Experts In Calif., Va., Weigh In On Real Estate
ROBERT SIEGEL, host:
Now, how the housing market is doing in two parts of the country on either coast. First, to the East Bay area outside San Francisco Contra Costa County, California. Gus Kramer is the county assessor there and he says his county is fairing a bit better than the national average, but only a bit.
Mr. GUS KRAMER (County Assessor, Contra Costa County): You know, every county is different. We're not quite that bad, but we are seeing a beginning of a second dip in property value here in the San Francisco Bay Area, especially the more urban counties.
SIEGEL: When you say a second dip in values, what's happening? Are more and more houses coming on the market from bank sales and foreclosures?
Mr. KRAMER: It's a combination of many things. It's a combination of more foreclosures. It's a combination of people continuing to figure out that it's cheaper to walk away from the homes when they owe twice as much than it's worth.
And then we also have the banks paralleling foreclosures on top of modifications. And people they're in the middle of getting a modification and then they get foreclosed on two, three months later anyway. It's just brutal.
SIEGEL: I want you to explain. When you say the bank is doing a modification on a mortgage and then foreclosing just the same, when you say modification, what does that mean?
Mr. KRAMER: Well, that's when somebody comes (unintelligible) the federal program and some of the banks have embraced it and said, well, we'll modify your loan to make your principal less or your interest less so you can afford the payment now. And while you're going through that process, the banks usually take anywhere from six months to 16 months to do it. The banks parallel, in other words, they're doing all the formal statutory things they have to do to foreclose on you. And they kind of set you up to fail. And if you can't make the payment or you get late with a payment, they foreclose on you right away.
SIEGEL: So you've had foreclosures of people who, as far as they knew, were negotiating their way to keep themselves in the house.
Mr. KRAMER: I've had people foreclosed on who had finished negotiating and had signed all the paperwork and were foreclosed three months later, even though they made all their payments.
SIEGEL: Mr. Kramer, thanks for describing the situation to us there.
Mr. KRAMER: You're welcome.
SIEGEL: Gus Kramer, county assessor in Contra Costa County, California. And now, to the east and to Manassas, Virginia, a town about 35 miles outside of Washington, D.C. And Sue Jacobs, who is a real estate broker there. Welcome back to the program.
Ms. SUE JACOBS: Thanks for having me, I'm glad to be back.
SIEGEL: In the spring of 2009, I went out with you. At that time in Manassas, homes that had sold for 200, $250,000 a couple of years earlier townhouses were going for $60,000, $50,000, is that still the picture there?
Ms. JACOBS: That is not the picture. There's houses that were selling for, actually, 45, 50,000, are probably selling for the mid to high 70s right now. And we're seeing very little inventory.
SIEGEL: So, when we hear of a national figure of, you know, a 25 percent decline year to year, that's not the picture in Manassas. You've had a little bounce back there.
Ms. JACOBS: Yes. I would say that on average, we have probably in the last 12 months seen approximately a 10 percent increase in prices.
SIEGEL: Of course those disastrous national numbers that came out today were for the month of July. Was July a terrible month after the expiration of the federal tax credit?
Ms. JACOBS: Actually, not. I mean, we continue to see momentum and most of the buyers that were dealing with right now. They're saying, you know, gosh, the prices are still low, but the interest rates are so low that we want to just take advantage of buying a house now, even though we don't have the tax credit, because if you look at it in the long haul, you're really actually saving more money with the lower rate.
SIEGEL: So, when I was with you, I think it was actually in February of 2009, at that time, when we thought we saw the bottom, we had just about seen the bottom?
Ms. JACOBS: I think we were at the bottom about that time. We absolutely were. We started to rebound shortly thereafter.
SIEGEL: Well, Sue Jacobs of Assist to Sell, Jacobs' team buyers. Thanks for talking with us.
Ms. JACOBS: I appreciate you calling. Anytime.
SIEGEL: Sue Jacobs spoke to use from Manassas, Virginia.
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