San Diego Foreclosure Update

This recent article from the Union Tribune shows what I’ve been talking about with many clients as of late. The foreclosure market is truly where the value is right now. I only see this getting juicier as we get into the full Spring buying season, Summer and then Fall.

San Diego County’s unprecedented housing downturn has created a sharp split in the resale market, with foreclosed properties selling at steep discounts while other homes take a much smaller hit.

Although values are down in all categories, the variance between the resale prices of foreclosed and regular properties is dramatic. An analysis performed by DataQuick Information Systems at the request of The San Diego Union-Tribune showed that during the first three months of the year:

Countywide, the median price paid for foreclosed houses and condominiums was $325,000 – 28.3 percent below the $453,000 median for nonforeclosure sales. That compares with a peak of $515,000 in the fourth quarter of 2005, when foreclosures were almost unheard of.

Single-family houses in foreclosure sold for a median price of $365,000, compared with a median of $500,000 for nonforeclosures. The 2005 peak in that category was $565,000.

Condos in distress sold for a median of $230,000, while the figure for nonforeclosures was $360,000. The median at the 2005 peak was $400,000.

And this is interesting too:

In areas with no foreclosure sales, the median house price dropped 5.3 percent on average in the past year, as measured by price per square foot, Gin said. But for every 10 percent increase in the percentage of transactions that were foreclosures, the median price per square foot dropped an additional 3.6 percent.

For example, in La Jolla, which had no foreclosure sales in the first quarter, the median price per square foot on 42 sales was $698, a figure 5.7 percent lower than a year ago. In National City, where nearly half of the 30 houses sold in the first three months of 2008 were foreclosures, the $268-per-square-foot price was down 32.7 percent over the past year.

San Diego Real Estate Market Opinion

This post is from my April 2008 Newsletter I send out to clients:

This is a cRaZy market!!! Let me know if historically you’ve ever seen anything like this. Conventional wisdom would suggest that this many foreclosure on the market should mean that interest rates would be historically high – around 12-15%. Completely the opposite is true. Loads of foreclosures and historically LOW interest rates. If that doesn’t signal TIME TO BUY in the next 18 months then what does? What do you think will happen in our San Diego real estate market in 5 years from today?

Anyhow, at the moment we seem to have 2 real estate markets going concurrently, the usual retail market and the foreclosure market. The foreclosure market is picking up speed and continuing to drive retail listing prices down in the areas hardest hit by the sub-prime debacle. Those areas hardest hit by foreclosures in San Diego are the South Bay, North County Inland and East County. The coastal areas of San Diego are holding up quite well amidst the turmoil.

Buyers – It’s shaping up to be a good year for buy and hold investors and home buyers. If the stringent lending standards ease up slightly and interest rates continue with their historically low rates Spring/Summer/Fall will be good for real estate.

Sellers – if you don’t have to sell, Buckle-up and Stay Put. Ride out the next 18 months and possibly look for an investment opportunity, re-fi, or rennovate.

San Diego Foreclosures Update

The talk I keep hearing at open houses, from clients, and in the media in general is how foreclosures will affect the overall market value of where their homes are located. This, of course, is primarily a matter of the micro-market in which you purchased your property.  Looking at the map above it is clear that San Diego real estate markets West of the Five have experienced the least amount of downward pressure on equity as a result of the limited number of foreclosures in beach communities. From this recent article in the Union Tribune:

According to DataQuick statistics, the greatest concentration of foreclosures last quarter was in the eastern area of Chula Vista, home to a large number of planned communities that have attracted many first-time buyers. Closer to the border, San Ysidro also had a high proportion of mortgage failures.

However, the beach areas are also vulnerable to sharp declines in equity and price cuts. A foreclosed property listed in Point Loma was last sold for $998,000, was taken back by the bank for around $850,000 and is currently on the market today for $635,350. See the flyer-link below for details.

3512 Poe St Foreclosed Listing

The Fine Print of the Mortgage Forgiveness Debt Relief Act of 2007

California and San Diego real estate mortgage defaults are literally off the charts as of the first quarter of 2008. Recently I’ve been helping some new clients who got in over their heads with house debt and un-refinancable Adjustable Rate Mortgages. A recent article details some of the issues you’ll need to know about when navigating the tax waiver law from the Mortgage Debt Forgiveness Act of 2007. Read the full San Francisco Chrinicle article HERE.

Congress, Bush and the real estate industry hailed the Mortgage Forgiveness Debt Relief Act of 2007 as a boon for struggling homeowners who might face a big tax bill if they restructure or give up on their mortgage. But like everything that comes out of Washington, it is full of fine print that borrowers should fully understand before they decide how to get out from under debt they can’t repay. The rules are extremely complex. I bring this up to show how important it is for homeowners in trouble to get professional tax and legal advice before acting.

Get info directly from the IRS HERE on the Mortgage Debt Forgiveness Act of 2007.

Is California In A Recession?

NO, California nor the USA is in a recession… according to this recent article from the UCLA Anderson Forecast. 

The California forecast

UCLA Anderson Forecast economists Ryan Ratcliff and Jerry Nickelsburg look back at the California economy since World War II and come to two conclusions. First, the U.S. and California economies move together — there has never been a recession in California without a national recession. Second, the California recessions have twice been amplified and extended by long-lasting structural adjustments — the Southern California aerospace contraction in 1990 and the Northern California tech bust in 2001. The recession-only downturns have been sharp-but-short contractions driven by temporary job losses in manufacturing and construction. These recessions typically last less than a year, but both the aerospace and the tech adjustments took more than half-a-dozen years to complete.

Today’s economy fits neither of these patterns; our economy is in “uncharted waters,” they say. There are some negative signs, such as job loss in real estate-related sectors, but it is unlikely that these sectors can create enough job loss to generate the 2 to 3 percent declines in non-farm payroll employment that have characterized past recessions.

The forecast is for a very weak California economy in 2008. The “double-whammy” of construction and financial activities job loss will continue to drag at the economy.

“The current state of the California economy and our forecast fall short of the weakness in previous historical episodes that we’ve chosen to label recessions,” Ratcliff and Nickelsburg write. “Based on comparing the current economy to past recession episodes, we once again conclude that real estate weakness will remain a significant drag on the economy, leaving us treading water in 2008 — but not slipping under the waves into recession.”

The Wealthy Are Buying Real Estate… Why Not You?

According to The Annual Survey of Affluence and Wealth in America, from American Express and the Harrison Group, 40 percent of the nation’s wealthy plan to buy real estate in 2008.

What do these rich people know that you don’t? Read HERE to find out. It is TIME TO BUY real estate.

You make money when you buy, not when you sell a home, suggests one popular idiom. That could be the reason the wealthy are trolling for bargains. While most of America is struggling with four percent gains in inflation, the wealthy, with discretionary income of $100,000 or more, believe that today’s market is a good time to buy.

When you think it’s time to buy click HERE.

FORECLOSURE OPEN HOUSE – Point Loma

OPEN HOUSE for a steal of a deal in Point Loma.

Sunday April 20th, 2008 NOON to 4pm

3512 POE St. Point Loma – MAP

This beautiful 5 bedroom, 3 bath home sold for $998,000 in April of 2007. This house features lovely wood floors, granite counter tops in the kitchen, spacious rooms, wooden blinds, wet bar in family room and a unique backyard with grapevines and fruit trees. We will help guide you thru the foreclosure process.

Click the link below for a PDF Flyer

3512-poe-st-flyer1 PDF

Search for Foreclosures in San Diego at www.SDForeclosureSearch.com

San Diego Real Estate Prices

This article just in from the San Diego Union Tribune:

“San Diego County’s median home price tumbled below the $400,000 mark last month for the first time in nearly five years as the region grappled with rising foreclosures and defaults, DataQuick Information Systems reported yesterday. The overall median stood at $395,000, down $20,000 from February and off 19.4 percent from a year earlier. It was the first time since November 2003 that prices were below $400,000.”

Yes, this is a CrAzy market. Let me know if historically you’ve ever seen anything like this. Conventional wisdom would suggest that this many foreclosure on the market should mean that interest rates would be historically high – around 12-15%. Completely the opposite is true. Loads of foreclosures and historically LOW interest rates. If that doesn’t signal TIME TO BUY in the next 18 months then what does? What do you think will happen in our San Diego real estate market in 5 years from today?

Anyhow, at the moment we seem to have 2 real estate markets going concurrently, is picking up speed and continuing to drive retail listing prices down in the areas hardest hit by the sub-prime debacle. Those areas h the usual retail market and the foreclosure market. The foreclosure market ardest hit by foreclosures in San Diego are the South Bay, North County Inland and East County. The coastal areas of San Diego are holding up quite well amidst the turmoil.

Buyers – It’s shaping up to be a good year for buy and hold investors and home buyers. If the stringent lending standards ease up slightly and interest rates continue with their historically low rates Spring/Summer/Fall will be good for real estate.

Sellers – if you don’t have to sell, Buckle-up and Stay Put. Ride out the next 18 months and possibly look for an investment opportunity, re-fi, or rennovate.

Virtual Open House – 1129 Felspar

Here is the actual MLS Listing for 1129 Felspar Pacific Beach, CA 92109
Listed by ReMax Coastal.

Contact Us for more info

Virtual Open House – 3840 Sequoia

Here is the actual MLS Listing for 3840 Sequoia Pacific Beach, CA 92109
Listed by ReMax Coastal