Friday, April 3rd, 2009 at 6:23 PM
Record NODs
from sddt.com
San Diego County notices of trustee sales hit their lowest levels since November 2007 in March, while there were a record number of notices of default (NODs) filed. Both are likely due to a backlog caused by government-mandated foreclosure moratoriums implemented late last year and were carried out through the beginning of 2009.
The 4,260 notices of default recorded by the San Diego County Assessor in March were highest number recorded in a single month, according to Daily Transcript records dating back to 1982. Year to date, 2009 is outpacing 2008 with 13 percent more total NODs with 11,020 recorded thus far. The 844 trustee’s deeds filed were a 38 percent decrease from February’s 1,365 and 27 percent lower than March 2008’s 1,162.
Rick Hoffman, COO and president of Coldwell Banker’s San Diego County and Inland Empire regions, said, “The next step you’ll see are the number of trustee’s sales will go up to reflect the number of defaults that have been filed,” he said.
Given the foreclosure moratoriums and banks being backed up with new foreclosure filings and being unsure of what new legislation might bring, Hoffman said: “What you’re seeing now is the playing field starting to become clear to everybody.”
Both the increase in notices of default and decrease in trustee’s deeds were “not a shock” to the market, Hoffman said. “The big thing is that this was anticipated by the market,” he said. While the high number of notices of default may increase the number of short sales in the housing market, Hoffman said the inventory will be welcome.
The number of homes sold in 2009 is up compared to 2008, and Hoffman said competition for lower-end homes has begun picking up, leading to the local housing market beginning to “become healthier.”
“We’re going through the normal pains of the recovery we’ve got to go through,” he said. “And I don’t think the introduction of these defaulted properties and eventual trustee’s sales and foreclosure sales are going to have as dramatic an impact on the market as we saw last year as we did [with foreclosures] at the start of this crisis.”
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I read that last paragraph three times, and I’m still not sure what he said.
The banks haven’t been shy about pricing the REOs to sell, if more come on the market, sales should go up. More headlines of increasing sales should be of interest to buyers, but the pricing will still need to be sharp to get them to buy. Would you get closer to buying if you saw that sales went up 3-4 months in a row?
Posted on Friday, April 3rd, 2009 at 6:23 PM in Thinking of Buying? | 13 Comments » | 
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Jim,
Same thing on NODs in Sonoma county. People need to understand that we have a long way to go.
Sonoma County NODs:
Tyrone | April 3rd, 2009 at 8:37 pm2008 . . 2009
Jan 451 . 394
Feb 513 . 468
Mar 498 . 553 ‘Thar she blows!’
Apr 509
May 505
Jun 492
Jul 460
Aug 482
Sep 191 <— CA Law SB 1137 takes effect
Oct 178
Nov 241
Dec 500 <— CA Law SB 1137 FAILS
“If it keeps on rainin, levees goin to break,
Genius | April 3rd, 2009 at 9:11 pmIf it keeps on rainin, levees goin to break,
When the levee breaks Ill have no place to stay.”
Would you get closer to buying if you saw that sales went up 3-4 months in a row?
Independent of sane pricing, no, and we’re not there yet.
tj and the bear | April 3rd, 2009 at 9:54 pmJim and LGS, so to continue the conversation on Sky Ranch, do you both feel that these are good values in East County if you get a good view lot?
I see people buying these, as a couple ones that had “Available” signs in the windows now show “Sold”!
This one just went pending too:
MLS-090013946-7234_Ocotillo_St_Santee_Ca_92071
It has 4,177 sq. ft., 5 bed, 5 ba, large lot, No mello roos, for $790,000 or $189 PSF.
LGS, why didn’t you buy there? And, where did you end up buying?
At what PPSF do you think they are resonable or good deals at?
It appears that Lennar is throwing in incentives per their website on low interest rates if you finance through UAMC.
I think when the 52 is completed, this should help the values of these properties, since it will be a quick shot on the 52 back West to the Beach, Sorrento Valley, etc.
Please let me know your thoughts.
Blue Streak | April 3rd, 2009 at 10:21 pmBlue Streak, the lowest price I’ve seen Sky Ranch go for was $159 sq. ft. and that included a lot of upgrades, but it was for a huge house so the price point was still in the high $600s and it wasn’t a good view lot.
I do think they are good value, given the quality involved. I don’t know how to evaluate the location: across the valley there was a serious problem with liquifaction in the 1980s and a lot of engineering has gone into that Sky Ranch hill, presumably because they think the same problem would occur with out it. Whether it will be successful or not is beyond me–you probably have that potential for hillslides, etc., on any big view lot like that.
My attraction to the property was first and almost entirely the views. Both sides of the hill offer very attractive ones.
I didn’t buy for two reasons: 1) I went to look at them when they were first built and passed because they were so expensive. When I went back with Jim some years later to evaluate, after he brought some price declines to my attention, they refused to let him be my buyer’s agent because someone remembered me from a long while past. I got plain pissed and I decided to go elsewhere because I though it was an asinine policy for a company that lost more last year than it earned during the entire boom of the previous five–they should be happy to sell a house, even if they have to share the commission. And it was unjust to Jim. But, 2) The houses were all too big for me and in my opinion although they were getting close to priced right, they were still 20% too high to feel like a steal. At the right price, I figured I didn’t care that it was too much house–I’d grow into it with a family someday. Given the financial situation, despite being able to still afford the property easily, I just didn’t feel comfortable spending so much money on a property that was way oversized for me–it just felt decadent.
I have to add, however, that I raved about the value and the quality to my folks a long while ago and they just purchased one (closed this month) near the house you mention. They haven’t moved in yet, but I do think it’s a wonderful house. They paid about what you noted for a one story with lots of great options and an excellent view. I love it the house–but after being in it a few times I am happy enough about my decisions: the house is too big and I’d feel dumb spending that much on a house that I mostly wasn’t using.
I ended up buying 3/2 townhome in Fletcher Hills, although I am a pending offer on a little nicer home next to the Town Center Plaza in Santee–if I get that at the price I’ve offered, I intend to move into that and make the Fletcher Hills place a rental (I bought it with that in mind, and it was priced accordingly).
It’s hard for me to say whether they’re a good deal for you–for the quality and the location, they are priced lower than anything comparable in the county. And I think you’re right about the location: I grew up in East County and moved away to Washington, DC., LA, then Sacramento, and never thought I’d be back–least of all to Santee. But now that I’ve been back for 2 years, I really like the area and the fact that the 52, 8, 125, and 67 crisscross here makes it more conveninent that most people who don’t live here probably realize.
I’ve seen the recent special financing offer and it does seem to be getting awful compelling–especially if you can get them to go to near $160 sq. ft. on one with 30 year financing locked in at 3.625 (which is the offer I saw). My folks were offered either/of: lots of “free” upgrades of the better financing.
They do seem to be having success with that in selling the remainder of their finished houses and not dropping the price as much as I thought they’d have to when I stopped looking six months ago. Where it goes from here is anyone’s guess, but if I really wanted a house that big, those houses would be top on my list.
To be perfectly honest, my “secret” plan is to wait to see whether some show up in a year as foreclosures. Some people bought those $790k houses you mention for $1.1MM+ two years ago…some may show up soon.
Also bear in mind that someday–it might be many years–Fanita Ranch will go up across the valley and offer similar sized homes on much larger lots and with good views. Barratt defaulted on the mortgage on that land and I don’t know its current disposition, but there was a ton of money, a ballot measure, and a lot of work done to establish the entitlements for that development. There’s a lot of value even in the defunct project for a developer that can come up with the money and can buy the land at the right price. Somehow, someday, it will be built unless bankruptcy or litigation goes on so long that the entitlements expires, or such is my opinion (as a former land use lawyer).
lgs | April 3rd, 2009 at 10:50 pmLGS, I greatly appreciate your detailed and quick reply.
I have been thinking the same thoughts.
I believe they are looking to sell those properties, so you may be able to go back in there and demand that Jim represents you or file a complaint to Lennar.
If Fanita Ranch gets built out in 3-5 years, what do you think it would do to the Sky Ranch valuations: stay the same, increase them, decrease them?
I guess it depends on how the market is doing then, right?
Here is a map of the proposed project:
cfx.signonsandiego.com/uniontrib/20070823/images/fanita.gif
And I just saw a recent post that the city must revise their fire plan for the development project, but Barratt sAmerican President says: “The market is in its worst condition since the Great Depression,” Pattinson said. “So there’s no hurry for anybody to start the project. . . . The fact that litigation comes now is not an impediment to the progress of the project.”
Blue Streak | April 3rd, 2009 at 11:24 pmlgs,
Haven’t been to Santee myself, but you’re right, it has a lot going for it. Much closer in (and to the beach) than LA’s IE, and a lot nicer overall. Vewy Intewesting!
tj and the bear | April 3rd, 2009 at 11:36 pmtj and the bear, Santee has a lot of smaller homes and not until the last 5 years or so has it seen major redevelopment. For anyone who hasn’t been there recently, Mission Gorge road redevelopment is amazing! All the shops/restaurants, etc. Plus they have a new YMCA aquatics center with a Soak City like pool area for kids. In addition, there are plans for a major sports complex near RiverWalk and the YMCA and plans for a major movie/theater complex. There are still lots of older areas, but the city is going through revitalization / regentrification in my opinion, in some areas.
Blue Streak | April 3rd, 2009 at 11:57 pmWould you get closer to buying if you saw that sales went up 3-4 months in a row?
—————–
No, because we often see sales rise over 3-4 months due to seasonality.
Also, the government has pulled out all the stops, explicitly telling us that their goal is to get bubble-sitters off the fence. Until the government removes itself from the housing/mortgage market, we will not see true market values for housing. By intervening in the market, the government will prolong the downturn.
That being said, because of govt intervention, we will probably see some vicious bull runs as we gradually work our way down. Right now would definitley qualify as a vicious bull run, IMHO.
CA renter | April 4th, 2009 at 2:40 amHoffman’s quote is non-sensical:
“We’re going through the normal pains of the recovery we’ve got to go through,” he said. “And I don’t think the introduction of these defaulted properties and eventual trustee’s sales and foreclosure sales are going to have as dramatic an impact on the market as we saw last year as we did [with foreclosures] at the start of this crisis.”
If you have the introduction of more Trustee and Foreclosure sales, in this case thousands of them it WILL CERTAINLY IMPACT the market. And I bet we all know what that impact will be…buyers will be happy is my guess.
dukes | April 4th, 2009 at 7:17 am“Would you get closer to buying if you saw that sales went up 3-4 months in a row?”
Again, an increase in sales means accelerated price declines in coastal North County. Why would I buy when housing prices are gaining downward momentum? Number of sales is a phony stat when it comes to market health, so naturally the NAR and local realtors will cling to it.
The Blur | April 4th, 2009 at 10:00 amAgain,
I have to agree with CA renter.
Remember, that after 2005, sales fell off a cliff and we didn’t start to see meaningful price action for 3 years.
In stock trading circles, the mantra is “volume precedes price”.
The difference is that in stocks, it precedes it by days while in housing it precedes it by years. There’s something to sticky prices.
Even if 2008 marked the low, we will still see prices actively falling for 2-3 years punctuated by price stagnation at the end. Anyone buying now except in places that have been severely beaten down to where affordability has been reached is catching a falling knife.
You may not want to think of yourself as a sucker, but if the shoe fits… wear it.
Chuck Ponzi
Chuck Ponzi | April 4th, 2009 at 12:05 pmAlso, to add to Blur’s comment, in equities, if you’re able to see level 3 trading data, you can see bid and ask lot sizes and prices. Essentially, this is visible demand and supply.
However, in wild trading swings, bids and asks quickly come out of the woodwork… those that want in and out.
In real estate, you can visibly see the current open ask lots… inventory. What you don’t see are those that are momentum buyers and sellers. Much of that momentum is based on the zeitgeist around that equity. When there are a lot of momentum buyers, small but meaningful upticks can cause the price to ride quickly. In a period of general weakness, this is called a sucker’s rally. Likewise, momentum traders can pummell a stock beyond its intrinsic value due to the desire to be out of it before it falls further.
Nothing about buying assets is as cold and calculated as one might think.
I would suspect that prices only stop falling after the last bubble sitter is in… and probably a while after that.
I am confident that we will exceed normal affordability in this cycle… in all areas, not just inland.
Chuck
Chuck Ponzi | April 4th, 2009 at 12:11 pm