I can see this letting some folks in the Bay Area refinance to a lower rate, but it would not help much.  It seems irresponsible to lend out technically what is government/tax payer money this way.  What do you think?

Foreclosure resales – homes sold in April that had been foreclosed on in the prior 12 months – accounted for 47.4 percent of Bay Area resales. That was down from 50.2 percent in March and 52.0 percent in February. Last month’s figure was the lowest since foreclosure resales were 46.8 percent of existing home sales last November.

A lower concentration of discounted foreclosure resales in the statistics is one reason the median sale price has recently begun to more or less flatten, or at least erode more slowly, in many markets.

This is largely due to the moratorium that has been lifted which reduced foreclosure inventory.  As the foreclosures come back I think we will see median prices slip again in May.   San Mateo’s median still stands at $520,000, which is not exactly affordable for the median income family in San Mateo.

I personally go to East Menlo Park a lot for this restaurant called Back A Yard Grill .  They really have the best jerked chicken, but that neighborhood is not somewhere you want to be after dark.  The houses there are definitely not worth the 600k to 700k they sold for in the peak, and using public funds to keep prices that high seems pretty ridiculous.  What do you think?

Personally I am not too surprised by the finding because District 14 pretty much contains the richest towns in the entire nation.   Generally higher income is correlated with better health and education.  San Mateo County also has the best weather out of the entire Bay Area by far so that puts people in a good mood.  Crime is also fairly low here so it is definitely a great place to live.

Perhaps realtors should use this news as a marketing tool?

First of all, lets do some simple math.  The median household income in San Mateo County is $80,000 to $90,000.   Granted, this is  pretty high compared to the rest of the country, but the median housing price was around $800,000 during the peak.  From what I have seen, a lot of these troubled homes were financed with 80/20 first and second mortgages and the mortgages are conservatively $4000 a month.  Additionally, the property taxes on a home valued at 600k to 800k would be $600 to $800 a month.  When you throw in insurance and maintenance the final cost is even higher.  For a family earning $90,000 a year, 31% of their monthly gross income would be $2325, which means to keep their home their mortgage has to be reduced to $1500 a month.  I think that is just laughable.

Now that the median price in San Mateo County has slid under $500,000, it would be plain stupid to pay property taxes on the basis of $800,000 and keep an unaffordable mortgage.  So I really do not think Obama’s plan will affect the sliding prices here in San Mateo very much.  Prices were just way out of reach for normal folks, and they need to fall.   Most people I know that live here in the county have not had huge pay raises in the last couple years, and the current housing prices are still out of reach for many.  I have said this many times before and I will say it again.  The housing market wil only recover when prices come in line with income, and all of these government efforts to keep people in unaffordable housing situations are just a waste of time and money.

For the troubled homeowners out there, I suggest that you squat in your home as long as you can because banks are really slow to foreclosed these days.  You can work on a short sale or tell the bank to produce the original mortgage note.  This will give you a few months of free housing. Forget about keeping your overpriced shack because it is not worthwhile in the long run.  Your credit can recover in seven years, and there is no point in paying a $800,000 mortgage  at $4,000 to $5,000 a month when you can rent the same house for half that price.

Anyway, I don’t see this spurring much sales activity in San Mateo county because there are very few new developments.  Most of the new developments are also very overpriced.  I can see the homebuilders just jacking up their prices due to this law, and it will not benefit consumers very much.

•  34.1 percent of sales in January were foreclosed within 12 months
• 273 home were sold in the entire month, which is 7.5% below last year
• Median price is now $489,500 compared to $650,000 last year.

Another interesting factoid is this:

• Typical monthly mortgage Bay Area residents committed to pay was $1297 last month, compared to $2571 a year ago.

It seems like it may be becoming cheaper to buy in some parts of the Bay Area.  This is the fifth consecutive month of sales growth for the Bay Area overall, but San Mateo County is still declining every month.  Basically, this county has yet to reach the bottom.