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As printed in the OC Register / Saddleback Valley NewsWritten by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo
October 18, 2010
Foreclosures in Calif. Are Non-Judicial
Q. Jim I understand that several banks in many states are suspending foreclosures How will that affect our Real Estate market?
- Jerry from Lake ForestA. Your information is correct Jerry. There have been articles indicating that Banks have suspended foreclosures in 23 states. The Reason is that there have been major problems with the signing of declarations in connection with JUDICIAL FORCLOSURES. In many states, these are foreclosures that proceed through the court system. Bank of America further expanded its suspension of foreclosures to all 50 states. The ood News is that in Calif. Most of the states foreclosures are NOT conducted through the court system. They are conducted through non-judicial foreclosure or trustee sales. Trustee sales do not involve a court process. Even though California foreclosures are not conducted through the court system, lenders in California must still comply with other legally required procedures for non-judicial foreclosures. Lenders are taking action to ensure homeowners are not improperly foreclosed on and are following state law.
Q. Considering all the problems with the Real Estate market recovery, do you think that home prices here in South Orange County will ever rise above the inflation level?
- Bill from Mission Viejo.A. Certainly many-people I talk with lately have the same question and are struggling with the same decision and delaying making offers on some very good deals available now. History reveals that the Real Estate market always increase above the inflation, not only in the USA, but all over the world. This is mainly due to the population growth and scarcity of land and resources. Buildable Land is shrinking in most of the desirable areas. Well some say “the deserts have plenty of land, however, water continues to be an issue, it is expensive and is still prohibitive.
One of the current economic indicators shows that the Fed. who regulates the financial market with a deficit of trillions of dollars continue the process, by printing new dollars, the value of money keep shrinking, and so Bill, the dollars in your bank account and mine continue to drastically declining in purchasing power.
Consider for a moment what you could by with $50,000 in our city Mission Viejo about 20 years ago, v.s. what you can buy today and possibly 20 years from now.
So, keeping large amounts of cash in the bank, certainly may not be the best use earning one to two percent on you money. Don’t forget those hard earned dollars are also taxable.income. So, if the real inflation number becomes more than 6%, you have hidden losses and you are losing 4 to 5 percent on your money.
Annual appreciation of 5% is ok over a 10 years span.
Considering -The major economic problems that took place in 2003 to 2005 which brought the nation to near bankruptcy. It may take 5 to 10 years before we can cover the losses. So, Yes, we believe that home prices will go up above the inflation but not in the short term.
-It depends on a lot of factors, mostly political- Buying a property now should not be a short term decision.
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Jim
Jim E. Flynn
CalBRE license #: 01215480
Phone: (949) 463-0739