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How is October shaping up for average $$ per square foot? (DOM=days on mkt.)

The more people hear that prices are down 20% to 30% year-over-year, the more they will inch towards buying. There will be a lot of lookers come springtime.

For those who want to take advantage of year-end closeout buys, now is the time to make offers. Even though the lenders are drooling about receiving bailout money, those who already own foreclosed property should want to clean up the books prior to year-end. Hopefully that’ll translate into bargains(?).

Here’s an update on REO totals:

SD Real Estate Owned by Lender (REOs)

Today’s Downey count was done manually to screen out those individuals with the last name ‘Downey’, and it picked up some that the previous count probably missed. There are undoubtably more properties owned by each lender in obscure names, so this chart is just a beginning.

But if you’re looking to grind an owner/lender for a year-end closing, this list is a place to start. Most of the properties owned by Deutsche, HSBC, and Bank of New York are being administered by Countrywide, and they have gotten more aggressive in the last couple of weeks. You can follow their inventory at:

Countrywide’s REO list

Happy Halloweeen!

I emailed an agent today regarding an REO property just listed, wondering how many offers were in – here was the response:

“All of our properties will sell at or above listing price and will eventually receieve multiple offers. Please bring a strong offer. Thank you.”

Oct. 30 (Bloomberg) — Eve Mazzarella was a Las Vegas success story. The high-school dropout and former housemaid moved to the Nevada city in 2000 from Seattle, got a certificate from the ABC Real Estate School and started selling houses in what would become the hottest market in the country.

In 2006, Mazzarella recorded sales of $13.8 million and made the National Association of Realtors’ “30 Under 30” list, which names the best young agents in the nation. Mazzarella started her own company, Distinctive Real Estate & Investments Inc., in December 2003. She whipped around town in a Mercedes-Benz sport utility vehicle. She planned to build a three-story office building in Vegas’s shabby downtown north of the Strip and preserve a historic house on the site by lifting it onto the roof.

Her competitors were impressed. “She was an up and comer with a brilliant future,” says Forrest Barbee, a broker at Prudential Americana Group, a Las Vegas agency where Mazzarella once worked.

The dream ended at about 5 a.m. on March 13, when federal agents smashed through the door of a stucco home on a quiet, grassy cul-de-sac looking for Mazzarella, 31, and her husband, Steven Grimm, 45, an erstwhile mortgage broker.

The day before, the U.S. Attorney for Nevada had indicted the couple on 6 counts of bank fraud, later revised to 13. Prosecutors say the pair recruited fake — or “straw” — buyers to apply for loans to purchase 227 properties worth $107 million. They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts.

For the entire story on Bloomberg, click here:

http://www.bloomberg.com/apps/news?pid=20601109&sid=aGYlBrRCgtq0&refer=home

Readers asked to compare pricing too – let’s take a look! In 2006 the subprime mortgages were raging, and you could finance 100% of the purchase of a house up to $1,500,000. Now, getting a loan is much tougher, the stock market has tunred into casino royale, and the recession is here – what is the effect on pricing?

It varies by area – Carmel Valley is up 35%, Vista is down 46%!

Places like Oceanside and Vista where prices have dropped precipitously, the number of sales are strong – over 50 sales in each. Others, like Poway, are still enduring double-digit drops in sales and prices concurrently, giving the impression that more trouble is ahead.

# of Sales, Average Sales Price, October 2006 vs. October 2008

I’ll add the $/sf breakdown next.

The City of Carlsbad is sponsoring a community forum regarding the plans to build a second power plant at the 100-acre site just off the I-5 freeway and Cannon Rd.

Stop by on Thursday, November 6, 2008:

Carlsbad Faraday Center, 1635 Faraday Ave., Carlsbad, CA 92008

5:30pm Open House

6:00pm Presentation

6:30pm Community input

For more information you can call (760) 434-2820 or www.carlsbadconnected.com

The Coastal Commission is the regulating body that has the right to approve the project.  The City of Carlsbad officially opposes it because “it seriously limits future opportunities to redevelop this land in a way that better meets the needs of the community”.

They also noted that the tearing down of the old plant is not expected; it will exist for another 10-15 years minimum.

Not mentioned was the city’s bungling of their opportunity to purchase the property a few years ago, when the current owner, NRG West, outbid them.

How are the numbers stacking up for October?

(The 2008 numbers are month-to-date, you can add 10% or so for the last three days of the month plus late reporters)

October Detached Closed Sales

It’s going to look impressive when October, 2008′s final sales number exceeds October, 2006 (when money was free & easy). The lower-end and mid-range markets have sales that look similar to ’06, but the over-$900,000 is struggling, comparatively. Compare the over/under-$900,000 markets:

Considering that there are 2,319 active listings in SD County over $900,000, there’s going to be more squishdown ahead (unless sellers can hold out?).

WASHINGTON (Dow Jones)–The chairman of the House Judiciary Committee, Rep. John Conyers, D-Mich., expressed concern Tuesday that the Justice Department and the Federal Bureau of Investigation are not doing enough to investigate mortgage fraud.  

“A national crisis requires a national response, and the department has yet to convince us that it did, and is doing, its part to adequately and promptly respond,” Conyers, joined by two other House Democrats, said in a letter to Attorney General Michael Mukasey and FBI Director Robert Mueller.  

Among other things, Conyers said he was struck by the fact that state attorneys general, and not the Justice Department, have appeared to take the lead on legal issues with major lenders. He cited a recent settlement agreement between several states and Bank of America Corp. (BAC) to modify certain subprime and adjustable-rate mortgages serviced by Countrywide Financial.

(glad they sent a letter…..)

The “Hope for Homeowners Act of 2008 program is built on five principals: 

1. Long-term affordability. The program is built on the idea, expressed by Federal Reserve Chairman Bernanke, that creating new equity for troubled homeowners is likely to be a more effective way to avoid foreclosures. New loans will be based on a family’s ability to repay the loan, ensuring affordability and sustainable homeownership.

2. No investor or lender bailout. Investors and/or lenders will have to take significant losses in order to benefit from the proceeds of the loans refinanced with government insurance. However, these losses would be less than the losses associated with foreclosure.

3. No windfall for borrowers. Borrowers will share their new equity and future appreciation equally with FHA. Borrowers will pay for the FHA insurance.

4. Voluntary participation. This will be a voluntary program. No lenders, servicers, or investors will be compelled to participate.

5. Restore confidence, liquidity, and transparency. Credit markets are fearful and frozen in part because banks and other financial institutions do not know what their subprime mortgages and related securities are worth. The uncertainty is forcing lenders to hoard capital and stop the lending necessary for economic growth. This program will help restore confidence and get markets flowing again.

I’m not sure lenders will agree that reducing the loan amount to 87% of the current value will end up costing less than a foreclosure, and because it’s voluntary for every lender except Countrywide and Indymac, how many lenders will bother?  Foreclosure will sound like a better option in many cases where the homeowner is marginally qualified. 

How many homeowners will be persistent enough with their servicing lender to procure a loan modification?

The government’s settlement with Countrywide stated that they must modify 50,000 of their loans by March 1st of next year, and 125,000 total in California.  Countrywide needs to be reaching out to their current customers, and they’ll likely be cherry-picking the best candidates. 

Those 50,000 are the winners in this deal.  Who will they be?

The government said that you don’t need to be delinquent to qualify for an FHA-refinance.  Countrywide and Indymac will probably first go after their borrowers who are current on payments, or just a payment or two down, then talk to the seriously-delinquents.  Other lenders who aren’t as willing to cooperate, will likely go the opposite route, modifying those whose only other choice is foreclosure.  Those who are current on their payments will probably “have trouble getting through” to their lender.

One more government scheme with seemingly specific intentions, but in reality not likely to offset the unintended results.