bubbleinfo.com

From the U-T:

http://www3.signonsandiego.com/stories/2009/sep/13/nations-housing-kenneth-harney/?uniontrib

When homeowners negotiate a short sale with lenders, they sometimes assume there will be relatively little impact on their scores. After all, the loan was successfully paid off, there was no foreclosure, and the lender voluntarily agreed to accept a lower balance than was owed.

But in fact, according to VantageScore researchers, short sales can trigger big drops in scores. Sarah Davies, senior vice president of analytics, said a homeowner who previously had an excellent score of 862 might plummet 120 to 130 points immediately as the result of a short sale.

While it’s true the lender may lose less money through a short sale compared with a foreclosure, Davies said in an interview, “it’s still a derogatory event.” The full debt was not repaid. The lender lost money. Scores tanked.

What happens when borrowers walk away from their mortgage debts altogether, the “strategic defaults” that have become commonplace in some large markets, especially in California?

They can count on 140- to 150-point immediate hits to their scores, plus negative marks on their credit bureau files for up to seven years.

People who file for bankruptcy protection covering all their debts — the mortgage, credit cards, auto loans, etc. — get hit with declines that are the scoring equivalent of a nuclear bomb: an average 355- to 365-point collapse in their scores. Bankruptcies remain on borrowers’ credit bureau files for 10 years.

The Gamble House in Pasadena is one of the most significant houses ever built in America, and a quintessential example of the Arts and Crafts movement.  Here are two descriptions, under their links:

http://www.galinsky.com/buildings/gamble/index.htm

The David B. Gamble house, constructed in 1908, is the internationally recognized masterpiece of the turn-of-the-century Arts and Crafts Movement in America. Built for David and Mary Gamble of the Procter and Gamble Company, the house is the most complete and best preserved example of the work of architects Charles Sumner Greene and Henry Mather Greene who made a profound impact on the development of contemporary American architecture.

Greene and Greene broke sharply from the academic traditions of their time, using nature as a guide rather than the dictates of popular historical styles. The design of the Gamble House, while in part inspired by the wood-building vernacular traditions of such cultures as the Swiss and the Japanese, is a unique statement drawn from the life and character of Southern California. Wide terraces and open sleeping porches facilitate indoor-outdoor living, careful siting and cross-ventilation capture the cool breezes of the nearby Arroyo Seco, and broad, overhanging eaves shelter the house from the hot California sun. Wood is celebrated in the Greenes’ use of articulated joinery, exposed structural timbers and shingles which blend sensitively with the landscape.

In the Gamble House, furniture, built-in cabinetry, paneling, wood carvings, rugs, lighting, leaded stained glass, accessories and landscaping are all custom-designed by the architects, and were created in the true hand-crafted spirit of the Arts and Crafts movement. No detail was overlooked. Every peg, oak wedge, downspout, air vent, hardware fitting and switchplate is a contributing part of the design statement and harmonious living environment.

from http://www.gamblehouse.org/

The Gamble House was designed in 1908 by architects Greene & Greene. It was commissioned by David and Mary Gamble, of Cincinnati, Ohio, as a retirement residence.

David Berry Gamble, a second generation member of the Procter and Gamble Company in Cincinnati, had retired from active work in 1895, and with his wife, Mary Huggins Gamble, began to spend winters in Pasadena, residing in the area’s resort hotels. By 1907, the couple had decided to build a permanent home in Pasadena. In June of that year, they bought a lot on the short, private street, Westmoreland Place, passing up the more fashionable address, South Orange Grove, known at that time as “Millionaires’ Row.”

At the same time the Gambles were selecting their lot on Westmoreland Place, a house designed by the firm of Greene & Greene was being built for John Cole on the adjacent property. Perhaps meeting the architects at the construction site, and certainly impressed with the other Greene & Greene houses in the neighborhood, the Gambles met with the brothers and agreed on a commission.

The architects worked closely with the Gambles in the design of the house, incorporating specific design elements to complement art pieces belonging to the family. Drawings for the house were completed in February 1908, and ground was broken in March. Ten months later, the house was completed, the first pieces of custom furniture were delivered, and The Gamble House became home to David Gamble, his wife Mary, and two of their three sons: Sidney and Clarence. (Their son Cecil was 24 at the time, and on his own.) In addition, Mary’s sister, Julia Huggins, came from Ohio to live with the family. By the summer of 1910, all the custom-designed furniture was in place.

Not bad for a house built in 1908.  Take a tour!

Alan Gin had to comment on the latest SDAR report:

from sddt.com:

The median price of detached resale homes in San Diego County rose for the fifth straight month in August, while sales dipped slightly.

A report from the San Diego Association of Realtors (SDAR) showed the median price of a detached single-family home sold rose 0.8 percent from $372,000 to $375,000.

Attached homes, such as condominiums and townhomes, had their median price rise nearly 8 percent from $210,000 in July to $226,000 in June.

Mulitple bids on lower-priced properties is driving up the median price, said Alan Gin, University of San Diego economics professor.

The five-month trend may show that the market has hit bottom, or even shows proof that the housing market has turned the corner, he said.

But it does not mean the local economy as a whole is out of the woods.

Gin said the positive news in the housing market is a good sign, but questions about unemployment linger.

Should unemployment continue to rise and a new wave of foreclosures enters the market at an inopportune time, Gin said the housing market could take a turn for the worse.

However, he said it is not likely.

Last time the median prices of attached and detached homes were this high were September 2008.

The total number of attached and detached homes was down 11.3 percent from August to July with 2,622 sales.

However, the drop off is not something to “take much stock in,” Gin said.

“I wouldn’t consider (an 11.3 percent decline in sales) a big change given that June and July were pretty big months in terms of housing,” he said.

He said an activity drop in August is a normal, seasonal change.

Last month’s sales were a 6 percent increase over August 2008.

Year-to-date, 2009 is out-pacing 2008 by almost 4,500 units sold, a 28 percent increase.

One thing that has been driving sales this year is the first-time homebuyer tax credit offered by the federal government.

The tax credit is equal to 10 percent of the home’s purchase price or $8,000 whichever is less. It expires on Dec. 1.

Erik Weichelt, president of SDAR, said Realtor associations, particularly in California, are pushing Congress to extend and expand the tax credit.

Aside from extending the deadline to sometime in 2010, Realtors are hoping to increase the limit of the credit to $15,000.

However, not much headway has been made lately as Congress has been focusing on other issues like healthcare, Weichelt said.

Six-year Realtor Jane Loveday said she started noticing buyers heating up the market in March; she added activity has been increasing steadily since.

Even more buyers have contacted her within the past few months, specifically trying to obtain the tax credit.

“I do have a couple of buyers who are specifically wanting to close by November 30 but whether they can find a property and get an accepted offer I can’t guarantee. That (the tax credit) is a huge stimulus to them.”

One of the problems facing potential buyers is a lack of inventory at lower price points.

Weichelt said there is less than a month and a half supply of inventory priced below $250,000.

He said almost every property that comes onto the multiple listing service in that price range has multiple offers on it within days.

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Gin said that an activity drop is a normal, seasonal change?

Here are the total sales history for July and August.  It looks like August is usually a big month for closings, culminating a summer’s hunt for homes:

All Residential MLS Sales, San Diego County

Normal drop-off? Sales haven’t slowed this much all decade between July and August. What does it mean?

Factors that could cause sales to drop more sharply than usual:

1. Fewer condos closing due to financing? Nope, condo sales last month were higher than August of the last 2 years.
2. Tougher financing? On the high-end yes, qualifying for jumbos is hard, but FHA loans have created a firestorm under $700K.
3. Higher rates? Nope, mortgage rates (5.68%) are lower this August than ever before.

I think sales are hampered by the lack of quality inventory, and many buyers are wondering if they should step up and pay more to win a bidding war. PROCEED WITH CAUTION. As REO listings are dripped out and anxious buyers jump on them, it’ll look like the market is getting hotter. But keep an eye on # of sales, and don’t listen to any of these cheerleaders who refuse to check facts before speaking!

My second REO assigment in the last two weeks, after a couple of dry months – could this be the beginning?  I think it is, but the quality isn’t great yet, at least of the ones they send me. This 1,245sf house on Paseo Ajanta in Rancho Penasquitos will probably need to be in the low-$300,000s or lower to find a buyer:

They have to get better, don’t they?

Downsizing baby-boomers could end up causing real estate’s biggest leg-down of all.

from the N.Y. Times:

http://www.nytimes.com/2009/09/10/garden/10nest.html?pagewanted=1&ref=todayspaper

In the quaint central Connecticut town of East Haddam, Bill and Rose-Marie Evans built a theme park for their three children. Their property included a pool, a hot tub, a swing set, a trampoline, a paved basketball court and more than enough yard to host neighborhood soccer and kickball games.

They had expanded the ranch house they bought in 2001, turning it into a 3,000-square-foot home with room indoors for games like pool, table tennis and Foosball, making it a prime sleepover destination. “The master bedroom was on the first floor,” Mr. Evans said. “There were three bedrooms and a second family room upstairs. The kids had 1,200 square feet to themselves.”

But then in mid-June, the moving van arrived, and the Evanses left behind their own personal vacation land and squeezed uncomfortably into a 1,200-square-foot rental, while they began building a marginally bigger home. The couple had decided that with the economy uncertain, they had to conserve money and live more modestly.

Leaving the home they once believed would be theirs into retirement was a painful decision, one many baby boomer families are facing. It’s an issue that especially resonates in suburbia, where highly taxed, stressed-out parents wrestle with the prospect of moving sooner than they had planned. But children can be uncomfortable with decisions that change their notions of security, and their unhappiness forces parents to consider what they do — or don’t — owe their offspring.

“We always believed that was going to be the place we would come back to with our own kids for Christmas and Thanksgiving,” said Andrew Inman, 19, who, along with his sister, Brittany, 17, is Mrs. Evans’s child from a previous marriage. “We kind of felt lied to.”

Baby boomers are already driving a new market for smaller, less expensive homes, according to Stephen Melman, the director of economic services for the National Association of Home Builders in Washington. In a recent member survey, 59 percent of builders nationwide said they were planning to or were already significantly downscaling from the McMansion era.

“Many boomers seem to be thinking they are going to do it eventually, they may as well do it now while they need the money for tuition or because there’s just less money available,” Mr. Melman said.

Thinking about moving to the country, yet not too far out?  How about a newer 3,110sf custom home in the foothills of Vista? 

My new listing, please take it easy on me:

 
From Sunset magazine:

ZONE 23. Thermal Belts of Southern California’s Coastal Region
Growing season: almost year-round (all but first half of Jan.). Rain comes in winter. Reliable ocean influence keeps summers mild (except when hot Santa Ana winds come from inland), frosts negligible; 23 degrees F/-5 degrees C is the record low.

Link to Sunset.com for climate zones

Areas like Rancho Santa Fe are prime for sellers who list at reasonable prices.  The REOs look GREAT when there are so many houses not selling (344 detached active listings today in the Ranch), and besides, everyone in Rancho Santa Fe wants to steal one from the bank!

This 3,148sf one-story house in the Covenant (south of Paseo Delicias) sold for $3,595,000 in August, 2006.

It was foreclosed in May, 2009 when no one jumped at the $1.8 million opening bid, so the lender notched down, and listed for $1,599,000 on July 17th, about half of what it sold for three years earlier. 

It closed for $2,090,000 on September 1st, a whopping 23% OVER LIST PRICE! 

Here’s a video tour:

All it takes to sell is a reasonable list price!