bubbleinfo.com

3563 Normount, OSD

3 br/2.5 ba, 1,754 sf

$459,000 SP 4/04

$308,900 LP 3/08

YB: 1982

HOA & MR = 0

This is your run-of-the-mill 1980s tract house on the south side of Oceanside.  The listing agent of this bank-owned property has been aggressive in his pricing, but this one is exceptional.  They ignored the January sale of a 1,725 sf one-story house that was just a block away that closed for $450,000, and listed this for $308,900 on Wednesday.  The bank will be reviewing offers on Monday, so there is still time to get yours in - and compete with the 12 offers already on his desk.

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862 Sapphire, PB

2 br/1 ba 816sf

$790,000 SP 7/04

$524,900 LP 3/08

YB: 1948

HOA & MR = 0

Your classic 1940s Pacific Beach bungalow on a 6,400 sf R2 lot about two blocks to the sand.  Not sure what the listing agent was using for comps to come up with his original list price of $524,900, but when he had a handful of offers come in before lunch yesterday, he knew he had something.  Because one was over $600,000, he raised the price to $649,900 – there’s still time to get your offer in on this one too.  The previous owner had financed 100% his $790,000 in 2004, and then refinanced out another $100,000 just seven months later.  What a country.

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1453 Heritage, Encinitas

5 br/4.5 ba, 3911sf

$1,019,900  LP 2/08

$1,040,400  SP 3/08

YB: 2003

HOA = $135, MR = $325

This one closed just $20,000 over list price, and there were offers in that were higher.  It was a cash buyer who was represented by an agent in the same office as the listing agent.  You don’t think……nawwww.  At the time this one came on the market, another of the same floor plan was listed higher than $1.2 million, went pending later, and closed for $1,180,000 – purchased by a buyer apparently unfazed by this low sale, and the other REO on Heritage that closed for $925,000.

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1085 Brightwood, San Marcos

4 br/3 ba, 2,646 sf

$534,900  LP 2/08

$615,000  SP 3/08

YB:2004

HOA = $80, MR = $267

I’ve seen it all now. It looked like every other house on the street was for sale when this REO came on the market last month in San Elijo Hills.  Though the list price of $534,900 seemed low, the house was had no upgrades (linoleum & 4" white tile), no landscaping and an over-hyped pseudo ocean view.  But a bunch of offers came in away, and apparently somebody really wanted it – they paid $615,000  =  15% over list price! 

More incredibly, since this one went into escrow, FIVE others on the street have gone pending since, ranging from $564,900 to $695,000.  Most had been sitting around stagnating, and boom – one REO lowballs the group, and all of a sudden everybody wants to live on the street.

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It is the wild, wild west out there – get good help!

We’re doing some traveling for the on-going college tour – I’ll check in later today!

Yesterday’s sunset!

The Real Estate Disposition Corporation (REDC) is having another auction extravaganza across the country over the next few weeks.  Southern California will have its turn between April 5th & 17th.  They’ll be in San Diego on April 12th at the Del Mar Fairgrounds, an appropriate location because it should be a real circus.  There are 217 properties scheduled to be auctioned off, begining at 9:30 am, and they expect to sell 25 to 30 properties per hour.

You need to bring $5,000 to get a bidder’s paddle, and if you’re the lucky winner they’ll take a 5% non-refundable deposit that day.  You do get a 30-day escrow period, and can use your own lender, though they will make you pre-qual with Countrywide on-site.

You have three inspection days to view the properties, and in San Diego they are this Saturday and next weekend.  They are paying brokers a 1% commission, so if you want me to meet you at a property with comps to give you my opinion, I’d be happy to help you.  I need to register you as my client before the auction, so if you’d like a hand, let me know ahead of time.  If you see one you really like and want to arrange a formal inspection, I’ll introduce you to a top inspector.  There is no inspection contingency period, so once you win one at the auction, it’s yours.

The properties are mostly the junk they couldn’t sell on the open market, but there might be some gems in there, plus the opening bids are less than half the previous values.

I will be attending the auction too – if you go and see me, say hello!

 http://www.ushomeauction.com/

The trustee sales on these properties produced no bidders, and went ‘back to the beneficiary’. The notice-of-trustee-sale amount is what’s owed to the bank, and the published number. Normally you can only find out what the opening bid is if you call the trustee a day or two before the sale date. If we keep seeing the opening bids dropping substantially below the amount owed, you’ll know that the banks are trying to liquidate right on the steps, rather than list on the open market later. When you see these come on the market, the list price should be around the opening bid, unless they get greedy:

There was a 14% drop between the average posted Sale Amount, and the actual Opening Bid at the courthouse steps – yet in every case here, there were still no bidders.

You can say these sellers beat the odds. They started builing this 6 br/8 ba, 8,390 sf "Mediterranean masterpiece" on a half-acre lot in La Costa in 2004, and the orginal list price was $3,999,000.

The last time it was on the MLS was December, 2006, listed for $5,290,000.

The tax rolls show that it closed this month for $5,600,000, to a cash buyer. Congratulations to the sellers – it’s the third-highest sales price in the history of Carlsbad, and the highest non-oceanfront price ever.

From today’s mailbox:

Morning Mr. Jim,

A friend of mine subscribes to the Gartman Letter. They gleaned this info and sent it to me as they know I am quite concerned about our current real estate situation. From the Gartman Letter:

Bill Gross of PIMCO made this statement yesterday:

“I think Ben Bernake gets it; I’m not too sure that other governors on his committee get it, as evidenced by the 75-point basis (cut)… for the problem that’s hardest is stopping the decline in home prices. We have an asset deflation of significant proportions here. We need the government, in some form or fashion, to begin buying mortgages and in the process begin supporting housing prices.”

Dennis Gartman then states “He’s right. He’s absolutely right, and we add the following modest proposal: Let’s do what Canada did years ago in the run-up to the take-over in Hong Kong by the mainland. Canada offered the people of Hong Kong the right to swift and certain citizenship if they were to bring $400K to Canada and use that money to purchase long term assets. Simply put, the price of the smallest hovel in Vancouver moved immediately to $400K! They were the best of all citizens: They lived abroad; they paid taxes into Canada and they did not use government services. It was a win, win, win situation for everyone."

"The US should do the same: Open up citizenship to those foreigners who can buy a house, with cash, and who will keep the house for a minimum of five years. The housing glut will be swept away: taxes will be paid and services likely will not be put to test. It is a modest proposal. It is one that makes sense.”

I worked in Vancouver Canada from 1983-1986 and the impact the Hong Kong money had was absolutely incredible. With our Government trashing our dollar, the foreigners will eventually end up buying a tremendous amount of our real estate anyway.

I feel we would be much better off awarding US citizenship to people with money than without, especially if it could help us out of our current real estate dilemma.

Mr. T

How much down payment are buyers using to finance their purchases? 

(Or are the lenders choosing for them?)

These are taken from the last 51 sales in Carlsbad, Encinitas, and Carmel Valley off our tax rolls, updated through March 7th:

• Six of the 51 buyers paid cash (12%)
• 11 financed between 27% and 67% of the sales price (21%)
• 24 financed between 70% and 80% of the sales price (47%)
• 10 financed 90% or more of their purchase (20%)

The one purchase that was financed 100% was a REO, where the credit union/seller carried the whole note for the buyer of a small condo. 

Here is how they look on a graph, with the above-80%LTVs in red:

The graph below shows sales in the same area in the same week, but in 2006.

• 7% of the buyers paid cash
• 49% of the buyers financed 31%-80%
• 44% of the buyers financed more than 80%

The diamonds have been able to refinance since their purchase date.  The blues have sold.  There were no foreclosures, and no notices of default.

Want to get a nice visual on the banking crsis? Click on this link to Bruce’s website:

http://and-still-i-persist.com/2008/03/12/charting-the-banking-crisis-a-boomerang-demo/

Press play when you get there!

These are homes in Carlsbad that have received their notice of trustee-sale date, and are just awaiting the inevitable. Look for their lenders to be putting these on the open market in the coming months – none of these are an active listing on the MLS, as of today:

Notice how hard it is to find anyone who is leaving money on the table – the vast majority of the ones who appear to have equity have a second mortgage that is getting washed out.

The end of the first quarter of 2008 is two weeks away - who will win the contest for the tickets to the US Open Golf Tournament in June?  Today’s count of closed sales of detached homes in SD County in 2008 is 2,241.  There are 1491 listings that went pending between Jan 1 and Feb 29, and 47% of those were in the last two weeks of February.  It’s going to take a big run of closings for the total to get over 3,000.  It will be a good test of how escrows are taking longer to close. 

In 1Q07 there were 3,963 closings.

Here are the guesses: