MikeBolen.com

Blogs, MP3s, Drudge Report, Cable News, Cell Phones, Craigs List. How much longer can dead tree news possibly last in this digital information age? I say not long.  Craigs List has taken vitually all classified ad revenue. In just the 3rd quarter of 2007 newspaper ad sales declined 7.4% while online ads expanded 21%.

The Napa Valley Register had a published Sunday circulation of 20,200 in September 2004 by September of 2007 that number had dwindled to a mere 16,623 . The San Francisco Chronicle reported that daily circulation dropped 4.2% to 370,345 in just the 1st quarter of 2008.

Many sellers still ask about newspaper advertising and most often newspaper advertising is the only advertising sellers ask about. Interesting to note most sellers do not even receive the newspaper they inquire about us advertising in. Studies now show 89% of ALL buyers begin their search on the internet. RE/MAX.com see my 1st post on this blog is the number 1 real estate website in the world receiving three times the traffic of any other real estate website.

Here at the RE/MAX Napa Valley office RE/MAX Cornerstone located in downtown Napa on the corner of 1st and Main we pride ourselves on our unique internet marketing. Contact me Mike Bolen today at Mike@MikeBolen.com or 707-254-9999 and let’s discuss how to correctly market your property.  

Seattle, Washington based Trinity Real Estate has acquired the Plaza Del Sol Apartments in Napa, California for $10.31 million from Sebastopol-based Plaza Del Sol Associates.

The property was not advertised nor offered on the open market for sale. Emphasizing the value of using a full time commercial broker to assist in your acquisitions. Most of the largest and many properties with large upside potential are sold “off market”.  

The Plaza Del Sol Apartments are located near Highway 29 at 713 Trancas St. in the storied Napa Valley wine country. Built in 1970, the apartment complex contains 70 units on 2.94 acres. It was 97 percent occupied at the time of sale and has a unit mix of 30 one-bedroom and 40 two-bedroom apartments. The sale is the largest multifamily deal in Napa since December 2006.

My team and I specialize in off market pocket listings. Over 65% of our sold deals are never advertised and 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 at Mike@MikeBolen.com or 707-254-9999

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

Many Bear Stearns stockholders are sick with thoughts of the JP Morgan buyout at a 2 dollar share price JP Morgan paid. The unreported shocker of the deal exposed here is how JP Morgan has acquired a high priced real estate marque the Bear Stearns Headquarters, for a relative pittance. The building is valued at roughly $1.1 billion while the total cost of the buyout was $236 million.  Between employees, contact lists, ongoing revenue streams etc. Bear was probably worth more that $236 million just in goodwill. So the building was thrown in with debt as part of the deal.

Yes their is debt on the building, about $570 million, but there was also an alternative need for JP Morgan. JP Morgan is looking to move from their present building and the Bear Stearns Headquarters is far more appealing than their current address. Bears location near Grand Central Terminal does not hurt either.

JP Morgan will have to absorb the risk and poor decisions Bear Stearns has made, but once that is complete the upside will be dramatic. While J.P. Morgan had planned to move its investment-banking and trading operations to a building that is planned for the World Trade Center site, it will now move those operations to the Bear Stearns headquarters. However, J.P. Morgan will retain the right to build at the World Trade Center site.

These guys really have channelled “The Donald” for this deal. The walk in with $530,000,000 in equity on day one and retain building rights at the World Trade Center site. These kinds of commercial real estate plays would truly make “The Donald” proud.

While admittedly I may not have a billion dollar deal to direct you to in Napa Valley I do have several “off market” deals with seven figure upsides. Contact me at 707-254-9999 or email Mike@MikeBolen.com

Despite protestations that mixed-income multifamily developments reduce property values, a new study from the Massachusetts Institute of Technology’s Center for Real Estate shows that there’s no significant difference in home-price appreciation between residences located close to a mixed-income development or elsewhere in the community. Great news for homeowners and rental owners is areas of heavy mixed used development like Napa Valley or San Francisco.

The study, “Effects of Mixed-Income, Multi-Family Rental Housing Developments on Single-Family Housing Values,” looked at seven such developments in the Boston suburbs. The results effectively disarm one commonly used weapon in the fight against higher-density, affordable housing projects. “We were extra-meticulous in our research because this is such a hot-button issue,” says Henry Pollakowski, a housing economist at MIT’s Center for Real Estate and the study’s co-author. “We talked to planners, tax assessors, and neighbors, as well as looking at patterns over time for the price comparison.”

Developers are happy to have proof of what they’ve been claiming all along. “I’m not at all surprised by the findings,” says Mark Huppert, principal with Seattle’s Catapult Community Developers. “The reality is that new multifamily housing–when appropriately designed to accommodate a retail, pedestrian, and neighborhood orientation–can in fact enhance the sense of activity and services. This report will serve as a tool for getting potential opponents to the table and will open up lines of communication before opposition can be formed.”

Feel free to contact me: Mike Bolen 707-254-9999 or email Mike@MikeBolen.com and I can direct you to some of the best multifamily deals in the area both advertised and “off market” pocket listings.

To read the study, visit http://web.mit.edu/cre/research/hai/40b.html.

The San Francisco bay area and Napa County has some of the nation’s most extreme barriers to new building in terms of land availability and especially development costs. There’s just not enough land available in the Bay area for single-family building to reach especially large volumes, and furthermore, much of the population can’t afford the region’s high single-family home prices.

The region isn’t experiencing the run-up in single-family home construction seen in most other parts of the country. In fact, while building authorizations in the single-family sector dropped 11 percent in the 12 months ending March 2005, multifamily starts jumped 20 percent, with apartments and condominiums now accounting for nearly half of ongoing total housing development.

Meanwhile, San Francisco Bay area apartment occupancy has been inching upward for more than two years. The spring 2005 occupancy rate reached 96.3 percent, up 2.4 points from the bottom performance of just less than 94 percent in 2003. While occupancy reached 98 percent during the late 1990s-early 2001 frenzy, today’s 96.3 percent occupancy rate actually is within a percentage point of full occupancy by long-term historical standards. Napa Valley Occupancy is even stronger with only a 2.2% vacancy rate.

Rents, on the other hand, still have a way to go. The typical apartment community in the Bay area suffered a 35 percent cut in effective rents between 2001 and the end of 2004, before rates began eking up in 2005. Still, the year-over-year increase as of spring 2005 was less than 1 percent. Average rents now stand at $1,341 per month, or $1.624 per square foot.

With Bay area apartment occupancy tightening, the region should be positioned to experience strong rent growth once again, assuming that single-family home values remain astronomical. During the same time as apartment rents faltered by 35 percent, the median price of a single-family home shot up 42 percent and now stands at $656,700, according to the National Association of Realtors. This makes the premium to buy versus rent housing in San Francisco one of the steepest in the country.

The outlook for rent achievement appears promising, too. Though it’s unreasonable to expect rates to return to their early-2001 high anytime soon, the return of rent growth well above the national norm certainly should be within grasp. Even if single-family home prices dipped, there’s still ample room for rents to increase. The Bay area, then, should join places like the Florida markets, Southern California, Austin, Seattle, and Las Vegas among the country’s rental revenue growth leaders in the immediate future.

After only two hours of deliberation yesterday, the jury unanimously vindicated a buyer’s agent accused by his clients of failing to disclose that two other homes in the neighborhood sold for less than what they paid. As a trial court case, this decision in Ummel v. Little is binding on the parties to the case, but has no binding authority for other cases. Moreover, the buyers may file an appeal.

This case involved a couple who bought a home in a coastal Carlsbad community in 2005 for $1.2 million. They regretted their purchase when they discovered that two other homes sold for about $150,000 less than theirs. They sued their real estate agent for negligent misrepresentation and breach of fiduciary duty. Their lawsuit grabbed national attention, given the recent downturn in the real estate market.

At the trial, the agent’s attorney argued that there were valid reasons these two other properties sold for less. One home, for example, had a lap pool which was unappealing to many buyers, and the sellers wanted to rent back the home for two years.

Bottom line. Do your own property investigation and due dilligence. No two properties are alike even the same model on the same street. Condition, lot location, traffic pattern, color, tenants, lease terms, debt, etc. Many many things effect value, caveat emptor!

Toyed with the idea of buying commercial and or investment real estate here in Napa? The current market has put buyers in the driver’s seat. According to the National Association of Realtors vacation home sales declined 31% in 2007 and investment sales declined 18% in 2007. These two categories of buyers represent 48% of all transactions.

Several factors create a buying opportunity in Napa right now:

1. Interest rates are extremely low on investment and commercial mortgages
2. Napa has one of the lowest unemployment rates in California at 4.7% this helps keep real estate investments leased up
3. There were only 38 transactions in Napa for February buyers are driving the market
4. The median Napa home price has declined $97,000
5. The apartment vacancy rate in Napa is a stunningly low 2.6%
6. Some properties can implement a value added strategy that will create positive cash flow
7. Ranked by Fortune magazine as one of the best places to live and launch a business http://money.cnn.com/magazines/fsb/bestplaces/2008/top100/index.html
8. Hotel construction is booming http://www.napavalleyregister.com/articles/2008/01/23/news/local/doc47969fdd26057309339053.txt

Intero Commercial Real Estate has some interesting real estate investment opportunities right now. Some of our most interesting offerings are “off market”. Contact me anytime at Mike@MikeBolen.com or 707-254-9999 for a list of available properties both on and off the open market.

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