OK back to and more on the Current Mortgage Crisis

A lot of this "local" referenced commentary and examples may be just as pertinent in almost any area. Just one opinion to consider.

If you purchased a residence anywhere in the Coachella Valley, Palm Springs to Thermal within the past 2 years, it has most probably dropped significantly in value. The Residential Real Estate Market typically evolves in an up and down cycle of values, and we reached the high point of the current Cycle in the second quarter of 2007 and now are heading down, fueled also by the debacle of teaser mortgage rates followed by the frightening, rising adjustable rates and the resultant plethora of Foreclosures.

If you purchased your home using a reasonable fixed rate mortgage, everything is fine. The good thing about Residential Real Estate Market Cycles is the fact they have so far ALWAYS turned back up, and they typically ALWAYS rise to higher values than the former upswing. You just have to sit it out. For the next rise, then sell when it is half to three quarters of the way up the Rise. I help clients understand the Market Cycles and know when to buy or sell, and have been 18 years in this Market area.

If you bought your house with a fixed, short term, Teaser Rate, and have since refinanced to a fixed rate. You are also OK.

If you are still in the Teaser Rate period and haven't yet refinanced, and are hoping the Market will turn around and start back up, say, this Summer - you are in a dream world and should get off the proverbial tomorrow, and contact your lender or another reliable lender, to refinance to a fixed rate.

The little that has been done to try to "fix" the problems in the residential real estate market is too little, too late and insignificant in the massive mess that has been created in the mortgage industry.

To get back to the loss in value on most houses purchased within the last 2 to 3 years. As an Appraiser, may I recommend you contact an appraiser to provide a professional opinion of the estimated Current Market Value of the property? Then, you may petition Riverside County to reduce the assessed value of your property, for tax purposes. It is typically around the amount you last paid for the property, If you paid in late 2006, say, $495,000 and it now appraises at $380,000 that may be a significant cut in property taxes. In some areas that value may have dropped as low as $200,000. Wow! Then the tax assessment adjustment would really help you save money. The sooner you file for an adjustment, the better, as it is not retroactive. You may obtain the form from the County, on line, and file a Petition to reduce the Assess Value for Tax Purposes, with appropriate proof of the reduction. Using an Appraiser, you can be assured of comparable more recent sales that are the closest in comparison to your property, allowing for all available points of assessed value depreciation. If the decline in property values continues, in a year, you may wish to again petition for a lowering of the assessed value. It is predicted residential values may continue declining well into 2009 and perhaps longer. The number of foreclosures is rising each month and there are hundreds of thousands of properties facing potential foreclosure over the next 18 months. If I can help, e-mail or contact me through my website. http://www.fastappraisalvalue.com/

If you are an investor and are looking for properties to take over and resell, NOW is not the time. If you, however, want to buy properties in foreclosure or in a short-sale situation, to spruce up and rent for 12 to 24 months, now may be the right time in some areas, but not all. Example, Hemet, Coachella, Thermal and Indio are starting to be bargain areas for newer construction tracts - but the value decline has not, by any means, reached the bottom of the cycle. Hemet has 2-3 year old 2 story houses that were previously sold in the $395,000-495,000 ranges now listing as foreclosure sales starting in the $169,000-189,000 range - but multiple offers are pushing up the accepted values in the $200,000-225,000 range. That area hasn't reached bottom yet. Expect similar sales offers in Indio, Coachella and Thermal for new construction.

Whatever your situation - take a close look at where you stand with your mortgage(s). Most people are comfortable with low to moderate mortgages, with good fixed rates and are not threatened. Those who are already in trouble or may about to be facing problems - the time to act and find out what to do, is NOW. Waiting only makes it worse.

Barry Noble    RE Appraiser and Broker