bubbleinfo.com

We sure appreciate the website fidelityasap.com

They track the trustee sales, and post the results daily. They show a rolling 90-day calendar, with the current report running from September through November.

We know that the new state law has slowed the recording of new NODs, but what about those trustee sales already in process?

Looking at these zip codes, it appears that the whole system has bogged down, or some combination of short sales, loan modifications, and credit counseling has caused lenders to cancel or postpone the majority of sales:

Trustee-Sale Results

To see the lenders cancel 33% (44 of 138) of the trustee sales is curious because they normally try to avoid cancelling at all costs. If they decide to re-start the proceeding they have to go back to the beginning and issue a new NOD (and be delayed by the new law).

WHY SO MANY CANCELLEDS? Are lenders being cautious, and purposely starting over because of the new law? Or are short sales/loan modifications working?

I checked the 46 cancelled addresses for activity on the MLS and tax rolls:

MLS Report of Cancelleds

The ‘others’ include those that sold on their own but not listed on MLS (one), or somehow cured their default, because their tax roll no longer shows the notice of trustee sale. If we accept that the lenders have backed off of half of the cancelleds (the 23 that are either ACT, PEND, or SOLD), what about those in the “none” category?

Why would lenders cancel 17 trustee sales that aren’t on the MLS?

Their defaults must be somewhere in the process of being cured by:

1. Loan modifications
2. Short sales by owner or agents bringing buyers direct (outside of MLS)
3. Refinancing (doubtful)
4. Lenders wanting to offer credit counseling
5. other reason?

The 46 cancelled trustee sales is far more than usual. If the cancellations continue, it should bring down the NOD-to-REO ratio. It’s probably a sign that the properties being foreclosed are of worth fighting for, either by owners struggling to find a way to cure the defaults, or agents willing to work on selling them. There wasn’t as much willingness to fight for the subprime-mortgaged homes.

We’re probably going to see the number of foreclosed properties drop substantially for the rest of the year, but we should be rolling again by springtime!

from www.sddt.com

San Diego-based ConAm Group of Cos. has purchased the 14.4-acre, partially constructed, Piazza d’Oro residential mixed-use project in Oceanside for a reported $30 million.

ConAm, which specializes in multifamily projects, acquired the land, what will be 221 residential units with some planned retail and office space from K. Hovnanian Homes (NYSE: HOV). The site is north of Highway 78 at Rancho Del Oro Road and Vista Way.

Justin Esayian, an associate of The Hoffman Co. who brokered the deal, said the residential units, some of which are being designed as live/work lofts, will be marketed as apartments. The project will also include a clubhouse, a fitness area, a pool and a tot lot. A small amount of flexible office space will be joined by a small neighborhood-type retail center.

“This is a great property with substantial improvements in the ground,” Esayian said. “K. Hovnanian was going to market it as for-sale condos until the housing market shifted. Now it doesn’t make sense and they wanted to sell it, so this is a win-win situation.”

The property is just one of numerous such land and development assets that Hovnanian has been selling around the country. Dallas-based D.R. Horton Inc. (NYSE: DHI) has been selling vast tracts of land around the United States as well. Horton posted a nearly $400 million loss in the second quarter and as bad as that was, the loss of $823.4 million in the like quarter a year earlier was much worse. The third quarter figures for D.R. Horton weren’t yet available.

As recently as September of last year, Hovnanian had opened escrows on some 2,100 residential units around the country in a single three-day period, but its fortunes have fallen precipitously since then.

For the quarter ended July 31, Hovnanian posted a $202.47 million net loss on $716.54 million in revenues. This was compared with a loss of $77.86 million on $1.13 billion in revenues for the like period a year earlier.

For the nine-month period ended in July, Hovnanian posted a $674.13 million loss on $2.58 billion in revenues. Those figures compared to a $160.52 million loss on $3.44 billion in revenues for the like period in 2007.

The stock has traded from a high of $13.50 to a low of $3.38 per share during the past year. The stock closed at $3.90 per share, up 14 cents on the day Friday.

Locally, Hovnanian didn’t record any opened escrows at all at its Vallecitos Ridge in San Marcos during the third quarter, only three homes were reserved at its Lake Rancho Viejo project in Fallbrook, and only two homes were reserved at its Bella Lago development in Chula Vista.

Neither Hovnanian nor ConAm officials could be reached for comment Friday.

Esayian said the property was particularly attractive to ConAm, which oversees a portfolio of more than 50,000 units nationwide, because it is already partially built. Esayian also said the project is a high-quality asset that will hold its long-term value in a tough market.

“Yes, the real estate market is uncertain right now, but this is a smart time to pick off the best properties at a price we haven’t seen in years,” Esayian said. “The guys at ConAm are local, they know the market and they have a long-term vision for this project. This is a bold play that is going to pay off for them both now and down the road.”

The sale is also seen as a strategic move for K. Hovnanian, which was seeking to minimize its land exposure on this project and was motivated to sell because of the fiscal year-end tax break, Esayian said.

For those of you who are wondering if the lenders might be dumping on price to cleanup the books before the end of the year…….remember this one? 

We’ve had 16 offers, four failed escrows, two termite reports, a mold report, mold remediation paid for by the bank/seller, and the most annoying part – 278 messages on the system just to sell one dang house, and it’s not done yet.

But we got approval today on Deal #5!

Deal #1 – $367,000  7/18

Deal #2 – $360,000  7/31

Deal #3 – $345,000  8/25

Deal #4 – $340,000  9/12

Deal #5 – $310,000  10/24  FHA

We sent in two offers last week, and as usual the seller asked each for their highest and best offer, hoping for some improvement on price.  When both buyers stuck to their guns, I thought the seller would at least counter one or both, instead they just signed one!

FHA deals also include the threat of appraiser-required repairs to be paid by seller, of which there could be quite a list on this one.

On a curious note, they also sent over an extension of the listing period, and raised the list price back to $359,900, from the current $349,900.

Get the feeling that there will be more like this between now and Dec. 31st?

******************************************************************

We’ve had a contest riding on the list price, and the eventual sales price, and though it’s not closed yet, we had some great guesses on sales price:

$431,000  Shelly

$429,000  RSF renter

$429,000  Sue

$425,000  money market

$419,000  Chester

$399,000  Ted

$389,900  CV man

$379,000  doughboy

$375,001  poor house

$374,900  Rob Dawg

$371,000  CBMark

$369,000  MN

$367,000  Nathan

$359,000  Dwip

$350,100  someone

$349,900  SD Coastal

$348,000  Tyrone

$340,000  MANmom

$335,000  Al in IC

$335,000  calwatch

$333,000  JMA

$329,000  greenlander

$328,000  Chuck Ponzi

$321,000  incessant din

$319,000  FreedomCM

$319,000  Adesigar

$315,000  PC LoadLetter

$310,000  OC Vulture

$310,000  Keith Rettig

$309,000  Horse Racing Man

$300,000  George8

$299,999  Smithers

$297,500  sloshr

$295,000  ocrenter

$294,500  CA renter

$289,000  Surfer Nate

$275,000  shadash

$220,000  Genius

Both winners had left comments at the time:

OCVulture:

>>>> $389,000 <<<<< and then start dropping it 10-15K every month probably will sell for $310,000

OCVulture | April 25th, 2008 at 5:38 pm

Keith (a former contest winner):

1. I am feeling cocky with my earlier win!I predict CFC will “agree” to you pricing it at $379K despite you telling them that if they want to move it quickly they should price it at $339K. However, even you will slightly over-estimate and will have to lower it 2-3 times with a final sales price of $310,000 and with a cash back of $6K plus cover at least some, if not all, of the closing costs.If I am only right about the price, OCVulture should have the tickets as he picked $310K before me. But if I am right about the additional details above, he should probably share…the three of us can go.But I will go one step further.
   The purchaser will attempt to flip the property after the barest of repairs ($8,500). If McCain wins the presidency, the investor will fail to cover his mortgage payment by December and the property will be foreclosed on again next year. If Barack or Clinton wins the presidency, the investor will try to sell but after a short wait will settle and rent the property under the belief that things will get better late next year.Keith Rettig | April 28th, 2008 at 11:16 am

OK, so you’re thinking of waiting longer.  No problem.

People who are willing to buy now are struggling to find worthy choices because there are so many over-priced listings! When they do occasionally come up, they tend to sell quick.

It doesn’t matter to me when you buy, but I think people should keep looking. The competition between buyers over the sweetheart deals will make them fairly elusive, and if you have a shot at a terrific deal, you should consider buying it.

But it looks like the struggle to find it could be relative to your price range.

Here are the number of detached homes that have gone pending between October 1st and October 22nd. Those in previous years have all closed – only two have closed in 2008, so there will probably be some that fall out.

Number of Detached Pendings between Oct. 1-22 in CBD, ENC, & CV

As you can see, in 2003 the higher-end sales really took off, boomed for a few years, but now it’s settled down. The action has shifted to the lower price ranges.

Here are the actives vs. pendings for Carlsbad, Encinitas, and Carmel Valley:

There hasn’t been much price squishdown yet among the higher-end active listings, and as a result, not many are selling.

Here’s more evidence for your consideration on Carlsbad, Encinitas, and Carmel Valley. 

How are the pendings?  Let check those that went pending in September, and compare to previous years.  It’s not a perfect data point, because those prior to 2008 have all closed escrow, while this year’s are in process. 

But the 2008s are beyond their 17-day inspection period, so the buyers should have committed to the deal by releasing contingencies by now, plus there are so many short sales listed as active listings that really are pending that aren’t in this count – that I think we can call it a reasonable comparision.

In spite of the bubble, the impending ARM-resets, the Wall Street meltdown, new president, etc., this year is looking better than 2006/2007 (and a lot like the 1997-2001 era), when it comes to September pendings in Carlsbad, Encinitas, and Carmel Valley:

Ocrenter is advocating 2001 pricing for buyers, but clearly most of today’s buyers in the coastal region are satisfied paying higher than that.

At what point will you jump in?

More then just checking the internet for homes, what will it take for you to be out looking at homes, contacting a realtor to see the inside of homes, and making offers?

More statistical evidence?   Government intervention?  A specific year?

I’m just curious, at what point will YOU take the next step in buying/selling?

Yesterday we saw that the closed sales this month in Carlsbad, Encinitas, and Carmel Valley were staying well above 2003 pricing. Who are the buyers that are so willing to pay these prices? Apparently they’re people who want a house more than they want to wait, and people with money to risk.

True, the lenders are demanding bigger down payments and income verification now, but that doesn’t appear to be slowing down the market much from previous years. If you are like many, you have seen houses selling for more than you thought too.

Here are the 63 closings that have appeared on the tax rolls, enabling us to check loan amounts – second loans/HELOCs are included too.

Down Payment Amounts

It’s pretty impressive that more than half of the buyers are using at least 40% down (22% paying all-cash!). Could it be a fluke? Yes, but this has been the trend – buyers are using bigger down payments.

Have the sales been impacted in CBD, ENC, and CV?

Number of detached sales between Oct 1st and Oct 17:

More evidence that those with money are buying, and if it keeps up, could complicate it for people who expect substantial price drops. It’s not that they won’t happen, it’s that those with money and less fear of the bubble will jump in sooner/higher.

Will it continue?

Ocrenter has been calling for buyers to demand 2001 pricing.

Is it happening in the tonier coastal communities?

Here are the houses that have closed escrow this month that had a sales price between 1998 and 2003 on their tax rolls:

October 2008 closed sales in Carlsbad, Encinitas, and Carmel Valley

The last one at $3.1 million typifies the frustration for buyers. The seller had loans totalling $1,600,000 which gave him plenty of room to come down on price, and sufficient pressure (around $15,000 per month counting property taxes). But he spent almost a year on the market waiting for the right buyer.

I had buyers interested in the mid-$2,000,000s, but the agent was adamant – she told me, “we’re not giving it away”. Sure enough, someone came along and wrote a check for the entire amount.

My point is that it is a real struggle to buy a house in the coastal Carlsbad-to-Carmel Valley region at 2001 prices – literally nobody has done it this month, and we’re a few years into this downturn. There aren’t ANY at 2003 prices!

It lends more evidence to my theory on the Haves and HaveNots. Today’s buyers are those who have more motivation to buy now than to worry about the bubble, which must mean they have money to risk. Are there enough of those buyers to keep prices afloat?

I’ll provide more evidence next – the analysis of down payments being used. Buyers are putting down large chunks of cash, and there have been a number of all-cash buys. As prices get softer, won’t more of the monied buyers jump in, and will they spoil it for the regular folks?