Barry Noble's Blog

©2007BarryNoble

Was I wrong? Am I wrong? I don’t think so. What do you think?

I've been told I was wrong, over the past 2 years:

· Told I was wrong when I warned of the impending credit crunch and foreclosures rising through the roof because of the strange loans being offered to unqualified borrowers by lenders with great imaginations;

· Told I was wrong, to speak of my negative predictions;

· Told I was wrong to warn people about the seemingly unbelievable ARMs (Adjustable Rate Mortgages) with teaser first 1 to 3 years fixed payments;

· Told I was wrong, to discuss and try to explain "normal" Residential Real Estate Market Value Cycles and to point out we were soon to (then) be reaching the high cycle, and the down trend was imminent.

Not even going back to earlier cycles and the Savings And Loan debacles..........but just to 1989/1990 - buyers, investors and even real estate agents and brokers thought they were in a never ending euphoric rise in residential property values, and were utterly devastated when the Market rolled into a long deep decline well into the 1990s. Yes, there were higher foreclosure rates, but not like it is now. Many investors got caught on the top of the roller coaster - and were forced into a vice - lose their properties or hold on to them, rent them out and wait out the dip. Those I knew and offered advice to, and who would actually listen to me then - survived, and held out through the "normal" cycle drop, stabilization and eventual (and fully-predicted) upswing again. Some sold off quickly and ran. Others, took some advice, and held out a little longer and sold at wonderful profits, about two thirds of the way up the rising cycle.

Now, my friends, (or would I be wrong to call you that?), it's that time again. I may again be told "You're wrong, Barry. You’re wrong to be negative. (Negative? is it negative to tell the truth?) You’re wrong to continue to predict the Market Cycle. Wrong to try to help buyers and sellers and agents who may not have experienced the previous cycles or just don’t remember them.

As I can be quoted, by associates and friends as having said, almost two years ago, the Market is going to head into a sharp decline in 2007 and it will last at least through 2008 and perhaps well into 2009. (The National Association of Realtors has apparently just come to this conclusion, this week.) There will be a stabilization period in the Market Cycle and then, barring unforeseen economic problems, we should roll into an upswing at the end of 2009 or early 2010. Like the clock, the East coast usually turns up or down earlier than the West coast. Major Eastern metropolitan areas’ markets are a precursor for the rest of the country – and in California, one can usually watch the cycle change spread from San Francisco and Sacramento down to Los Angeles and San Diego, then it changes last in the inland Riverside and San Bernardino counties. I used to work in my favorite greater Los Angeles to Malibu region, but now claim a little piece of Palm Springs paradise, and the desert resorts of the Coachella Valley as my home and working environs. All this, for my area, can be changed if there are major unforeseen economic problems, natural or man made disasters – but the man made disaster of the sub-prime and related foreclosures is only the tip of that iceberg. The surviving lending institutions can bite their respective bullets and rescue those who have a chance to survive their high priced mortgages, but those who were never in the position to pay for a home way out of their earnings capability will, unfortunately, lose out in this sad situation.

If you need to sell and move on for job transfer, job improvement, retirement, family need and really need to sell you home now. I have some advice for you that you may not like, but it may really help you out. If you’ve bought a new or resale home within the past one to four years and your ARM teaser fixed rate is coming to an end, but you may be able to hang in there and hold on to your home if you can work something out. I have some advice for you too. If you’ve bought a home in a new tract and recently closed, only to find the builder is selling off the later or last phases at great reductions, in a “fire sale” mode to get out from under the final inventory and you are facing a reduced value, even below your mortgage owed. There is some good advice for you too. If this is not affecting you, but you have friends or relatives that might be in some of these situations, they need advice now, not a few months down the road. If you’re an investor and have recently bought a fixer residential property or properties, you may find my advice very helpful, even profitable.

You can sit back and watch it all fall away – or get proactive and do something about it. A few cannot be helped, but the majority of good, honest people out there and possibly reading this, who find themselves in a really sticky situation, can be helped, and there are other people out there to do just that.

I’m a Real estate Appraiser and Broker, here in Southern California – and love to appraise properties and broker consult on special properties. I will answer any questions or offer my help or, if I personally can’t help, will refer you to someone who should be able to help – if you contact me early enough to make “help” possible. I am a common sense, ordinary chap, who believes honesty is not old fashioned.

©2007 Barry Noble (all rights reserved) 

State of California Licensed Appraiser and Broker

barry@PalmSpringsCA.net (760) 992-9523

Home Truths - if you have an adjustable Rate loan on the home you purchased in the past two to four years - but are still paying the teaser lower rate - it's about to change. Get into a fixed rate before it is too late.

Home Truths: If you bought a residential investment property in the past 6 months and have been fixing it up to resell in the next couple of months - think twice. It would be better to rent it out for 12 to 24 months - and wait for the next Market stabilization and rise.

Home Truths: If you believe that the British have an ideal health plan that helps everyone - think again. They have hospitals ripe with MRSA infections from filthy habits and unwashed hands, they ignore older people and have little or no services available to any over 65 unless they can pay high private fees.  Before you go into hospital here - ask about the hospital's MRSA history and plans to counter the spread of MRSA in US hospitals.

Home Truths: If you bought into a mid priced residential tract within the past 8 months, anticipate the later or final phases may either not be built or will be built out and sold at notably less than you paid for the same model. Don't pancic when your value is less than your mortgage owed. Hang in there, wait out the (normal) down cycle - and be prepared to sell it no earlier than 2 to 3 years from now - at the value you purchased it or slightly higher. It's called the normal Real Estate Market Cycle.  It has just been made more difficult and more severe by sub-prime lending debacles.  

Contact me for Real Estate Appraiser advice and Broker consulting. Common sense, truth and good advice.

Barry Noble

barry@PalmSpringsFinest.com