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Some folks from Seal Beach just paid $1.3 million cash for these five units on Acacia, a half-block to the beach.  The last listing showed the annual gross scheduled income to be $90,000/year:

Hi Jim,

I thought it would be interesting to plot up the Dec sales/price data you put up this morning.

Graph is attached.  The X axis is the % change in sales, the Y axis is the % change in price. The size of dots indicates the number of sales (more sales are bigger dots), and the color indicates the price (blue is cheap, red is expensive).

I thought it was interesting that the data falls into two distinct groups.  One group lies along what I call the “REO-Reality” axis, which is where the neighborhoods are acting in a equilibrated fashion.  You can see that these are the places where the price per square foot is less, and have been experiencing active sales (i.e., big blue dots).

The other group falls along what I call the “I’m not giving it away” axis, and is expensive places that have had very small sales (small red dots).   These are mostly the high end coastal communities, although La Jolla does not fall on this line.

Love the blog,

Regards,

Dwip

Reader LGS sent this in:

Remember that odd transaction with the Lennar-affiliated LLC that you noticed over at the Santee property?  I’m now beginning to wonder if my theory about it was indeed correct:  that by “selling” the homes at asking prices to affiliated LLCs, with less stringent reporting requirements, they are moving things off their balance sheet.  In any event, someone doesn’t like what they’re doing somewhere—116 off-balance sheet joint ventures?  One has to at least ask what the legitimate business purpose for the arrangements are, if any.

LGS and I had picked up on Lennar’s transferring of properties to LLCs, and apparently we’re not the only ones.  The Wall Street Journal checks in today with a story about it:

http://online.wsj.com/article/SB123155084225070187.html

An excerpt:

In a written report and Web video, Mr. Minkow criticized Lennar’s practice of putting large amounts of debt in off-balance-sheet joint ventures, saying there is insufficient disclosure about them to investors. Lennar has about $4 billion in off-balance-sheet debt through 116 joint ventures and has typically given very few details about these arrangements.

The builder’s chief financial officer, Bruce Gross, said in an interview, “we have full disclosure on our joint-venture debt. There is nothing concealed.”

Mr. Minkow is a convicted stock-fraud felon who was imprisoned for his role in masterminding the ZZZZ Best stock swindle in the 1980s. Since his release, Mr. Minkow has won kudos from the Federal Bureau of Investigation for uncovering frauds on the Internet, in the real-estate field and elsewhere. His recent effort to expose executives and directors who embellish their academic credentials has led to several resignations of high-level officials. Other campaigns against public companies have had mixed impact.

In some cases, Mr. Minkow has sought to profit from his investigations by betting on a decline in the target company’s stock, through buying put options. In the case of Lennar, Mr. Minkow says he has no such option position, but instead is being paid a fee by an unnamed client.

In his report, Mr. Minkow takes aim at a $5 million loan taken out by Lennar’s chief operating officer, Jon Jaffe, in 2007. He claims that Mr. Jaffe obtained the loan from a California real-estate broker who has done business with a Lennar business partner and that the broker also has made a big profit on property adjacent to a Lennar development.

Mr. Jaffe denied that Lennar had business dealings with the broker who extended the loan. Mr. Jaffe said he took out the loan to pay for renovations on his six-bedroom, ocean-front home in Laguna Beach, Calif., recently appraised for $18 million. “My loans on my home had nothing to do with Lennar,” Mr. Jaffe said.

Mr. Minkow also accuses Lennar of perpetrating a “giant Ponzi scheme” in its land deal with the California Public Employees Retirement System that landed in bankruptcy court. He said Lennar moved other joint-venture assets into the venture, known as LandSource and depleted the venture of cash before it imploded amid the housing downturn.

Mr. Gross denied that Lennar controlled other assets that were rolled into the LandSource venture. He said they were contributed by Lennar’s partner in the deal, MW Housing Partners, a Calpers investment vehicle, as part of its overall $970 million investment.

(Disclosure: Lennar was my pick in Robert’s contest of guessing the first builder to go bankrupt)

Oceanside sales have been red hot lately. Of the 12 REO sales we’ve closed since September 1st, EIGHT of them have sold above list price. As you’ll see below in the Oceanside stats comparing December 2008 to December 2006, their sales increased 52%, while pricing dropped 33%.

Oceanside is finding some equilibrium, because their pricing has gone down enough that sales have increased substantially. Other areas that have been stickier on price continue to see their number of sales drop.

To try to gauge the differences, I came up with the Jim Formula.

I doubled the difference in sales, and added it to the difference in pricing. For example, there were 51 more sales in Oceanside, so I doubled it to 102, and then subtracted the difference in pricing, 97, to get +5.

It probably doesn’t mean anything, it’s early this morning and the coffee is running hot. But follow how the other areas measure up, using the same formula:

December Sales of Detached Homes

Obviously those with smaller samples are skewed, but you get the idea. If your area of interest is in the top half of this list, you’ve seen prices come down enough that 2008 sales are closer to 2006 sales, when the funny money was readily available (Carmel Valley being the exception, as usual).

When you see a ‘superior’ home list and sell, it is somewhat understandable. Buyers are holding out for the best available choice, and in many cases paying more to get it.

What about those with bumps and bruises, or other slight defects? When we see those list and sell quickly, it’s a sign of some buyer anxiety – they’re not holding out for the very best, instead, making due with a close-enough fit (as long as the price is right).

This house was the other example, along with the Leucadia house, that went pending the week before Christmas – this fell out, but was marked pending again on January 6th. The list price is $745,000 for 3,476sf.

I think this house was ideally suited for those needing a guest suite. The downstairs bedroom was extra-large, and if granny was going to live with you, or visit a lot, you’d like this one – and the price was good; at list price it’s $214/sf:

This one house doesn’t indicate any ‘bottom’ – it would take 50-100 of these to sell, before you could call it a trend and say buyer psychology might be changing. But if you see more sales of the less-than-superior homes, it’ll mean that the frustrations that buyers are enduring are causing them to overlook a couple of imperfections in order to finally buy something.

Here’s a contest update!

We were guessing the number of closed sales of attached and detached SD homes between November 1st and December 31st. Today’s count is 4,956 – here are the guessers:

4,949 Erica Douglass
5,000 CVman
5,021 Rob Dawg
5,150 Angela
5,259 Turnack

We’ll take the final tally on January 20th, but it looks like Erica, CVman or Rob Dawg!

From sddt.com

WASHINGTON (AP) — Mortgage giants Fannie Mae and Freddie Mac said Thursday they will extend the suspension of foreclosure sales and evictions from single-family homes through the end of January.

The companies had suspended foreclosures through the holidays, but were expected to resume proceedings after Jan. 9.  The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as it works with mortgage servicers to find options for troubled mortgage holders under the Streamlined Modification Program.

Freddie (NYSE: FRE) and Fannie (NYSE: FNM) began the modification program in December, aiming to create more affordable mortgage payments for borrowers at risk of foreclosure. The program applies to borrowers who have missed three payments or more, own and occupy their homes, and have not filed for bankruptcy.  Under the program, borrowers can reduce their interest rate, extend the life of the loan or defer payments on part of the principal. 

The extended hiatus on foreclosures will give Fannie more time to launch a new policy that will allow renters in company-owned foreclosed properties to stay in their homes, the company said in a news release. Details of the new policy have not been announced.

Fannie personnel have been reviewing seriously delinquent loans to see if borrowers have been contacted and all options to work out their situations have been exhausted, the company said.  Freddie Mac Chief Executive David Moffett said in a statement the mortgage giant is “committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market.”

Fannie and Freddie own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the sibling companies in September.

I was talking to a guy yestrday about the cold snap we’ve been having, and he said,

“It’s been so cold lately that I had to put the top up on the convertible.”

Link to South Carlsbad State Beach website – and camping reservations

This San Diego beach features swimming, surfing, skin diving, fishing and picnicking. The large bluff-top campground is very popular, especially in summer. Stairs lead to the beach.

Campground showers—TOKEN operated
Token machines at ranger station and campfire center
Tokens available upon check-in

Location-Directions
The beach is located 3 miles south of Carlsbad on CARLSBAD BLVD.
Take INTERSTATE 5, exit PALOMAR AIRPORT ROAD.
Go west to CARLSBAD BLVD – SOUTH.
Turn SLIGHT RIGHT onto ramp CARLSBAD BLVD. – SOUTH.
Merge onto CARLSBAD BLVD. – SOUTH, continue 1.6 miles to campground entrance.

Campground Address
7201 Carlsbad Blvd.
Carlsbad, CA 92008
The campground entrance is not accessible from Poinsettia Ave.

Wi-Fi Service
South Carlsbad State Beach now offers AT&T Wi-Fi Service!
This service enables park visitors with wireless enabled laptop computers or personal digital assistants (PDAs) to access the Internet. You can access this service if you are within a 150 foot range of the Lifeguard Headquarters located in the Park.