San Diego Snapshot 4/27/2008

We continue our upward march toward 2000 SFR that are <$500K, >3BR, >2BA, >1750 Sq Ft. I expect to see this by Jun 2008.

Remember that in Summer 2004, there were about 2000 TOTAL homes for sale, which included both SFR and attached residence.

Temecula/ Murrieta feeling the heat!

Last sale was 20 months ago for over $1.2M. The owner put the home on the market for $999,000 in Jan and after recieveing a Notice of Default from the bank has since reduced this falling knife to $799,000.

I know Temecula and Murrieta are nice growing communities, but if I had $1.2 million to spend on a house I think I can come up with some more, lets say, desirable areas.....La Jolla, Rancho Santa Fe, Del Mar......come to mind and guess what? They hold there values too.

San Diego Snapshot 4/20/2008

Shorts continue to increase as more home owners get upside down by the week.

San Diego Snapshot 4/13/2008

Notice a huge increase in the # of homes in this profile. This only points to an increase in market deterioration. We haven't seen anything yet!

Continued increase in SFR shorts......many more ARMs resetting this summer!

Alas, a bit of sanity in an insane world!

Fellow bloggers,

It's been a few years since single family homes were under $300K (at least ones that are deemed livable), however this year is a new year, a year where we take back our right to live in the finest city in the world and not have to sell our kids or in-laws on ebay (although the money may not necessarily be a factor when the in-laws are involved).

Ladies and Gents.......I present:

I must admit it's nice to see the number 2 again.

Bob

Honey, the neighbor's bank just screwed us!

The homeowners at 2195 Plesantwood put their home up for sale 37 days ago for $469,000. That would mean a nice profit of $269,000 from the original purchase price of $200,000 in 1998.





Little did the homeowners at 2195 Plesantwood know that their neighbors down the street at 2141 Pleasantwood didn't really win the lottery and move to Monaco, no the only thing they received was an eviction notice to vacate the property asap.


Their bank, meanwhile, forgot to take into account the feelings of homeowners at 2195 Plesantwood Lane and quickly listed the home for $369,000.






I suppose as terrible as it sounds a $169,000 profit in 10 years will have to do.

San Diego County seeing 2002-2003 pricing levels

According to DataQuick, the combined median price for a home in San Diego county is $415,000. Looking back in history that puts us in between 2002 and 2003 pricing levels. While that's a step in the right direction most homes are still overpriced.

If you take the median price for 2000 ($269,000) and add 3% inflation for 8 years that gets us $340,000. So the $415,000 median price is about 20% inflated.

San Diego Snapshot 4/5/2008

Figure 1 shows the inventory of SFRs in the county that meet the following criteria:

1) Cost < $500K

2) Bedroom s>3

3) Bathrooms >2

4) Living Area >1750 sq ft

Trend: More homes are priced under $500K, most likely reaching 2000+ by late Fall 08.

The figure 2 below shows the short sales for the same period:

Trend: Upswing in shorts, looks like the most in years!

Any loss you can take, I can take deeper!

A battle of "who can sell their house first" is brewing in Escondido. Oakwood Creek Place to be specific.

The homeowners at 679 Oakwood Creek Place put their 2376 sq ft home on the market nearly 22 days ago at $400,000. This is the home they purchased in Jan 2005 for a mere bargain of $574,000 at the time.

Meanwhile, the homeowners at 657 Oakwood Creek Place weren't going to wait for 679's comp to hit the books, so 10 days later they list the 2400 sq ft home they also purchased in Jan 2005 for $599,500 on the market for $395,000.

Where is our government to help bail out these folks, lets give them a lower interest rate, or better yet lets buy their homes using tax payer dollars.....

The bottomline is in 2005 there were hardly any real homeowners buying, however there were many flippers in for a quick buck. When you treat homes as stocks you are liable to get burned, and you did. I sure as heck don't want the government bailing out these people or for that matter any banks either.

REDC Closer Look

Real Estate Disposition Corporation (REDC) sells real estate assets through the utilization of the auction marketing process. On April 12 in Del Mar over 200 properties (mostly foreclosures) will be auctioned off to the highest bidder. You might be wondering if you can get in a home cheap?

Let's take a closer look:

This property was sold new for $734,500 in Feb 2005. It is currently owned by Countrywide Bank and was sold at auction in Jan 2007 for $540,454.63 and was recently listed for on the MLS for $549,900 as of 1/30/2008.

With no buyer insight Countywide has turned to REDC to sell this property at auction.
How much is it worth?

There are currently 4 properties in near proximity that are currently being listed:

1090 MOUNT WHITNEY RD, 2950 sq ft, 5Br, 3Ba for $514,900
1069 MOUNT WHITNEY RD, 2860 sq ft, 5Br, 3Ba for $525,000
1074 MOUNT WHITNEY RD, 2860 sq ft, 5Br, 3Ba for $494,780
1445 AUTUMN HILLS DR, 2950 sq ft, 5Br, 3Ba for $450,000

So that's about $170 /per sq ft on average or $457,000 for the house.

So just because the starting bid is $249,000, I would venture to say that Countrywide will not accept more than a 100K hit on this home. I would also venture that Countrywide will happily dump this money pit off their books for $450-475K.

San Diego Snapshot 3/28/2007

Figure 1 shows the inventory of SFRs in the county that meet the following criteria:

1) Cost < $500K
2) Bedroom >3
3) Bathrooms >2
4) Living Area >1750 sq ft





The figure 2 below shows the short sales for the same period:

I started tracking this last year and missed a few months, however you can see that the rise in both cases has been nearly exponential.

Homes are becoming more affordable and while owners are quickly becoming upside down on their biggest investments.

Office of Federal Housing Enterprise Oversight

OFHEO's (http://www.ofheo.gov/) mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation).

OFHEO's oversight responsibilities include:

Conducting broad based examinations of Fannie Mae and Freddie Mac; Developing a risk-based capital standard, using a "stress test" that simulates stressful interest rate and credit risk scenarios; Making quarterly findings of capital adequacy based on minimum capital standards and a risk-based standard; Prohibiting excessive executive compensation; Issuing regulations concerning capital and enforcement standards; and Taking necessary enforcement actions.

OFHEO also produces the House Price Index (HPI) at the national and state level. The HPI measures the appreciation rates by fiscal quarter:

Figure one shows California's HPI since 1991 and it ain't pretty: (http://www.ofheo.gov/media/pdf/statepdfs/CA.pdf)

The website also allows you to track HPI by three local areas (http://www.ofheo.gov/hpi_city.aspx) so check it out.

Tax tips for a tanking market--reappraise your home!

Q. When can I appeal my assessed value?

A. Under State law, if the current market value of your property (recent comparable sales) falls below the assessed or taxable value as shown on your tax bill, the Assessor's Office is required to lower the assessment. This type of property tax relief generally applies to recently purchased property. There are two periods during the year in which the taxpayer may appeal their assessed value for a temporary reduction:

(1) Between March through May:
During this period, the taxpayer may submit a written request to the Assessor, indicating their opinion of value and providing supporting documentation, such as sales of comparable properties or a recent appraisal. For more information, call (858) 505-6262.
(2) Between July 2 and November 30:
During this period, the taxpayer must file an application form. Appeal forms can be obtained and must be filed with the Clerk of the Board at 1600 Pacific Highway, Room 402, San Diego, CA 92101-2471. For more information, call (619) 531-5777.

Chula Vista Nightmare

This owner must have been asleep at the wheel. I really don't care who you are or what you did, no one deserves to lose over $700K in less than two years.

Where were his friends, family, appraiser and most importantly, his realtor? If your realtor doesn't step in at this point any give you rationale advice what good is he/she?

The lenders not only need to tighten their lending standards, they also need to filter out the crooked appraisers and realtors out there preying on the clueless!

C.A.R. reports sales decrease 28.5 percent, median home price falls 26.2 percent in February

It's always interesting to see how the CAR view the housing market (http://www.car.org/index.php?id=MzgzNzc) here are a few highlights:

"Although sales rose for the fourth straight month in February by 9.5 percent compared to the previous month, they continue to be dragged down by the ongoing effects of both the credit/liquidity crunch and tighter underwriting standards that have reduced the pool of qualified buyers who can obtain a loan," said C.A.R. President William E. Brown.

"It is crucial that FHA reform legislation currently under consideration by congress include higher loan limits for high-cost states like California," he said. "The proposed legislation also includes a reduction in the down payment requirement for FHA loans and will include condominiums in the FHA single-family program, which will make it easier for buyers in the condominium market to qualify for loans."

Is this guy a fool or what--increased sales? higher loan limits? reduce down payment requirements? This is the reason we are in this mess in the first place!

The Federal Reserve Bank’s recent action to reduce the federal funds rate will have little near-term direct effect on the housing market," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "However, Fed rate cuts should result in more favorable real estate finance rates as we move through the year."

Give that woman a hand, that Harvard degree sure comes in handy!

Breakdown: 3573 Sand Ct. Carlsbad, CA

Lets calculate the monthly payment according to the San Diego county tax rates and local Carlsbad assessments (https://www.sdctreastax.com/ebpp3/Search.Aspx):

Lets use the CNN "Home Affordability" (http://cgi.money.cnn.com/tools/houseafford/houseafford.html) calculator to determine what annual gross income you need to afford this home with 20% down and having zero debt:

Final Analysis:

Your income should be $170,000 a year with no debt (best case). The thing that really hits home is even if you paid your home in full, your monthly payment is about $950.00 a month and will continue to grow. Thats scary! I'm keeping far away!

Hit of the Week-$799K to $500K in ~3 years

Don't say I didn't warn all of you that homes were severely overpriced in 2005. Even at $500K this home will stay on the market for a while.


Listing Price History:

Date Price
Nov 22, 2007 $650,000
Jan 24, 2008 $600,000
Feb 21, 2008 $500,000

Same Old Story

Looks like we have a minor pullback in the number of homes under $500K, 3+BR, 2+BA and at least 1750 sq ft in the county, however the total SFR inventory climbed 0.2% or 25 homes from last week.

Even with the Feds stepping in with their "band-aid" policies and bail-out packages make no mistake that the weak dollar is the number one reason the economy will continue to slide. I fully expect the Dow to be under 11,000 by the end of the year with banks starting to crumble and home prices plunging by 15-20% in California.

San Diego Housing Crash

I'm certainly excited to be back after some time and hope that this blog will once again provide some important information regarding the collapse of the San Diego housing market. Its been nearly six months since I last posted here and I just want to take some time to compare my last post and where we are now.

As the graph dramatically indicates the inventory of homes in the county under $500K with at least 1750+ sq ft, 3+ bedrooms and 2+ bath more than doubled in six months and now account for nearly 14% of the total inventory, compare to under 5% last July.

This represents a significant deterioration in the underpinning of the San Diego market.

All indications are pointing for more corrections in the housing market as tighter lending standards and full disclosures are prevalent. I will continue to track this and keep you updated.