MikeBolen.com

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.