This new tract at the top of the hill in Carlsbad couldn’t have timed it much better, with the overall market being fairly steady since they opened.
They’re one of the few new-home tracts in the Encinitas school district that have ocean views, and are now selling from the low-$800,000s to $1 million-plus.
The first clip of this youtube is a drive-through when they were just starting to pour slabs in March, 2009, and the rest is from a few days ago:
Here is a tour of the models from September, 2009:
University of San Diego economist Alan Gin said he is optimistic about the housing market because the economy looks more promising.
“The economy is starting to rebound,” Gin said, “so the question is, can the economy rebound fast enough to save people from these foreclosures? Can enough new jobs be generated so people who are stressed out can find work and meet their mortgages? I think that’s going to be the conflict through much of 2010. Some people might be saved; others will not.”
Rick Hoffman, president of Coldwell Banker Residential Mortgage in San Diego, said his agents have seen more activity in the last few weeks from buyers and sellers, and not just because spring is always more active than winter.
“We can’t keep inventory in our Carmel Valley office,” Hoffman said.
But he characterized consumer confidence as weak.
“When you start looking statistically at prices that reached a floor and have come up a bit, consumer confidence always lags the actual statistics,” he said. “I don’t think the message has gotten to consumers that, hopefully, we’re off the bottom and maybe we’ve changed to a slight increase.”
Rich Toscano, a real estate market watcher at Pacific Capital Associates, said another measurement of price changes, cost per square foot, rose about 5 percent from February to March, double the median increase of 2.5 percent. He said that indicates a rise in value.
“I have a feeling that we are in a recovery of sorts,” Toscano said. But, he cautioned, “I definitely have concerns about the sustainability of the recovery.”
Most worrisome to Toscano and others is the outlook for interest rates. Last week, the Mortgage Bankers Association reported an average rate for 30-year fixed-rate mortgages of 5.31 percent, up from 5.04 percent the week before. Some economists believe that rate could reach 6 percent by the year’s end.
Carl Levin is the chairman of the subcommittee that investigated the WaMu disaster – from the latimes.com:
“Washington Mutual built a conveyor belt that dumped toxic mortgage assets into the financial system like a polluter dumping poison into a river,” Levin said. “Using a toxic mix of high-risk lending, lax controls and destructive compensation policies, Washington Mutual flooded the market with shoddy loans and securities that went bad. . . . It is critical to acknowledge that the financial crisis was not a natural disaster, it was a man-made economic assault.“
“As CEO, I accept responsibility for our performance and am deeply saddened by what happened,” said Kerry K. Killinger, WaMu’s former chief executive. But he and other executives said in their prepared remarks that they had worked to limit the company’s mortgage lending as the housing market began slowing and that, more than anything else, the bank was overtaken by economic events out of its control.
“Beginning in 2005, two years before the financial crisis hit, I was publicly and repeatedly warning of the risks of a housing downturn,” Killinger said. “Unlike most of our competitors, we aggressively reduced our residential first-mortgage business.”
Stephen J. Rotella, WaMu’s former president and chief operating officer, testified in his prepared remarks that he and others worked to reduce the company’s exposure to the deteriorating housing market but were unable to do enough — or to anticipate the historic market collapse.
“As the former COO of WaMu, I would like to be able to say that after my arrival at the bank in 2005, every decision that was made was correct,” he said. “But I was neither more prescient about the future than the chairman of the Federal Reserve Bank or the secretary of the Treasury, nor did I have complete decision-making authority at the company.”
In his first public statement since the bank was seized by regulators and sold for $1.9 billion to JP Morgan Chase, Rotella said the failure was principally the result of the company’s risky concentration in the housing market and rapid growth “magnified and exacerbated by the extreme conditions in the economy.”
“The executive team and all of our people worked very hard to mitigate those risks right up until the seizure and sale of the bank,” Rotella said.
This footage was taken in December when both houses were for sale. The agent had told me that he would submit our offers of $1.2 each, that is until a female agent said she’d submit the same, and he forgot all about me.
Later he raised the prices to $1.5 million each, and mentioned in the remarks that they were approved short sales. The house that owed $4,195,000 was foreclosed last week – the opening bid was $1.25 million, and no takers. WaMu has about the same amount out on the other house too:
If you’re trying to gauge your chances of finding a seller who is distressed, here are the number of detached properties that have listed on the MLS as short sales (SS), bank-owneds (REO) or regular sellers (Reg.), plus the number of SFR trustee sales completed that either went back-to-bene (BTB) or were bought at the steps by a 3rd party – since March 1st:
Town or Area
Zip Code
SS
REO
Reg.
BTB
3rd
Cardiff
92007
2
1
16
0
2
Carlsbad NW
92008
3
3
25
3
2
Carlsbad SE
92009
8
5
88
3
3
Carlsbad NE
92010
2
4
18
4
1
Carlsbad SW
92011
9
1
54
2
0
Del Mar
92014
0
0
36
0
1
Encinitas
92024
7
3
76
4
2
La Jolla
92037
3
3
94
2
1
RSF
67+91
0
4
77
2
1
Solana Bch
92075
2
2
23
5
0
RB West
92127
12
5
85
7
1
Carmel Vly
92130
7
5
96
0
1
’10 Total
All
55
36
688
32
15
’09 Total
All
44
15
747
28
2
This year has seen a relatively big increase in short-sale and REO listings compared to 2009, but they’re still only 12% of the total listings that have been coming on the market recently in San Diego’s North County Coastal region. With only 1-2 properties being sold at the trustee sales per day, there isn’t much to look forward to this summer. The regular sellers won’t be feeling much pressure from distressed neighbors, and likely to hang around waiting…..for something.
After losing her condo in San Diego to foreclosure last year, Charissa Kolich thought that at least she was free of mortgage bills.
But Wells Fargo & Co., which holds a home-equity loan made five years ago to Ms. Kolich, last month filed a lawsuit against her in the Superior Court of California, San Diego County, seeking to collect the nearly $72,000 it said she still owed on that second mortgage. “This was all kind of a shock,” says Ms. Kolich, a food-service administrator recently diagnosed with inoperable brain cancer.
Banks are coming under increasing political pressure to write off or at least write down second-lien and other junior mortgages as a way to help borrowers keep their homes or extract themselves from heavy debt. As the Wells Fargo suit shows, however, banks often are reluctant to give up on loans when they see a chance of recovering all or part of their money.
This issue will be the focus of a hearing Tuesday by the House Financial Services Committee in Washington. Panel members are due to quiz executives from Wells Fargo, Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co. about their junior-lien mortgage policies.
Bank of America is sending out emails confirming that they are participating in the HAFA program, and linking to the N.A.R. description:
HAFA Provisions
Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
Uses standard processes, documents, and timeframes/deadlines.
Provides the following financial incentives:
$3,000 for borrower relocation assistance;
$1,500 for servicers to cover administrative and processing costs;
Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.
Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
Here is the link that provides the details about going from HAMP to HAFA:
The Home Affordable Foreclosure Alternatives (HAFA) Program provides additional options to avoid costly foreclosures and offers incentives to borrowers, servicers and investors who utilize a short sale or deed-in-lieu (DIL) to avoid foreclosures. HAFA alternatives are available to all HAMP-eligible borrowers who: 1) do not qualify for a Trial Period Plan; 2) do not successfully complete a Trial Period Plan; 3) miss at least two consecutive payment during a HAMP modification; or, 4) request a short sale or deed-in-lieu.
In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Generally, if the borrower makes a good faith effort to sell the property but is not successful, a servicer may consider a DIL. With a DIL, the borrower voluntarily transfers ownership of the property to the servicer – provided title is free and clear of mortgages, liens and encumbrances. With either the HAFA short sale or DIL, the servicer may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.
HAFA simplifies and streamlines the short sale and DIL process by providing a standard process flow, minimum performance timeframes and standard documentation.
HAFA is all well and good in areas around the country where Fannie/Freddie loans prevail. We’re on the lookout for any sign that major lenders/servicers are fully releasing borrowers from future liability on non-Fannie/Freddie loans. It may take a while before it filters down, because borrowers have to apply for a HAMP first, and then HAFA. If anyone hears about a policy authorizing full release of a non-Fannie/Freddie deficiency, or pre-approved short sale, let’s us know! Our BofA rep said last week it will depend on the investor, but if you have to process the whole package just to find out, and the answer is no release, who cares – nothing has changed.
How about my new listing in Leucadia, just in time for a double cheeseburger?
Three bedrooms/two baths, 2,076sf built in 1955 with a private one-bedroom legal unit currently rented for $1,050/month but perfect for guests or in-laws! Walk to Leucadia Donuts too!
I think it’s already over, but there will likely be a flurry of activity during the next couple of weeks in the under-$800,000 market, It will be impressive if we see a group of sellers who waited until now to list their homes for sale to catch peak urgency. Any seller who thinks their house is worth $7-something should list today for $799,000 and see if they get tax-credit lucky.
But I think that most of the tax-credit buyers have already secured their purchase, and have closed or are in escrow – with many jockeying for a May closing and their double cheeseburger.
With much of the demand pulled forward, the next 60-90 days are likely to be a long flat spot – especially with so many sellers who insisted on packing that extra 5% to 10% of icing on top of their retail-priced cake. They are being overly-optimistic about today’s buyers/frenzy, and slow to reduce their prices. It will probably be like last year, where the total of September and October sales (205, 175) of North SD County Coastal detached homes was higher than May and June (167, 179), with sellers lowering their prices as summer winds down.
Buyers came out firing the first of January, and 3+ months later the inventory is picked over. In NSDCC there are 1,085 detached active listings, and 938 of them (86%) have been on the market more than two weeks – they should start lowering their price to get in the game. But instead they will likely want to wait another month or two, thinking it’ll get better, later.
The inventory is so thin that buyers can see all the homes in their target area within a day or two, and then they just monitor the new listings. This puts intense focus on every new listing, but sellers and listing agents mis-interpret all the early action as their price is too low – and they hold out. A week or two later the visitors have dried up, and the listing gets stale, relative to how wrong the list price is.
A very aggravating practice that has been growing (besides the insane booties) are the agents who insist on throwing their new listing on the MLS, but then add that it can’t be seen for days or weeks. They are burning all of their prime urgency, and buyers forget about them by the time they are available to be seen. Anything a listing agent does to dissuade buyers is shooting themselves in the foot, but apparently few think about that, and just follow the herd.
I think mortgage interest rates are a concern to buyers, but as long as rates stay under 6%, it’s likely that buyers will tolerate them. Buyers who have been in the hunt for months or years aren’t going to give up, but they’ll probably be pickier, and expect better pricing. Doubtful that sellers will listen, and another reason for the Big Stalemate to start right about now.
No big surge of short sale detached listings in North SD County Coastal yet either. There were 31 listed in March, and 5 the first week of April. With HAFA being aimed at Fannie/Freddie loans only, any benefit is likely to miss SoCal. Both WFB and Bank of America are offering webinars, conference calls, etc., but until they waive the right to pursue any deficiencies, the whole package will be a nothing-burger here. More fuel for the Big Stalemate, with buyers hoping for more drama, and sellers burying head in sand.
