How do you save thousands of $$$ in wood repair bills on the exterior of you home? How often should I paint the outside of my home? Check around your home for peeling paint, cut away any vegetation up against your dwelling and keep all structures that extend beyond a covered roofline well covered in a good coat of paint. Pressure wash regularly to keep appearances up. Many times homes do not need paint but just some clean up. Make sure you use two coats for the southern exposed areas. Quality painters will use two coats primer and a strong finish coat. This will help seal the structure against the elements.

“It’s a good idea to paint wood every five years and stucco every seven. – Tom Romaneck of Romaneck Painting

According to a New York Times article published earlier this week, politicians are tempted to let the Real Estate market crash and burn, then level out once the smoke clears. Washington sponsored Homebuyer’s Tax Credit may have only scratched the surface of what is needed to prop up a market which

 ”expired last spring, and paid first-time buyers as much as $8,000 and buyers who were moving up $6,500. The cost to taxpayers was in the neighborhood of $30 billion, much of which went to people who would have bought anyway.”

Some say that if the stimulous is pulled back, it will continue to demoralize the already demoralized and create an even deeper abyss. What say you?

“What happened to all of the foreclosures you said would be hitting the market this summer?” a good client asks me.  I am left speechless as word has been on the street for months that an ominous black cloud of bank owned properties has been looming in the shadows, waiting to rain like baseball sized hailstones on the current Real Estate inventory. 

So the question is, “Where is it?”  

According to Mark Dotzour, Chief Economist at the Real Estate Center, Texas A&M:

“There are now more than four million properties that have been foreclosed upon and banks haven’t released most of them to the market.  Will this tactic help or prolong the housing crisis?  How long do the banks plan on holding these toxic assets?  Years?”  Source: Housing Predictor

Are the banks controlling the Real Estate market?  Banks have gotten wise to the fact that by holding onto their existing inventory, that they have a vice grip on controlling prices.  Yes folks, we are now back to multiple offers!  First time buyers and investors alike are scratching and clawing to buy their piece of the American Dream.  This market is limited to entry level pricing. 

Inventory above $750K nationwide is stacked up at about 18 months.  Inventory below $500K is at about 2 months.   A colleague recently said of a property in Oakland, CA, “I kid you not…this home last week fetched over 55 offers!”

So why would banks want to control the market?  For starters, to make up for losses.  Secondly, if you had a chance to be one of the largest Real Estate holders in the U.S., what would you do?

The facts are that banks are delaying placing foreclosed properties on the market, delaying working with homeowners to modify their loans, delaying short sales and even delaying filing Notice of Defaults on delinquent borrowers…this looks great on bank’s quarterly statements and increases earning reports for investors.  Also, as stated earlier, by holding back properties, banks can control prices. 

“But what if another bubble is created due to shrinking inventory and pent up demand?” you ask…simple…banks are also controlling the lending side of things through strict underwriting guidelines and the new HVCC legislation.  If an appraiser comes in high, the underwriter kicks it back, knocks the price back down to foreclosure and shorts sale values.  In fact, I have spoken to many Real Estate agents who have cringed when the phone call comes in from the lender saying that “we need more comps.”

And to make matters worse, a Wells Fargo executive who oversees foreclosed properties for the bank, “hosted parties and spent long summer weekends in the $12 million Malibu beach house,” after the owners lost the house to the bank and were wiped out by Bernie Madoff’s Ponzi scheme, according to the Los Angeles Times.

“Residents in the gated community told the Los Angeles Times that the executive took up occupancy at the home in May.”  Residents said the bank executive’s name was traced from the community’s guards, who had issued her a homeowner’s parking pass.

“Who knows?  The Shadow Knows…”