How does this happen in 2019? Hat tip to Peter for sending this in!
The Web site for Fortune 500 real estate title insurance giant First American Financial Corp. leaked hundreds of millions of documents related to mortgage deals going back to 2003, until notified this week by KrebsOnSecurity. The digitized records — including bank account numbers and statements, mortgage and tax records, Social Security numbers, wire transaction receipts, and drivers license images — were available without authentication to anyone with a Web browser.
Santa Ana, Calif.-based First American is a leading provider of title insurance and settlement services to the real estate and mortgage industries. It employs some 18,000 people and brought in more than $5.7 billion in 2018.
Earlier this week, KrebsOnSecurity was contacted by a real estate developer in Washington state who said he’d had little luck getting a response from the company about what he found, which was that a portion of its Web site (firstam.com) was leaking tens if not hundreds of millions of records.
He said anyone who knew the URL for a valid document at the Web site could view other documents just by modifying a single digit in the link. And this would potentially include anyone who’s ever been sent a document link via email by First American.
KrebsOnSecurity confirmed the real estate developer’s findings, which indicate that First American’s Web site exposed approximately 885 million files, the earliest dating back more than 16 years. No authentication was required to read the documents.
Many of the exposed files are records of wire transactions with bank account numbers and other information from home or property buyers and sellers. Ben Shoval, the developer who notified KrebsOnSecurity about the data exposure, said that’s because First American is one of the most widely-used companies for real estate title insurance and for closing real estate deals — where both parties to the sale meet in a room and sign stacks of legal documents.Link to Full Article
My second tour of downtown Carlsbad where it becomes obvious that big money is taking over and if you don’t like it you better say something quick. P.S. Do you know what Elm is?
Many will lament the redevelopment of downtown Carlsbad, but it is happening everywhere as big money takes over. It’s not just the look that’s changing either.
The old Sears at UTC is being completely re-purposed, and new companies that never existed before are coming in to provide services we didn’t even know we needed.
Carmel Valley’s Del Mar Highlands is adding 120,000sf of upscale retail tenants to compete with the One Paseo mixed-use project across the street. Horton Plaza is getting re-worked, Mission Valley has already transformed, and surely other old parts of town will get upgraded in the near future.
There doesn’t seem to be any way to stop it either. Let’s make the best of it?Link to Article
Once upon a time Carlsbad was a sleepy little beachside town, but now big money is taking over. Here’s a tour of projects being discussed on the street:
Here’s a visual comparison of last year’s counts of NSDCC weekly active and pending listings, and how we are doing this year.
Mortgage rates had bumped up from 4.47% in April to 4.83% in October, but the inventory kept growing too, which didn’t help. The pendings are a better gauge than sales for showing when the buying decisions were being made, and you can see that last year, buyers started losing interest after mid-June.
The bulging inventory in the second half of 2018 also left us with an inventory hangover. We started the year with 35% more homes on the market than the previous year, which led to a slower start in 2019.
But the weekly pendings have strengthened lately, and have been tracking about the same counts as we had in 2018 – probably due to lower rates. Last month, the Freddie Mac average 30-year rate was 4.14%.
If rates stay the same as they are today, we really should see the season extend past June – because it got whacked last year. But high pricing and more inventory could spoil the momentum too.
This reminds me of the time of when we were at the Rosarita Beach Hotel back in the ’80s and somehow my credit card got on the loose and I ended up paying for drinks for everyone all night!
There was a good summary of the ibuyer business published yesterday:
But as more players jump into the space and markets are saturated with various competing platforms, profit margins that are already paper thin get squeezed even more. Zillow says it’s making $1,723 per home flip at a minuscule 0.6 percent profit, which leads one to wonder if this space is really worth getting into if you don’t have multiple modes of monetization.
That’s where the concept of a one-stop shop for home buying and selling becomes especially attractive. If one company can seamlessly integrate each individual component of the real estate transaction—buying, renovating, insuring, and selling—and optimize operational efficiencies along the way, there’s a path to becoming the truly dominant real estate company.
Being the one-stop shop has been the goal of most large real estate operations, where the owners can make profits on every related service – escrow, title, loans, etc. It’s why these outside companies all jumped in to the ibuyer space – the cumulative profits look very enticing, and making as little as $1,723 per home flip doesn’t look bad as long as they get the other fee income too.
I think they will be able to dominate in the homogenized lower-priced tract neighborhoods where there isn’t much variance in values. They can make their own market too, because a first-time homebuyer won’t balk over paying a few extra thousand in price to get an easy entry into a renovated home. If great salespeople are employed, the ibuyers could make a killing.
It will also enable the ibuyers to dabble in the higher-priced areas, where losses can pile up quicker. No need to risk big money when there is no pressure on them to buy anything. I would expect their purchase quotes in the higher-end areas will be well under retail, to give them plenty of cushion.
How will sellers, buyers, and realtors react?
Sellers usually have a price in mind, and tend to be a little uncomfortable with interviewing several candidates/options. If ibuyers advertise effectively and get the first call, then all they have to do is get close to the seller’s price-in-mind, and convenience will be what decides it.
If a realtor gets the first call, and comes in with seller’s price-in-mind or higher, they will get the listing. Realtors will feel the need to quote higher-than-ever list prices.
Sellers who want quick money and convenience won’t worry about leaving a little money on the table, and take the ibuyer deal. Those sellers who want top dollar will list with a realtor.
With everything being high-priced, buyers will probably gravitate to the homes in top condition, and just pay what it takes. Hopefully we won’t run out of buyers.
Crafty agents might offer third-party reviews of the options. Sellers will already be getting biased opinions from ibuyers and realtors, and they could use a consultant to help sort out the best option. But sellers would have to be deliberate and analytical to resist winging it themselves.
The Big Question? With sellers having more equity than ever, will they mind leaving some on the table?
The successful ibuyers doing volume could smooth out any bumpy markets, because they will be determining the home values to suit their bottom line. If they can’t sell, they can always rent instead.
We’ll have even fewer motivated sellers!
Doesn’t it feel like we’re in another bubble?
Home prices have been on a tear for ten years straight, and are at their highest levels ever.
Is this bubble going to pop too?
Let’s look at the statistics first. I took the most recent 45 days to get the latest scoop, plus the MLS prefers to calculate the smaller sample sizes.
NSDCC Detached-Home Listings and Sales, April 1 – May 15 (La Jolla to Carlsbad)
It is remarkable that all-time-high prices aren’t causing more people to sell!
In previous markets, once prices started reaching new highs, homeowners would jump at the chance to move. The inventory would grow and cool things off, and/or we’d hit an economic downturn and foreclosure sales would direct the market. But not today!
We are a mid-level luxury market. The more-expensive areas like Los Angeles, Orange County, and the Bay Area feed us downsizers who think we are giving it away.
Homebuying has de-coupled from jobs. We do have substantial employers like Qualcomm, bio-tech, etc. but not near enough to justify these lofty prices. How do we keep afloat? It’s the big down payments; either from previous home sales, successful business ventures, or the Bank of Mom & Dad.
They changed the rules. Banks have to give defaulters a chance to qualify for a loan modification before they can foreclose. With everyone enjoying their equity position, they will find a way to hang onto their house or sell it for a profit, instead of lose it.
Mortgage rates around 4% are ideal. Not likely to go up much either.
Reverse mortgages are an alternative for those who need money. They might crank down the amount of money you can tap, but as long as homeowners are flush with equity, they will be able to get their hands on some of it via reverse mortgages or the typical equity line.
Buyers have been full of money, and willing to blow it. I’ve seen sales close for 10% to 25% above the comps this year, so it doesn’t seem like people are worried about a bubble. Those sales could be creating unsustainable comps, and be short-lived values, but will the next buyer question them enough?
Coming Soon vs. ibuyer. We need a gimmick to transition us to the ibuyer era, and the ‘Coming Soon’ off-market sales will be the sexy distraction. The price of an off-market sale isn’t necessarily lower than retail, and in some cases they can be higher when the buyers get jacked up about the opportunity.
The ibuyer era could be the last hurrah for open-market real estate. If the big-money corporate buyers can build enough credibility and begin to dominate the space, they will be able to dictate the prices paid for their flips, and control the marketplace. If so, they will make sure we won’t have another down market!
In the meantime, we might see prices start to bounce around, instead of the constant trend higher. But if it gets harder to sell, then many will just sit tight instead.
If you think a bubble pop will happen, ponder this question. Who is going to give away their home now?
We can probably say that affluent people are coming, and those who are priced out, or cashing out, are leaving. There were 31,354 houses and condos sold in San Diego County in the last 12 months, so those migrating are only part of our real estate market.
Millennials are leaving San Diego in the thousands, according to a new report by Brookings.
The new Census Bureau migration data reveal a post-recession shift in the migration of young adults and seniors.
From 2007 to 2012, San Diego lost more than 7,000 people between the ages of 25 to 34 annually. From 2012 to 2017, the number nearly doubled to more than 13,000.
The report points out that millennials have the tendency to move to “educated places” such as Denver and Seattle. Millennials also prefer more affordable areas such as Kansas City and Minneapolis.
While San Diego is losing young people, several Texas cities appear to be gaining a good chunk of millennials. Cities like Houston, Dallas, Austin, Denver and Seattle gained tens of thousands of people between the ages of 25 to 34 between 2012 and 2017.
As for those 55 and older, more than 18,000 migrated to Phoenix per year from 2012 to 2017. Cities like Tampa, Riverside and Jacksonville also saw their fair share of people ages 55 and older.Link to Article