Pemeliza already took a couple of swings this morning, here’s the first:
JTR, I know you don’t cover Mission Hills much but here is a new short sale listing in my neighborhood at more than 50% off the 2007 price. It also has the modern clean look and I think it is a great deal at the asking price of 1M. http://www.sdlookup.com/MLS-100063015-906_W_Lewis_St_San_Diego_CA_92103
His other was:
There are many properties on the market priced 10% lower than the prior comp and are still sitting on the market….
I haven’t seen any listings priced 10% under the prior comp and not selling. If you have examples, I’d like to see them – I have buyers! I have a client that sends over low sales occasionally, and every time they’re examined, there is a reason – bad condition, inside deal, etc.
If anyone knows of under-market listings, leave them in the comment section – let’s take a look!
This contemporary villa in Manhattan Beach was designed and built by Steve Lazar for his family’s personal use, though he probably gets a few gawkers passing by.
An excerpt from Nick’sarticle in the WSJ about housing inventories:
The growing pessimism is attributed partly to rising inventory in many markets, a trend that doesn’t bode well for prices. The Wall Street Journal’s latest quarterly survey of housing-market conditions in 28 major metropolitan areas found inventories of unsold homes were up in 19 markets at the end of the third quarter, compared with a year ago, with especially large increases in San Diego, Los Angeles and Sacramento.
“We’ll see some additional price declines,” said David Berson, chief economist at PMI Group Inc., a mortgage-insurance company in Walnut Creek, Calif. “The gains we’ve seen can’t be sustained given the current supply situation.”
He is right about the increase in active inventory since last year.
Our active-inventory count of detached and attached listings is taken around the middle of each month. In September, 2009 the count was 7,848, last month it was 12,565 – a whopping 60% increase. Here is how this year compares with others:
Once potential sellers think prices are going up, they want to get in on it, and sell too.
But these are psuedo-sellers tip-toeing in from the sidelines. For whatever reason (their high loan balance, elevated ego, etc.), they aren’t motivated enough that they’d sell for what the last guy got – they have to try for more.
Over-priced turkeys are everywhere, and the buyers aren’t going for them. Thus, the active inventory has been building all year, though the trend has tapered off over the last 3 months with healthy sales combined with post-season cancellations.
Why don’t psuedo-sellers get realistic and lower their price after a few weeks or months? It would be normal to think that they won’t lower their price because they can’t, due to loan balance, or just working the short-sale/free rent package.
But only 2,753, or 22% of the 12,447 active listings today are marked as short-sales.
Yes, there are listing agents who aren’t marking their listings as short sales – but it looks like the majority are elective sellers, just happy to have a sign in the front yard from which they can hang holiday decorations?
We have seen in the past that when the inventory gets bloated, buyers tend to back off. Sales have been holding up, but it appears like we’re heading for the Big Stalemate:
Sellers who need to sell, need to lower their inflated list-price. To casual observers it might look like prices are going down, but consider this from SR, zillow’s CEO:
MP: I know you’re out there discussing data and stats on a regular basis, including in our Daily Real Estate Advisor. Despite the story the data tells, what positive messages do you think are important to get out there about real estate?
SR: Home values have bottomed and bounced off the bottom in some parts of the country. In San Diego, for example, they’re already 5-10% off the bottom. We don’t expect a significant price appreciation from here, but we don’t expect home values to go further south in those parts of the country. This points to the way we must look at home values—which is at the neighborhood and regional level. It’s more nuanced than what the national media typically reports. There is definitely some good news for our industry which has been underreported. For example, we’ve clearly passed through the bottom in terms of transaction volume. Homes are selling again and the dark days of two to three years ago when there were no sides taking place are behind us.
We’re off the bottom, but there has not been continually-increasing trend – we went flat at $250/sf:
The buyers have tolerated a little bump in pricing when there was little to choose from (note how the active inventory during the second half of 2009 was the lowest of the seven years), but now that so many over-priced turkeys have proven what homes aren’t worth, the buyers are happy to sit tight and wait.
Will sellers lower their inflated list-price? I think it is very doubtful. There isn’t enough difference between a short sale and foreclosure, so those sellers won’t care to lower their price just to sell. The elective sellers think they have enough resources to wait it out, and don’t mind that 38% of the listings have been on the market for more than 90 days. There will be an occasional flurry, but mostly stagnation ahead.
“A disappointing report. Home prices broadly declined in August. Seventeen of the 20 cities and both composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows,” David M. Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.
“Over the last four months both the 10- and 20-City Composites show slowing growth, after sustaining consistent gains since their April 2009 troughs,” he said.
Blitzer said the housing market appears to have stabilized at new lows.
“At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers’ tax credits,” he said.
Annual growth rates slowed down in the three California cities, with Los Angeles, San Diego and San Francisco posting annual gains of +5.4%, +6.9% and +7.8%, respectively – a significant drop from the +7.5%, +9.3% and +11.2% reported for July.
“The recovery that started in 2009 has petered out,” Karl Case, one of the co-founders of the index that bears his name, said in an interview on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene from Wellesley, Massachusetts. He said excess supply was the main challenge to a recovery in housing. “That’s the big negative: the vacancy inventory.”
For the first time in 16 months, the San Diego month-over-month was negative (-0.6%) for both seasonally-adjusted, and non-seasonally adjusted from July to August.
Hat tip to Susie for sending in this latimes.comarticle:
For example, Jean C. Wilcox of Irvine has sued EMC Mortgage Corp., accusing it of stringing her along for three years while making several offers to modify her nearly $800,000 loan, losing documents repeatedly and never intending to permanently change the terms of the mortgage. An EMC spokesman declined to comment.
“It was just ‘extend and pretend,’ ” said Wilcox’s lawyer, Anthony Lanza of Irvine. “And it was like they had the fax machine hooked up to a shredder.”
Anaheim lawyer Damian Nassiri said his firm had filed about 100 lawsuits against mortgage lenders since 2007. Earlier suits alleged that lenders misrepresented terms of mortgages or engaged in other shady practices to foist abusive loans on borrowers. Most of his firm’s suits now accuse lenders of dealing in bad faith with borrowers who have become delinquent on loans.
Worse, Nassiri said, in cases where foreclosure was inevitable, banks misled borrowers into accepting trial loan modifications. The intent, he claimed, was “to get some kind of money out of them” while stalling actions to seize the homes.
“There are too many bad loans for the banks to handle, and they can’t dump all these properties out on the market all at once because we would have another Depression,” Nassiri said.
Similar allegations of breaches of contract and acting in bad faith have cropped up in lawsuits around the nation, said Anthony Laura, a Washington lawyer who represents lenders accused of wrongdoing and tracks litigation trends.
Some suits allege that the problem is so widespread that courts should certify the plaintiffs as representing an entire class of aggrieved borrowers. Wilcox’s suit, for example, seeks class-action status on behalf of other California borrowers with similar complaints about EMC.
Boston consumer lawyer Gary Klein, a longtime antagonist of mortgage lenders, has filed suits seeking class-action status against the top three loan servicers — Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. — and others.
A multidistrict panel of federal judges on Oct. 8 consolidated eight such suits, including two from California, for pretrial proceedings in federal court in Boston.
The suits allege that trial loan modifications extended by Bank of America under the Obama administration’s anti-foreclosure plan were contracts that the bank violated by denying permanent modifications to borrowers who fulfilled their obligations.
In court documents filed in one of the cases, Bank of America said the plaintiffs mistakenly believed they were guaranteed loan modifications if they made three trial payments under the government’s program.
“A borrower must actually qualify, including income verification, an analysis of the modified loan’s affordability and other factors,” the bank said in the filings.
Wilcox said she had about $250,000 in equity in her home when EMC first offered to modify her loan and would have sold the house had she not relied on the company’s promises for a permanent modification. Now it’s not clear whether any equity remains.
“You’re paying out all this money,” she said, “and all the time the value of your house keeps going down.”
Thieves are walking into homes filled with poison to get their loot, according to police.
At least six homes have been targeted in La Jolla while they were covered with tents and being treated for termites.
“Some people think it is a circus tent,” said Mike Lawson with La Jolla Termite & Pest Control. “In reality it is a deadly tent.”
The tented homes are filled with a fumicide that is mixed with tear gas. Only thieves using gas masks could pull off the crime and even then it’s a dangerous move.
“The house is filled with chemicals designed to kill things,” said San Diego Police Lieutenant Jim Filley. “If you’re in an environment like that for a prolonged period of time, you’re going to get very sick and you’re certainly capable of losing your life.”
People in the pest control industry have worried about thieves for years. A tented home is a sign that no one is home. There have been incidents where burglars have been overcome by the toxic gas and died.
Lawson said that thieves are breaking in with crowbars and smashing windows. He said during the two-day tenting, homeowners might want to hire security firms or ask neighbors to keep an eye out for anything suspicious.
Police suggest that while you are covering up and removing food from the house, you may also want to take valuables away. “Just get your video camera, small electronics, the things that are stolen in burglaries,” said Filley.
In the 1973 comedy classic, “Sleeper”, Woody Allen’s character, Miles Monroe, wakes up 200 years in the future to discover that mankind has regressed into an “inept totalitarian state”.
Things are kinda rough a mere 37 years after 1973, and now the home made famous in that film for its spaceship design is in foreclosure. If you’ve ever driven on I-70 west of Denver you’ve seen the home on the south side of the highway, way up on a ridge.
It can now be yours.
The home was bought in 2006 by businessman Michael Dunahay from another local entrepreneur, John Huggins, for $3.43 million. Dunahay is about $171,000 behind on his payments, and the holder of the note, Bayview Loan Servicing, is planning a foreclosure sale next month. An earlier sale planned for October 6 was postponed. This is not the first time Bayview has moved to foreclose on Dunahay. It filed paperwork to do so last year, but withdrew.
Back in January 2006, I interviewed Huggins, the previous owner, who had bought the house for under $2 million:
