bubbleinfo.com

duncbdunc left this comment a couple of posts back:

“By the way, there is something that I’ve wanted to mention to you for a while and since this is an old thread that nobody’s looking at anymore, perhaps this is a good time to pipe in.”

“Many of my friends, colleagues and aquaintances love your blog but we hesitate to hire you because our presumption is that you are too busy.”

“I wonder if it would be helpful for your business to devote a post to discuss your current level of capacity as I assume that there may be many silent readers/followers that would love to hire you but assume you are too busy to service their needs.”

“I wonder sometimes if you are like the lonely hot chick that nobody ever talks to because they assume that everyone else is.”

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The blog is a side project of mine, intending to be an introduction to Jim the Realtor, and what I do:

Drive around looking at houses all day.

Sometimes I’m talking to sellers about representing their best interests, but because they are exceedingly unrealistic, I don’t take many listings these days.  Instead, I devote most of my time to helping buyers.

Our first meeting is usually at a house for sale.  A new client will see a house on-line that looks interesting, and contact me for my thoughts on it.  I’ll suggest that we take a look at it together. 

Upon arrival you’ll note that the gray ghost is a little banged up, and I am too, but just another regular guy (5′ 10″, 175 lbs.).  We’ll start our tour of the house and I’ll be doing a lot of the talking.

I’m an evaluator, demonstrating how to size up the benefits and burdens of each house so you can make better-educated decisions.

It sounds simple, and looks easy.  But my job is to go beyond the basics, and touch on the things not so obvious, enabling you to fine-tune and expand your evaluating skill.

If you’re picky like most of my clients, you’ll get used to looking at houses you don’t buy.  Buyers sometimes feel guilty for wanting to look at listings that appear somewhat marginal in the MLS, but hey, let’s investigate every possibility.  This is where Richard comes in – he assists with showings, so we can meet people all day long throughout the North County Coastal region.

I encourage buyers to make plenty of offers – it helps people get used to the process, and hopefully have a few chances to read and understand the contracts.  I take full responsibility for writing a powerful offer on your behalf, and always back it up with compelling reasons to convince the listing agent and sellers to sign it. 

But we are just the warm-up act.

Once you find a house and open escrow, you’ll see why we’re successful – my wife Donna takes over.  She ensures that your “in-escrow” experience is smooth and steady, the way it should be. 

I’d love to have the opportunity to sell a house to every one of you.  The next listing you see that looks interesting, call or email me, and let’s go take a look – I have time!

I am very grateful to be busy, and appreciate those who have become clients as a result of the blog.  The package offered here is a result of us paying attention, and trying to provide exactly what the market demands.  If you have any suggestions, I’d love to hear them.

3clicks wrote:

“While I embrace the Internet for many reason, It would be used by some as another way to disguise the snake oil.” 

Agreed, but once every listing has a video it will cut down the deceit.  Videos should be mandatory, and they’d especially help the bank-sellers in far-away towns who should have the benefit of seeing their REO and the comps for a thorough review.

It might have helped here:

The internet has magnified our quest for instant gratification.

In real estate, the internet helps to stir up a frenzy by allowing a potential home buyer to search for an attractive property – and when they see a hot one, they’ll look into it. But by the time they react, it’s already sold. Buyers learn to react faster and faster, and after missing one or two good ones they’re on the edge of their seat, checking for new meat every few minutes!

Here’s more:

George asked for an explanation of the frenzy-like conditions we’ve been seeing lately.

How do you explain it? 

Lower prices are the #1 contributor, and in Carmel Valley that means roughly 20% off peak pricing.   Buyers are tired of waiting, and if the deal is seems good enough, many will buy just to be able to get on with life. 

Four of these houses sold at peak pricing, and had to endure haircuts of -17%, -18%, -20%, and -21%.  A couple of the sellers had to write a check for $25,000 to $50,000 to close, but the others had equity.  There were no short sales or foreclosures.

Here’s a video of nine houses that have recently sold under $300 per sf in Carmel Valley, 92130:

from sddt.com

There are five cities in San Diego County that experienced an increase in property tax revenues in the fiscal year ending in June 2009 despite the county’s assessed value being down 2.3 percent overall.

Del Mar, Coronado, Solana Beach, Poway and Encinitas are the only five cities in the county that have experienced growth, according to County Assessor David Butler.  “They’re the ones you’d expect — coastal cities and other well-off areas,” he said.

Del Mar and Coronado had the most growth at 5.75 percent and 5.11 percent, respectively.  Solana Beach, Poway and Encinitas all grew by less than 2 percent each.

Unlike much of the county, the five cities have had relatively stable home values and few foreclosures.

Additionally, their city governments have not had the same sort of financial issues seen in other cities within the county.

As the city of San Diego faces a deficit of $179 million, some of these cities have been able to produce a surplus, even if it is small.

In Poway, the 2008-09 budget ended with a $320,000 surplus, which Poway City Manager Rod Gould said was due to making cuts with “a scalpel rather than a meat cleaver.”

He said citizens would not likely notice most of the cost-saving strategies the city employed, though they may see slightly lower park maintenance or have to wait a little longer at the permit counter.

“The reason we’re doing a little better than most (other cities in the county) is because we saw this coming three years ago,” he said.

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Our friend Kingside contributes this data received while attending a recent Butler speech:

# of NODs/# of NOTSs/Prop Tax Reviews/Total County Assessed Values/% chg/Total Supplemental Taxes

* in billions

The changes in assessed values (shown in supplemental taxes) must be particularly volatile these days. Properties sold at peak are having their assessed values reduced 20% to 50%, while at the same time the sales of long-time-owned properties are causing increases in similar amounts.

According to the tax rolls the builder paid $425,000 cash in 8/2005 for this lot in a gated community in the hills of Pala in 2005.

He borrowed $500,000 in 2006, and another $330,000 in 2007, to construct a 4,109sf one-story house on the 4.68 hilltop acres. 

They tried selling it for $1,200,000, during the second half of 2006 – but no takers, and it ended up getting foreclosed in June, 2009. 

We listed it today for $482,800, without appliances.

I think this is the first video to repeat in bubbleinfo history, so you may have already seen my initial journey in July - and yes, it’s still just as boring – 12735 Rancho Heights, Pala, CA 92059:

Hat tip to Tom for sending this along.

Sean at foreclosureradar.com has published his latest report:

https://s3.amazonaws.com/CA_Foreclosure_Report/September+2009+CA+Foreclosure+Report.pdf

Excerpts:

With 90,365 properties in inventory, banks currently carry about 4.77 months of supply, however, it takes the banks on average 7.33 months to dispose of a bank owned home, thus current inventory is less than should be expected from normal operations given current foreclosure volumes. Bottom line – there is no “shadow” inventory of bank owned homes being intentionally withheld from the market.

The number of properties on the brink of foreclosure continues to increase and has more than doubled from a year ago. With a smaller percentage of scheduled foreclosures actually being sold due to postponements at trustee sale, while at the same time seeing strong sales of bank owned (REO) properties, banks have managed to reduce their inventory by 41.8 percent from a year earlier. With the banks reselling an average of 18,943 homes a month in the 3rd quarter, and an average time to resell of 7 months (given the time taken for eviction, repairs and resale), we believe there is essentially NO shadow inventory of bank owned homes at this time. Moving forward there are more loans which are delinquent, in default, and scheduled for trustee sale than ever before, which would typically lead to a significant rise in foreclosure sales. We do not believe this increase is likely in the near future given the continued political pressure on banks not to foreclose.

Foreclosures continue to be sold at trustee sale at considerable discount to both the outstanding loan balance and the current estimated fair market value. As we saw in foreclosure outcomes, the lure of an average 20.5 percent discount to fair market value has dramatically increased the number of properties sold to 3rd party investors. At the same time it is very clear why more properties aren’t purchased at auction – with banks pricing the properties they end up taking back as REO an average 23 percent more than the current market value.

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Here the weekly totals of new SD REO listings coming on the MLS – no real increases:

Of those 1,116 REO listings, 717 have already been marked contingent, pending, or sold (64%). The drip system is working great for the lenders!

In the same time frame there have been 4,753 non-REO listings inputted, and 1,850 of those are contingent, pending, or sold (39%).

REO listings make up 19% of the total new listings, but 28% of the contingents, pendings, and solds.

Who cares where the market has been, where is it going??

How do you know if the market is going up or down? Better or Worse?

Monitor specific listings in your area.  Rate each listing based on how well the list price reflects the value (and eventual SP).   

Does the list price incite urgency? 

Did you grab for your checkbook?

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Early in my career I learned to use this sophisticated organizational system to assist with tracking – I put each listing in one of these three categories:

1. Hot Buy

2. Warmed-Over Turd

3. Dog, Barks at Traffic

Try this at home!  You’ll see that using these categories will help!

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How fast they go pending can give you a clue about the sales price:

First 10 days = list price or higher

11-30 days = within 5% of list price

30+ days = at least 5% to 10% off list

We’ll follow a few listings to help gauge the market’s direction in the fourth quarter – here’s a youtube tour of the first set:

Hat tip to my brother-in-law for contributing this story about the market in Vegas!

http://www.cnbc.com/id/33310096/

On the first day, Katie and her husband saw 13 homes.

Only three were anywhere close to move-in condition, despite the fact that all of the homes were built in 2005 or later. All were foreclosed properties. “People find out a year before they’re ever kicked out, so what do they do for that year?” says Katie. “Completely destroy their homes.”

I know we’ve already heard about this, as had Katie, but the destruction was even beyond her expectations. “There’s no cleaning that would help.” There was dirt rubbed on the walls, graffiti, holes in the walls and garbage deposited inside the holes. The smell? “I couldn’t get past it.” Obviously there was no hardware on the doors and no appliances, kitchen cabinets, stovetops…whatever could go went. 75 percent of the homes she went into were an instant no.

Then……

“We went to a home that had been on the market for one day, and the key was stolen out of the lock box. Our Realtor said immediately, ‘You want this home.’ She told us another Realtor had stolen the key because they wanted their client to get it. So what did my Realtor do? She broke in. And sure enough this was the home we fell in love with. It was on for $132,000 so we decided to be really aggressive and offered $160,000, plus we had government backing on our loan. Well our Realtor called that night and said, ‘You’re not going to get the home. They got 30 offers and half are cash offers, so the bank is not even going to look at you.’ The banks just want the cash to unload these places.”

What do you do now?

You’ve been making offers but it doesn’t seem like you are getting close to buying anything – with some listing agents you don’t even get a response!

The mainstream media makes it sound like prices are going up, but they don’t explain why.  The underlying economic fundamentals make you nervous, and the government support can’t last forever, can it?

Thoughts to ponder:

Buy when everyone else isn’t – The competition will dwindle after November 1st because the clocks roll back an hour and people won’t be looking at houses after work, just mostly weekends.  The holidays will be in full swing, and it’ll be too late to close by November 30th.  After the frenzy we’ve had lately, buyers will want a break – expect fewer competitors through the end of the year.

Homebuyer tax credit – it won’t matter now if it gets extended or not.  If it doesn’t, buyers will take a break.  If it does, buyers will take a break anyway because they’ll figure that they’ll have at least six more months to take advantage of it.  If it doesn’t get extended and the $8,000 is a big deal to you, get it from the seller.

Lousy inventory – There wasn’t much to buy in 4Q08, and unless the tsunami starts rolling soon, it’s going to be a very dry 4Q09.  We’re tired of hearing it, but insider rumblings indicate that relief is on the way – there are too many properties in default for there not to be additional REOs coming.

Loan Mods to Fizzle Out – Six months from now loan mods will be a distant memory – they aren’t working, and the lenders are giving up.  It used to be about 2:1 rato of NODs to NOTs, but the banks are throwing down, and today in San Diego County they are about even; 10,582 NODs outstanding, and 10,023 Notices of Trustee Sales. 

Seasonality – There is seasonality in the sellers’ mindset.  They are overly optimistic during the hotter spring selling season, and desperate around the holidays.  Did you notice that the spring kick was a dud again?  Sellers are their agents held out wondering if it would get better, but it never did – once they got more realistic towards the end of summer, properties started moving.

Consider Compromise – Keep waiting patiently for the right house, at the right price, but if you wanted to improve your chances, look a little harder at the fixers, and the short sales.  Those are the ones holiday buyers will shy away from, and you stand a better chance of stealing.

Keep looking!!