In Southern California, sales are brisk for homes priced near or below the current $265,000 median. The majority of those homes are foreclosures, so prices are often low enough to draw multiple offers from potential buyers.
Richard Toscano, who in 2004 started a popular San Diego housing-bubble blog called Piggington’s Econo-Almanac, lately has been posting data showing home prices are favorable compared with incomes and rents in lower-priced parts of San Diego.
He’s drawn fire from some, but others who have followed the blog for years have recently posted comments detailing home purchases. Toscano, who sold his San Diego condominium in 2002 (he said the sale was due more to a job transfer than his belief in a bubble then), is still holding off on buying for various personal reasons, he said.
But he thinks it’s no longer dangerous to buy in some areas.
“We have this weird, disparate bottoming,” he said. “In some areas we may be there already, but others are not nearly as close.”
Thanks everyone for participating in the contest for Chargers playoff tickets!
Here are the finalists for best explanation, and winner of four Padres tickets vs. Cardinals:
#4, from JK:
Positives
1) Fannie Mae loans will still be available
2) Stimulus money will inject some money
3) Some people will ‘feel rich’ with the Dow over 9,000
4) Most people still dont understand that it may be easier to walk away
5) Lots of people in SD made money off real estate; once you start, it’s hard to stop
Negatives
1) Banks are drawing a harder line on mods
2) There is a lot of meat left to grind into sausage (foreclosure pipeline)
3) Double dip recession starts when clunkers ends
There isn’t much for sale now and don’t see much on the horizon. This supposed tsunami that is going to hit is looking more and more like an ankle slapper.
#1, from JordanT – THE WINNER(lack of seasonality, and similar to today’s market)
Seasonality is not a major factor in this market as the buyers are investors and first time home buyers (very similar dynamic to last fall). The number of distressed sellers will stay about the same as well, since there doesn’t seem to be much seasonality to NODs/NOTs. Congress will at least extend the $8,000 housing credit, with a chance of making it $15,000 to anyone.
Therefore, the market is going to be very similar to what it is today.
I took part in the North SD County Association of Realtors meeting this morning, entitled:
“How Your Brokerage Can Survive in Today’s Economy”
It was at Jake’s Del Mar and included a free breakfast, so I thought I’d participate for once, to see if there was any hope. I have submitted my ideas to the association’s staff and board officers previously, to no avail.
Because they made a point to ask what we think, I’m going to memorialize it here for reference.
Whenever you get agents together, you’re going to get plenty of whining, and few ideas. After a long round of complaining about short sales, the current chairman knew he could call on me to change the subject. He asked me to comment on technology, and off I went.
These were topics I covered:
1. Videos– Every agent should include a video tour of their listings – it’s free and easy with a digital camera and youtube. Agents will say that they don’t know how to do it, but that doesn’t stop them from taking lousy photos. Video tours are the future, yet they are currently banned from being in the MLS remarks, due to concerns about self-promotion.
2. HomeDex– CSUSM’s Dr. Robert Brown was there to recite the most recent HomeDex data, his contribution to the real estate industry. But I noted how we don’t provide any interpretive direction or help – just spew data and let the consumer figure it out. The realtors don’t know how to explain it, and if they just go around telling their clients that prices have been going up for four months, they’ll likely lose a client.
Just reporting data with no explanation or interpretation is not professional sales.
3. Short Sale Procedures – I implored the local association to develop and inflict a uniform short-sale process. It’s no wonder nobody likes them, each listing agent does them different, and you never know what to expect.
If there was a set of procedures that every agent followed when negotiating a short-sale offer, at least we’d have some confidence there. With no rules or regs today, the listing agents pull all kinds of shenanigans, causing many clients and agents to despise them, and short sales in general.
Shortly thereafter the meeting was adjourned, and I had a word with the chairman, Kurt Kinsey, who is a like-able guy and a 22-year veteran realtor. We discussed the vaunted Shadow Inventory, and I mentioned the recent foreclosureradar stats to back up my thought that banks are not sitting on REOs. The real shadow inventory are those who have received their notices of default, but haven’t been foreclosed yet.
Here are today’s numbers for SD County:
NODs= 11,700
NOTs= 8,595
REOs= 4,161, including 71 properties foreclosed today.
We know that a bulk of the 20,295 defaulted properties are in the loan-mod process, but I told Kurt that I think at least half of those could get foreclosed on during the next six months, and that demand is so strong that there should be a buyer for every one.
Dianne McMillan, the CEO of NSDCAR, was next, and the first topic was enforcement – can’t we self-police ourselves and throw out the bad agents? She said that all they can do is fine up to $5,000, and make recommendations to the CA Department of Real Estate, whose complaint caseload is backed up 18 months.
I had to bring up you-know-who, the broker involved with at least ten cases of raising sales prices to enable six-figure kickbacks from the sellers. Those actions have cost lenders around $4,000,000, and not only is she walking around free, she got elected to be a director of the association of realtors!
How she got elected was slick – her district has 300 agents in it, but only eleven cast a vote in the election. Besides her own vote, she only needed to convince five people to vote for her!
I pressed Dianne on how this could happen, and she finally said that the people who vetted the candidates didn’t pick up on the previous problems.
NOTE to all vetting people and companies – GOOGLE THEIR NAME!
Dianne did admit to reading my blog about the incidents, and her demeanor was less than positive. She said I should get involved, but I told her I wouldn’t waste my time, primarily because the board coddles the new agents, to which she agreed.
There are other things – how about a feedback website? They could sponsor a website where consumers could comment on their agent’s performance, just like on ebay, and if a comment was negative, the agent would have a chance to rebut. But NSDCAR won’t do it because they need the dues, and as I was told the first time I brought it up a few years ago, “we’d just get sued”.
Or how about a simple blog to interact with consumers and agents?
There were cards in the middle of each table that went babbling on about how the NSDCAR “is about to become the single most important source of professional support ever”. We’ll see, it’ll take huge changes in the status quo to achieve it.
We knew there would be double REOs – houses that get foreclosed back-to-back.
2612 La Gran Via, Carlsbad
4 br/3 ba, 3,834sf
$1,100,000 12/05 refi mortgages
$961,006 11/06 Trustee sale O-bid, REO
$876,000 5/07 SP
$733,146 8/09 Trustee sale O-bid, REO
$778,000 8/09 LP
It’s been featured here before, a typical Old La Costa custom with funky floor plan and a smaller back yard. This former owner was a restauranteur, so we can probably chalk this foreclosure up to the economic downturn?
Interesting to note that the IndyMac current list price is higher than the opening bid at the trustee sale. We’re going to watch this trend, and remember those lenders who list lower – no reason to buy at the trustee sale if you can get it lower, later.
Campo and Jacumba are remote, but could there be some investment opportunity? Houses are $50,000 to $200,000, or you could buy this 445 acres suitable for a wind farm for just $1.3 million >>>>>>>>>
San Diego Gas & Electric has announced plans to develop electrical infrastructure in east San Diego County that will connect within the company’s existing power network.
The planned new substation, along with the company’s approved Sunrise Powerlink transmission line and recently announced partnership in a wind project on the Campo reservation, will help boost the emerging renewable energy industry in eastern San Diego and Imperial Counties.
SDG&E already has secured 26 percent of its power supply for 2012 from renewable energy resources, which is well ahead of the voluntary commitment the company made to supply 33 percent of its power from clean energy sources by 2020.
“Experts agree that a lack of electrical infrastructure is the most significant barrier to tapping into the vast potential for renewable energy in this region,” said Debra L. Reed, president and chief executive officer for San Diego Gas & Electric, in a release. “This project will serve as the backbone for delivering renewable energy from the mountain region east of San Diego County for decades to come.”
The National Renewable Energy Laboratory has identified portions of eastern San Diego County, Imperial County and the northern Baja California region as having some of the highest concentrations in the country of potential energy from the sun, wind and geothermal, SDG&E said in a release.
ECO, the planned new electric substation in East County near Jacumba will transmit electricity via the existing Southwest Powerlink electric transmission line and connect future wind farms and other renewable energy projects. The project was submitted for approval to the California Public Utilities Commission on Monday.
The plan also calls for rebuilding the existing 50-year-old Boulevard substation. Local communities such as Jacumba, Boulevard, Campo, Bankhead Springs, Live Oak Springs, and the Campo, La Posta and Manzanita Indian Reservations will benefit from improved energy reliability when the current Boulevard substation is modernized, SDG&E said in a release.
The two substations will be connected by a new 13-mile, 138-kilovolt power line. SDG&E also will add new communications equipment at a facility near Boulevard to help improve remote system management.
In June, the Campo Band of Mission Indians of the Kumeyaay Nation, Invenergy and SDG&E jointly announced a plan to build on tribal lands a wind energy project capable of generating up to 160 megawatts of renewable power, or enough clean energy to power 104,000 homes. This joint project will be the Campo tribe’s second wind generation facility and is expected to offset as much as 145,000 metric tons of carbon-dioxide emissions annually.
Last week we saw that the newer 2,700 square-footers in Carmel Valley were a hot commodity, and holding steady in the $800,000s.
What do you get for less?
Here’s a youtube video of three houses, two that just went pending, and one that closed, in the $600,000 to $700,000 range:
In other news, the median sales price has gone up four months in a row, which has some babbling.
From sddt.com:
“You have a floor,” said Louis Galuppo, a practicing real estate attorney and director of residential real estate at the University of San Diego. “Last year, (in July) prices were dropping in certain places and that’s not happening in certain areas now. In fact, that’s not happening in a lot of areas under $500,000.”
“The market can handle it all day long right now,” Galuppo said about the short sales and foreclosures that could come onto the market. Galuppo said people were afraid when foreclosures started coming into the market significantly last year, but since then those fears have been quelled — for the most part.
While uncertainties about the housing market and economy loom, some buyers have seen value with current home pricing as demonstrated by the 117 offers made on a Clairemont-area home last month.
From the North County Times, noting the 21% increase:
North County’s median house price rose to $440,000 in July, the fourth month in a rebound from a historic crash, an industry group reported Tuesday. The monthly HomeDex report released Tuesday by the North San Diego County Association of Realtors showed the median price of single-family homes rising from $415,000 in June and from $364,000 in March, its lowest level in six years. The $235,000 median for condominiums and town homes remained about 7 percent below month-earlier and year-earlier levels.
The market for mid- and low-priced homes is “red hot,” said Jim Klinge, a Carlsbad real estate agent who viewed the high home prices of 2004 and 2005 with skepticism.
But Klinge cautioned against putting too much stock in the month-to-month changes in HomeDex’s median, the level at which half of the sales were for greater amounts, and half for less. Klinge said sellers of luxury homes are beginning to drop their prices as the end of the summer selling season approaches. The late summer rush at the top end may have skewed median prices upward, he said.
“(Sellers) are thinking, ‘If we’re going to do something, we’d better do it now,'” Klinge said.
Nearly 8 percent of San Diego County mortgage borrowers are at least 90 days behind on payments, and thus in imminent danger of foreclosure, according to First American CoreLogic, a mortgage research firm.
Though with 22,462 houses and condos on foreclosureradar’s list of NODs, NOTs, and REOs, there has to be relief ahead, doesn’t there? Typically in January we see the low inventory count for the year, before the spring kick.
Let’s use the active inventory as one of our primary indicators.
We’ve seen over the last few months how frenzied up buyers can get when there are few homes for sale. If we head into the 2010 spring kick with an ultra-low inventory and decent interest rates, it’s going to be off to the races.
If there is a surge of REOs over the next six months, and we head into the spring with a bloated inventory, then we could slog along.
We’ll probably know where we stand by the holidays.
Housingtracker’s average for last December was 15,116 homes for sale, and today’s count is 11,457 listings.
If the active inventory is rising by the holidays, then trouble is brewing, because normally the inventory declines towards year-end. If there are fewer homes on the market in December than there are today, then the spring kick should be lively – any increase in REO inventory could correspond with the usual seasonal boost.
Where do you think we’ll be?
Guess how many attached and detached active listings there will be on the morning of December 1st, and the closest guesser will receive two tickets to a Chargers game!
We’ll have an instant winner too – the best explanation for a guess will receive four Padres tickets for Saturday August 22nd vs. Cardinals at 7:05pm!
