bubbleinfo.com

The website that provides us contemporary homes from around the world is featuring one right in our backyard – on the corner of Prospect and Exchange as you drive into downtown La Jolla.

This 7,200 square-foot lot was an abandoned brown-field site, vacant since 1992. The architect/owner used the space to build a private, urban residence for his family with an on-site architecture studio.

The main living area is surrounded by a reflecting pool on one side and a glass floor on the other. Below grade, where the office and recreation facilities reside, the glass floor/ceiling liberates the space and allows ample natural light.

(click on link for additional photos)

A month into the era of no-recourse-for-all-short-sale-lenders, how is it going?

The U-T carried this comment:

Since the law has passed, agents have seen banks revise their release of lien amounts in letters to larger figures. In one case, the number was bumped from $12,000 to $30,000.  “Right now, it’s hurting more than it’s helping,” said Jacalyn Blank, a San Diego short-sale negotiator.

John commented on the previous SB 458 post:

Was about to close on a short sale with $10,000 to the 2nd lien holder.  Now thanks to 458, the 2nd wants $45,000 which no one in this transaction has.

JimG is a realtor who does his share of short sales, here’s his report:

Our short sale girl is reporting deals are being held hostage by 2nd lien holders who want MUCH more $$$$. California law is backfiring at this time as the 2nd lenders have no incentive to play.

We have two short-sales in process that have been caught up in the same mire:

SS #1 – The second lender, whose original balance was $250,000 and will get nothing if the 1st lender forecloses, is holding out for $100,000.  At least the lender in third position is willing to take $3,000 on their $300,000 note.

SS #2 – Bank of America, who had agreed to take $25,000 on the second mortgage balance that was around $160,000, proceeded to sell the note to a no-name lender, who now wants $100,000.  They too will get nothing if the first forecloses.

Of the 2,757 detached and attached sales in San Diego County last month, 515 of them, or 19% were marked as short sales.  We can probably expect that short-sale closings are going to drop off over the next few months, and maybe forever – because what every short-sale negotiator is now trying to do is convince the first lender to settle for less.  Hopefully the first mortgage holders get fed up and just foreclose instead.

More from C-L on the delinquent mortgages – can we work our way out of this?

We are hitting the peak months of resets/recasts, yet delinquencies are dropping? 

The banks/servicers must be working feverishly to reset/recast the expected $1.6 trillion in ARMs, or just not reporting lates?  When this is all done, will anyone be surprised that a whole lot of people got a whole lot of free rent?

(Click on this image to enlarge)

Jumbo rates in the 4-5% range still look attractive to me – from cnbc.com:

The deadline for ending temporarily higher loan limits at Fannie Mae, Freddie Mac and the FHA is October 1st, but they are effectively ended now.

A Wells Fargo spokesman confirms, “August 15th was the deadline for applications and rate locks for FHA and conventional conforming loans with balances above the limits we expect will be in place after September 30th.”

The loan limits were raised by Congress in 2008 temporarily from $417,000 to $729,000 in the highest priced markets in order to help bring much-needed liquidity to the mortgage market after the sub-prime meltdown that sent investors fleeing. There has been heavy lobbying by the Realtors, mortgage bankers and home builders to extend the limits, but so far to no avail.

Even though the rule goes into effect on October 1st, all loans have to be funded, sold and shipped to the GSE’s by then. Refi volume has been so high lately that it can take 45 days to do a loan, so lenders have to cut off in time.

What does that mean on the street? A check of Wells Fargo’s website shows it offering the 30-yr fixed conforming at 4.25 percent, and jumbos at 4.625 percent. Obviously the rate changes will affect only the highest priced markets, largely on the coasts.

From sddt.com:

There is one part of the real estate market that is booming: mortgage fraud.

A new report issued this week from the Federal Bureau of Investigation finds the annual loss from devious activities in the mortgage market totals between $4 billion and $6 billion.

“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said U.S. Attorney Joseph Russoniello.

Last year the Department of Justice, the FBI and other government agencies launched Operation Stolen Dreams to target mortgage fraudsters across the country. The project led to 485 arrests of people associated with more than $2.3 billion in losses.

Read the rest of this entry »

In the comments of the last post, we were discussing the thought of making an offer on a house that you haven’t seen.  It is definitely more personal when you are looking at a primary residence – so let’s start with an investment property!

The intent of this video is to give you enough ingredients to be able to calculate the cost of repairs, and hopefully determine if this property pencils out for you, prior to visiting in person.  Buyers are checking comps in advance, and just need to estimate repair costs on any property, right?

As the listing agent, do I worry about verifying that buyers have seen the property? 

On vacant properties – No. 

Why?

Because on vacant houses, listing agents don’t know if ANY of the offerors have seen it - unless I stake out the property, slumped down in my car across the street, Rockford-style.  Yes, I would prefer if buyers have seen it, but when asked, every buyer’s agent says, “of course”.

I’m going to assume that NONE of them have seen it, and instead I’ll provide ample evidence to give everyone the most thorough experience of what you are buying, before you go.

Try it out for yourself – those who follow the blog have already seen this house a few times, here is the final cut – plus for those who need to see it, we’ll make that easy too, by conducting open house late in the afternoon during the first day on the market (in effect, our actual stake-out!):

Hat tip to my father-in-law for sending this along!

Whether  these changes are good or bad depends in part upon how we adapt to them, but, ready or not, here they come!
                                           
1. The Post Office.    Get ready to imagine a world without the post office.  They are so deeply in financial trouble that there is probably no way to sustain it long term. Email, Fed Ex, and UPS have just about wiped out the minimum revenue needed to keep the post office alive. Most of your mail every day is junk mail and bills.

 2. The Check.    Britainis already laying the groundwork to do away with checks by 2018. It costs the financial system billions of dollars a year to process checks. Plastic cards and online transactions will lead to the eventual demise of the check. This plays right into the death of the post office. If you never paid your bills by mail and never received them by mail, the post office would absolutely go out of business.

3. The Newspaper. The younger generation simply doesn’t read the newspaper. They certainly don’t subscribe to a daily delivered print edition. That may go the way of the milkman and the laundry man. As for reading the paper online, get ready to pay for it. The rise in mobile Internet devices and e-readers has caused all the newspaper and magazine publishers to form an alliance. They have  met with Apple, Amazon, and the major cell phone companies to develop a model for paid subscription services.

4. The Book. You say you will never give up the physical book that you hold in your hand and turn the literal pages. I said the same thing about downloading music from iTunes. I wanted my hard copy CD. But I quickly changed my mind when I discovered that I could get albums for half the price without ever leaving home to get the latest music. The same thing will happen with books.  You can browse a bookstore online and even read a preview chapter before you buy. And the price is less than half that of a real book. and think  of the convenience once you start flicking your fingers on the screen  instead of the book, you find that you are lost in the story, can’t wait  to see what happens next, and you forget that you’re holding a gadget instead of a book.

 5. The Land Line Telephone. Unless you have a large family and make a lot of local calls, you don’t need it anymore. Most people keep it simply because they’ve always had it.  But you are paying double charges for that extra service. All the cell phone companies will let you call customers using  the same cell provider for no charge against your minutes.

6.  Music.  This is one of  the saddest parts of the change story.  The music industry is dying a slow death. Not just because of illegal downloading. It’s the lack of innovative new music being given a chance to get to the people who like to hear it. Greed and corruption is the problem. The record labels  and the radio conglomerates simply self-destruction. Over 40% of the music purchased today is “catalog items,” meaning traditional music that the public is familiar with. Older established artists. This is also true on  the live concert circuit. To explore this fascinating and disturbing topic further, check out the book Appetite for Self-Destruction by Steve  Knopper and the video documentary “Before the Music Dies.”
 
7.  Television.    Revenues to the networks are down dramatically. Not just because of the economy.  People are watching TV and movies streamed from their computers. And they’re playing games and doing lots of other things that take up the time that used to be spent watching TV.  Prime time shows have degenerated to lower than the lowest common denominator. Cable rates are skyrocketing and commercials run about every 4 minutes and 30 seconds. I say good riddance to most of it.  It’s time for the cable companies to be put out of our misery. Let the people choose what they want to watch online and through Netflix.

 8. The “Things” That You Own. Many of the very  possessions that we used to own are still in our lives, but we may not actually own them in the future. They may simply reside in “the cloud.” Today your computer has a hard drive and you store your pictures, music, movies, and documents. Your software is on a CD or DVD, and you can always re-install it if need be. But all of that is changing. Apple, Microsoft, and Google are all finishing up their latest “cloud services.” That means  that when you turn on a computer, the Internet will be built into the operating system.

 So, Windows, Google, and the Mac OS will be tied straight into the Internet. If you click an icon, it will open something in the Internet cloud. If you save  something, it will be saved to the cloud. And you may pay a monthly subscription fee to the cloud provider. In this virtual world, you can access your music or your books, or your whatever from any laptop or handheld device. That’s  the good news. But, will you actually own any of this “stuff” or will it all be able to disappear at any moment in a big “poof”? Will most of the things in our lives be disposable and whimsical? It makes you want to run to the closet and pull out that photo album, grab a book from the shelf, or open up a CD case and pull out the insert.

 9.  Privacy.    If there ever was a concept that we can look back on nostalgically, it would be privacy. That’s gone. It’s been gone for a long time anyway. There are cameras on the street, in most  of the buildings, and even built into your computer and cell phone. But you can be sure that 24/7 “They” know who you are and where you are, right down to the GPS coordinates, and the Google Street View.  If you buy something, your habit is put into a zillion profiles, and your ads will change to reflect those habits.  And “They” will try to get you to buy something else.  Again and again.  All we will have that can’t be changed are memories.

SOMETHING TO THINK ABOUT…MOST OF THESE THINGS ARE ALREADY TAKING PLACE, AND THE OUTCOME IS SET IN STONE.
 
 
 Footnote: There will be more and more people out of work…..post office, newpaper, bank employees, many television professions, printers, music industry, etc, etc, etc.

School starts in the next week of two, and the holidays aren’t too far off. How are sellers going to play their hand over the next few months?

There are 181 houses for sale between $1.3 million and $1.7 million in North San Diego County’s Coastal region, and 198 have closed this year in the same price range.  Here is one of the actives:

What’s a trophy property? 

A property with several unique or special characteristics, including location, view, the home’s condition, and/or the size, shape, and usability of the lot.  The price matters too, but you’ll know when you’re in a trophy property when you have thoughts like, “I don’t care what the price is, I gotta buy this house!”

The Reasons Trophy Properties Sell For More:

1. The prices paid for trophies include the “once-in-a-lifetime” premium.  Yes, there will always be others, but are you willing to wait until the next one appears?

2. Trophy properties have maximum emotional appeal whose actual value is uncertain.  Examples:

• The house reminds you of a favorite from your past.
• You can visualize Junior running around in the backyard.
• A view that takes your breath away.

How do you put a dollar value on those?

3. Trophies tend to be among the better-maintained homes.

4. Trophy properties appeal to the ego. 

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Ultimately, your own personal definition of a trophy property is based on how picky you are – which you can gauge by tracking how many trophies you actually see in person:

Your Trophy-meter:

A.  One trophy out of every 10 properties seen in person - you’re not too picky – or just lucky.  You might as well start packing because you’ll probably be moving soon.

B.  One trophy out of every 25-50 seen – You have average picky-ness.

C.  One trophy out of every 100+ seen – You’re a crusty old dog.  You know when you’re looking at a trophy property because you are speechless – you have nothing to complain about!