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Most recent articles

San Diego is #1

Of the top 25 metro areas in America, San Diego is the least affordable, according to this report from Zach Fox at SNL (and formerly of the North County Times):

http://www.snl.com/InteractiveX/Article.aspx?cdid=A-27562902-13864

An excerpt:

sandiego1Housing prices have enjoyed substantial, double-digit growth over the past year, leading to affordability issues in some major metro markets that could cap prospects for future growth.

From a renter’s perspective, San Diego might be even less affordable than San Francisco, which famously boasts the nation’s most expensive real estate.

Prices in San Diego shot up 19.4% year over year in January, according to the latest data available from the S&P/Case-Shiller home price indexes. With prices so high, real estate agents said first-time homebuyers need to adjust their expectations.

Young renters can only make the leap to homeownership in San Diego with help from a government down-payment assistance program or their families, said Leslie Kilpatrick, president of the Greater San Diego Association of Realtors.

“I think we’re seeing more and more of that,” Kilpatrick told SNL. “This generation of parents is realizing the difficulties their children are facing in buying a home.”

A recent study by HSH, a provider of mortgage interest rate data, details how much income a household needs to afford the typical home in a given market. HSH calculated the minimum income needed to purchase a median-priced home in a given market. The study assumed a 28% front-end debt-to-income ratio and a 20% down payment and only covered principal and interest.

The results of this study raise an interesting question: How many renters in each market could afford to buy the typical home?

While it may not be possible to come up with a definitive answer, SNL explored the question using the HSH study, recently released U.S. Census Bureau data detailing renter incomes and corresponding Census data on housing units.

By one measure, San Diego had the lowest ratio of income-eligible renters — meaning they earned enough to buy a median-priced home — to housing units among 25 major metropolitan areas.

In San Diego, real estate agents think the market might be stabilizing, but prices are so high that first-time buyers are struggling to find entry. But that does not necessarily mean the market is in a bubble again.

Rich Toscano, a financial adviser with Pacific Capital Associates in San Diego, launched a blog in 2004 presciently predicting a housing crash based on overvaluation. He maintains a graph that compares home prices to a blended value of rent and per capita income. The index is now at the peaks seen in 1979 and 1990, but it is still well-below the most recent bubble.

“People say to me, ‘Are you worried about it?’ And I think, ‘It’s expensive, but it’s always been that way,’” Toscano told SNL. At the same time, he does not think there is much more room for prices to sustainably rise.

“I wouldn’t say there couldn’t be more upside, but what I would say is that whatever upside there is, I would expect to be given back eventually, at least in relative terms,” he said.

Real estate agents in the San Diego metro area seem to agree with Toscano that prices are starting to stabilize and that the days of double-digit annual growth have likely passed. Still, for buyers interested in the lower end of the market where homes are more affordable, bidding wars remain fairly common.

“Most people miss a few before they understand that when they see something they like, they have to act boldly and put in a strong offer,” said Kilpatrick, president of the local association.

Jim Klinge, a real estate broker in the metro area, similarly told SNL via email that the most recent low-end buyers he represented lost several bidding wars before nabbing a home. On Klinge’s blog, which gained national fame during the housing crisis for its candor and brash style, the agent reports hyper-local statistics on supply and demand. For now, the fundamentals suggest San Diego’s housing market is strong.

“What really matters is wondering if/when we will run out of rich people,” Klinge wrote.

Posted by on Apr 18, 2014 in About the author, Jim's Take on the Market, Market Buzz, Market Conditions | 10 comments

Drone at Robertson Ranch

Robertson RanchThose who live near the new Sage Creek High School in north Carlsbad will have another large new-home tract beginning shortly.  The West Village of Robertson Ranch was recently acquired by Toll Brothers, and they expect to be selling new homes there in 2015.

Shapell Homes purchased the acreage for $30+ million in 2010 from the Robertson family. At the time, they said they would build:

Single-family homes ranging from 1,800 to 4,000 square feet and townhomes from about 1,400 to 1,800 square feet. A senior housing project, probably for rent, also is expected.

If you are thinking of selling a home that is close to Tamarack/Cannon and El Camino Real, you may want to consider selling this year when there is less competiton!

Here is a tour of the area:

Posted by on Apr 17, 2014 in Bubbleinfo TV, Builders, Drone, Jim's Take on the Market | 10 comments

Selective Foreclosure

From RealtyTrac:

http://www.realtytrac.com/content/foreclosure-market-report/q1-2014-home-equity-and-underwater-report-8037

“The relatively high percentage of  foreclosures with equity is surprising to many because it would seem  homeowners with equity could easily avoid foreclosure by leveraging that equity by refinancing or with an equity sale of the home,” Blomquist  noted.

No surprise here.

With no pressure from anyone to foreclose on non-payers, mortgage servicers can be picky about who gets foreclosed.  It makes sense to foreclose where you can make a profit, and let the still-underwater folks ride the gravy train for another year or two.

Deadbeats don’t need to panic, it’s still quiet around SD County:

San Diego County Filings

Posted by on Apr 17, 2014 in Foreclosures/REOs, No-Foreclosure as Banking Policy, Short Sales, Short Selling | 3 comments

Fewer Low-Priced Homes For Sale

california

I like this reporting – instead of speculating with the usual mumbo-jumbo about why sales are slower, Madeline states a fact:

While the price of a California home rose to a level not seen in six years, it didn’t drive buyers out of the market. In March, the median price for a home rose to $366,000, which was up $16,000 from February and marks the highest price since March 2008. Despite the high price tag, home and condominium sales were up nearly 21% for the month.

March’s sales may have been up from February’s figures, but they were still down 13.3% from March 2013.

“Despite the nice jump in March home sales, sales continue to be slower than we’ve seen since 2008,” said Madeline Schnapp, director of economic research for PropertyRadar. “The supply of lower-priced distressed properties is disappearing at a rapid clip and is not being replaced by an adequate supply of non-distressed properties.”

http://www.housingwire.com/articles/29698-california-home-prices-reach-highest-level-in-6-years-doesnt-slow-home-sales

The number of homes for sale on the lower end has dropped considerably, and where the low-inventory has the most dramatic impact – higher up hasn’t had the same problem.  Here are the number of NSDCC homes listed for sale under $600,000 in the first quarter of the year:

First Qtr.
#Listings Under $600K
Avg. LP/sf
#Listings Over $600K
Avg. LP/sf
2011
221
$293/sf
1,260
$471/sf
2012
212
$282/sf
1,058
$481/sf
2013
134
$322/sf
1,176
$508/sf
2014
55
$369/sf
1,184
$544/sf

There just aren’t as many lower-priced homes for sale.

Posted by on Apr 17, 2014 in Jim's Take on the Market | 0 comments

More Drone

If I lose the drone, ”too bad, you’re not getting another one.”

There was some real panic today when I lost the wi-fi connection – which also terminated the camera feed – while the drone was over the lagoon.  For a moment, I was thinking about going for a swim!

Posted by on Apr 16, 2014 in Bubbleinfo TV, Drone, View | 1 comment