Ojai Buffered From Housing Shock

Foreclosures shut doors on some locals, but fewer than other areas in county

By Daryl Kelley
The sagging housing market came home to grocery store stocker Peter Rueger this week, when he received notice that his family has 30 days to get out of their house in Oak View.
“This was truly our dream home, and a month ago I thought we could still sell it,” said Rueger, 46, who lives with wife Barb, their 14-year-old daughter, mother-in-law, one dog and four cats in a smallish home under towering oaks on a creek.
“But you see what’s happening in the realty market,” he added. “It’s a year too late for me now.”
The Ruegers’ three-bedroom home is one of at least 12 Ojai Valley properties seized by lenders or facing foreclosure sales, as a wave of defaults has swept the California housing market in recent months.
So far, the Ojai Valley has fared fairly well because upper-end homes in attractive communities continue to sell better than marginal properties in low-income areas, where more buyers with fewer assets were allowed to purchase houses they couldn’t really afford, experts say.
Indeed, Ojai home sales dropped just 8 percent in the first half of 2007, from 119 to 109, compared with the first six months of 2006, while prices fell 6.5 percent, according to DataQuick Information Systems.
But for July, the numbers were more ominous, with sales down sharply and prices falling 14 percent from a year ago. And in the Oak View area, sales were off from 46 to 29 for the first half of the year, though up a bit in July.
“Ojai, Ventura and Camarillo haven’t been hit that hard yet,” said real estate agent Jaime Diaz, an Ojai resident who specializes in selling homes facing foreclosure. “But there are hundreds of foreclosures in Oxnard. A lot of people bought more than they should have and can’t refinance or sell. Their houses are worth less than their loans.”
The Ojai Valley, with about 35,000 residents, has a dozen properties in or facing foreclosure. That compares with Santa Paula’s 22 and Fillmore’s 14, Diaz said.
The problem, experts say, is that many buyers were allowed to borrow too much in the so-called sub-prime lending market as home values more than doubled from 2001 through mid-2005.
But when housing prices started to decline during the last two years, marginal borrowers didn’t have the equity to refinance as their variable monthly payments rose.
One of Diaz’s clients — the Estrada family of Meiners Oaks — lost their home in a foreclosure sale at the Ventura County courthouse on Thursday. The family owed $504,000 on an aging 800-square-foot stucco house on El Roblar Drive.
Diaz had been trying to sell the home for $434,000 on the so-called “short sell” market in which homes sell to speculators for less than their loan amounts. But he got just one offer — for $324,000. So now the lenders are trying to recoup what they can through auction. The amount of Thursday’s bids were not yet public.
“These are good, hardworking people,” Diaz said of the Estradas. “But their payment was $3,500 a month plus taxes, and they just couldn’t keep up.”
A lot of “predatory loans” were made in the last few years by lenders assuming that home values would continue to increase, and that they would get their money back even if unqualified buyers could not make payments, he said. Payments on these loans often increased after two or three years.
“Foreclosures are the pink elephant right now,” he said. “And the scary part is we don’t know how many high-end homeowners did the same thing.”
For example, he said a number of homes sold for more than a million dollars in luxury Spanish Hills and Sterling Hills neighborhoods near Camarillo in the last several years ago. And some of those homes are beginning to pop up on foreclosure lists, he said.
At least for now, however, the Ojai Valley market is doing pretty well, said Dawn Shook, executive officer of the Ojai Valley Board of Realtors.
“We get a little bit of the foreclosure market up here, but not too much,” she said. “The higher end houses are still selling if they’re a little bit larger or in a good area. That’s the criteria that’s kept things going. But some of the lesser priced, less desirable properties are just not selling right now.
“People from out of the area say that Ojai is better off because it’s so desirable and does have higher priced homes,” she said.
But that won’t help the the Ruegers, who saved their money through 23 years of marriage, including 18 as renters in the Upper Ojai Valley.
“And when we saw this home we knew it was our dream house,” Peter Rueger said. “It has 12 large oaks here, and you see these (terraced) gardens? We did all that.”
The Ruegers bought their home with a $245,000 loan five years ago, but refinanced twice and now owe $428,000, and can’t make their $3,200 monthly payment, despite his income from Vons and his wife’s as a manager of a convenience store.
A lawsuit over a property line by a neighbor kept them in court for three years, and prevented them from selling when they still had some equity, he said. The Ruegers won the suit three months ago, and an offer covering their full $428,000 debt was secured a month ago, he said. But the bank foreclosed this week anyway.
“The Realtor said you’ve got 90 days to close this sale, but the bank sent me a letter yesterday and said you’ve got 30 days to get out,” he said. “So everything we saved for years just got pulled out from under us.”