Trick or Treat

With the rapid approach of Halloween in our small rural community of Manton, California, we can soon look forward to hearing "rat-tat-tat" on the front door and the delightful sound of enthusiastic young voices calling out "trick or treat."
I always buy Reese's peanut butter cups and hope there will be some leftovers. For "grown-ups" who still like to dress up for the occasion, the Saloon at Manton Corners will be having a party. As always in Manton, there's something for everyone.

The remainder of this blog is about "trick or treat" in the Manton real estate market, so read on at your own peril. Anyone who has owned property for the past three or four years has been subjected to a cruel trick: the massive decline in value of equities, particularly real estate. Many contractors are out of business, including our nephew, and the remaining ones still standing are renting out spec houses they can no longer sell. It's a familiar story just about everywhere. A shockingly large percentage of homeowners who have a loan now owe more than the house is worth. Five years ago nobody even knew the words "short sale" or "REO." Now most sales are distressed properties. Can anyone say the words: "Half Price?"

Like everything in life, there is a flip side to this story. Patient savers who were priced out of the sizzling market a few years ago (does anyone remember 20% a year equity gains?) are now able to do some bargain hunting. We have become accustomed to "half price" sales of furniture and clothing, but real estate? There is a catch, of course. It helps if you are an all-cash buyer, because the banks are sitting on their cash. It's very hard to get a loan and it's very hard for rural real estate to appraise for the loan amount. However, buyers with excellent credit and a lot of perseverance can find a real Halloween treat: fine property is available in some cases at half the price it sold for five years ago.

If you are thinking about making a purchase, here's one more thing to get your mind around: the interest rate on a conventional 30 year fixed rate mortgage is 4.19%.
NOT A TYPO. As of the week ending October 15th, the advertised rate is 4.19%. If you want to pay a point or two, it's likely you could lock in a rate under 4%. OK, I'm not saying it's free money, but it's the best rate I've ever seen. Some day that forgotten word "inflation" may return, and when it does, that current rate lock will look like a stroke of genius. I don't have a crystal ball, but it seems to me that the decline of the dollar will continue as long as Uncle Sam keeps printing money out of thin air. As far as I know the word "real" is still in "real estate." And then there's the phrase real estate agents love: "land... they're just not making it any more." Perhaps that doesn't apply to the big island of Hawaii.

One more treat to keep in mind: those unadvertised properties known as "pocket listings." This term refers to properties which are not currently for sale, but owners have told a licensed broker that they would like to sell if they could get their price. Why would a person who wants to sell decide not to advertise in the open market? There are many possible reasons. Sometimes buyers are so discouraged by the "soft" market that they give up trying because they doubt they will receive the price they want or need. Sometimes a potential seller has tax considerations which might delay a sale in the current year. Sometimes the seller has signed a long-term lease which runs with the land and could dissuade an offer from a buyer who wants to occupy the property. Sometimes there are personal reasons related to issues of health or relationships. Whatever the reason, in most cases these potential sellers will let go of their property if the offer price is sufficiently attractive.

As a practicing real estate broker in Manton, I am aware of several such pocket listings. Properties I know about range in size from one to fifteen acres. Some are bare land, some have houses which are custom-built. For obvious reasons I am not able to describe these properties in such detail that they could be easily identified. However, if you are a serious buyer who has been waiting for the right time to pick up a special Manton property at a special bargain price, perhaps this is the time to TREAT yourself. Just give me a call and describe your dream property. I just might have what you're looking for in my pocket.

Happy Halloween!

Tom Knight, Broker
Manton Realty
(530) 474-1335
DRE#01441406