March 22, 2008

Open House- East County Easter Weekend

Is land important to you?

Land can be troublesome. It wants care, and where fires are a threat it needs special attention. But land can be liberating. Cubicle workers and surfers can both appreciate having room to stretch the legs and run the dog. Today we offer something for land lovers and trouble avoiders.

7370 La Mesita Place in La Mesa - Belvedere homes

Don’t complicate my life with land, give me a trouble free home.

7370 La Mesita Place in La Mesa is one of seven townhomes available in this 21 unit project recently built. Open Saturday, this unit has 2 bedrooms, 2.5 baths and 1321 square feet. It’s a three story home with a 2 car attached garage, central air & heat and some interesting architectural features. It sold about a year ago for $469k and now they’re asking $400k. Information is incomplete and it’s not clear if there is a HOA fee.

170 Landale Lane, El Cajon (Granite Hills) open Saturday. 2,167 square feet; 4 bedrooms, 3 baths going for a steep $345 per square foot, a total of $748 thousand. It’s been listed 33 days, built in 1960 and sits on 1.63 spacious acres. If you can survive reading the blinding solid block of run-on capital letter text you will learn that it has a pool, security system and automatic gate. Similar homes nearby have sold for more and for less- Zillow estimates the value at $618k. At the listed price, Redfin would refund about $15,000.

” Oh, give me land, lots of land under starry skies above, Don’t fence me in…” Bing Crosby popularized this Cole Porter song, and now is your chance to own a nice piece of California land for less than 1/2 million dollars. 269 Lilac Drive in El Cajon is open Saturday for your viewing pleasure. It’s a tiny house- 2bed, 1 bath, 770 sq.ft. and outrageously priced at $552/sq.ft. But it’s only $425k and it comes with 4.4 acres of LAND. Built in 1945, it’s been listed about 24 days. Save $8,500 with Redfin.

269 Lilac Drive in El Cajon

Not much house, but lots of land.

Happy hunting and happy Easter to you!

[data from generally reliable sources, please comment on any errors!]

March 18, 2008

I Sure Wish You Hadn’t Done That

It’s been a while since I’ve done any major buyer bashing and I sort of miss it. I know you like it too. Oh sure, you deny it now but I have the stats to prove how many of you read the posts dealing with stinky purchases. Have a look at these sorry fools who completely missed the mark and tell me you aren’t absolutely beside yourself with incredulous disbelief.

4664 Adair Street - 1944 single family home in Ocean Beach with three beds, one bath. Sold on January 17, 2008 for $785,000 ($787 per square foot). This property has 998 square feet and it’s eppraisal is $669,807. Yikes!

1314 Devonshire Drive - 1948 single family home in Ocean Beach with three beds, one bath. Sold on February 25, 2008 for $890,000 ($613 per square foot). This property has 1,451 square feet and it’s eppraisal is $766,727. Uh oh!

3731 Brant Street - 1937 single family home in Hillcrest with one bed, one bath. Sold on December 18, 2007 for $516,000 ($784 per square foot). This property has 658 square feet and it’s eppraisal is $386,545. Geez!

4077 3rd Avenue #102 - Hillcrest condominium with one bed, one bath. Sold on December 31, 2007 for $347,366 ($588 per square foot). This property has 591 square feet and it’s eppraisal is $281,081. Merry Christmas!

3565 Boundary Street - 1939 single family home in North Park with two beds, one bath. Sold on December 28, 2007 for $450,000 ($731 per square foot). This property has 616 square feet and it’s eppraisal is $368,003. Mmmm.

If you liked this post you might also enjoy:

Unsold in 60 Days? What are You Complaining About!

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March 18, 2008

Flogging Foreclosures

“Beating a dead horse”

… is an idiom that means a particular request or line of conversation is already foreclosed, mooted, or otherwise resolved, and any attempt to continue it is futile [Wikipedia]. This applies in abundance to the real estate bubble, high risk mortgages and foreclosures. You just can’t escape the overwhelming flow of statistics and opinions and they all say the same thing: there are problems in the industry. And they fail to say the same thing: How do I deal with this? Today we have some specific local news and opinion that may be relevant to you.

foreclosure - not a pretty picture

Let’s start with one of my favorite experts, a man who is not afraid to voice his derision at individuals and institutions that get too full of themselves. Recently Rich Toscano of the VoiceOfSanDiego.org pointed to the next phase of the mortgage debacle: People with good credit will start walking away from their homes around 2009. They accepted the option ARM temptation to buy more than they could otherwise afford, but they have a bit more time before they have to face the reality of their situation. Soon, their great numbers could dwarf the number of subprime holders presently in distress. On the bright side, if you’re looking for a better home you may soon have a wide selection to choose from.

In another column, Rich goes on to illustrate the bad news about real estate inventory:

The jump from a 7 month to a 12 month inventory backlog is dramatic, particularly when you note the tendency to rise later in the year.

Next, local ERA® Metro Realty has prepared a detailed report on foreclosures (PDF download) for San Diego. Forgive my extreme abbreviation of their findings when I say, for instance, that El Cajon will see about 200 significant adjustments to high risk loans in the first half of this year which will begin to result in foreclosures in the second half of this year. And 809 high risk loans in April and nearly that many in May will adjust with serious consequences for county residents. ERA has produced an impressive report but readers should note that they are a Realtor, and Realtors have their own perspective on things.

Some troubled homes to pick through. These are all foreclosure or pre-foreclosure homes, and all on Massachusetts Avenue in Lemon Grove, 91945.

Finally, I don’t think I’ve mentioned Bob Schwartz blog yet. Bob is a Realtor with a refreshing attitude. I mentioned above that ‘Realtors have their own perspectives’ (hinting that they are sometimes salespeople first and client advocates later). Bob says this; “I’ve been a member of the National Association of Realtors (NAR) for over 30 years and I’m hard-pressed to remember the Association forecast being anything but overly optimistic.” Bob has lots of interesting things to say to San Diegans.

Lots of well seasoned agents mellow out. The sales hype fades and they bring real value to the client and the industry as a whole. Here’s hoping they survive the ‘troubles’ for the good times ahead.

[data from generally reliable sources, please comment on any errors!]

March 17, 2008

Bulls, Bears and Butterflies

Different people have different levels of tolerance for risk. I personally have a very low tolerance and, after losing money in a number of different speculative stocks over the years, have come to accept that I am not a person who does well with anything that involves losing money. I am much more comfortable with conservative, safe investments and am willing to be patient if it saves me the anxiety that goes along with high risk situations, financial or otherwise. If that means hibernating while the rest of the pack runs with the bulls, so be it. I will happily snooze away all the while.

Bulls are the aggressors among us. Willing to charge on empty and take down their prey. In a real estate market like this, they are the ones scooping up properties in distress and banking on the possibility that they can turn a quick profit on some undervalued assets.

Bears are the quiet ones, waiting patiently and watching what others do. Cautious, perhaps even timid at times, these folks don’t mind letting the bulls race past them and sometimes scoff at the foolhardy way in which they act with such abandon. Slow and steady wins the race is the credo of this lot. They will lay in wait until just the right moment to raid the honey jar and then relish every sticky bite.

Butterflies are flitty and undecided. They come and go looking for nectar, taste a little and flutter away taking refuge in the trees until they are ready to come back down and explore some more. Their temperaments are delicate and they quickly shy away from danger. Tough to pin down, they tread lightly in making decisions or commitments. They are tempted easily into a courtship but will not stay long and it takes a great deal of patience to sit and wait on them.

You probably know at least one of each of these personality types. No matter what your mentality, there are others who will approach the market in a different way. The vast majority of us seem to be sleepy bears right now but I admire those who are willing to jump in and take a risk. As for the butterflies among us, they may just be to flighty for any market but we have to appreciate their contributions, for once they were lowly caterpillars. Had they not had some wit or wisdom, they would have been shoe gum a long time ago.

Recent San Diego Sweet Digs Posts:

Weekend Open Houses

Huge Reductions on San Diego Homes - Walmart’s Not the Only One With Falling Prices

Jaw Dropping Deals - Single Family Homes Priced Under Market

Monday Madness - Eating Lemon Grove, Part 2

Debutante’s Ball - Come Dance With Me

March 17, 2008

Monday Madness - Flaccid Folding Stuff ?

Is your American dollar weak and ineffective?

Every American with an extra dollar throbbing in his pocket is faced with the question of what to do with it. That dollar droops lower daily like a wax statue of David in a florist’s hothouse. Our dollar is laughed at around the world. It buys less gasoline, less food and less of the imported goods we love than it did last week. There is no reason to think it will firm up any time soon.

Meanwhile the stock market is stumbling, American businesses are stagnant at best, and the White House is dispersing dollars around the world while withdrawing funds necessary for our own well-being. We see economic chaos worldwide with the exception of the oil producing countries and companies.

So where do you put that limp dollar so that it can grow?

‘Commodities’ is the usual answer. You may recall the gold rush of the late 70s. The price of gold, silver, etc skyrocketed and was excitedly reported daily in all the news media. Other commodities you can invest in include wheat, pork bellies, oil and foreign currencies. Even your pathetic dollar is a commodity. Real estate is often considered a commodity. The price of commodities fluctuates, of course, but the value is fairly consistent. The value of an ounce of gold doesn’t change significantly from year to year but the price will change with the value of your currency and market demand. Inflated dollars buy less gold. Increased demand can raise the price of gold but has little effect on the long term value.

Real estate is similar to gold. Supply is fixed and prices fluctuate with the strength of the dollar and the variable demand from buyers. The actual value of real estate doesn’t change much. Your grandparents paid $5,000 for a house that was recently worth $500,000 dollars. Has the value changed? Yes, somewhat, but only because California land is in more demand now by a growing population. On the other hand the house itself is now old, not up to code and possibly a fire trap. It is worth less than it was, and yet it can sell for 100 times more of our shriveled dollars.

Thrust your dollar into a hot eager market !

Your dollar will get excited about this opportunity to grow in hard times. Television is a prime measure of public interest with at least a dozen series and as many specials on topics like “Flip this House”, Flip that House” and “Flipping Out”. Your daily newspaper and your news magazine will feature frequent stories of woe and of success in real estate. The internet is awash with more on every aspect of the real estate ‘crisis’, but you won’t have any problem finding tales of opportunity. The millions of dreamers who watch this stuff will soon get off the couch and start buying.

The people suffering are those who bought high and are selling low. They got caught in the frenzy of the market hype of recent years. Like the Dutch tulip fable of the past, they pushed prices and demand beyond reason and paid in the end. The smart investors don’t follow the crowd–they buy low and sell high. The crowd will soon pour back into the real estate market. You may want to get there first.

Why is this man smiling?

[insert your investment related caption with the comment link]

March 16, 2008

For Those Who Like it Rough (You Know Who You Are)

There is something alluring about a fixer-upper. Not only is it exciting to envision the promise of a major renovation, but there is also the hope that you can buy dirt cheap and reap the rewards of converting a property into a desirable commodity, whether you plan to keep it for yourself, rent it out or turn around and sell. But keep in mind, these properties pose substantial challenges. You need to have a contractor you trust and be prepared for surprises. There are hidden costs that can turn a fixer into a nightmare. I don’t know of a single rehabilitation project that didn’t run into some unanticipated repair. Healthy contingencies are an absolute must. If you are conservative, you should tack on a good 20% of your budget for the unexpected. For those of you up to the challenge, here are some rough properties looking for visionary investors with strong stomachs.

2440 Seaside Street - 1941 single family home in Ocean Beach with three beds, one bath. 984 square feet priced at $507 per square foot. Asking $499,007. Zillow values this property at $582,000 and it’s eppraisal is $724,696. On Redfin 151 days.

4526 Cape May - 1948 single family home in Ocean Beach with two beds and one bath. 960 square feet priced at $573 per square foot. Asking $550,000. Zillow values this property at $618,500 and it’s eppraisal is $796,620. On Redfin 4 days.

3606 1st Avenue #104 - 1985 condominium in Hillcrest with two beds, two baths. 912 square feet priced at $406 per square foot. Asking $370,000. Zillow values it at $379,000 and it’s eppraisal is $329,869. On Redfin 14 days.

3781 Brant Street - 1907 single family home in Hillcrest with two beds, two baths. 1,200 square feet priced at $375 per square foot. Asking $450,000. Zillow values this property at $573,500 and it’s eppraisal is $663,207. On Redfin 139 days.

3654 Boundary Street - 1933 single family home in North Park with two beds and one bath. 800 square feet priced at $406 per square foot. Asking $325,000. Zillow values this property at $380,500 and it’s eppraisal is $394,971. On Redfin 16 days.

If you liked this post you might also enjoy:

Huge Reductions on San Diego Homes - Walmart’s Not the Only One With Falling Prices

Jaw Dropping Deals - Single Family Homes Priced Under Market

Debutante’s Ball - Come Dance with Me

March 14, 2008

Weekend Open Houses

Home is where you find it

As often happens we have mostly newer listings in a middle price range, eager to show off for an admiring public. Some have already dropped in price. Will they drop even more? Only time will tell and it is truly a matter of who has more time- the seller or the buyer who really likes the home.

Is there an empty house like this that needs your personal touch?

Could this lonely house be calling to you this weekend?

1265 Saltbush Lane, El Cajon

The usual amenities for a gated community.

On the subject of the time element in sales, I’ve seen it reversed to good effect. Usually a property comes down in price in proportion to the time it is on the market. I’ve seen sellers raise the price over time and I’ve done it myself. After a time consuming offer fell through I raised the price of a property I had listed and it sold quite quickly at a substantially better price. That was a different time, of course, but I’ve seen people doing it in recent months. I haven’t had time to track their success with this plan, but I’m very curious.

Suppose you have an item for sale that generates some interest- a house, an iPod, a nice car… And you publicly announce that you are offering it for the fair price of $x, but every day you will raise the price by $y. Would people have an incentive to rush to buy your item?

[data from generally reliable sources, please comment on any errors!]

March 13, 2008

Mapping the Gold Mines - A Prospector’s Delight

This is California.  Gold mining country.  Home of the forty-niners and the place where some 300,000 people from across the Americas flocked to discover fortune and fame.  That was in the mid-1800’s and people keep coming even now despite the fact that the rush has long been abandoned and it costs a gosh darned fortune to live here.

If you read my recent article Jaw Dropping Deals, you already know inventory below $300,000 is a rare find in certain neighborhoods.  However, there are distinct pockets of affordability and foreclosure related buys.  In San Diego, those are primarily concentrated in South, East and North Central sections of the county.  I rarely have much difficulty finding a few East of North Park, but I almost never find good prospects in Hillcrest or Ocean Beach and almost never in the more desirable north county coastal areas.  What I do find in those places is usually stuff only a fool or visionary would touch.

When you search in certain areas you will find many more opportunities.  In Chula Vista for example, I found one, two, three, four, five bank owned properties in no time at all.  Same thing in Spring Valley and Escondido.  I don’t usually like to recommend these kinds of purchases because they can be laborious, time consuming and frustrating to buy.  However, if you’re looking for a bargain in distressed real estate and you’re willing to trudge through some of the muck for a really fantastic opportunity, these are some places where you will surely find what you’re looking for.  But take it easy people, this aint no gold rush and I don’t want you trampling over these poor folks.  Yell Eureka when you’ve got one and we’ll know you did good.

Recent San Diego Sweet Digs Posts:

Huge Reductions on San Diego Homes - Walmart’s Not the Only One with Falling Prices

Monday Madness: Eating Lemon Grove, Part 2

Debutante’s Ball - Come Dance With Me

Mixed Messages and Puppeteer Pricing

March 11, 2008

Huge Reductions on San Diego Homes - Walmart’s Not the Only One with Falling Prices

There’s a Walmart mentality scouring the nation.  It’s hit Wall Street, real estate and the average shopper looking for a bargain on just about anything.  This reminds me of recessions past when advice on saving money and cutting corners ran amuck.  I distinctly remember reading an article  in the early ’90s suggesting that one way to save a buck was to squish all your soap remnants into a ball to make a new bar, thereby delaying the inevitable purchase of more.  Or you could collect all the fur balls left around the house by your loving pets and use them to make pseudo down pillows.  How about recycling your plastic and aluminum?  If you’ve never been motivated to save the earth perhaps the idea of saving a nickel will get you off your duff.  I don’t know if the final month in this first quarter will prove that we have slipped into an actual recession, but the fear is real and I see the signs all around.  I am hopeful that March will keep us afloat but I think April just may do us in.  At any rate, real estate continues its course of steady decline and prices are frenetic.  Here are some steep decreases in asking prices.  Wait and watch or grab ‘em while they’re hot, you ask?  Some sellers are going up, others are coming down; we’re at a crossroads however you look at it.  Which way will you turn?

Reduced $99,000 - 4185 Arizona Street.  Was $499,000, now $400,000.  1927 single family home with two beds, one bath.  904 square feet priced at $442 per square foot.  It’s Zestimate is $436,000 and eppraisal is $437,653.  On Redfin 36 days.

Reduced $50,000 - 4548 Texas Street.  Was $449,000, now $399,000.  1924 single family home with three beds, one bath.  1,014 square feet priced at $393 per square foot.  It’s Zestimate is $407,500 and eppraisal is $636,633.  On Redfin 61 days.

Reduced $165,000 - 4394 Arcadia Drive.  Was $1,590,000, now $1,425,000.  2007 single family home with three beds, three baths.  3,700 square feet priced at $385 per square foot.  It’s Zestimate is $1,467,000 and eppraisal is $773,971.  On Redfin 48 days.

If you liked this post you might also enjoy:

Jaw Dropping Deals - Single Family Homes Priced Under Market

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March 11, 2008

The Importance of Rules - Please Play Nice

I’ve been told I have the persona of a school teacher.  I’m a little uptight, like routine and am a stickler for rules.  I like to buck the system and climb on my soapbox when I feel wronged or see others wronged, but for the most part I am more comfortable with a society that accepts certain behaviors as moral truths.  I like rules because I truly believe they define the playing field.  They let us know what we can expect from others and what they can expect from us.  When those understandings are broken or breached it leads to a breakdown that often cannot be repaired or (at best) erodes trust and creates major obstacles between people.

I recently read an article by Bob Bruss in which he said “[t]he asking price of a home should be inconsequential to the price you offer.”  I completely disagree.  An asking price is a rule of sorts; one that is negotiable, but a rule nonetheless.  It tells buyers what a seller considers to be the value of their home and sets down one of the basic parameters around which they are willing to deal.  Sellers expect buyers to negotiate, but they don’t expect to be disregarded.  Ignoring the asking price is like not acknowledging their partnership in the transaction.

There are other unspoken rules in real estate that are basic to a successful deal.  For example, buyers expect honesty in disclosures.  They don’t like secrecy or deception.  When the inspection report comes back, if there are glaring defects that were not disclosed by the seller, there will be an instant distrust between the parties.  Similarly, buyers don’t like it when sellers over glorify their properties and sellers don’t like it when buyers pretend to be disinterested in a home when they really are, just for the purpose of hiding their excitement for fear that a seller will play hardball on price.

The best transactions between people are those in which both the buyer and seller are genuine, authentic and motivated.  Primarily driven by a desire to make the other whole or at least full enough.  When one party is trying to take advantage of the other, the deal just doesn’t feel right and, while it may or may not succeed, it will leave a lasting impression and taint the relationship.  They say all is fair in love and war, but that implies that you should expect to get burned.  People buying and selling homes don’t have those same expectations.  They just don’t.  If you want a fair price on a home, your best bet is to lead with your mind and follow your gut.  If your deal starts to take on a sour tone it might be time to reconsider and move on.

Recent San Diego Sweet Digs Posts:

Mixed Messages and Puppeteer Pricing

Just Another Friday Open House List

Price Watcher Plus!  A Dose of Caution and an Ounce of Advice

First Time Buyer Bargains