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Were you planning on getting a mortgage rate in the 4% range?

Conforming rates are back up to 6% with no points, and the super-conforming loans between $417,000 and $546,250 are around 6.375% with no points.

Jumbos?  High-sevens at most lenders.

But higher rates aren’t stopping those on the lower end from gobbling up whatever they can get. Asked to to describe how buyers are scrambling to tie up homes listed under $250,000, one agent called it “mayhem”.

How has the new year opened? The higher end isn’t nearly as lucky:

SD County Detached and Attached Listings Gone Pending Between Jan 1-29

Yes, those in 2009 haven’t closed yet, but there are probably another 1,000 short sales marked active that have pending offers on them too – but the listing agent won’t mark them pending.

You could say that these numbers are just reflecting how prices have come down – haven’t a bunch of more expensive homes slipped under the $600,000 level recently?

True – but tell that to the sellers (and agents) of the 4,217 active listings above $600,000 – including 1,041 listed this month!

Mayhem is right!

One more tidbit for buyers – if you buy a house and things don’t work, you can get a new FHA mortgage just two years after a foreclosure!

Looking for a vacation home? Check this 2:28-minute youtube video:

I witnessed my first actual evicting of occupants today at this house at 4773 Sequoia in Oceanside.

It had been foreclosed in September, and a 60-day notice was served after the tenant turned down the cash-for-keys offer.  He didn’t leave after two months, and because he didn’t contest it in court, the case went directly to the sheriff’s office.

The tenant is an active-duty Marine, a big fan of UFC fighting, and had a big nasty pitbull – and I’ve seen my share.  I communicated this to the asset manager, hoping that the eviction would go quietly because the sheriff’s posse would be dispatched.

They emailed me the exact time, 10:40am, and I arrive a few minutes early thinking I’ll see 2-3 burly sheriffs looking for trouble.  I look through the garage window and see all of the tenant’s stuff in full view.  At about 10:45am, a squad car pulls up, and a little skinny guy with white hair about 60 years old gets out.  I start thinking that a major confrontation is about to erupt, and now I’m relying on a guy who looks like Barney Fife to save the day.  I hoped he still had his bullet in his front pocket!

Myself, the locksmith, and Barney go to the front door, knock, and no one answers.

We let the locksmith go to work, and Barney and I go around to the back door - and it’s unlocked.  I step in, and Barney says “Hold on, let me go first”, and I leap out of the way, figuring he’s the one with the bullet.

Nobody was home, and the house was vacated, with the garage full of junk.  Thinking that the sheriff is in charge of evictions, I ask, although somewhat nervously, ”who is going to come and clean the place out?”

Barney turns to me with a big smile and says, “That’s your job!”

He went on to say that he has been traveling to Carlsbad, Encinitas, and Carmel Valley more often lately, and mentioned Torrey Highlands by name.

The locksmith said his company of 12 people used to have 550 properties assigned to them, but today they are down to half of that, around 275.  It’s gotten so bad that he has had to expand to Riverside County. 

He thought it must be due to a competitor cutting in on his business, but someone in his network recently told him that the banks have been buried and not listing any new properties.  He heard that we should see a major onslaught on REOs coming to market, starting in February.

I’ll be a little older then, but I’m ready!

Let’s face it,  higher interest rates are in our future – heck, they can’t go much lower!

What’s the effect on buying power?

As the interest rate is increased, here are the corresponding loan amounts that get you the same monthly payment, approximately:

$417,000 @ 5.50% = $2,367.68

$375,000 @ 6.50% = $2,370.26  (10% reduction in buying power from today)

$338,000 @ 7.50% = $2,363.35  (20% reduction)

$308,000 @ 8.50% = $2,368.25  (26% reduction)

$282,000 @ 9.50% = $2,371.21  (32% reduction)

Rising interest rates will hinder the benefits of lower prices – but you save on property taxes!

Do you think it’s not possible in our lifetime? 

I couldn’t wait to get into the business in 1984, because rates had just come down to 13%!

This is a curious new rule – Fannie/Freddie lowering their portfolios from $850 billion to $250 billion by year 2022.  Fannie/Freddie might end up a bit healthier, but who is going to lend, and keep the loans in their portfolio?  Will it force a FHA/VA-only market?  What will mortgage rates need to be to encourage banks to take the risk?

WASHINGTON (Dow Jones)–Fannie Mae (FNM) and Freddie Mac (FRE) will be allowed to increase their mortgage holdings to a maximum of $850 billion through the end of the year before their regulator requires them to eventually reduce their portfolios to $250 billion, under an interim final rule published Tuesday by their regulator.  

The new requirements, issued by the Federal Housing Finance Agency, are in line with the agreements between the agency and the Treasury Department announced in September when the federal government took control of the two firms.   FHFA said in a statement that the two government-sponsored enterprises would be allowed to increase their mortgage holdings to $850 billion through Dec. 31 of this year.

Beginning on Dec. 31, 2010, however, the two firms will have to reduce their mortgage portfolios by at least 10% annually until the assets reach $250 billion.   The rule is subject to a 120-day comment period.
(Dow Jones Newswires 03:13 PM ET 01/27/2009)

The lower-end of every market is what’s selling, and Encinitas is no different. Back in 2005 the houses in Village Park were selling between $600,000 and $700,000, but now you see sales prices in the $400,000s – and they’re selling. Three closed sales on this street in last 45 days, three pendings, and only one active – under the power lines.

Here is a trip around Village Run – a six-minute youtube tour:

I can wait to sell houses in Fresno or Bakersfield or Blythe!  Blythe is nice this time of year!

From C.A.R.:

I’m very pleased to be able to share three important developments with you regarding CALMLS, the statewide Multiple Listing Service (MLS) initiative, that impact every REALTOR® in California. This past weekend at the C.A.R. board of directors meetings in Monterey, following an extensive vetting process that included input from REALTORS® and other stakeholders statewide, CALMLS named Concentric as its technology partner; secured a $3 million line of credit for partnership activities, ongoing operations, and future development; and debuted dynamic new branding for CALMLS’ products and services.

Selecting Rocklin, Calif.-based Concentric was a critical first step toward a more current and flexible MLS system, designed with a real estate agent’s needs in mind. Platform- and browser-neutral, Concentric’s Web-based system performs substantially faster than any product on the market. CALMLS will incorporate many different technologies to allow choice as well as myriad new applications for the licensees accessing the system, including creating the foundation for a property-centric database that will allow members easy access to relevant data on all properties in California. Concentric’s next-generation product is a notable and clearly visible leap forward from current MLS software and is built on a platform that can adapt to ever-changing technology needs.

CALMLS also debuted new branding for the products and services offered by the statewide MLS entity. These now will be branded as calREDD™, an acronym for California Real Estate Dynamic Data.  The new calREDD™ branding reflects the long-term vision of creating one database for all California real property, with advanced technology that goes beyond current MLS systems and incorporates a database rich with detail about every single property in the state.

At the directors meetings this past week, Concentric conducted standing-room only demonstrations, with local REALTOR® associations vying for priority to have the system for their respective MLSs. In fact, 66 local REALTOR® associations and three regional MLSs representing more than 120,000 members across the state already have signed letters of intent to participate in CALMLS.

We’ve seen an invasion of ice cream trucks around Oceanside – now there in Carlsbad too.  You see them around all the foreclosures – are they a precursor to more problems in C-bad?

P.S. This is a blantant cross-promotion with Calculated Risk!

P.S.S. I mentioned in this video that Vista doesn’t allow ice cream trucks anymore, after one of them was found to have maggots in their ice cream (told to me by an ice cream truck driver).

This 1,486sf house at 4244 Esperanza was foreclosed by Countrywide on September 9, 2008.  The previous owners had run up the housing ATM to $441,000, and bailed.

Shortly thereafter it was assigned to me as an REO – but it was still occupied by the long-term tenants.  It turned out that they wanted to buy it, and their short sale offer was being reviewed by Countrywide at the time of the trustee sale.

I relayed that information to the asset manager, and said “Why don’t we just sell it to them?”

He said to make sure they were pre-approved, which we did, and he’d order an appraisal.

Three months went by, and in spite of my constant badgering, no call from an appraiser. 

The asset managers each have 300-400 files in process, but how many can work more than 100 effectively? Not many, if any.  As you can guess, plenty are falling through the cracks.

The last week of December I finally hear from the appraiser.  I contacted the tenants’ realtor to schedule an appointment, and got a real shock.  They had continued to push their offer through the short sale division, got it approved, signed docs and were literally ready to close!

When I relayed that to the asset manager, he declared it to be impossible.  I mentioned that it’s the third one I’ve seen that Countrywide has rescinded the trustee sale, and he didn’t believe that either.  He demanded that I provide proof that it closed, once it did.

The next week I sent him a copy of the grant deed proving it had indeed closed, but that wasn’t good enough – he wanted to see the closing statement too.  But I’m not a party to the transaction, why would anyone give me a copy of the closing statement? 

He proceeded to put his foot on the gas with the eviction attorney, who let me know that the sheriff was scheduled to throw the former-tenants-now-new-owners out in the street in a few days.  I pleaded for mercy, sent them the grant deed, and thankfully the attorney backed off. 

But I could help but think how close I was to being on the front page of every newspaper in the western world over that one!

A while back we realized that short sales were going to be a part of our life. 

Having quality listings is the name of the game for realtors.  But if I have to outwit, outplay, and outlast the lenders to survive a short sale too, let’s at least do it with quality properties owned by cooperative people.

I only had one short sale listing in 2008, and it went pretty good – we only lost one buyer (two days before the bank approved the deal) and found a replacement the next day who paid full price, all-cash.

Here’s the first of 2009 – 3565 Rock Ridge, a former model home in Calaveras Hills.

It’s a 4 br/3 ba, 2,031sf house on a 5,100sf lot with 180-degree views and southerly exposure overlooking most of east Carlsbad.  The master is downstairs, The HOA is $124/mo., and the ‘roos is $881/year.  It sold for $820,000 in 2005.

Today the list price is $499,000!

If you are interested in seeing it, we’ll be open today 1-3pm (though I won’t be there).