SELLERS BEWARE ** Americans brace for next foreclosure wave..

UPDATE:  6-14-2012 ... this update coincides with the story below..

U.S. foreclosures up for 1st time in 27 months

Please understand that this post is not intended to alarm you, on the contrary, it is designed to arm you with information that could help you make the best decision for your real estate investments in this volatile market.  I am one of the most "Positive" people in the Franklin NC real estate market that you could find! I've just come off the best year I've ever had in 2011.. 74 sales, and only 2 of them were foreclosures or short sales..  I believe in Franklin NC & Otto NC, I believe in YOU, and I believe we can sustain our local market even in the face of national real estate dismay. But I also believe that it is my duty to keep you focused on what could happen, and what is happening now as regards to our market here in Franklin.

Most everyone knows that real estate is to be viewed on a local level.  This is true, but there are some national forces which play into the local levels of every town and city in America. In the last few years, I have seen home values plummet all over the country with some declines as much as 66%.  Thankfully, Franklin NC and Otto NC have not been hit nearly as hard as the rest of the country, we have been hit. Home values here in Franklin NC have been declining since late 2008 and have continued to recede reflecting the national trend caused by the mortgage and banking crisis. Recently though, I have observed that the amount of foreclosures and short sales appearing in our local Franklin NC MLS has slowed to a trickle. 

 To most of us in the business, this is good news, however, after reading the following articles, one may arrive at the conclusion that this good news is going to be short lived.  This "slowing to a trickle in mortgage foreclosures" was caused not by a resolve of the mortgage crisis, but by the exact opposite. The emergence of another huge problem with Lender compliance and illegal foreclosure practices known as "robo-signing". By PALLAVI GOGOI 
 

The problem of shoddy mortgage paperwork, which comprises several shortcuts known collectively as "robo-signing," led the nation's largest banks, including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., and other lenders to temporarily halt foreclosures nationwide in the fall of 2010.  This temporary halt in foreclosure executions is what has created the illusion that the crisis is coming to an end.  (read more about "robo-signing" here)

Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

 Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio said: "Last year was an anomaly, and not in a good way,"  In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement. Read the full article here by Nick Carey  (Reuters)

They key here is to understand that yes, foreclosures have temporarily halted in many cases, but this is only until the banks settle their legal issues with the government. In the meantime, they continue to process the foreclosures, but are not executing them until their legal issues are settled. 

Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing that the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur. 

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold -- 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Housing experts say localized warning signs of a new wave of foreclosures are likely to be replicated across much of the United States  Read the full article here by Nick Carey

So in the nutshell, what does this mean to you as a "Seller" in Franklin NC? 

1. As a Seller you must realize that pricing will continue to fall because of the wave of new foreclosures, which when they sell, their stats will be included in all  comparables.  This will drag down pricing and effect appraisals drastically. I have seen many "good deals" go South because lender appraisals are coming in LOWER than the sales price.  This is all a result of foreclosure and short sale stats being factored in the appraisal "comp" inventory.  Do I think this is fair? NO! But it is what it is..

2. As a Seller you must price your home for the market at hand if you truely want to get "SOLD".  This market is what is called a "Buyer's Market", it  simply means that there is MORE housing inventory available than there are Buyers to purchase them. And with all this inventory available mixed in with foreclosures and short sales, you as a Seller must adjust your price in order to compete for these willing and able Buyers who are searching for the best homes at the lowest prices. Keep in mind that this next wave of foreclosures is going to put further downward pressure on housing prices for another 2-3 years.

3. As a Seller in today's market YOU HAVE A WINDOW OF OPPORTUNITY. It is my opinion that because this is an election year, that this new wave of foreclosures will be somewhat held at bay until after the election. I don't believe WHO WINS will have any effect on whether or not THE WAVE WILL COME, it will come for sure. The question is, will you BE SOLD before this mess arrives?  I would encourage you as a Seller,  to obtain a "Real Market Value Appraisal" of your home to substantiate your price in the marketplace.  Pricing your home below this appraisal will give you some comfort in knowing that when an offer comes you'll have a good idea of whether or not it can come to fruition by the lender's appraisal. And also, it will help you to show the potential Buyer that you are IN THE MARKET as far as your pricing goes and downward price negotiations will be held to a minimum.  Sure, as your agent I can come up with competitive listings that can be used as a market indicator of what your price should be, but I am not an licensed appraiser and the appraiser's report is quite impressive and influencial when shown to the potential Buyer.

I hope this information has helped you to understand your place in the local Franklin NC Real Estate Market.  I can tell you that business is brisk, we have a lot of Buyers arriving NOW, and they are not waiting till the Summer season to come and purchase a new or second home here in Franklin & Otto..  Amazingly low interest rates and an abundance of home inventory are driving sales here in Franklin.  I get a sense for how the market traffic appears in Franklin NC when I check the "stats" on my website, www.baldheadtherealtor.com .  My site is now tracking over 5000 visits a day which translates to over 150,000 visits monthly! When I see this traffic on my site, I can see a direct correlation to the local automotive traffic in town with OUT OF STATE PLATES!  LET'S GET YOUR HOME SOLD NOW!!

Bald Head

Home Affordable Foreclosure Alternatives (HAFA) Program:
If you can't afford your mortgage payment and it's time for you to transition to more affordable housing, the Home Affordable Foreclosure Alternatives (HAFA) program is designed for you.  GO HERE FOR MORE INFORMATION

Macon County NC Real Estate with Specialty in Franklin & Otto
"Offering Solutions to My Clients"
Your gateway to Paradise in the Smokey Mountains of Franklin, NC. John Becker / Bald Head, provides a superior level of informed, professional real estate service to Buyers and Sellers. You can obtain any information you require in order to make an informed purchase regarding Franklin NC Homes for Sale and Otto NC Properties for Sale with John Becker at Bald Head Realty.  Call 828-506-3719