Yunnie’s in Town

by | Aug 20, 2010 | Psycho-babble | 32 comments

From sddt.com

A housing shortage once the market fully recovers is one of the biggest concerns facing San Diego real estate, according to an economic forecast delivered to local agents by the chief economist at the National Association of Realtors (NAR) on Friday.

Reiterating many issues familiar to anyone in the local market, Lawrence Yun — speaking at the San Diego Association of Realtors’ Real Estate Summit — said the shortage of housing created by the historic lows in new home construction pose a potential crisis two to three years from now.

He said the conditions for an economic recovery in San Diego are in place, though it’s unclear what the recovery’s pace will be.  And if the job situation improves considerably, the all-time lows in homebuilding will be a big problem.

“I’m concerned with the lack of new housing,” Yun said. “There’s always volatility in home prices in coastal areas due to the difficulty of building. It’s possible if the job situation gets better, we could face a shortage when the distressed inventory is out of the system.”

This scarcity of supply would result in quickly escalating home prices that would be good for current homeowners, but bad for the industry.  “There would be more people priced out of the market and far fewer transactions,” he said. “Home building needs to reflect population growth.”

Before his speech, Yun said it was possible for San Diego to recover much faster than the rest of the country. “Coastal markets recover a little faster in terms of prices. All of real estate is local.”

“America is fortunate that it can print money and not have inflation, because foreigners still trust the dollar,” he said. “If the low-probability event happened and countries started to distrust the dollar, mortgage rates would increase very fast.”

(more…)

Trustee-Sale Buying

by | Aug 20, 2010 | Buying at Trustee Sale | 6 comments

From the latimes.com – an excerpt:

Competition at the auctions is brutal, said Bruce Norris of Norris Group, a real estate investment firm in Riverside.

Norris unwittingly bought a house that was the site of a gruesome double murder. No one else bid — a rare occurrence that showed others knew the history — leaving Norris with less cash to bid for other houses.  “It’s a very lonely place out there,” Norris said.

That’s only one of many risks in the foreclosure business. People who’ve lost their homes through foreclosure sometimes vent their anger by smashing walls, knocking over water heaters or ripping out toilets.  “We’ve literally had people take $20,000 of cabinetry out and feel perfectly justified doing it,” Norris said.

(more…)

Pre-Marketing

by | Aug 19, 2010 | Listing Agent Practices, Market Conditions, Thinking of Buying?, Thinking of Selling? | 12 comments

I don’t think it is in the seller’s best interest to “pre-market” a home, but most REO agents insist on installing a for-sale sign in front of their new REO assignments at least several weeks before the price is determined. 

Callers who hear that there is no price get ticked off, and are quick to forget.  Oh, you got their number and you call them back with the price?  They are bored by then, and it’s harder to re-ignite any interest, plus the other agents don’t appreciate seeing you constantly trying to scoop their buyers on EVERY SINGLE LISTING YOU GET.

Wouldn’t it seem better to avoid ticking off buyers and other agents?

McMansions In McTrouble

by | Aug 19, 2010 | Market Conditions, North County Coastal, Thinking of Buying?, Thinking of Selling? | 21 comments

Hat tip to clearfund for sending this from cnbc -it mentions the TERI house in Bressi Ranch:

They’ve been called McMansions, Starter Castles, Garage Mahals and Faux Chateaus but here’s the latest thing you can call them — History.

In the past few years, there have been an increasing number of references made to the “McMansion glut” and the “McMansion backlash,” as more towns pass ordinances against garishly large homes, which are generally over 3,000 square feet and built very close together.

What sets a McMansion apart from a regular mansion, according to Wikipedia, are a few characteristics: They’re tacky, they lack a definitive style and they have a “displeasingly jumbled appearance.”  (Wiki says the word McMansion first appeared in the SD Union-Tribune in 1990)

Well, count 2010 as the year the last nail was hammered into the McCoffin: In its latest report on home-buying trends, real-estate site Trulia declares: “The McMansion Era Is Over.”

Just 9 percent of the people surveyed by Trulia said their ideal home size was over 3,200 square feet. Meanwhile, more than one-third said their ideal size was under 2,000 feet. 

“That’s something that would’ve been unbelievable just a few years back,” said Pete Flint, CEO and co-founder of Trulia. “Americans are moving away from McMansions.”

(more…)

Keep It In Perspective

by | Aug 19, 2010 | Market Conditions | 11 comments

Hat tip to the Blur for sending along this cnbc.com article about a Trulia report:

More than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home, according to a survey published on Wednesday. 

The survey, by real estate search site Trulia.com, found 27 percent of renters do not plan to ever buy a home. Although 72 percent still expect to buy eventually, that proportion is down from 77 percent six months ago.

Of those who do hope to become homeowners, two-thirds say they will wait two years or more.

This reluctance to buy could drag out the real estate market’s slump longer than many have predicted, Trulia said.

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When you link to the report, you’ll see in the fine print at the bottom:

This July 2010 survey was conducted online within the United States by Harris Interactive via its QuickQuery(SM) online omnibus service on behalf of Trulia between July 22-26, 2010 among 2,055 U.S. adults aged 18 years and older. The sample included 1,345 homeowners and 663 renters. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.

EDIT:  They found 179 out of 663 renters to say that they’ll never buy a home in an on-line survey.  But cnbc.com leads with the line, “More than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home”. 

I guess that is polling, but the media sure tries to sensationalize every datapoint.

Fannie/Freddie Overhaul

by | Aug 18, 2010 | Mortgage News | 8 comments

EDIT: The Fannie/Freddie overhaul got rolling yesterday, and hopefully they’ll get the answer right – leave loan guarantees in the hands of the private mortgage insurance industry.  The new FHA model, where they are ranking the risk based on the borrower’s credit score and amount of down payment (the more security, the lower the mortgage insurance premium) is what PMI companies do – just let them insure the loans, and pass along the risk premium to the borrowers, not the taxpayers.

From Bloomberg – they didn’t allow embedding of their video, here is link to Berman’s interview, who says the overhaul is gaining “traction”: 

http://www.youtube.com/watch?v=A8CLV4i5Xds

The Obama administration, looking to overhaul the U.S. mortgage-finance system, gathered support from lenders and the real estate industry for reducing, without ending, the government’s role in insuring loans.  A limited government backstop “has a lot of traction,” said Michael Berman, chairman-elect of the Mortgage Bankers Association, in a Bloomberg Television interview after a Treasury Department conference in Washington to discuss proposals.

The Obama administration is seeking advice on how to rebuild a system at the center of the 2008 credit crisis. Some Republicans have sought to abolish Fannie Mae and Freddie Mac, the main sources of U.S. mortgage financing. Yesterday, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. should consider “full nationalization” of the system.

“To suggest that there’s a large place for private financing in the future of housing finance is unrealistic,” Gross said at the meeting. “Government is part of our future. We need a government balance sheet. To suggest that the private market come back in is simply impractical. It won’t work.”

Fannie Mae, based in Washington, and Freddie Mac of McLean, Virginia, have drawn almost $150 billion in Treasury aid since September 2008, when they were seized by the government amid soaring losses on mortgage investments. The U.S. has promised unlimited support for the two companies. Including Ginnie Mae, the government insured almost 97 percent of U.S. mortgages in 2009, according to Inside Mortgage Finance.

“There is a strong case to be made for a carefully designed guarantee in a reformed system,” aimed at providing access to mortgages, even during economic slumps, Treasury Secretary Timothy Geithner said. “The challenge is to make sure that any government guarantee is priced to cover the risk of losses and structured to minimize taxpayer exposure.”

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