bubbleinfo.com

The camera is always running, let’s review some of the last year’s lowlights:

So Mr. Smarty Pants got his lunch handled to him on the last video, right?

I try to avoid that by doing a quick check before going out on these.  The tax rolls have a computerized comp checker using size and distance from subject property as the primary criteria.  The was a model match to this house that sold in October for $562,000, and even though it was an REO, it was decked out pretty nice.

That was all I needed to see, but also consider that there are eight one-story houses currently for sale in 92024 that are UNDER $500,000!

Why did this go pending?  The reasons, in most likely order of being right:

1.   Neighbor within 1-2 blocks bought it for family member.

2.   Someone who has coveted the neighborhood for a long time.

3.   Naive buyer and/or agent who got suckered by the ‘won’t last’ mantra, and the short-sale 2,100sf active listing across the street for $695,000 (unsold).

I mumbled at the end of the video that we should outlaw these types of sayings – in this environment, the old, worn-out hype is just begging buyers to test you.  If you have a house that is in perfect condition, that’s one thing, but a house built in 1974 that’s in original condition is just the type that buyers will say, “We’ll see about that not lasting” and not make an offer just to show you.

Plus, if it’s such a bargain, maybe you should have listed it higher?

A fourth possibility is that the market is heating up – and that this year’s spring kick might actually happen this time.  Adam started this post on Piggington (link below), saying that he’s sees the market being more active today than it’s been in the last 2-3 years, and that bargain hunters might as well take the next few months off.

http://piggington.com/creating_a_sense_of_urgency_you_better_buy_now

I concur that sales are hot and heavy in the lower price ranges of every market.  But I think people should always keep an eye out for the right house, at the right price.  The model-match comp mentioned above?  It was listed for $656,900 for 30 days – then shows up sold for almost $100,000 less? 

Even if the banks start dumping properties and prices continue their descent, the competition for them will increase.  Being able to land the right house, at the right price, will likely be a challenge no matter what time of year.  Plus, as we saw in 4Q08, the inventory of good homes for sale was pretty thin.

Just keep an eye out – who knows what you’ll see?

P.S. The house on the video is also a probate sale, so it’ll go through the court’s overbid process.

From sddt.com:

Smart growth, lending practices and economic conditions were the focus of North County’s real estate forum, Conversations ’09, which drew nearly 200 real estate professionals to California State University, San Marcos on Friday. The event was hosted by the North San Diego County Association of Realtors in partnership with CSUSM.

Economists discussed reasons behind the housing market crash while elected officials and industry members weighed in on North County’s shifting development patterns. North County’s housing market began its decline during the last quarter of 2007. Though sales are down, they are slightly greater than in the rest of the nation, said Robert Brown, professor of economics at CSUSM.

The median home price sold in North County fell from $632,000 in 2007 to $454,000 in 2008, Brown said. Such reduced prices have put homeownership in reach for more people; the current median home price of approximately $300,000 is affordable to 30 percent of the population, Brown said.

“Homeownership is still one piece of the American dream and I think it will continue to be,” said John Tuccillo, former chief economist for the National Association of Realtors. 

While lower home prices may be good news for first-time buyers, it is a bust to homeowners with reduced equity and those interested in selling their homes.

Both Brown and Tuccillo, cannot predict when home prices will begin to rebound. Federal aid to failing banks and tax credits for homebuyers have created a situation of unprecedented uncertainty.

While on the subject of falling home prices, real estate professionals sounded off about predatory lending practices that spurred the foreclosure crisis. John Murphey, vice president of mortgage and lending for San Diego National Bank agreed with Realtors that the overextension of lending practices was the impetus for the recession.

“It all comes down to greed,” Murphey said. “It was a wonderful, wonderful Ponzi scheme that was making everyone all kinds of money.”

While such lending practices resulted in widespread foreclosures, they also forced homebuilders such as Barratt-American into bankruptcy, said panelist Mick Pattinson, chief executive officer and principal of Barratt-American. The company was forced into foreclosure after its lender canceled a loan for homes under construction.

“They don’t practice what they preach,” Pattinson said of U.S. banks. “They insisted I be leveraged one-to-one. They (Bank of America) were leveraged 30-to-1, Lehman Brothers was leveraged 60-to-1.

Though many have lost a great deal, some insist there is no time like the present to invest in real estate.  “In times like these, great wealth is made,” said panelist and executive editor of The Daily Transcript, George Chamberlin.

The recession is likely to preserve North County’s landscape, staving off smart growth development until conditions improve. “Smart growth” is anti-sprawl, transportation-oriented development, said Ivan Holler, director of planning for the Rancho Santa Fe Association of Realtors. The term is likely to shape future housing development in California, accelerated by AB 375, which mandates cities draft strategies for creating sustainable communities and reduce miles driven on roads.

Vacant big-box stores left behind by now-defunct retailers must be sold before new shopping centers can be built, just as foreclosures must clear the market before homebuilding can begin, said Virginia Felker, chairwoman of the Encinitas Planning Commission. Such structures, which dot North County’s landscape are likely to remain at least through the coming decade.

While the city of Carlsbad is resistant to the higher density housing encouraged by the smart growth concept, looking forward, the city hopes to provide living space for its share of the “green” jobs President Obama talks of creating, said Councilman Matt Hall.

With policy issues such as these facing the industry, Conversations ’09 served as an educational and consensus-building forum for members of the North County real estate industry.

“We need to alert people in real estate that their interests are much broader,” Tuccillo said. “If real estate is your business, politics is your business.”

Here’s a link to Zach’s take on it:

www.bizblogs.nctimes.com

On one of the best street in Carlsbad, Buena Vista Circle:

Here’s a NYTimes story about an ex-Countrywide guy making a killing by buying bad paper from distressed banks:

http://www.nytimes.com/2009/03/04/business/04penny.html?_r=2&partner=rss&emc=rss

An excerpt:

So it may come as a surprise that a dozen former top Countrywide executives now stand to make millions from the home mortgage mess.

Stanford L. Kurland, Countrywide’s former president, and his team have been buying up delinquent home mortgages that the government took over from other failed banks, sometimes for pennies on the dollar. They get a piece of what they can collect.

“It has been very successful — very strong,” John Lawrence, the company’s head of loan servicing, told Mr. Kurland one recent morning in a glass-walled boardroom here at PennyMac’s spacious headquarters, opened last year in the same Los Angeles suburb where Countrywide once flourished.

“In fact, it’s off-the-charts good,” he told Mr. Kurland, who was leaning back comfortably in his leather boardroom chair, even as the financial markets in New York were plunging.

WASHINGTON (Dow Jones)–The success of the Obama administration’s plan to cut mortgage payments for millions of at-risk homeowners hinges on congressional action to shield mortgage servicers against lawsuits from investors, a top mortgage industry official said.   The plan, which the administration kicked off Wednesday, is heavy on incentives for mortgage servicers and borrowers, but provides no protection for servicers against lawsuits from mortgage investors who might become angry about the modifications.   Roughly 60% of seriously delinquent U.S. mortgage loans are concentrated in “private label” mortgage-backed securities, or MBS, which are not issued by Fannie Mae (FNM) and Freddie Mac (FRE).   Such mortgages “probably won’t be modified until there’s a safe harbor,” David G. Kittle, the chairman of the Mortgage Bankers Association, said. “The incentives are not enough to protect anyone from a lawsuit.”   Under the program, the government would pay mortgage servicers a $1,000 one-time fee to reduce borrowers’ mortgage payments to 38% of their income for five years.

“Private Label MBS” = Countrywide Loans Concentrated in California = No Relief in Sight

This house in Encinitas Ranch has broken from the pack. Last week they lowered their price $150,000, now it’s the range $1,049,000 to $1,149,876. The bottom of their range is $400,000 below the closest competition – that’s the way to find a buyer!

The overall market numbers make it look like a spring kick could be in the works – sales are up!

But let’s dissect it and compare to previous years, and to the current actives.

These are the detached listings that went pending during the first two months of the year:

When looking at the 2009 numbers, the lower-end is moving OK compared to the number of actives, but when you get to the million-plus market, then boom, it hits the wall. With the super-conforming loans going back to $697,500, we should see a decent market run the next few months in the lower price ranges.

But how will the million-plus debacle affect buyers in all ranges?