Archive for January, 2008
January 31, 2008
Lots of folks seem to be doing a double take on this listing in east El Cajon. Advertised as a two-bedroom, two-bath house for only $149,900, it is no wonder this property has been appearing on the daily stats board of most popular listings for over three weeks in a row. This house is located in the Woodcreek Estates which includes a gym, pool, jacuzzi, and clubhouse. Another Woodcreek Estates listing that catches your eye is a $158,000 three-bedroom, two-bathroom house just down the block. What’s the catch?
At first glance, these homes looks like amazing deals. The price makes any buyer do a double take, “Say what?!” Once you read the listing, though, you realize it is a land-lease property, meaning you don’t own the land (like a mobile home estate). And what’s the real asset you’re buying when you buy a house? The land it’s on!
If you were fooled by this listing, don’t worry, it got me too. I think they should add in the listing comments “GOTCHA!”
Recent Sweet Digs Posts:
All Aboard!!! Repo Express Now Departing…
The Problem With Generalities
January 29, 2008
What’s the latest trend in real estate? Try bus tour selling!
Taking their captivated (or captured) audiences from property to property in a bus is one way companies are “working” their properties. This new trend is being seen all over California. According to the San Jose Mercury News, “Banks [explained the brokers and real estate agents who organize REO bus tours] do not regard these wood and stucco buildings as places to sleep, dream and raise families. They consider them losses on their books – and need to sell them quickly, even if it’s for tens of thousands – or more – below the so-called market price.”
In San Diego, the Union Tribune reported on the Coshow Real Estate Group who runs the “REPO Express bus” taking potential buyers to look at foreclosed condos in East Village, Hillcrest, Little Italy, Cortez Hill, Bankers Hill and the Gaslamp Quarter. “Large inventories of these real-estate-owned properties have made lenders increasingly willing to negotiate. Several condos on yesterday’s tour had been marked down tens of thousands of dollars below original asking prices and comparable resale listings provided by Coshow.”
Among the 20 passengers on the Repo Express this Saturday was Beatrice Doblado of Fletcher Hills. “Doblado, 68, said she bought foreclosed homes during the housing slump in the mid-1990s ‘and it has paid royally.’ Now, she is looking for a home to live in.” All the other passengers on the bus had the same goal in mind: finding a great deal.
Condos ranged from a downtown two-bedroom in the Renaissance complex with an asking price of $605,900 (previously listed at $649,900) to a Little Italy one-bedroom fixer in the Acqua Vista complex for $205,900.
Not a bad deal if you’re in the market for an REO. Being escorted around on someone else’s gas money is usually a good thing… if you don’t mind being stuck on a bus and being herded around like cattle for three hours.
Recent Sweet Digs Posts:
The Problem With Generalities
Fed Throws a Bone to Buyers
January 25, 2008
Many moons ago I was a philosophy major. It didn’t take long before I realized that wasn’t my cup of tea. There are few things in this world that annoy me more than hypothetical questions because I don’t care about the answers. I don’t care about the answers because they are fake. So what if nobody hears the tree fall? There is no doubt in my mind that it makes a sound. It’s simple science. If something of mass falls through the air and lands on something else, it will make a sound. In fact, even if it were to never land it would make a sound (but I guess that’s not realisitc either-
what a hypocrite I am). I can tolerate theories to an extent so long as they are tested and I believe they have value whether or not they prove to be true. The problem with generalities is they are specifically flawed…always. We live in a grey world and however much we try to box things in, there is always an exception.
Real estate is no different. There are lots of theories and studies about what sells, what doesn’t; why it does or doesn’t. I don’t discount the fact that there are trends and clearly we’re in one now, a negative one. But not everybody buying or selling is suffering and not every segment of the market is an apocalypse. I so like the saying that a home’s value is the price someone is willing to pay for it. For me that is an absolute truism because it reflects the nuances of any sale. Now, don’t get me wrong, I am ready and willing to slam the idiots who overpay or underprice out of sheer ignorance. But I also realize there are subtle factors that affect each and every individual property too numerous to count. So let me close with the idea that maybe you can also overthink the market and agonize about making the right decision until you are blue in the face. If there is a good buy on a property you love, you have truly done your due diligence and you can afford it, don’t kill yourself over the state of the market. I’m not suggesting you be foolish either. I’m just saying relax and be smart. On that note, here are some good byes.
1719 Adams Avenue
- 1920 single family home with 3 beds, 2 baths
- Asking $399,000
- Zestimate $497,500
- Last sold for $415,087 on 9/13/07
- On Redfin 120 days
2412 30th Street
- 1926 single family home with 3 beds, 1 bath
- Asking $450,000
- Zestimate $492,500
- On Redfin 8 days
4763 Hawley Boulevard
- 1924 single family home with 2 beds, 1 bath
- Asking $479,000
- Zestimate $470,000
- Last sold for $545,000 on 3/24/06
- On Redfin 4 days
If you liked this post you might also enjoy:
So You Like the Down and Dirty (Don’t Worry, I Won’t Tell)
It’s the Appreciation Stupid!
Hot Deals and Downright Steals (You’re Gonna Get Busted!)
January 25, 2008
No buyers? Maybe you’re looking in the wrong place.
Picture, if you will, your turbaned knight swooshing in from the desert on his white stallion, waving wads of wampum in his hand, ready to rescue you from your house-selling dilemma. Yes, or perhaps the quiet Asian multimillionaire who seeks a peaceful getaway in the States where his children can go to school. Maybe it is the eccentric French comtesse, the Austrian burgher, the cosmopolitan Columbian, or the cash laden Canadian, tired of the cold who will fall in love with your cozy old home. But how can this happen?
In our global economy, where Arabs and Asians can buy your mortgage bank, isn’t it time to take advantage of foreign wealth for your own benefit? Look around East County and you will find thousands of Arabs, Mexicans and other foreigners who have already bought here. How can you put your house on the world market? Well you may want a specialist.
The NAR (National Association of Realtors) with 1500 agents who have completed training and other strict requirements for international sales are a good bet. They have achieved the CIPS (Certified International Property Specialist) designation and are prepared to deal with the complexities of foreign transactions.
What do we know of current trends with foreign buyers?
According to an AP report in the Seattle Times “There are markets like Paris and London and the south of France where some home values have gone up 100 percent,” said Christian Voelkers of the Hamburg realtor Engel & Volkers Group. “At the same time, U.S. prices have either stayed put or come down.” The Times says that Manhattan, Boston, North Carolina and Chicago are attracting foreign buyers. In Los Angeles, South Koreans are looking for condos.
Gary Glaser of San Diego writes “Some are buying vacation homes in Florida, California and Colorado that would previously have been considered out of reach. Others are gambling that properties purchased now will translate into profitable investments down the road, when both the dollar and the U.S. housing market eventually rebound.”
Your common sense tells you that with the dollar’s value dropping like a stone and real properties going down at the same time, some foreigners with strong currency and a need to invest are going to be looking at California. Sorry, not your average property- they will generally want premium properties. While most will be looking at coastal homes, there is something to be said for better inland properties and that’s where my readers come in. There’s much about a larger home with some land attached that might attract these buyers. Some are buying condominiums, yes, but others might feel confined in such a space. I say go for it. It’s an alternative to the stingy buyers in the States who just want rock bottom prices.
To find a foreign buyer with resources, consider a CIPS Realtor:
The Certified International Property Specialist Network (CIPS Network) is the specialty membership group for international practitioners of the National Association of REALTORS®, the world’s largest trade association. The CIPS Network is comprised of 1,500 real estate professionals who deal in all types of real estate, but with one common element: they are focused specifically on the “international” market. Whether traveling abroad to put deals together, assisting foreign investors, helping local buyers invest abroad, or serving an immigrant niche in local markets, CIPS members are consumers’ best resource to ensure they are dealing
with a professional skilled in the unique aspects of international real estate.
According to the NAR, these nearby CIPS agents are available:
- Bill & Marti Klees, San Diego – http://www.seaportrealtors.com/ – appraisal, residential, commercial
- Armida Martin Del Campo, Bonita – (619) 479-9700 – residential sales
Other agents of exchange:
You might also consider a CPA, law firm or bank with oversees connections, not only for introductions to buyers, but technical help with the transaction. It is also true that regular Realtors, including your Redfin Realtor can expedite foreign sales. In fact they are required to do a certain number of these transactions before they can apply for the CIPS designation.
[data from generally reliable sources, please comment on any errors!]
see also: Monday Madness: Time to Learn French!
January 25, 2008
What it means for San Diego
According to the AP, one part of the economic stimulus package will benefit buyers by greatly increasing the maximum limit on government-sponsored Fannie Mae and Freddie Mac loans. Depending upon prices in the local market, such loans could reach $730,000, well beyond today’s limit of $417,000. San Diego, a high priced market, would qualify for large loans. This temporary measure would permit high end buyers to take advantage of lower interest rates. If approved, this opportunity would run through December, but an identical increase for FHA loans would be permanent. AP’s Alan Zibel continues:
“The National Association of Realtors has been pushing for a permanent expansion of the Fannie and Freddie limits. The trade group calculates that borrowers could save $3,000 to $5,000 per year in reduced interest costs as a result and projects up to 210,000 foreclosures could be prevented since refinancing into lower-rate loans would be easier.”
Uncle Giveth
Lower interest rates at no cost to anybody (can it be?)
What helps buyers will help sellers, in this case. Buyers have an incentive to buy while the rates are low. Combine that with attractive prices and Redfin refunds and this might just be the time and place to buy. Here are some East County homes that have dropped in price in the last two days and should qualify only under the new rules:
Rich Toscano of voiceofsandiego.org points out that these loans carry no explicit guarantee and that Fannie Mae and Freddie Mac have been “mired in huge multi-year accounting scandals, and they either own or guarantee the payment of $4.9 trillion of mortgages.”. Nevertheless lenders take comfort in that ‘guarantee’ and will offer lower rates to those borrowers. You don’t want to think about who’s gonna pay if this system collapses. Take your loan and hope for the best.
Uncle Taketh Away?
What if Freddie and Fanny can’t solve their problems?
[data from generally reliable sources, please comment on any errors!]
January 24, 2008
More news on increasing foreclosure rates. The lastest news from the Union Tribune says “Foreclosures up 353% in S.D. County in 2007“. This is up from an earlier reported figure of 328%. New figures from DataQuick show that foreclosures went up 353% to 7,349 foreclosures. Default notices were also up by 128% with 20,138 notices. These are the highest levels since DataQuick has been tracking (since 1988 for foreclosures and 1992 for default notices).
According to the Tribune, “The county’s previous foreclosure record was 4,077 in 1996, when Southern California was in a housing slump caused partly by a decline in defense spending.” Looking back in DataQuick’s archives to 1996, you can find a deja vu press release describing the increase in foreclosures as a result from banks becoming more strict on their lending practices.
And who’s the hardest hit? Try the Chula Vista-East Lake-Otay Ranch area at 301 foreclosures in 2007. Not far behind, and all over 250 foreclosures, were Spring Valley, north Oceanside, Nestor, and south Chula Vista.
DataQuick‘s release states, “The number of mortgage default notices filed against California homeowners jumped last quarter to its highest level in more than fifteen years…” Just in time for the holidays – talk about a nice Christmas present.
According to Marshall Prentice, DataQuick’s President, “Foreclosure activity is closely tied to a decline in home values. With today’s depreciation, an increasing number of homeowners find themselves owing more on a property than it’s market value, setting the stage for default if there is a mortgage payment shock, a job loss or the owner needs to move.”
Recent Sweet Digs Posts:
So You Like the Down and Direty (Don’t Worry, I Won’t Tell)
It’s the Appreciation Stupid
January 23, 2008
According to the Google Analytics report I got this week, you guys are a bunch of hungry wolves! I was pleased to see that there was a huge readership response to my recent post Hot Deals and Downright Steals. That tells me you like the down and dirty stuff, the best of the best, and you appreciate us doing the homework. You know what? So do I. I love the hunt and I scream with delight when I find a really fantastic buy. It has been a long time since there was a safe haven for investors; stock market, real estate or otherwise. I know you’re looking for a good place to put your money and I truly hate the thought of anyone losing in a house. That really sucks. The good news is that so far 2008 has brought us yet more properties on the market and the prices are getting really competitive. It was beginning to look pretty sleepy out there, but the new pulse is high energy for buyers and cut throat for sellers looking to get back in the game. So, here are a few more properties you should take a look at. Just do me a favor and wipe your chops before someone sees.
4127 Dwight
- 1927 single family home with 2 beds, 1 bath
- Asking $280,000 ($365 per square foot)
- Last sold for $365,000 on 10/28/05
- Zestimate $316,000
- On Redfin 1 day
4338 38th Street
- 1927 single family home with two beds, 1 bath
- Asking $219,000 ($320 per square foot)
- Last sold for $360,000 on 8/27/04
- Zestimate $347,000
- On Redfin 252 days
4534 45th Street
- 1928 single family home with 3 beds, 2 baths
- Asking $599,000 ($406 per square foot)
- Last sold for $630,000 on 5/26/05
- Zestimate $612,500
- On Redfin 9 days
If you liked this post you might also enjoy:
San Diego Real Estate Listings I Like (And Why)
All Dressed Up and Nowhere to Go
‘Triple D’ is Not My Bra Size
January 22, 2008
How many times do I have to say it? Appreciation, appreciation, appreciation. I have little patience for flipping in this market, so that’s not what I’m talking about. I’m not interested in the short timers out there right now. They’re crazy. I’m talking about normal people buying homes that they will live in for 5 years or more. Those people with realistic expectations about buying a house and the promise of growing their investment incrementally over time. No whamboozles, fireworks or quick profits. Just the plain old regular hope that one day, through diligence and care, they will sock away a little nest egg for their futures and that of their loved ones. I think there are two categories of stupid investments. The first being inexperienced investors who haphazardly jump into a deal without doing their homework and laying out a proforma or development/rehab plan and, second, those people who so adamantly subscribe to the American Dream of home ownership that they are willing to do just about anything to achieve it. The second group is feeling the wrath of their hasty decisions and shame on those pirana lenders for capitalizing on their dreams. In keeping with my previous posts, buyer beware. For heaven’s sake pay attention and don’t get sucked into an investment without knowing what you’re getting into. It isn’t hard – I promise. All the tools are right here. With all the good buys on the market, there is surely one for you that will appreciate over time. Maybe your dream home or first pick is not priced right, but there are lots of good properties that will serve you well financially and emotionally. Here are some that missed the mark.
1937 Howard Avenue
- 1927 single family home with 2 beds, 1 bath
- Sold on 12/14/07 for $455,000 ($632 per square foot – ouch!)
- Last sold on 2/15/91 for $132,500 (double ouch!!)
- Zestimate $447,500 (triple ouch!!!)
3812 Park Blvd. #601
- Hillcrest condo with 2 beds, 2 baths
- Sold on 12/11/07 for $610,000 ($537 per square foot – ouch!)
- Last sold on 7/28/05 for $572,500 (double ouch!!)
- Zestimate $599,500 (triple ouch!!!)
4276 48th Street
- 1939 single family home with 2 beds, 2 baths
- Sold on 12/28/07 for $405,000 ($391 per square foot – ouch!)
- Last sold on 4/27/07 for $365,000 (double ouch!!)
- Zestimate $399,500 (triple ouch!!!)
If you liked this post you might also enjoy:
Rotten San Diego Home Sales – What’s that Smell?!
Recent Fathead Buys – Doah!
Hot Deals and Downright Steals (You’re Gonna Get Busted!)
January 22, 2008
“The Apprentice”
Tables have turned, Mr. Trump. Neglecting to the get the proper permits for a local real estate development project could be means for a Trump-style firing.
Just 30 minutes from downtown San Diego, you’ll find the site of the future Trump Ocean Resort Baja Mexico. When complete, the resort will consist of three 26-story towers overlooking the Pacific. “Trump Ocean Resort Baja will set the standard of premier property ownership and excellence in service for all of Northern Mexico,” according to Donald Trump.
The development was started in 2005 when the San Diego real estate market was hot. Back then, the idea was that the housing boom in San Diego would create a population prime for the picking for buyers in a Trump resort. Property across the border would be less expensive: affordable luxury. Studios are $400-420k, one bedrooms are $480-550k, and two bedrooms are $660-770. Buyers have lined up, putting 30% down to hold a unit. Well over a hundred units are already reserved.
As for the site in Baja? The project garnered criticism early on, such as Surfline’s article “New Trump Baja Resort to Be Built on Mexico’s Most Polluted Beach” which set out to warn potential buyers that 30 million gallons of sewage are dumped daily on the beach. Despite these kinds of criticisms, the development has moved forward, slowly.
However, now we’re hearing about a new hiccup. According to the San Diego Union Tribune’s article “Slow going for Trump resort“,”Tijuana officials say the developer received a land use permit in 2005, allowing 526 units to be built on the property that juts out into the Pacific Ocean at Punta Bandera. But the developer has yet to receive a construction permit from Tijuana’s Urban Development Department, the key city agency that gives the go-ahead for new projects.” With having already taken money from many buyers and the project being behind schedule, neglecting to get the proper permits could be a huge PR nightmare from Trump.
Like his contestants that sit before him in “the boardroom”, Trump is quick to point the finger to his teammate sitting beside him, Irongate. Irongate is the developer actually building the resort, while Trump is providing equity, $200M, and his name. The response to this permit fiasco from Trump’s executive assistant was, “The only thing I am at liberty to say now is that we are working with Irongate on a project there.” Meanwhile, Irongate rep says they have yet to see money from Trump and so far have just gotten his name to use. How’s this boardroom going to play out? Will the buyers pull out and say, “You’re fired!”?
Recent Sweet Digs Posts:
A Lighter Load: Lower Prices, Interest Rates Good for Buyers
Housing Hype & the Savvy Shopper
January 19, 2008
I had lunch with a friend yesterday who has been thinking about buying a property in the North Park, Hillcrest, Ocean Beach area and asked my opinion about whether or not I thought interest rates would come down. He also remarked that he thought there were some good buys on real estate right now. In terms of interest rates, I think they may come down a little but honestly I wouldn’t wait to buy on that alone. Interest rates are already good great and if you’re buying with the intent to hold, potential incremental reductions in interest rates probably won’t make a huge difference in the long run. I definitely agree with his observation that there are great buys on the market. Granted, some sellers are still holding strong when it comes to reducing their asking prices, but that hasn’t deterred others who are anxious to sell, even at a loss. So, for my friends everywhere (including you), here are some fantastic deals that have caught my eye.
4718 Oregon Street
- 1926 Spanish Style Single Family Home
- Two Beds, 1 Bath
- Asking $320,000 ($494 per square foot)
- Short Sale
4334 38th Street
- 1927 Single Family Home
- Two Beds, 1 Bath
- Asking $236,900 ($346 per square foot)
- Zestimate $340,500
- Seller Incentives
- Bank Owned Foreclosure
3719 37th Street
- 1950 Single Family Home
- Two Beds, One Bath
- Asking $189,900 ($243 per square foot)
- Zestimate $358,000
- Trustee Sale
If you liked this post you might also enjoy:
Hot Deals and Downright Steals (You’re Gonna Get Busted!)
If the Road to Italy is Paved with Spaghetti, What Leads to Hillcrest?
Good Bye Good Buy
Bonus link: http://producten.hema.nl. Don’t scroll down, just watch.
