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From the Union-Tribune:

Buyers flock to resales amid glut of new condos

By Lori Weisberg, staff writer

The ubiquitous construction cranes that not long ago pierced the downtown San Diego skyline have largely disappeared, leaving in their wake hundreds of unsold condos that were planned years before the current real estate slump.

Developers who once snapped up downtown land with almost giddy abandon have retreated amid falling prices and low demand. Of the 22 condo buildings in which developers are offering units for sale, all but three have completed construction, and 1,549 condos remain unsold.

It would take more than five years to sell that many condos if the sluggish pace of sales during the past year were to continue, according to MarketPointe Realty Advisors, which tracks the new-home market.

Meanwhile, nearly two dozen additional apartment and condo projects with more than 3,400 housing units have been approved. But none are slated to begin construction anytime soon, according to downtown redevelopment officials.

“Those projects won’t be developed mostly forever,” real estate analyst Gary London predicted. “This market is in lockdown, as well it should be. It needs time to resuscitate. Except for the few cranes in the air, that’s the last you’ll see of them for at least six years.”

The full article:

http://www3.signonsandiego.com/stories/2008/dec/24/1n24downtown235834-downtown-feels-effects-housing-/

This year there have only been two houses in 92067 that have sold for less than $1,000,000, and those were $935,000 and $950,000.

So when you see a detached listing pop up for $799,000, you automatically think ‘short sale’ (which it is) and that it must be on a busy street and be a dog of a fixer too, right?

This is a 4 br/2.5 ba, 2,710sf fixer alright, on an acre lot.  But the location is in a quiet setting about a mile off Del Dios in Hacienda Santa Fe. The owner paid $700,000 in May 2001.

It used to be that places like Hacienda Santa Fe were considered ‘less than’ because it’s not in the vaunted Rancho Santa Fe “Covenant”.  But since so many other newer developments have been built like The Bridges, Cielo, and The Crosby, being in the Covenant has lost some of its cachet.  Buyers spending millions prefer the newer homes, and because the RSF Association’s ”Art Jury” is so restrictive about what can be built, the outliers have become a compelling alternative.

Here is a 3:48 min video tour:

from sddt.com

The national publicly traded homebuilders continue to bleed red ink and their San Diego-area projects are doing little to help.

With 10 active projects in San Diego County as of the end of the third quarter, Lennar is one of the most active homebuilders in San Diego County. These detached and attached projects range from Little Italy in downtown San Diego to Santee and Rancho Santa Fe to San Ysidro.

An example of how tough things were even before the fourth quarter started was Lennar’s Eaglepointe @ Sky Ranch development in Santee.

Despite the fact this 53-home project opened for sale in October of last year, no closings had been recorded by September 30 and only eight families had opened escrows, according to MarketPointe Realty Advisors, a San Diego-based apartment and new-home market research firm. The prices run from $830,000 to $875,000 as of September on homes that range from 4,177 to 4,908 square feet in five-bedroom floor plans.

Nationally, Lennar reported a 36 percent decline in home deliveries and a 46 percent drop in new orders in the quarter from a year ago. Backlog plunged 60 percent to 1,599 homes.

For the fourth quarter ended Nov. 30, Lennar Corp.(NYSE: LEN) posted an $811 million loss nationally, compared to a $1.25 billion loss a year ago. The company lost $1.1 billion for the fiscal year just ended and lost $1.94 billion during fiscal 2007.

“In 2009, cash generation will continue to be our top priority,” said Stuart Miller, president and CEO of Miami-based Lennar. “We will convert inventory to cash and reduce both our land purchases and homebuilding starts.”

Red Bank, N.J.-based Hovnanian Enterprises (NYSE: HOV) posted a net loss of $1.12 billion on $3.3 billion in revenues for the 12-month period ended on Halloween. That was compared to a loss of $627.12 million on $4.79 billion in revenues a year ago.

“Since mid-September, the housing market has deteriorated in lock-step with the widening financial crisis and declines in broader economic conditions,” said Ara K. Hovnanian, president and CEO. “Despite the headwinds we faced, we ended the year with $838 million in cash, slightly above the guidance we gave earlier in the fall before conditions worsened.”

Earlier this fall, Hovnanian sold its Piazza d’Oro, a partially developed, 14.4-acre, mixed-use project in Oceanside, for $30 million. The project was approved for 221 residential units and some retail.

D.R. Horton (NYSE: DHI) of Fort Worth, Texas, posted a loss of $2.63 billion on $6.64 billion in revenues for the 12 months ended Sept. 30, compared to a loss of $712 million on $11.3 billion a year ago.

Horton has been involved in some fire sales of late.  The builder, which had reportedly paid more than $100 million for land for an eventual 2,000 homes in the Desert Hot Springs area, is said to have sold the parcels for less than a tenth of that figure.

Horton has four “active” projects in the county according to MarketPointe Realty, including the 140-unit Atlas condominium in Hillcrest, La Boheme in North Park, Esperanza in East San Diego and Seacliff in Oceanside.

MarketPointe reported that the sales at Horton’s Atlas began in April 2007 and as of Sept. 30, 58 opened escrows had been reported as opened and 32 closed.

The units at Atlas range from 719 to 1,485 square feet in one- and two-bedroom floor plans that were priced from $349,000 to $539.

KB Home’s (NYSE: KBH) nine months ended Aug. 31, saw a net loss of $668.84 million on $2.11 billion in revenues, compared to a loss of $156.76 million on $4.34 billion in revenues in 2007.

KB home had six active projects in San Diego County as of September that range from Chula Vista to Fallbrook and the Skyline area to Campo.

One of these projects is Buckingham @ Windham in Oceanside, a 30-unit detached project. MarketPointe reported a total of 25 escrows opened and 11 closed as of Sept. 30.  The project opened for sale in March 2006 and prices ranged from $784,990 to $889,990 in September.

Brookfield Homes (NYSE: BHE) which has one of its headquarters offices in Del Mar, a loss of $46.6 million on $299.14 million in revenues through the first nine months of the year.

That was compared to $39.8 million in net income on $385.67 million in revenues for the first three quarters of last year.

Brookfield announced discounts at some of its developments in October, particularly in the Inland Empire.

The Mahogony at Old Creek Ranch project in San Marcos was discounted by $90,000 to $669,900 and more than $21,000 in upgrades were included in the package.

“Broad-based external pressures continued to negatively impact the housing market as rising unemployment, falling home prices, increased foreclosures, tighter credit and volatile equity markets further eroded consumer confidence and depressed home sales,” said Lennar’s Miller.

“As we enter fiscal 2009, we are hopeful the new administration will approve a major stimulus package to stimulate housing demand in order to stabilize housing values, which will reduce foreclosures and stabilize the financial markets, leading to restored consumer confidence.”

From Barbara Boxer:

Dear Friend:

I have released a report detailing the impact of the nation’s recession on California’s counties and cities.  The report, which was based on interviews conducted with officials in 20 cities and all 58 counties, paints a stark picture of the economic strains felt across California.  The analysis includes unemployment figures, home foreclosure rates, budget deficits, and first-hand accounts of the impact of the recession.

This report is a reality check on the economy — things are not good, but change is coming.  I am going to focus like a laser beam on saving and creating jobs, which is the backbone of any economy. 

The report shows that budget deficits and revenue reductions have forced local government to make cuts in many programs, including public safety programs, Medi-Cal services, mental heath services, meals on wheels, and youth and senior centers. Non-governmental charitable organizations also have been stretched to the brink.  In addition, critical infrastructure projects are stalled due to financing problems, which limits job growth at a time when unemployment rates are at their highest level in decades.

This report shows clearly that action is needed.  I am working with Congressional leaders and President-elect Obama on federal economic recovery legislation, including:

• Investment to repair and improve existing infrastructure, including roads, bridges, transit and rail;
• Increased support for federal programs that support energy efficiency in new buildings and upgrades to existing buildings, which would create jobs;
• Investment in water infrastructure projects, including reclamation, reuse, and groundwater cleanup programs that could not only provide new water supplies but also create jobs;
• Increased investment in the Community Oriented Policing Services (COPS) program, which awards grants to state, local and tribal law enforcement agencies so they can hire and train law enforcement officers, purchase new crime-fighting technologies, and develop innovative policing strategies;
• Providing additional Community Development Block Grants, which help states and local governments to implement plans to address local housing needs and neighborhood stabilization as a result of the foreclosure crisis; and
• Increasing the percentage of funding the federal government provides to states for the Medicaid program, which provides health care services for low-income individuals.

The full report is available on my Senate website at:
http://boxer.senate.gov/features/Boxer_California_Recession_Report.pdf
Sincerely,

Barbara Boxer
United States Senator

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From her report:

San Diego County:

$10 million loss in property tax revenue Jan-Sept 2008.

Demand for food banks increased 50%, with 55,000 individuals per month seeking food assistance

City Of San Diego:

Population:  1,336,865

Unemployment rate:  6.8%

Foreclosure filings Jan-Nov 2008:  22,991 (one per every 21 households)

Builders of small new-home tracts did pretty well during the heyday, but for those that didn’t get out; well, let’s say that the lenders are having some tough conversations now.

We saw the seven houses next to Carlsbad Village Drive, the Barratt tract in Leucadia, and now a couple of others in southern Encinitas east of the I-5 freeway:

This 4,915sf house in Orchidia has been listed nine times since 2005 with three different realtors.  List prices have ranged from $1,750,000 to $2,500,000, and the current LP is $2,150,000 (as a short sale).

This one looks abandoned from the street, and unfortunately for the neighbors the NOD filed in August showed a delinquent balance of $164,000 on the $1.5 million first mortgage. There’s no chance the owner will cure that debt, and if the private lender holding the $500,000 second TD won’t negotiate, then either he’ll end up buying the house at the trustee sale, or he’ll lose half a million dollars.  Either way, the likelihood of this eventually selling for well under $2 million is excellent.

A couple of blocks down is another small tract of seven (1:45 min video):

I had two of these conversations yesterday, one with an agent, another with a seller, about showing their listed home for sale today:

JtR: Hello ma’am, I’m Jim Klinge, an agent who has buyers who would like to see your house tomorrow. Can we stop by in the afternoon?

Seller: What can you tell me about your buyers?

JtR: I’m sorry, I’m not sure I heard the question, can you repeat it?

Seller: Tell me about your buyers, have they talked to a bank? Are they well-qualified?

JtR: Yes ma’am, they are well qualified, can we come by?

Seller: Well, I don’t know, I have little kids and it’s Christmas – are they motivated?

JtR: Well, come to think of it, we’re casually looking, so if something changes I’ll call back. Thank you very much and happy holidays.

A big struggle in the marketplace is finding the motivated sellers – people who really need to move. I have found houses recently that have been great matches for my buyers, but the price is too high and the sellers and listing agents would rather wait longer for the lucky sale, rather than make a deal.

When I get resistance about just SHOWING the house, then I know that even if we like it, the chance of making a deal is remote. There are enough houses to show that I have to cut somewhere, and the sellers (and agents) who make it difficult to see the house eliminate themselves from my list.

At Klinge Realty, all lanes are open - show our listings anytime and make an offer!  Here’s a new REO listing in Vista, a 2br/1.5 ba, 846sf penthouse going for $169,900:

I’ll add this story that happened this summer. An agent who had her own property listed a few doors down from my listing called about showing mine. I said no problem, it’s on lockbox. She said that she was going to be on vacation that weekend, and she wanted me to show her client my listing. I told her that I thought it would be a conflict of interest, because if I showed it to them, I’m going to talk them into paying full price for it. They never saw it, and she turned me into the board of realtors for failing to cooperate.

So there is one caveat. If you’re a realtor who is going on vacation, and you want me to show my listing to your client, I’ll do it – as long as you don’t mind that I talk them into paying full price for it. Fair enough?

Boy, the local traffic conditions have changed. It used to be that if you were heading southbound of I-5 on a Saturday afternoon you’d be stuck in a grinding bumper-to-bumper crawl from Oceanside to Del Mar.

Not any more (58 sec):

My oldest daughter Kayla is a senior at Cathedral Catholic High School.  She’s been on the Dance Team the last four years, which performs during halftime at the home football games – which means I’ve seen a lot of high school football lately!

The Dons completed a perfect 14-0 season last night, winning the 2008 Division II High School State Championship with a thrilling 37-34 victory over Stockton St. Mary’s at the Home Depot Center in Carson. 

Tyler Gaffney, their star running back, ran for 329 yards and five touchdowns, both state bowl records. He’s been incredible this year, running for 2,872 yards and scoring 56 touchdowns (48 rushing), which ties him for fourth all-time in state history for TDs in one season. 

Here’s #56, the one Cathedral had to score to win with less than 2 minutes left, after St. Mary’s had ran back the kickoff for a touchdown to take the lead (18 sec):

He ran long touchdown scrambles in every game, usually carrying multiple tacklers with him. Hopefully he’ll have a long career ahead – USC, Stanford, and Notre Dame are his three leading choices for college.

My kid is having the perfect season too – a few weeks back she won homecoming queen!

From the U-T:

After dipping sharply in September, San Diego County notices of default bounced back last month, dimming hopes that the troubled housing market has seen the worst of the ongoing real estate slump.

Although still well below the peak foreclosure activity of the summer, defaults in November were on the rise following a brief lull. Analysts said the slowdown was caused by greater efforts by lenders to modify troubled home loans.

DataQuick reported 1,045 foreclosures within the county last month, a decrease of nearly 9 percent from October but a year-over-year increase of nearly 119 percent. In October foreclosures had declined 37 percent from the previous month, leading some analysts to believe the housing market was on the rebound.

DataQuick researcher Andrew LePage noted that November had only 17 business days, masking an upswing in daily foreclosure activity. Average daily foreclosure filings last month totaled 61 compared with about 50 in October, he said.

The pace of foreclosures in 2009 will depend on how successful the government is in encouraging loan modifications and propping up the sagging economy, LePage said, adding, “Without further government intervention, I think we are in for a big jump in the new year.”

DataQuick recently reported that 52 percent of all existing-home sales in San Diego County in November involved homes that had been foreclosed on in the prior 12 months.

Heavy foreclosure activity is contributing to ongoing price declines, with the median price of a resale home in November at $335,000, down 33% from November 2007.

Some homeowners are reluctant to go into foreclosure, even when they’re overwhelmed by debt. In Chula Vista, Gustavo Diaz de Leon recently negotiated a short sale, in which his lender agreed to accept less than the amount due so he could avoid default.

“I didn’t want to just walk away.” Diaz de Leon said.

He said he used an adjustable loan to buy the home for $500,000 in 2005. It will be sold for about $330,000. Under the short-sale agreement, the proceeds will be used to pay off a first mortgage and Diaz de Leon will continue to pay off the home’s second mortgage.

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Here are the # of foreclosures Y-O-Y in North County areas:

The last number on the chart gives us some perspective – though foreclosures went up 133% year-over-year, it’s still less than 1% of the total properties in even the worst-hit neighborhoods.