Double Flip

How is your sense of value?  Can you correctly guess the list price of a home after a three-minute tour? I have t-shirts for those who guess the LP.

Extra note on the video: You’ll hear me say ‘bathroom’ when discussing the deconstruction.  The garage used to be its own living unit, with bathroom and kitchen – these owners took it out and made it back into a garage.

Investors Are Active

Doomers have claimed that since rates went up, investors are fleeing the market.  Thankfully Alejandro of the latimes.com looked into it a bit deeper to find that there are plenty of investors, but it’s finding the deals that is the challenge – an excerpt:

Now the foreclosed homes in those markets are almost gone — yet investors have kept buying, competing with individual buyers in standard sales.

The number of so-called absentee buyers, usually cash investors, has dropped slightly in Southern California since hitting a record in January. But they still account for more than 1 in 4 home purchases in the region. And just 8% of those deals were on foreclosed homes in June, compared with 25% a year earlier and a peak of 55% in February 2009.

“Everybody and their dog is an investor,” said Dick Caley, a Long Beach real estate agent. “It has gotten to the point where I do not even return the call.”

As it turned out, housing investors needed neither the prodding of the Federal Reserve nor the bulk foreclosure sales from Fannie Mae, which never materialized beyond the pilot phase. The single-family rental industry now has several major players in multiple markets, with some recently created companies trading publicly.

The mix of investors and their strategies are shifting, with large financial firms starting to pull back and smaller players moving in, looking to buy, fix and flip homes for a quick profit. But rapid price increases are making it harder for people to afford a house and qualify for a home loan.

investors still buying


North Leucadia

The two big Pardee tracts in Carmel Valley haven’t disrupted the resale market – instead, with deliveries being so far out, they have probably helped resales which have a more-immediate occupancy.

Leucadia might be different – Shea is building enough new mid-range homes that the resale market might feel it next year.

At this location off Vulcan, Shea is building 39 houses from 2,520sf to 3,041 sf (which hopefully should start under $1,000,000), and 30 townhouses from 1,276sf to 1,575sf.  They decided not to use my suggested Train Track Estates:

New Normal for Foreclosures

Back in the old days there were 100-500 foreclosures per year in SD County:

Microsoft Word - A Brief History of Foreclosures

We’ve already had 1,504 properties get foreclosed in the first half of 2013, so historically we’re still at elevated levels.

But with the county averaging 3,000+ total sales per month, lenders will be able to sprinkle in a couple of hundred REOs each month without affecting values much.  In addition, flippers will keep doing their share; selling a similar amount of properties for retail-plus.

San Diego County Trustee-Sale Results

Lenders must be feeling comfortable at these levels, because the number of total notices were almost identical for the last two quarters. The Notices of Trustee Sale were down 52% Y-O-Y:

San Diego County Filings

Pin It on Pinterest