People will resort to some cooky rituals to make them feel good about living in a foreclosed home.

Irvine Home Address … 51 LAKESHORE 20 Irvine, CA 92604

Resale Home Price …… $499,000

Raven hair and ruby lips

sparks fly from her finger tips

Echoed voices in the night

she's a restless spirit on an endless flight

wooo hooo witchy woman, see how high she flies

wooo hooo witchy woman, she got the moon in her eye

The Eagles — Witchy Woman

Witches are being brought in to spiritually decontaminate foreclosed houses.

The Housing Slump Has Salem On a Witch Hunt Again

Buyers Worried About Bad Vibes From Foreclosed Homes Seek a Cleansing

By S. MITRA KALITA — JANUARY 13, 2011

SALEM, Mass.—There's a certain look and feel to a foreclosed home, and 31 Arbella St. has it: fraying carpet, missing appliances, foam insulation poking through cracked walls.

That doesn't faze buyer Tony Barletta since he plans a gut renovation anyway. It's the bad vibes that bother him.

So two weeks before closing, Mr. Barletta followed witch Lori Bruno and warlock Christian Day through the three-story home. They clanged bells and sprayed holy water, poured kosher salt on doorways and raised iron swords at windows.

It's amazing the silly things both big and small people do in order to feel good about a new purchase. Guys will typically run numbers on spreadsheets to convince themselves they can afford it. Women will imagine each room of the house, where the furniture goes, and whether or not the place gives them a warm and fuzzy feeling. I guess some people feel they need some dude with a broadsword to walk through their house and frighten the ghosts away. Sounds pretty stupid to me.

“Residue, residue, residue is in this house. It has to come out,” shouted Ms. Bruno, a 70-year-old who claims to be a descendant of 16th-century Italian witches. “Lord of fire, lord flame, blessed be thy holy name…All negativity must be gone!”

The foreclosure crisis has helped resurrect an ancient tradition: the house cleansing. Buyers such as Mr. Barletta are turning to witches, psychics, priests and feng shui consultants, among others, to bless or exorcise dwellings.

Normal, middle-class Americans don't go for strange rituals. No, if mainstream people have a problem, they turn to St. Joseph. He will help them out.

Sellers, too, are adopting the trend to help move a property stuck on the market.

In recent months, foreclosure and other distressed sales have represented about a third of all home sales, according to the National Association of Realtors. With so many foreclosures riddling the market, some buyers find that a coat of paint is hardly enough to rid a house of its creepy quotient.

“It's not entities or ghosts that we're dealing with anymore,” says Julie Belmont, a so-called intuitive who works in Orange County, Calif., where 40% of home sales last year were distress sales. “With foreclosures, a lot of it is energy imprints from past discussions, arguments, money problems. All of that is absorbed by the house.”

The Julie Belmont site is an interesting exploration of how some people make a living.

Homeowners of various faiths have turned to different rituals—called house cleansings or space clearings—for centuries. Catholics and Hindus, for example, might ask a priest to bless a new home before moving in. Before their new year, the Chinese cleanse the home to sweep away any bad luck accumulated over the past twelve months.

Ms. Bruno's process pulls from a few methods: Ringing bells, she says, breaks up the negative energy of a place. Iron keeps evil spirits away, says Mr. Day, brandishing a sword across the living room.

Mr. Barletta heard about the pair through his real-estate agent after his offer on the home was accepted. “I'm a spiritual person,” he says. “I just wanted to remove the negative energy first.”

In Salem, the site of the 1692 witch trials, the occult is a part of the everyday, from the high-school sports team known as the Witches to entrepreneurs such as Mr. Day and Ms. Bruno. He owns the Hex Old World Witchery magic shop downtown and she gives psychic readings there.

“It's a very spiritual city,” says Salem real-estate agent Janet Andrews Howcroft.

I think she means to say the city is filled with suckers who can best be appealed to with mumbo jumbo.

But the city's real-estate market hasn't been so charmed. Home prices here fell by about a third in the past two years, according to Ms. Howcroft. And Essex, the county that Salem calls home, had the state's second-highest foreclosure level in October, says the Warren Group, which tracks real-estate data in New England.

Ms. Howcroft attributes recent requests for house blessings in part to the economic picture here. She counted at least eight transactions last year that involved a house cleansing, compared to the occasional request in prior years.

I attribute the recent requests to the last gasp of desperation on the part of loan owners who cannot get the price they need to get out of the hole. When denial is stretched to its breaking point, people can engage in some pretty bizarre behavior. Do any of you remember the bulls in 2006-2008 who used to spam Lanzner's blog with dozens of daily comments to talk up the market?

The house on Arbella Street is under contract for $167,000, and was appraised for nearly double, pending renovations. But, Ms. Bruno cautioned, that bargain comes with a price. She gestured toward an empty room with “Mike, Age 13” scrawled on the wall in child's handwriting. “If someone took your home away, how would you feel?”

Taking her cleansing agent of kosher salt in a bowl of water and lighting a candle, she led the group—including the buyer's agent—up the stairs. Arriving at the upstairs kitchen, gutted of its cabinetry and appliances, Ms. Bruno yelled into the air: “You will not hurt anything I hold dear. I am the exorcist of your garbage!”

LOL! Do I really need to comment?

She is quick to distinguish her services from that of a plain-vanilla psychic. “Unlike psychics, witches know you can change the future,” she explains.

They might be described as good witches. Ms. Bruno, who feels she is well compensated for her readings, doesn't charge for her house cleansings—she's done more than 100, she says. Rather, she considers them to be a form of charity work. “I don't want to live off people's sadness,” she says. Fellow Salem witch Lillee Allee also performs house blessings and, like Ms. Bruno, she doesn't take a fee.

Elsewhere, others are viewing the rituals as a real business opportunity. Austin, Texas-based feng shui consultant Logynn B. Northrhip is teaming up with Scottsdale, Ariz., real-estate agent Jason Goldberg to offer a package of services to create better vibes in a home, either before sale or after purchase. The two met at a yoga retreat.

In Sacramento, Calif., realtor Tamara Dorris also used feng shui to help speed the sale of a property that had been on the market for more than a year. She placed a jade plant, believed to bring good financial luck, in a “prosperity corner” and waited.

“Within two weeks, I had two offers,” she says. “Most homes have at least one or two prosperity flaws. Foreclosed homes have five or six flaws.”

Foreclosed homes only have more flaws is the flipper fails to renovate and fix those flaws.

Sometimes, it's bad feng shui to even attempt to buy a foreclosure. That was Grace Lee's discovery as she toured 30 houses in the San Diego area, her consultant Simona Mainini in tow, to find a new home. In the end, Ms. Mainini just advised her to buy new construction, saying it would save her money on repairs and other troubles in the long run.

“You can keep looking for deals in distressed properties,” Ms. Mainini recalls telling her client. “But they all have an energy that is very weak for money.”

Sorry, Ms. Mainini, but distressed properties are not very weak for money. Although, I suppose they aren't helping the distressed owners much.

Another owner hoping for 10% appreciation last year

I remember when the housing bust first started, it was common to see peak buyers offer their properties for sale at a price that would give them some negotiation room, pay the realtors's commission, and get them out at breakeven. Now that prices are double dipping, we are seeing this behavior all over again.

This owner probably thought she was getting a bargain. The previous owner paid $551,000 back in 2004. He imploded when his Option ARM went bad. She was getting a 20% discount in late 2009. Was it enough?

Irvine Home Address … 51 LAKESHORE 20 Irvine, CA 92604

Resale Home Price … $499,000

Home Purchase Price … $450,000

Home Purchase Date …. 12/22/09

Net Gain (Loss) ………. $19,060

Percent Change ………. 4.2%

Annual Appreciation … 9.6%

Cost of Ownership

————————————————-

$499,000 ………. Asking Price

$17,465 ………. 3.5% Down FHA Financing

4.79% …………… Mortgage Interest Rate

$481,535 ………. 30-Year Mortgage

$100,867 ………. Income Requirement

$2,524 ………. Monthly Mortgage Payment

$432 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$83 ………. Homeowners Insurance

$367 ………. Homeowners Association Fees

============================================

$3,406 ………. Monthly Cash Outlays

-$412 ………. Tax Savings (% of Interest and Property Tax)

-$601 ………. Equity Hidden in Payment

$32 ………. Lost Income to Down Payment (net of taxes)

$62 ………. Maintenance and Replacement Reserves

============================================

$2,487 ………. Monthly Cost of Ownership

Cash Acquisition Demands

——————————————————————————

$4,990 ………. Furnishing and Move In @1%

$4,990 ………. Closing Costs @1%

$4,815 ………… Interest Points @1% of Loan

$17,465 ………. Down Payment

============================================

$32,260 ………. Total Cash Costs

$38,100 ………… Emergency Cash Reserves

============================================

$70,360 ………. Total Savings Needed

Property Details for 51 LAKESHORE 20 Irvine, CA 92604

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Beds: 2

Baths: 2 baths

Home size: 1,610 sq ft

($310 / sq ft)

Lot Size: n/a

Year Built: 1979

Days on Market: 8

Listing Updated: 40553

MLS Number: S643538

Property Type: Condominium, Residential

Community: Woodbridge

Tract: Al

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