Archive for June, 2009
San Diego real estate news stays positive for the summer home buying season
June 29th, 2009 Categories: Client Testimonials, San Diego County Community News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO-
“With affordability for first-time buyers at a record high, sales of existing, single- family homes continued to remain above the 500,000 level for the ninth consecutive month,” said C.A.R. President James Liptak. “Buyers are beginning to realize that the combination of favorable home prices, historically low mortgage rates, and first-time home buyer tax credits, may not align again for many years.
“The sales gains over last year have diminished in recent months,” he added. “This trend is expected to continue through the end of the year, as limited inventory at the moderate and low end of the market constrains sales activity,” he said.- www.car.org/newsstand *
We ended last week with continuing positive real estate news and market conditions and confirmation of our interpretation of what is happening in the field.
The market variables, as quoted above, continue to present a great opportunity for buyers with the exception of inventory index which statewide has dropped by over half from 8.7 months to 4.2.
C.A.R.’s Unsold Inventory Index fell to 4.2 month
s in May, compared with 8.7 months in May 2008.*
But turning our attention back to the positive, if you have been sitting on the fence and are renting, consider this;
The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,052 last month, up from $1,038 the previous month, and down from $1,782 a year ago(my edit). Adjusted for inflation, current payments
are 52.1 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 60.7 percent below the current cycle’s peak in July 2007.- DQNews.com**
For the home seller in the $500,000+ market, you are seeing some of your first good news as this market has been stagnate for some time due to the cost of the “jumbo” loans. Additionally, this is typically a move up market, where in the buyer in selling or has sold real estate in order to move up. With market conditions so heavily favoring buyers there are not too many people selling in order to buy.
Conversely, sales $500,000 and above rose from 15.2 percent of sales in April to 17 percent in May. The last time the $500,000-plus market made up more than 17 percent of all sales was last October, when they were 19.9 percent of sales.**
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The fast and the furious: Bank owned homes
June 26th, 2009 Categories: Client Testimonials, Real Estate News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO- There are two consistencies in the real estate market right now. First, short sales can be a time consuming pain in the neck for both buyers and sellers. Second is that bank owned 
homes or homes in which the owners have plenty of equity and are realistic in their expectations can expect a quick market time.
I am currently working with several potential buyers in the Oceanside area. This is a great north county coastal city with a solid market for single family detached
homes under $300,000. For the active lifestyle Oceanside has several miles of coastline, a harbor, a seven plus mile bike path along the San Luis Rey River as well as proximity to what is left of San Diego’s back country for some great cycling on open and challenging roads. It is also the host city for the only Ironman branded event in southern California which is the Ironman California 70.3.
With the affordability rate so high for homes, interest rates remaining historically low and the tax credit given by the fed, this is a prime market for first time buyers. If we look at 3 bedroom single family that have sold in the last six months we can see the contrast in the transaction time of short sales versus others.
There were 190 homes sold in the city of Oceanside and of those, 49 needed court or lender approval which is a primary sign of short sales. Of those 49 homes, the average was a 3 bedroom 2 bath approximately 1280 square feet and the average sold price was $229,946. The big factor here is there is an average market time of 129 days. The longest marketing period was over a year at 369 days. These numbers do not include the actual escrow period.
The remaining 141 homes which are primarily bank owned homes tell a bit different story. While physically they were very similar at 3 
bedrooms, 2 baths and 1285 square feet, it may surprise some to know that these homes sold for LESS than the short sale homes at an average of $224,334. Additionally, and this is the HUGE factor, the average market time was only 38 days, with 39 of these homes going into escrow in 7 days or less.
Another significant difference was over half of these homes, 86, sold for over the asking price.
For buyers in this type of market the lessons here is that good homes can go fast and you need to take a realistic look at comparable homes. If when looking at those comparables properties they suggest a market value over the asking price, don’t hesitate to do what is necessary if you do really want the home.
Take advantage of this market and work with a realtor you trust. It’s so heartening to see citizens that thought they would never be able to buy a home in southern California have this amazing opportunity. Get after it.
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Citigroup’s scam on the American public
June 24th, 2009 Categories: Real Estate News, San Diego county Real Estate News
SAN Diego- In a recent post here, I stated my case to end the foreclosure moratoriums and how those moratoriums are key to presenting a false picture of economic health on governmental and individual business levels.
In today’s San Diego Union Tribune, which I subscribe to, there is an article on page 4 of the business section titled ‘ Citigroup to increase worker compensation’. The subtitle is ‘ Pay raise would offset slim bonuses’. As I read the article, I could not help but feel insulted by how little these companies understand what’s happening to the average American. These financial institutions seem to operate any way they see fit for themselves and to hell with the rest of you as you won’t survive without us.
Here’s the deal. Because of the public outcry over bonuses, Citigroup is raising rank and file worker’s compensation as much as 50% in order to scale back on the value of bonuses. Now please note two things. First the potential number of employees affected is close to 300,000, so this is no small number, and they are doing this as PROFITS ARE UP and all is rosy in the financial sector. Really?
We the people, through the federal government own 34% of Citigroup and have contributed approximately 45 billion to their business through TARP money. The money has not been used to to help their troubled mortgages as designated in the TARP program, but has been used to write new loans primarily to municipal borrowers.
Citigroup said its committee overseeing the use of taxpayer money approved $44.75 billion in lending initiatives as of March 31. That is up from the $36.5 billion in lending initiatives announced in February, and now includes $5 billion in loans to municipalities.
The loans being offered by Citigroup to state and local governments, municipal agencies, universities and non-profit hospitals would not likely have been made had the bank not received money from the Troubled Assets Relief Program, or TARP.- blog.taragana.com, 5/12/2009
The good news they are writing new loans to secure borrowers so they in essence are protecting our investment. But the key component here is the positive impact on the balance sheets. But in order to keep those balance sheets looking good, what to do with those pesky distressed borrowers the money was SUPPOSE TO BE USED FOR? I know a MORATORIUM!!! And so begins the shell game we’ll call hide the bad assets.
Of the four biggest U.S. banks — Citigroup, JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. — Citi has been on the shakiest footing as a result of the mortgage crisis, reporting losses in the past four consecutive quarters while its rivals have managed to post profits. The steps announced Monday are designed to stem those losses.
"Typically the lender loses the most money when a house goes into foreclosure," said Barry Zigas, director of housing policy at the Consumer Federation of America. "(The lender) takes some kind of loss that’s usually much greater than what they sacrificed through some kind of workout." *
The solution…… a MORATORIUM. Watch the shell to follow the ball?
Citigroup says it is imposing a moratorium on most foreclosures as part of a series of initiatives aimed at helping at-risk borrowers remain in their homes — making Citi the latest big bank to announce sweeping efforts to try to curtail losses from souring mortgages. *
However, the first moratorium period and now continuation of those moratoriums are only the the shells making their sweeping circles in order to confuse.
But a moratorium only solves so much, according to Zigas. "A moratorium on foreclosure will be effective at stopping foreclosure, it won’t be effective at stopping the underlying reasons of why people are in trouble," he said.
By taking a proactive approach, Citigroup isn’t waiting until it’s too late to deal with delinquent borrowers, said Steve Curnutte, president of InsBank Mortgage in Nashville, Tenn. However, the problem is growing faster than most banks can handle, he said.
"It’s nearly an insurmountable undertaking," said Curnutte. "The number of bad loans that they can modify using their resources is being quickly outstripped by the number of new loans that need to be modified."- /www.insidevandy.com, 11/11/2008 *
These “profitable” financial institutions are sitting on a powder keg smoking a cigarette trying to convince us everything is cool. And again, this is a continuation of the thought process that got us here in the first place. Ignore the true fundamentals, or in some mortgage cases don’t even ask, and hope that everything will be okay in the end. See the moratoriums are being used as way for banks not to book these losses and they are hoping they will bridge them to a rosier economic climate.
With approximately 55% of mortgages modified last year failing, we could say this plan isn’t working so well. Additionally, unemployment is nearing 11% and there are actually employees voting to decrease their compensation to save their and other’s jobs. A local example of this can be seen by the teachers of the Poway School District who agreed to a pay cut and to work fewer days. So, while it certainly is a good thing for the Citigroup employees, giving 50% pay raises in this false environment is ludicrous. Hire the qualified from the many that are willing to work for reasonable compensation.
Now, I feel for the families that would be displaced by foreclosure, but we need to purge these homes in order to get back a solid foundation to base a recovery on. Currently pricing and interest rates are making for a great real estate climate and the banks should be seizing on this opportunity. Or, there may have been a better solution that the government should have acted on earlier; become a lender. Read this great article by Neil Baron with USA Today and then ask yourself if there could have been a better use of our 12.8 trillion dollars given to business like Citigroup.
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Shorts sales; Check your ego at the door!!!
June 19th, 2009 Categories: Real Estate News, San Diego county Real Estate News
SAN DIEGO- I attended a conference call regarding short sales yesterday. The main theme of
the call was how to expedite the short sale process. I went into the call skeptical and left with the same skepticism. As with most ‘negotiations’ success really depends on who you get on the other end. They can make or break it. Try to negotiate with someone that is stubborn, uncooperative, does not communicate and is just plain unhappy with their job. You get nowhere, fast.
However there was one piece of information that was a bit surprising to me. 53% of those surveyed and the number one reason for a seller to not complete the financial paperwork required by the lender in the short sale was shame over their financial situation.
If this applies to anyone reading this, call me. You will be assured a confidential and non-judgmental transaction. The worst thing you can do is let the situation continue to snowball due to ego. Let’s work on turning this around together.
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California extends foreclosure moratorium
June 16th, 2009 Categories: Real Estate News, San Diego county Real Estate News
SAN DIEGO- In February the California Legislature passed a law extending the foreclosure 
moratorium in our state for an additional 90 days starting Monday 6/15.
The biggest flaw with continuing these moratoriums is we need to flush this inventory now. Continuing to push the negative consequences of foreclosures in to the future is not a solution and often times can actually make a borrowers situation worse. Additionally, it can create the appearance of a much healthier, while false, economy that citizens then base financial situations on.
Still, some borrowers who are currently talking to their mortgage companies are also likely to wind up in foreclosure once their files are reviewed. "We are getting so many of these cases where people don’t fit the new [Obama] program," says Michael Thompson, director of Iowa Mediation Service, which works with troubled borrowers. Many borrowers are unemployed or underemployed or have credit problems that go well beyond their mortgage troubles, he says.
Many have been "playing for time" while the moratoriums have been in place, he says. But the delays have only increased the amount of interest and fees they owe, making their loans "nonviable in the long run."- Wall Street Journal online, 4/15/2009*
Another negative impact of this moratorium is at a time when buyer activity is high because of low
interest rates, the market inventory in San Diego county is back to what is considered healthy at approximately 6 months. If the banks were allowed to continue the foreclosure process I think it is fairly safe to presume, based on what I am already seeing, that we would be able to continue to clear quite a bit of inventory. I have searches set up that 3-4 months ago saw 5-8 new listings a week. Those same searches sometimes are not seeing any new listings for a couple weeks in a row keeping those buyers on the sidelines.
Lastly, imposing these moratoriums can create a false profit for the banks and mortgage 
companies, which then report better earnings. These false earning reports in turn buoys the stock market creating an environment where everything is rosy. Again, these things would be great for our economy if they were not created artificially.
“The moratoriums "have to some degree postponed the realization of problems" and "may help bank earnings in the first quarter" by delaying charge-offs of some troubled loans, he says.” *
Probably the most ironic part of all of the legislation passed in California is that loans backed by the state do not fall under the moratorium.
The California Foreclosure Prevention Act law applies to first mortgages taken out between 2003 and 2007 for owner-occupied homes. CalHFA loans are not eligible.
If you have a loan backed by the state of California, so sorry, we need the money and you’re done!!!
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This is a test
June 11th, 2009 Categories: Real Estate News
I have had to switch blog post generators. I have switched to Windows Live Writer, so here goes.
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What I learned from Denis Menchov’s crash
June 1st, 2009 Categories: San Diego County Bike Rides, San Diego County Triathlon Race Reports
CARLSBAD– So I missed the Rock N Roll marathon this Sunday as I had a family birthday party for my niece and then clients. However, I did get to watch the last stage of the Gino D’Italia which was appropriate as I had watched all the other stages.
This last stage of the Giro D’Italia was a time trial. The culmination of over 2100 miles raced over 21 days through Italy, the Swiss Alps and touching France and Austria. The leader of the race coming into this last was Denis Menchov of Rabobank. He had already had the pink jersey for 8 days and coming into this last stage had a 20 second lead over second place Danilo Di Luca and a minute forty three over third. All that separated Denis Menchov from the overall was 8.7 miles. It had been raining slightly earlier and the drops were just starting to fall. All the other riders were finished leaving just Denis and his 20 second lead out on the course. It was his race alone to lose. As Denis comes in to the last 1000 meters, the unthinkable happens and that is when the school bells rang.
1. GET UP!!!
As Denis went down you could almost see that he was waiting for the spill to stop so he could get up. He knew there was only one thing to do and that was to get up. No pouting, no tantrum, no self pity or sorrow. Get up!!
2. Even when things are going wrong focus on the goal
Another aspect of the crash that seems so evident is his desire to get to his bike. He was reaching for it before he even stopped sliding down the road. There is only one way to finish and that requires the bike. He stayed on task. He knew what his mission was and what he needed to accomplish it.
3. Have a great team and trust them
Within 8 seconds of his hand first touching the ground, a RaboBank mechanic had him on new bike and that is where the race was won. He had a great team mate and he trusted him. He did not question the bike or the mechanic’s hold on the bike. He got his butt on the saddle and did his part as the rider.
4. Be ready
Imagine if that mechanic had been texting, tweeting or scrolling through his playlist on the IPOD. Additionally, you never know when general fitness is going to show importance. That mechanic ran for his life for a good 10 seconds which probably felt like an hour. He had the strength to hold up the bike while Menchov got situated and had the engine to run for his life until the rider could ride out of his hand
5. Treat everyone like the hero
Every member of Team Rabobank should have(they may have) paraded that mechanic through the team area ala the movie Rudy. If this mechanic had been treated poorly or less than by the team, the result may have been much different. Disgruntled people don’t perform magic.
6. There are always people on your side
Menchov may not have known it, but the world was with him as everything came back together. For us it may not be the world, but I think we often forget that we have people out there pulling for us. Whether it is family, friends or a stranger, we rarely are alone if we choose not to be.
Lastly, it’s not over if you don’t want it to be.
Now granted, a broken bone could have caused a different result, but in this situation all of the above came together and Menchov chose for it to not be over. In a post race interview he said he knew he had time advantage and that he had a chance, so he chose for it to not be over.
Keep the rubber side down.
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