Carmel Valley Biotech

From the UT:  To life science professionals, Torrey Pines and Sorrento Valley, the ZIP codes 92037 and 92121 signify the old core of San Diego’s biotechnology industry, right next to the academic institutions that spawned it in the late 1970s.

To the north, 92130 represents biotech’s emerging hub of Carmel Valley. It shows life science with a different face, not only geographically but in terms of business style. There’s less proximity to academia but greater closeness to the professional service firms biotech and related life sciences companies need, including law and venture capital firms located along High Bluff Drive and El Camino Real.

So while Carmel Valley doesn’t offer the Torrey Pines Mesa experience of a chance meeting with an academic researcher whose lab is across the street, it’s quite efficient at bringing together all the pieces a biotech company needs to grow. And as biotech (and other technology sectors) kept expanding in San Diego, its growth became inevitable.

It began with the high-profile move of Neurocrine Biosciences, said Joe Panetta, chief executive of the San Diego-based Biocom. a life science trade group. Neurocrine moved its 400 employees from Sorrento Valley to its new 200,000 square-foot building in 2004.

“For a long time, we’ve talked about Carmel Valley as being geographically the next step north for the industry,” Panetta said.

Biotech employees also find the area to be a great place to live, said Panetta, a Carmel Valley resident.

“Many of these people have children, and the school systems between Del Mar and San Dieguito, Torrey Pines, are excellent, and that’s always been important to people in the biotech industry,” Panetta said. “They want to be located in a place where (a) they can live close to work, and (b) they have access to the best schools.”

Biocom says about 60 of its members sport 92130 addresses. A few of these companies have market values above $1 billion, namely Volcano Corp. ($1.5 billion), which moved here from Rancho Cordova in 2008; and CareFusion Corp., ($5.9 billion), spun off from Cardinal Health in 2009.

The ZIP code has about 4.4 million square feet of office space with a vacancy rate of 15.1 percent and an average lease rate of $3.55 a square foot, according to a second quarter report from Cushman & Wakefield.

Read the rest here:

http://www.utsandiego.com/news/2012/oct/30/biotech-thrives-92130/

Multigenerational Local Impact

The report this week about the increase in multigenerational households having a negative impact on housing was fascinating, but irrelevant to our local demand for homes.  Likewise, the talk about student debt, and the difficulty of finding jobs doesn’t impact the NSDCC market either, because very few freshly-minted college graduates are buying $800,000 homes.  Thankfully they can move in with their parents!

Theoretically, these obstacles might affect buyers in the starter-home areas, but the demand there is so red hot now that we don’t need more buyers – we have plenty who are trying to buy, but are struggling to compete.  For example, Skylar is finally in escrow, after offering on 15 properties since June – that’s a lot of losing!

Mortgage rates are the only thing that matters, and as long as they stay in the 3s and 4s, it looks like the demand will stay strong.  Take for instance, the preliminary October detached-home-sales count for NSDCC, already up 36% year-over-year, and the month isn’t over – there will be another 5-10% added to this number:

NSDCC October # of Sales Avg. $/sf
2010
188
$364/sf
2011
186
$379/sf
2012
253
$385/sf

Overall, we’ve had 19% more NSDCC detached-home sales in 2012, compared to last year:

NSDCC Jan-Oct # of Sales Avg. $/sf
2010
2,072
$378/sf
2011
2,166
$378/sf
2012
2,572
$371/sf

Considering how strong it has been all year, this is a market for the affluent – those with big down payments, and/or those willing and able to carry big monthly payments.

If anything, the multigenerational groups are probably pooling resources so they can buy together in areas like ours – so the increase in multigenerational households would be adding to the demand.

It’s good that college kids can go home again!

http://globaleconomicanalysis.blogspot.com/2012/10/multigenerational-households-on-rise.html

Beachy Duplex

A renovated house with an extra granny flat near the beach is a rare find:

Here are the MLS remarks:

Completely remodeled quaint beach house West of the 5 Freeway in North Leucadia, just a short walk to Ponto Beach.   The home boasts 2,111 sf with 3 bedrooms, 2 bathrooms, and a mother-in-law unit with separate entrance with an additional bathroom.  The house sits on an oversized .25 acre lot on a very quiet street.  Both the interior and exterior have just finished being completely remodeled; new kitchen and bathrooms with granite counters, new flooring and carpet throughout.

http://www.sdlookup.com/MLS-120054330-162_Andrew_Ave_Encinitas_CA_92024

D-I-L

Luther Burbank Savings took ownership of this house via a deed-in-lieu-of-foreclosure – without ever filing a notice of default.  The previous owner (who paid $568,000 in 2003) never tried to sell either, but had two loans, the LBS first mortgage of $594,500 plus a second loan for $121,000:

Here is Bank of America’s policy on deed-in-lieu-of-foreclosure:

You may be eligible for a deed in lieu of foreclosure if one or more of the following apply:

  1. You are going through a hardship (for example, a job loss, divorce or a medical emergency).
  2. You are unable to afford your current mortgage payment.
  3. You are unable to modify your current mortgage to make it affordable
  4. You tried to sell your property at fair market value with a licensed real estate agent for at least 90–120 days and were unsuccessful

Depending upon your loan type, when you complete a deed in lieu of foreclosure, up to $3,000 may be available for your relocation expenses. You may also be eligible for up to $8,500 to help settle obligations such as your home equity loan or line of credit. A deed in lieu effectively ends your home loan, and in some cases means you are not required to pay any remaining amount owed on your loan (also known as the deficiency).

Back in the Game

R.C. and Stacy Davis lost their condominium to foreclosure in 2009, a bad break that seemed destined to keep them from buying another home for many years.

Yet on Wednesday — only three years after their foreclosure — the couple signed the papers to buy a four-bedroom house in Livermore.  Their avenue to homeownership? A loan backed by FHA.

“We’re as happy as can be,” Stacy Davis said.

The ability to get an FHA loan so quickly after a foreclosure could be welcome news to thousands of people who lost their homes during the housing bust. In the coming 12 months, about 22,000 Bay Area foreclosures will hit the three-year mark.

While mortgage giants Fannie Mae and Freddie Mac make people wait seven years after a foreclosure, the FHA will approve loans after three years, providing the buyer has established good credit and the ability to pay the mortgage.

“There’s definitely a movement of folks who have had a foreclosure to re-emerge and re-engage in the market,” said Dustin Hobbs of the California Mortgage Bankers Association. He said brokers around the state have picked up on the trend.

“It helps the housing market,” said Guy Schwartz of CMG Financial in San Ramon, which handled the Davis’ mortgage.

The FHA, which is self-supporting, provides mortgage insurance for loans with low down payments and more flexible household income requirements. The Davis loan came with a 3.5 percent down payment plus required monthly mortgage insurance and a 3.75 percent interest rate on a 30-year loan.

“An FHA loan is a good option for those who can qualify,” said Paul Leonard, California director of the Center for Responsible Lending. And there couldn’t be a better time to try, he said.

The Davis’ journey from foreclosure to new home began in 2005 when they bought a condo in Concord for $262,000 at the peak of the market.

The couple’s interest-only, 100 percent-financed loan was a classic bubble product that became a formula for foreclosure during the housing crash.

To make things worse, the condo was in a rough neighborhood, said Stacy Davis, who is a special-education teacher at Mission San Jose High School in Fremont. Her husband is a senior producer for the Golden State Warriors.

They tried to sell the condo after their daughter was born, but no one wanted to buy it, Stacy Davis said. “We decided we’re going to try to stick this out. We owned it and we would make it work.”

So they remodeled, put in a new kitchen and molding.

Meanwhile, the neighborhood deteriorated. Shopping carts piled up on the sidewalk, she said. Graffiti blossomed on walls.

After their son was born, they tried a short sale and found a buyer. “Within a week, an upstairs bathroom pipe busted open and flooded the whole place — the new kitchen, the molding, all destroyed. So the buyer backed out,” she said.

Their condo in ruins, they moved to a rented house in Dublin and the bank foreclosed. Their credit rating dropped to about 500, but they were able to build it back to about 700.  “Within a year we were getting credit card applications. We didn’t feel like it affected our lives at all,” she said.

The purchase of the house in Livermore completed, the Davis family will begin moving in early next month.

http://www.mercurynews.com/business/ci_21865116/foreclosure-victims-buying-homes-again

San Diego Case-Shiller, Aug 2012

The August seasonally-adjusted San Diego Case-Shiller Index rose 1.9% year-over-year, and +0.6% month-over-month – which is the biggest M-O-M increase of the year, and continues the winning streak of 2012.  The SD seasonally-adjusted Case-Shiller Index has risen seven months in a row, and a cumulative +3.1% year-to-date:

Case-Shiller Home Price Index: San Diego, CA Chart

From cnbc.com:

U.S. single-family home prices rose in August, the latest sign that the housing market is on the mend, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.5 percent on a seasonally adjusted basis, in line with economists’ forecasts.

It was the seventh straight month of increases, extending the longest continuous string of gains since prices were boosted by the homebuyer tax credit in 2009 and 2010.

The sustained good news in home prices “makes us optimistic for continued recovery in the housing market,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. “Even as we end the seasonally strong home buying period, the statistics are positive,” said Blitzer.

On a non-seasonally adjusted basis, prices fared better, gaining 0.9 percent. Prices in the 20 cities climbed 2 percent year-over-year, topping expectations for a 1.9 percent increase.

http://www.calculatedriskblog.com/2012/10/case-shiller-house-prices-increased-20.html

Rootage

It’s not a surprise to hear that realtors are prone to copy one another when writing MLS remarks.  There is one particular word; ‘boasts’, being used around the county, in a variety of situations:

More On Pricing Stats

The latest Case-Shiller Index comes out tomorrow, and Zillow is predicting a 1.7% year-over-year increase in the 20-city composite number. Trying to bring more localized color to the pricing picture isn’t easy because there are differences in every segment.

These are the general statistics for detached sales in La Jolla, Del Mar, Solana Beach, Carmel Valley, and RSF that closed during the June 1st-to-September 30th time period.  I was hoping that we’d see statistical evidence of rising prices – either fewer sales on the lower-end, indicating that the ‘market’ had been moving up, and/or that the average square footage was declining.  But neither has been happening much:

$0 – $800,000 Price Range

Year # of Sales Avg SF Avg. $/sf DOM
2010
73
1,886sf
$397/sf
58
2011
65
2,012sf
$355/sf
74
2012
89
2,122sf
$350/sf
60

$800,0001 – $1,000,000 Price Range

Year # of Sales Avg SF Avg. $/sf DOM
2010
77
2,426sf
$407/sf
47
2011
91
2,502sf
$374/sf
69
2012
117
2,414sf
$394/sf
70

$1,000,001 – $1,200,000 Price Range

Year # of Sales Avg SF Avg. $/sf DOM
2010
56
2,908sf
$421/sf
79
2011
51
2,908sf
$411/sf
85
2012
75
3,058sf
$393/sf
61

$1,200,001+ Price Range

Year # of Sales Avg SF Avg. $/sf DOM
2010
180
4,272sf
$551/sf
100
2011
183
4,436sf
$621/sf
122
2012
242
4,638sf
$552/sf
100

All Det. Properties Closed Jun 1-Sept 30

Year # of Sales Avg SF Avg. $/sf DOM
2010
386
3,255sf
$474/sf
78
2011
390
3,381sf
$491/sf
97
2012
523
3,486sf
$460/sf
81

The reason it feels so hot?  There are a lot more sales – 34% more than last year, which is quite a pop in such a short time frame.  But other than that, you can’t really say that there has been any significant increases that would indicate much-higher pricing, at least statistically. (the identical 2,908sf in the $1.0-$1.2 range is a fluke!)

http://www.calculatedriskblog.com/2012/10/zillow-forecasts-case-shiller-house.html

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