifamily where foreclosure on commercial loans is near non-existent will have little downward pressure from the foreclosure market with higher cap rates being propelled by tough capital markets.

Now is the time to buy multifamily rents are exceptional, vacancy is at record lows and prices have fallen to record lows when compared to income. Here at the RE/MAX Napa Valley office, RE/MAX Cornerstone I specialize in multifamily property contact me, Mike Bolen at 707-254-9999 or email anytime Mike@MikeBolen.com. I look forward to hearing from you.

Carol Lloyd wrote an interesting article for the San Francisco Chronicle about a listing my collegue Armando Lincoln is currently offering for sale Schellville Station  what an amazing property with a tenant already in place.

Take a chance on commercial property

When Eddie Heintz visited the 6,000-square-foot structure on Carneros Highway (Highway 12) last spring, the property was rough, but its potential seemed clear and easily within reach. “The location was perfectly situated between San Francisco and Napa and there was lots of traffic,” Heintz told me. “It’s near Infineon Raceway, as well as only about four miles from Sonoma. That’s why I jumped on it.” Instead of wine, he would specialize in beer. He called it Schellville Station.

The plan was to begin as a deli with a general store of local foods, add a beer garden/bar the following year and finally build out a barbecue shack that would offer comfort food and home-smoked meats. But when the landlord/partner failed to deposit his contribution to the project, Heintz grew nervous. The change in ownership wiped out the validity of Heintz’ lease.

“I feel really bad for Eddie,” said Armando Lincoln, the commercial agent currently representing the owners. “I don’t know what else to say.” Click HERE to see the listing.

Armando Linoln can be reached at 707-299-9779 or Armando@CREHQ.com

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone my team and I specialize in off market pocket listings. Over 65% of our sold deals are never advertised. Most are offered to sale only to buyers represented by our team. To gain access to the off market or foreclosure inventory or to learn how we work with buyers contact Mike Bolen at Mike@MikeBolen.com or 707-254-9999 I specialize in multifamily apartment investments. We also work with over 20 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more commercial investment buyers than my team.

Las Vegas and Miami continue to share the dubious distinction of being the weakest markets over the past 12 months returning -22.8% and -21.7%, respectively. These two markets witnessed some of the fastest growth in the 2004/2005 periods, with annual growth rates peaking above +50% and +30%, respectively. For the month of February, markets in the West were the biggest decliners.  San Francisco, Las Vegas, and Los Angeles were the worst performers.  Each had a negative return in excess of 4%.

The cost of a typical Bay Area home plunged 17.2 percent year-over-year in February, compared with 13.2 percent in January and 10.8 in December, according to an index of real estate values published by New York credit rating agency Standard & Poor’s. “Prices have a lot of room to fall,” said Patrick Newport, an economist with Waltham, Mass., research firm Global Insight Inc. “We could see some really big drops.”

There is now much opportunity in the market in both commercial and investment properties here in Napa county. Here at the RE/MAX Napa Valley office RE/MAX Cornerstone my team and I specialize in commercial investment properties contact me Mike Bolen at 707-254-9999 or Mike@MikeBolen.com and let’s discuss your acquisition target.  

The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels — reaching an average of more than 500 foreclosures per day — DataQuick said in a report, warning that the widening foreclosure problem could “spread beyond the current categories of dicey mortgages, and into mainstream home loans.”

From DataQuick’s report on California foreclosures in the first three months of 2008: “Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 47,171 during the first quarter. …  Last quarter’s total rose 48.9 percent from 31,676 in the previous quarter, and jumped 327.6 percent from 11,032 in first quarter 2007.”  That translates into 517 foreclosures every day in the first quarter of 2008.

DataQuick president Marshall Prentice: “The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006 and that’s working its way through the system. The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans.”

From The L.A. Times’ Peter Hong: “Sinking home values and the collapse of flimsy mortgages sent a record number of California homes into the foreclosure process in the first three months of this year, a real estate information service reported today.”

Default notices — which mark the beginning of the foreclosure process — increased sharply, but not as rapidly as outright foreclosures. From Bloomberg News: “California mortgage defaults more than doubled in the first quarter to the highest in 15 years as a drop in sales and prices prevented some homeowners from selling their properties to pay debt, DataQuick Information Systems said.

More: “Homeowners received 113,676 default notices in the first quarter, up 143 percent from a year ago, La Jolla, California- based DataQuick said today in a statement. The level was the highest since at least 1992, when DataQuick’s statistics begin.”

Opportunities for sharp minded investors exist in this market. For a complete pre and post foreclosure property list contact me, Mike Bolen 707-254-9999 or Mike@MikeBolen.com

San Francisco – As the political season rages candidates find it an absolute to be seen “doing the right thing”. The present housing crisis is a case in point, as Congress now seems increasingly intent on aiding millions of homeowners who can’t easily pay their mortgages and may face foreclosure. This sort of bailout might seem like “doing the right thing” but it is incredibly harmful and politicians should be ashamed.

I certainly take no pleasure in seeing someone fall into foreclosure. According to the University of North Carolina, estimates of defaults in 2008 run up to 2 million. If realized, that would be roughly twice the 2006 level and about 2.7 percent of the nation’s 75 million owner-occupied homes. It would be the highest rate since World War II but well below much higher rates during the Great Depression.

Many proposals to fix housing abound from a temporary stay on all foreclosure to “induced” sit downs between lenders and borrowers. No matter the plan or better yet no matter the scheme the proposals place politicians on a retaining wall, trying to protect troubled homeowners. The imagery is conducive to reelection and that is about it.  Politicians promoting these schemes moraly soil themselves and bring about economic chaos.  

About 50 million homeowners have mortgages. Who wouldn’t like the government to cut their monthly payments by 20 percent or 30 percent? But these shemes reserve that privilege for an estimated 1 million to 2 million homeowners who are the weakest and most careless borrowers. With the FHA now authorized to lend up to $729,750 in high-cost areas, some beneficiaries could be fairly wealthy. By contrast, people who made larger down payments or kept their monthly payments at manageable levels would be made relatively worse off. Government punishes prudence and rewards irresponsibility. Inevitably, there would be resentment and pressures to extend relief to other ”careless & needy” homeowners.

The justification is to prevent an uncontrolled collapse of home prices that would inflict more losses on lenders — aggravating the “credit crunch” — and postpone a revival in home buying and building. This gets the economics woefully backwards. From 2000 to 2006, home prices rose by 50 percent or more by various measures. Housing affordability deteriorated, with home buying sustained only by a parallel deterioration of lending standards. With credit standards now tightened, home prices will absolutely fall to bring buyers back into the market and to reassure lenders that they’re not lending on inflated properties.

If rescuing distressed homeowners delays this process, the aid and comfort that government gives some individuals will be offset by the adverse effects on would-be homebuyers and overall housing construction. None of this means that lenders and borrowers shouldn’t voluntarily agree to loan modifications that serve the interests of both. Foreclosure is a bad place for most creditors or debtors. Although the process is messy, promising to lubricate it with massive federal assistance will retard it as both wait to see if they can get a better deal from Washington, which would then assume the risk for future losses.

My grandmother a direct desendent of our second president John Adams through the Ashby line often quoted John Adams I think this quote sums up what his thoughts would be on the foreclosure mess.

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.”  JOHN ADAMS
    

For many residents of this, one of the most storied valleys in the world, life is still a bowl of grapes. But beyond the picturesque vineyards and stonewalled estates, times are shaky. Tourists sipping their way up the 30-mile (50-kilometer) valley from the city of Napa to Calistoga may never see this other Napa Valley. But this celebrated wine country is proof that there are few places in the U.S. left unsmacked by the housing crisis. Beautiful Napa is experiencing foreclosures, plunging housing prices, unheard of drops in home sales and the nervous sense of foreboding that has spread across the country like a flu.

In the nine county San Francisco Bay area, where home sales tumbled in January to their lowest levels in 20 years, Napa County suffered the sharpest drop of all — more than 55 percent from a year earlier, according to Dataquick Information Systems, a real estate research firm. In the same period, houses at any stage of foreclosure jumped by 152.9 percent.

But the city of Napa, which is both the county seat and the largest population center with 75,0000 residents, and its lesser-known neighbor, American Canyon, are where Napa’s working people live, and they are bearing the brunt of the housing crash, not to mention its collateral damage versus Saint Helena, Calistoga and Yountville.

American Canyon, known for the visitors center that is the usual first stop on the Route 29 wine trail, is a new town. It incorporated in 1992 and grew from 6,000 people in 1999 to over 14,000 residents in 2007. But excitement over fast-sprouting single-family-home developments has given way to concern over unsold houses and languishing businesses. Houses in new developments are already for sale — either because of foreclosure or because the owners are threatened with it — even as developers are still building the rest of the planned sites.

Perhaps the best bellwether of the times is the city of Napa, which has spent the last seven or so years playing catch up with Yountville, St. Helena and its other illustrious neighbors. Within seven years, median housing prices in Napa rose 99 percent, to $550,000 last June ($532,500 now), according to DataQuick. But the people who flocked to the city seeking refuge from the million-dollar houses in San Francisco, Marin and other parts of Napa County are now seeing the same flurry of “for sale” signs that are hitting so many other once-booming cities across the country. Downtown Napa is still a maze of construction as developers proceed apace with plans for more than $300 million in new stores, offices and condominiums. Napa continues to position itself as the best investment in all of northern California. With the recent price decline coupled with all the momentum in downtown Napa now is the time to double down on Napa.

Contact Mike Bolen 707-254-9999 or Mike@MikeBolen.com and I can direct you to one of my professional agents who specialize not just in commercial and investment property but in Napa as well.

I have been in the real estate business for 16 years and have asembled the following tips for investors when buying bank owned (REO) property:

Foreclosure properties are available in large numbers throughout Napa, Sonoma, Marin and Solano county. Feel free to contact Mike Bolen at Mike@MikeBolen.com or 707-254-9999 I can direct you to a Realtor who specializes in finding the right foreclosure investment for you.

Much like the internet stock price bubble California real estate prices have experienced a stunning reversal in upward momentum. C.A.R. (the California Association of Realtors) reports prices in California are falling three times faster than the nationwide average price decline. The median California single family home price is currently declining at a rate of $3,000 per week. Median prices have fallen 31% in Sacramento a shocking figure to be sure.

Investors should still use caution when looking at foreclosure investments. Areas that have a lot of foreclosures tend to be on the down trend. Neighborhoods that have a plethora of foreclosed homes are often faced with higher crime levels, lack of property upkeep and other negative features. This can lead to severe price drops in the neighborhood as it becomes less attractive to potential homebuyers. Unless investors are specifically looking for a neighborhood renewal project, they would do well to locate properties in neighborhoods which have not been as negatively affected by the downturn.

The trick? Find the foreclosure or better yet pre foreclosure (short sale) in a great neighborhood with few if any other distressed sales. These opportunities are available in both residential and commercial real estate in Napa, Sonoma, Marin and Solano counties.  The best and often the only way to find these properties are with the help of a competent full time Realtor who specializes in commercial and investment real estate.

 Contact Mike Bolen at 707-254-9999 or email Mike@MikeBolen.com for a referral to a market expert in your area.
  

There is no argument that today’s real estate market news cycle is dominated by the sub-prime loan meltdown. The drive by media will say real estate is not just slow or in a correction but rather a full fledge depression. This news when reported with soaring war costs, election uncertainty, sky high oil, and a bloated deficit has sent real estate investors running. I say keep focus when blood runs through the street opportunity quickly follows.

Having analyzed the real estate market for over 16 years I see an opportunity like few I have witnessed in the past. The commercial real estate market is not only stable it is flourishing. Remember commercial real estate received little of the appreciation frenzy experienced in our super heated Marin, Sonoma and Napa markets.

To bust the myth take the multi-family commercial sector. This sub market has actually benefitted from the subprime meltdown. The multi-family market has actually experienced an up-tick in rental rates, a new demand from developers for multi-family zoned land and extremely low vacancy rates. All the while prices for multi-family product are actually declining! This type of market anomaly cannot exist for an extended period and a price move upward in this sector is inevitable. The time to buy is now.

When contrasted with a stock market investment, consider that today borrowing rates are low and commercial real estate will give you a better investment return than bond yields and you own the investment. A commercial real estate investment gives you not only tax advantages but the opportunity for long term real estate appreciation.

A mentor once told me “never wait to buy a commercial real estate investment, buy the commercial real estate investment and wait”. Keep in mind 6 out of every 10 millionaires in the United States made their fortune in real estate. A single good commercial real estate investment can yield the same benefit as an entire lifetime of toil in another field.