The reality of the market- Is this normal?

Since June 2005 the Sacramento / Natomas real estate market has seen a downward spiral on prices as we have seen foreclosures at historical rates. While this has been an opportunity for buyers, it has been very challenging for us as homeowners. Predicating the future is harder than ever and as your Natomas Real Estate specialist I believe it is important to share with you what I am seeing.

For the past 2 1/2 years banks have liquidated toxic assets with little concern for price or the surrounding neighborhood. They were primarily concerned with how quick they could liquidate the assets to help their balance sheets. When a neighbor had financial distress there were no available options as the banks closed nearly all lines of communication. Values in many areas declined in excess of 65% of 2005 highs. I believe many banks have realized that those enormous losses were somewhat self inflicted and have started to look at other approaches. Many banks have ramped up their staff in renegotiations departments in attempts to fix a loan and keep a homeowner in their home. If you are or if you know someone struggling this is a perfect time to contact your bank and see if their loan terms can be renegotiated. Your patients may be tested, but the outcome would certainly be worth the aggravation.

The other department that banks supporting is called the short sale department. This is designed to sell a home without a foreclosure therefore being more humanitarian to an owner and saving the legal fees and mounting losses involved with a full foreclosure. I have found that the banks net a higher proceed, the property stays in superior condition and the homeowner is given an opportunity to salvage the best of a difficult situation. A typical scenario is that a homeowner's income has decreased or debt levels have increased to the point that a payment cannot be made. There are many causes such as job loss, transfer, separation, or loan more

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