Tuesday, March 22, 2011

Homes with unpermitted upgrades hit with property tax bills

Homes with unpermitted upgrades hit with property tax bills

BY COURTENAY EDELHART, Californian staff writer cedelhart@bakersfield.com Monday, Mar 21 2011 05:42 PM

If you have an unpermitted addition or significant improvement to your home, take heed. The county may be coming for you.

Since the real estate bubble burst, the Kern County Assessor's Office has been periodically reviewing home values, in most cases resulting in the reduction of property taxes. Pretty much anyone who bought a house at the top of the market in 2006 received a property tax decrease.
But that ongoing review has also turned up a few homeowners who were paying too little because the county was unaware of improvements to properties that increased their value.
Kern County Assessor Jim Fitch estimated about 50 such homes have been uncovered in the last couple of years, and owners of those homes are receiving revised tax bills.
Gail Oblinger, 73, is one of them. She bought her 1950s-era house in 1988. In the 1960s, a previous owner added on a bedroom and bathroom that increased its value, but the county only learned of the improvement recently. Oblinger had already paid her 2010 taxes, but was billed another $476, reflecting a difference of $40,477 in assessed value.

Oblinger immediately called the county to complain, and was grateful officials in the Assessor's office agreed to work with her to lower her extra 2010 payment. But she still thinks the extra bill isn't fair.

"What good does it do to get reduced valuation because home prices in the area have gone down if they can just turn around and charge you again for something that wasn't even your fault?" she said.

The extra room and bathroom were already there when Oblinger bought the house, she said, and she's had a legal permit for any improvements she's done.

"They're not just doing this to me. They're doing it to others, too. My neighbor is having the same issue," Oblinger said. "This is an older neighborhood, mostly retirees. We can't afford this."
Fitch said he's sympathetic, but the county simply can't allow homeowners to continue paying a rate that doesn't reflect the true value of their property.

"The fact of the matter is if they were to sell that house, they would get more for it because of the additions," he said. "We can't just ignore this."

In the past, the county valued property based on the acquisition price or new construction, but the extraordinary real estate market made additional reviews necessary, Fitch said.
As part of that review, the county is using computers to compare characteristics of structures to its own records, and note any discrepancies. Appraisal staff review all the automated work and make adjustments as needed, Fitch said.

If you don't agree with your home's assessed value, you can appeal it. A review board will take into consideration comparable sales of similar sized homes in making a determination. For more information, call the Assessor's Office at 868-3485.

Friday, October 15, 2010

California real estate market: the good and the bad

California real estate market: the good and the bad

The state of the California housing market is a mixed bag - no surprise here - and recently released data is continuing to offer conflicting views.

One article, found on CNNMoney.com, is saying California is displaying signs of stability while the rest of the nation is still mired in unknown territory, most of it negative. Pointing to price data, the article notes that prices all across the golden state have been on the rise for the last nine months. For Bay Area homeowners, the news is even more welcoming to hear. San Francisco topped the list in terms of price gains compared to all other U.S. metro areas.
Home prices are rising in virtually every corner of the state. They've climbed for nine consecutive months, and in July posted a 10.4% gain year-over-year. That puts the state's median price at $315,000 -- nearly twice the national median of $183,000...San Francisco posted the biggest gain of any U.S. metro over the past year, rising 14.3%. The median price there is now more than $607,000.Read more: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=72508#ixzz12SDF5GP3

The rise in prices was attributed to the falling inventory in distressed properties, increase in the number of short sales and an economy that is on the mend.

Most of the subprime-related distressed properties have been flushed from the system. And when a foreclosure does hit the market, it's snapped up. The median days it took to sell a home in July was just 44 --lightening fast.

"It's the dearth of supply for distressed properties that has put pressure on home prices," said Appleton-Young, [California Association of Realtors' chief economist]. "More than half the homes on the market last year drew multiple offers."

So, while prices have gone up with our very own San Francisco metro area leading the charge, there's still bad news. As reported on SFGate, the volume of sales in Northern California dropped by 11% in the month of August. Same time last year, 7500 homes exchanged hands compared to 6700 homes last month - the lowest number of sales for the month of August, which is traditionally a popular summer homebuying time, in 18 years.

So how should one digest the mixed data and messages? Does the rise in the median price mean that the bottom has come and gone? Or is the low number of sales just a foreshadowing of more gloom to come to the golden state?Read more: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=72508#ixzz12SDORu9s

Posted By: Jenny Pisillo (Email) September 17 2010 at 10:10 AM
Listed Under: Bay Area, Real estate data, Sales, San Francisco Read more: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=72508#ixzz12SDTJpQ7

Mother, daughter plead no contest to felonies in real estate scam

Mother, daughter plead no contest to felonies in real estate scam

BY STEVE E. SWENSON, Californian staff writer sswenson@bakersfield.com Friday, Sep 24 2010 05:08 PM Last Updated Friday, Sep 24 2010 05:08 PM

A mother and daughter will go to prison for their part in a real estate scam that cheated dozens of people out of 24 homes, a prosecutor said Friday.

Alice Kantin, also known as Meyer, 69, and her 38-year-old daughter, Dawn Kantin, pleaded no contest Friday to felony charges that will put the mother in prison for two years and the daughter in prison for five years, Deputy District Attorney Gordon Isen said.

The two will be sentenced Oct. 25, but in the plea bargain approved Friday, the prison terms were agreed upon by the attorneys involved, he said.

The Kantins will also be ordered to pay restitution in an amount to be determined, but it is unknown if they have any money to pay the victims, Isen said. The loss is a few million dollars, he said.

The mother and daughter have been in jail in lieu of posting $2 million bail each since their May arrests. Their pleas came as the case was set for a pre-preliminary hearing.
Both pleaded no contest to one count of conspiracy to defraud clients and the daughter pleaded no contest to falsely acting as a notary.

The daughter's application to become a notary was denied by the Secretary of State's office due to a "substantial and material misstatement or omission in the application," according to a prosecution declaration in the case.

Each were charged with 44 felonies of conspiracy, embezzlement, theft, notary fraud and forgery stemming from transactions between 2007 and 2009.

Both women reportedly agreed to take over payments for distressed homeowners by using rents from people who had an option to buy the homes, investigation reports say.
But in most cases, the homes went into foreclosure during a time the senior Kantin poured at least $290,000 into her bank account, the reports say.

Both the homeowners and renters lost everything, the reports say.

Several victims, who could not be reached for comment Friday, have said in prior interviews with news reporters that they were so upset they still cry at the mention of the Kantin name.
Alice Kantin operated from a firm called Desert Air Real Estate Investments Inc. in Bakersfield, according to court reports. The Secretary of State's office has no record of the corporation.
Attempts to reach the mother's attorney, Brian McNamara, and the daughter's attorney, Leticia Perez, were unsuccessful Friday.

State disciplines appraiser with Kern ties

State disciplines appraiser with Kern ties

BY COURTENAY EDELHART, Californian staff writer cedelhart@bakersfield.com Wednesday, Oct 06 2010 05:07 PM Last Updated Thursday, Oct 07 2010 10:05 AM

The state has disciplined a Ventura County real estate appraiser with ties to Bakersfield, saying she filed multiple "misleading and inaccurate" appraisal reports.
Janet Vasquez of VIP Appraisals in Santa Paula previously worked for Dwight Reynolds of Bakersfield, who surrendered his license last year after the state took issue with a report Vasquez prepared that he signed off on.

The California Office of Real Estate Appraisers, which licenses and regulates appraisers in the state, issued a stipulated settlement and disciplinary order on Sept. 29 that suspends Vasquez's license for 60 days and places her on probation for three years, during which her work will be subject to review by the state.

She also was ordered to pay $2,500 to reimburse the state for its investigation and prosecution costs, and must undergo at least 45 hours of additional training.

Vasquez was found to have violated the Uniform Standards of Professional Appraisal Practice, a set of mandatory rules that govern the appraisal industry.

Violations included filing "multiple misleading and inaccurate appraisal reports; failure to analyze the prior sale of the subject properties, failure to analyze the listing history of the subject property, failure to accurately report and analyze the pertinent physical characteristics of the comparable sales; failure to analyze more relevant comparable sales; significant overvaluation" and "failing to disclose that significant portions of the appraisal report were taken from an appraisal prepared by another appraiser."

Vasquez did not return a telephone call seeking comment.

The complaint against Reynolds said that in December 2007, he co-signed as supervising appraiser for a report on a 22,476-square-foot, three-story, 49-room Bakersfield hotel that was riddled with "errors and omissions" in violation of the Uniform Standards of Professional Appraisal Practice.

Reynolds denied any wrongdoing at the time, saying he had planned to retire anyway and allowing his license to expire was cheaper than fighting the charges. He hinted that another appraiser was responsible for the problems with the report. Those problems included conflicting information on the cost of renovating the hotel and its revenue potential, according to state documents.

Vasquez was the report's co-signer.

The state also said problems were found with Vasquez's appraisal of a single-family home at 12713 Crown Crest Drive in Bakersfield and a property at 818 E. 88th St. in Los Angeles. Vasquez described the Los Angeles property as a single-family residence with a two-car garage, when in fact, it was two attached rental units with a four-car carport.

She valued the Bakersfield house at $925,000, but a review appraiser's value of the same home as of the same date was $750,000.

The Bakersfield house has ties to Crisp, Cole and Associates, a now defunct real estate company whose principals, David Crisp and Carl Cole, are under federal investigation for alleged mortgage fraud.

Vasquez appraised the house for Lime Financial Services Ltd., in support of a mortgage loan to Staci Martinez.

Martinez bought the house in May 2006 with a $925,000 loan that later defaulted, sending the house to foreclosure. In March 2006, just two months prior to Martinez' purchase, the home had been sold for $774,950 to Yennhi Nguyen.

Nguyen is related to Robinson Nguyen, a former agent with Crisp and Cole.

Wednesday, November 4, 2009

US Housing Crash Continues

US Housing Crash Continues
It's Still A Terrible Time To Buy
Falling House Prices Are The Solution, Not The Problem

By Patrick Killelea, last updated Thu Oct 15, 2009

House prices will keep falling in most places because those prices are still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's yearly income with 20% downpayment. Landlords say a safe price is a maximum of 15 times the house's yearly rent. Yet on the coasts, both those safety rules are still being violated. Buyers are still borrowing 6 times their income and putting only 3% down, and sellers are still asking 30 times annual rent, even after recent price declines. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will keep falling for a long time. Anyone who bought a "bargain" this time last year is already sitting on a very painful loss.

It's still much cheaper to rent than to own the same size and quality house, in the same school district. On the coasts, yearly rents are less than 3% of purchase price and mortgage rates are 6%, so it costs twice as much to borrow the money than it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 9% of purchase price, which is three times the cost of renting. Buying a house is still a very bad deal for the buyer on the coasts, but it does make sense to buy in the Midwest and some other places where prices have fallen into line with salaries and rents. Check whether you should rent or buy in your own area with this NY Times calculator.

The bottom will be here when buying a house to rent out clearly makes money. Then you'll know it's safe to buy for yourself because then rent can cover the mortgage and all expenses if necessary, eliminating most of the risk. For a rough indication of the wisdom of buying, divide annual rent by the purchase price for the house: 3% = do not buy
6% = borderline
9% = ok to buy

So for example, it's borderline to pay $200,000 for a house that would cost you $1,000 per month to rent. That's $12,000 per year in rent. If you buy it with a 6% mortgage, that's $12,000 per year in interest instead, so it works out about the same. Owners can pay interest with pre-tax money, but that benefit gets wiped out by maintenance costs and property tax, equalizing things. It is foolish to pay $400,000 for that same house, because renting it would cost you only half as much per year, and renters are completely safe from falling house prices.
It's a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. Prices fall as interest rates rise, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. To buy at a time of very low interest rates is a mistake.

It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

Your property taxes will be lower with a low purchase price.

A low price gives you the ability to pay it all off instead of being a debt-slave forever.
Paying a high price now may trap you "under water", meaning you'll have a mortgage larger than the value of the house. Then you will not be able to refinance, and won't be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.
The US economy will not recover until interest rates are allowed to rise. To favor debtors and banks, the Federal Reserve forces artificially low interest rates on America, destroying the free market for money itself. The Fed prints up bales of money and lends it to banks at 0%, so the banks feel no need to pay you any interest for your money. While this does temporarily let debtors and banks evade the consequences of their own bad decisions, it also eliminates all investment in businesses, crippling the economy and leading to mass unemployment.
Investing in business is always risky, and it's especially risky in uncertain times like now. People with money will not invest until they feel interest rates are high enough to compensate them for the risk. Investors and banks refuse to risk their money at the Fed's artificially low rates, because at those rates, they will lose money. Would you loan money to a business at 4%, when the odds of losing your money are 8%?

Buyers borrowed too much money and cannot pay it back. Now there are mass foreclosures, and the Federal Reserve is buying up bad mortgages to let banks evade the consequences of their own foolish lending. Congress also authorized vast amounts of bailout cash from taxpayers, to be loaned to banks that can't even remember how to write a safe mortgage. These purchases and loans reward banks for making very bad gambles on lending.

The Federal Reserve's manipulation of interest rates punishes savers (did you check CD rates lately?) and keeps debtors in the maximum amount of debt possible without default. The Federal Reserve's motto seems to be "make everyone slave away for the banks, forever". There is a recognition at the highest levels of banking/government that debt is essential for creating obedient workers. And once the obedient worker has trapped himself with debt he is reluctant to admit he's made the biggest mistake of his life. People want to believe that they're not stupid.
We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice -- a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the media will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing money to spend on luxuries.

Should taxes and artificially low interest rates and newly printed cash be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed and overpaid for a house? Should savers be forced to pay the debts of other people who cannot afford "their homes" no matter how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can to buy a bigger house, and don't pay it back, knowing that the Fed and Congress will force the real repayment obligation onto savers, onto people who are living within their means, so that you can stay in "your home" rather than in a house you can actually afford. No one ever died because they had to rent.

Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that two trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get.

A return to traditional lending standards means a return to traditional prices, which are far below current prices.

Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.

It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby's corruption of US legislators. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.

Shortage of first-time buyers. From The Herald: "We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don't produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize."

High house prices have been very unfair to new families, especially those with children. It is foolish for them to buy at current high prices, yet government leaders never talk about how lower house prices are good for pretty much everyone except bankers, instead preferring to sacrifice American families to make sure bankers have plenty of debt to earn interest on. If you own a house and ever want to upgrade, you benefit from falling prices because you'll save more on your next house than you'll lose in selling your current house. Every "affordability" program drives prices higher by pushing buyers deeper into debt. To really help Americans, Fannie Mae and Freddie Mac and the FHA should be completely eliminated, along with the mortgage-interest deduction. Canada has no mortgage-interest deduction at all, and has a more affordable and stable housing market because of that.

Government "affordability" programs just encourage debt, making prices higher, not lower. True affordability is not more debt -- true affordability is lower prices. The government's false affordability programs have created more debt than can ever be repaid. Credit rating agencies then lied about the value of this debt, ending trust in the whole system.

The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government ever talks about the obvious solution: less debt and lower house prices. That solution would harm bank profits! The real result of every "affordability" program is to keep you in debt for the rest of your life so that you remain an obedient worker. Lower house prices would liberate millions of people from decades of labor each. There is never anything in the press about the millions of people that were hurt and continue to be hurt by high house prices.

The government pretends to be interested in affordable housing, but now that housing is becoming affordable via falling prices, they want to stop it? Their actions speak louder than their words. The government will step in or stay out only if it helps corporate profits for congressional campaign donors.

Why is the failed market in health care exempt from anti-trust laws? Because the insurance cartel makes the most profit that way, and the cartel uses that money to pay lobbyists who get congressmen to vote against change.

Why is the failed market in housing propped up with taxpayer-subsidized loans? Because banks make the most profit that way, and banks use that profit to pay lobbyists who get congressmen to vote against change.

It is not government itself that is the problem, but corporate control of government, using congress to forcibly extract profits from you.

Deflation. There is fear of inflation, but it's not likely in the next few years. The actual amount of money created by the Fed lately is a trillion dollars, which sounds huge, but is small compared to the $10 trillion drop in housing "values" and another $10 trillion drop in stock market capitalization. The US government will not print extreme amounts of cash like Zimbabwe did, because significant inflation would mean that foreigners would no longer lend money to the US government unless interest rates were much higher to compensate them for inflation losses. Higher interest rates would push more people with adjustable mortgages into default, leading to more bank losses. So the Fed won't do it. The most likely scenario is like Japan: low inflation and low interest rates, with falling house prices for years to come.

Baby boomers retiring. There are 77 million Americans born between 1946-1964. One-third have zero retirement savings. The oldest are 62. The only money they have is equity in a house, so they must sell.

Huge glut of empty housing. Builders are being forced to drop prices even faster than owners. Builders have huge excess inventory that they cannot sell, and more houses are completed each day, making the housing slump worse.

Failure to re-regulate finance. The Graham, Leach, Bliley Act did away with the depression-era safety constraints placed on banks. This paved the way for record profits in the finance industry and an effective takeover of the US government by large banks, which has not yet been reversed.

The best summary explanation, from Business Week: "Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low interest rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

Sunday, May 24, 2009

New home appraisal rules: Good or bad for customers, appraisers?

New home appraisal rules: Good or bad for customers, appraisers?
BY COURTENAY EDELHART, Californian staff writer cedelhart@bakersfield.com Friday, May 22 2009 12:34 PM

A new rule intended to prevent fraudulent appraisals has many in the real estate industry fuming, and some complain it's boosting the cost of having an expert evaluate a home.
At the urging of the New York State Attorney General, as of May 1, McLean, Va.,-based Freddie Mac and Washington, D.C.,-based Fannie Mae will no longer purchase mortgages from loan originators that do not adopt the Home Valuation Code of Conduct.

That's no small thing, because together the Federal National Mortgage Association, otherwise known as Fannie Mae; and the Federal Home Loan Mortgage Corp., or Freddie Mac, own or guarantee about half of the nation's home loans, or $5 trillion in mortgages.

The new code attempts to curb inflated appraisals by refusing reports from people selected, retained or compensated by mortgage brokers and real estate agents.

It applies only to conventional loans, not to Federal Housing Administration loans.
The idea is that brokers and agents have a vested interest in higher valuations because their pay hinges on a home's sale price or the size of the loan. During the housing boom, some unscrupulous people pressured some appraisers to say homes were worth more than they were. After the housing market crashed, those inflated valuations helped fuel massive foreclosures.
So now, appraisal management companies are acting as middlemen by hiring appraisers on behalf of banks and other clients, and reviewing appraisal reports.

"The idea is to build a firewall between brokers, Realtors and other third parties," said Freddie Mac spokesman Brad German.

That would seem to be a good idea, but some in the industry say it hurts consumers because adding that extra layer boosts the appraisal fee, and instead of rolling it into the mortgage with other closing costs, it may have to be paid separately.
Freddie Mac's German says he's heard "anecdotal evidence" that appraisals are more expensive now, but hasn't seen hard data.

Either way, many appraisers are angry.
"We're working about four times as hard for about half the money," said Jeff Sorrell of Accurate Appraisal Service in Bakersfield.

That's because appraisal management companies pocket much of the fee for appraisals, which typically cost $300 to $500. In some cases, the appraiser is only getting about half that fee.
Then, too, long-time appraisers are outraged that they've spent decades cultivating clients only to have those relationships washed away with the stroke of a pen.

"We're the only industry I know of that is not allowed to have direct contact with our clients," Sorrell said.

To add insult to injury, appraisal management companies often have contracts over wide regions, so appraisers they hire could come from anywhere and work in unfamiliar areas, said Kim Ryder of Kim Ryder Appraisal in Bakersfield.

"You could have some random appraiser from L.A. County or something, and they don't know this market. Even from city to city within the county, there's huge variation," she said.
Ryder also worries that the people reviewing her reports may not be local, and more than likely aren't licensed appraisers, so they may lack expertise to know if her work is fair and accurate.
But not all appraisers are unhappy with the change.

"I think, after everything that's gone on the last two years, it's a good idea," said Matt Anzaldo of Anzaldo Real Estate Appraising. "Let's be honest; there was pressure before to say certain things, and that pressure's not there anymore."

Anzaldo said his business has actually grown since the change took effect.

"I'm getting a little bit less than I was receiving before for each appraisal, but my volume is higher," he said.

Appraisers have merely traded one type of pressure for another, Sorrell said. Appraisal management companies charge him late fees if he doesn't file reports quickly, he said, so he feels rushed.

"If you're doing an older housing tract with only four models, it's easy to crank that out," he said. "But if you're doing a 5,000-square-foot house out on the river on five acres of land, there aren't a lot of comps for that, so you have to do a lot of research to do it right, and that takes time."
Sorrell said the new system penalizes good appraisers along with bad ones.

"A few bad apples are ruining it for all of us," he said.

Friday, February 20, 2009

Hope in the Housing Market: Lower Prices, Interest Rates Equal Opportunity for Buyers

Hope in the Housing Market: Lower Prices, Interest Rates Equal Opportunity for Buyers

By Jenny Shearer, The Bakersfield Californian

Jan. 31--Guadalupe and Ariana Sanchez represent hope in the housing market.
The 28-year-old couple with four children just bought their first home.

"We got it pretty cheap. Right now is the best time to buy," said Guadalupe Sanchez, a carpenter.

Sanchez toured 20 homes, bid on four, and landed a deal with a three-bedroom, two-bath house on Sherman Avenue in the southwest for $160,000.

"I told my wife, we're just throwing our money away by renting. Let's try to get a house," he said.

Low home prices and low interest rates -- coupled with inventory agents say that they're quickly moving -- are positive news for Bakersfield's real estate market.

For example, Ken Carter, president of Watson Touchstone ERA, said his agents sold 241 homes in December, a 56 percent increase from the 154 transactions in December 2007.
About half of the 241 sales were foreclosures, Carter said.

Bakersfield has "a big pile of properties that we have to work through, those properties that are in some state of default," Carter said, adding the market "can't be in great health until we work through those. The good news is we're working through those at a record pace."

Homes are moving every day, and buyers have choices. Friday morning, for example, 3,636 properties in Kern County -- single-family homes, condos, mobile and manufactured -- were marketed on the Multiple Listing Service, according to the Bakersfield Association of Realtors. Of those 3,636, there were 1,402 bank-owned properties and 1,126 were short sales, in which a lender accepts offers that are less than what a home is worth.

Real estate investor Mike Pope took a hiatus from buying in 2006 but returned to it last June. He looks for homes with solid structures in neighborhoods that could benefit from revitalization.
In June, he paid about $110,000 for a home on Teresa Court, near Pacheco Road and Hughes Lane, that last sold for $235,000 in 2005.

"It had graffiti inside and outside you would not believe," Pope, 55, said of the bank-owned house that needed new doors and windows.

Here's what Pope did: He spent $23,000 on materials for improvements and did most of the work himself. He has a tenant who wants to buy the house for about $180,000.
"My biggest reward on the one on Teresa (Court) is getting to know the neighbors. They would keep an eye on the house; I would have them over to see the progress," said Pope, who is on medical disability from a teaching job.

Those ready to buy may even be outbid on good buys as home prices approach pre-boom levels.
"What we have found in the association is that many of our membership are saying they're having a competitive bidding scenario again on some of these homes that are coming into the inventory ... that are REOs," said Nance Fillmore of Fillmore Realty and Financial Services. She's the president of the local Realtors Association.

Real estate experiences peak-trough cycles that take about eight years to 10 years to complete, said Mark Carrington, director of sales and support for First American CoreLogic, a Santa Ana-based real estate data firm.

It typically takes three years to four years for home values to decline, and six to seven for them to increase.

Home values peaked in July 2006, and "'07, '08 and '09 is the drop," Carrington said.
"So far right now, we're acting just like any other cycle has happened. It's a deeper, steeper drop than we've experienced in a long time, (but) the timeframe is pretty average so far."
Prices are down now, a benefit for buyers.

"That is of course an effect of the foreclosed properties that are pervasive in our market," Fillmore said. "If the homeowners can ride out this period of time, it will go back to a normal appreciation that we've experienced for many, many years in the past."

Certainly, some homeowners were in over their heads, or got there after a job loss or illness.
"A person loses his or her home because some type of trigger happens that is overwhelming," Carrington said.

Fillmore urges those who have trouble making payments to consult their lenders and take advantage of programs such as the federal government's Hope for Homeowners.
Last year, Warren Ash, broker at Bakersfield Realty Group, handled about 330 bank-owned properties.

"I've been told by more than one company to expect my inventory from that company to double or even triple in 2009," he said.

The industry is also watching the impact of option adjustable-rate mortgages, popular from 2003-06, which allowed borrowers to make minimum payments, paying less than both the principal and the interest that was owed. Homeowners could choose to make small, medium or large payments.

It seemed like a great idea when home values kept increasing.
"That five-year period for most of those loans is going to peak in 2010," Carrington said, adding modifications and refinancing may be available to help some folks keep their homes.
To see more of The Bakersfield Californian, or to subscribe to the newspaper, go to http://www.bakersfield.com.