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!]

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]

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!]

Monday Madness – Eating Lemon Grove, part 2

Gluttony or Gourmet ?

Let me guess that you like food. In a recent survey more than 3 of 4 people confessed that they like food. Don’t be ashamed, you are not alone. Let me tell you about a local city that has more restaurants per square mile, more restaurants per person, and more restaurants than you can shake a stick at.

We’re continuing an exhaustive search to find every restaurant in Lemon Grove. It won’t be easy and we may gain a few pounds, but it is paramount that Redfin readers have this important community information. Along the way we’ll comment on some nearby housing opportunities.

We’re looking down on Lemon Grove Plaza with Albertson’s supermarket at the core. Most of today’s restaurants are within this plaza. We’ll eat our way from west to east on this adventure.

• Burger King is just off the map to the left. Not much I can add to what you already know about them. They have a fair amount of drive-thru business, but the inside is usually not busy.

• The Colonel’s KFC store is practically next door to BK. Employees here always seem cheerful. Lots of customers, you may have to wait a bit.

• China King is a treat. Popular items are the broccoli beef, sweet & sour orange chicken, egg fried rice but there is much more. Look for smiling Toni as you enter. These people take pride in their work.

A short walk away near Waite Street in La Mesa is 3726 Jill Lane, a condo built in 1990. With 2 beds, 2.5 baths and unknown square feet (it was only listed 3 days ago) it gives access to all the food and facilities of the Broadway strip. It’ll cost you $369k plus the monthly HOA fee of $250.

• Submarina- what can I say? This one’s small and clean and you know what to expect.

• Del Taco has an indoor playground, but the enclosure keeps the noise where it belongs. Staff is polite and friendly and food quality is reliable.

• Godfathers RIP. For many years they offered an affordable buffet lunch. Soon it will be a bank.

Walking east we find 7228 Waite with 3 bedrooms, 2 baths and unknown square feet. Listed last November, the price has come down to $420k but you should know it was $335k in 2003.

• Carl’s Jr has a playground that only McDonalds can compare to, and many happy kids enjoy it while the parents savor a quiet meal inside.

• This McDonalds is the best in the county. It is one of many franchises with the same owner and they do something right. The staff is always happy. A meal is always better in a cheerful environment.

Just a little farther east is 7260 Waite Drive boasting 4 beds, 2 baths, 1,463 sq.ft. and built in 1953. It was listed Dec 3 and has dropped to $440k but you’ll want to know that the Zillow estimate is $358,500, Cyberhomes estimate is $320,675, and the epraisal estimate is $405,961. Don’t rush into this just now.

• Colima’s Taco Shop is the newest restaurant in the little strip mall. I hope you will try it because they seem to be struggling a to get started.

• In-N-Out has tasty burgers. I remember not so long ago when they opened to great fanfare. We all wanted one in our area and those first days were greeted with long lines of eager customers. Well the customers are still pouring in.

If you have dutifully followed the tour, you might be feeling some gastronomic distress by now. Take a few days to digest our adventure and come back in a week or so for another gluttonous gander.

see also:
Monday Madness – Eating Lemon Grove, part 1

You can follow my East County blog or here, and Carol‘s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.

Just Another Friday Open House List

Nothing to get excited about folks, move along:

These open houses aren’t particularly distinguished. They are the kind of homes that regular people live in day in and day out. I suppose they are OK for ordinary people. Hey, wait- that’s me! Maybe you are ordinary too and you might find just the thing here. But now I must change the subject with a little rant…

Have you noticed all the UPPERCASE text in real estate ads? All the !!!!!!! excitement. All the hype? Realtors, like any other salespeople, have to be ON when they are in the public eye. Kinetic and ebullient and full of themselves and their product. Do they ever get tired of it all? After spending an hour reading their obnoxious ad copy, I am exhausted. I couldn’t face an hour with a Realtor right now. All the more reason to respect their dedication.

Give them some love folks. These tireless workers are fighting to survive in a difficult time. Be patient with their pushy personalities and horrible listings and useless photographs. Grit your teeth and forge ahead. For you buyers and sellers it spells a few miserable months, but consider that these agents keep it up for years. Where is the monument that they deserve?

9270 Amy’s Street, Spring Valley

7 more units available here. Seller offering other incentives.

15935 Spring Oaks Road, El Cajon

If you come home drunk, you’ll never find the place. Located at Woodcreek Estates, there are ten other homes for sale here. They seem nice but that monthly maintenance fee is steep. There are more than the usual park amenities here.

As you tour the open houses this weekend, give a Realtor a hug. Let them feel that you understand the difficulty of their ambitious lives. Pretend that it’s all worthwhile.

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

First Time Buyer Bargains

Let’s search the Redfin maps for those properties that might appeal to a young couple, perhaps with one child and not expecting another for a few years. What sort of home might appeal to such a family?

Two bedrooms seems right, one bath might suffice. Even if there are no children at the moment, schools might be a consideration. Let’s guess that the young couple have moved beyond the party crowd and seek a quiet environment that is compatible with career and family development.

This hypothetical couple may be tempted to hesitate, thinking the market may drop further. It’s good to consider that ‘he who hesitates is lost’–any or all of these homes could be sold tomorrow. If your dream home is among them you’ll have to settle for something else. It’s not unreasonable to assume a rebound in the market in three years, and if our couple plans to stay for five years they have several options when they choose to move on. They could retain the unit as a rental or sell at a profit. With all this in mind, let’s see what we can find in the near East County.

2139 Berry Street, Lemon Grove

In Lemon Grove near the Berry Street park is a condo that’s offered for $165k. Over the last 90 days or so the price has dropped significantly and seems reasonable. It has the 2 beds, one bath and 855 square feet and at that price it will move for an excellent $193/square foot. Of course there is a pool, clubhouse, playground & rec area. The condo homeowners dues seem reasonable at $180/month. I don’t know this particular development, but I’ve had many happy hours at the Berry Street park during the Summer free concerts. It’s a great place for children or meditation, especially if you live in a small condo. All East County schools are acceptable and the Grossmont District High Schools & Colleges have been exemplary. Buy with Redfin and Save $1,950*

9126 Lamar Street in Spring Valley is a single family home with 2 beds, 1 bath. It’s a humble home built in 1945 with a one car garage. But it is a home and includes a small parcel of land. With 725 square feet, it sells for $207 per sq.ft. and there are no homeowner fees. Nearby is Lamar Park. This house sold for $322,000 in 2004; now it’s yours for $150,000.

In the gated community of La Mesa Village is the tiny unit number 216. It’s smaller (572 sq.ft.) and costs more ($169,000 or $295/sq.ft.) than the above units, but this is the heart of La Mesa, ‘Jewel of the Hills’. Built in 1973, it includes a clubhouse/rec room, pool and a monthly fee of $220. Probably too small for a couple with a child, or even a dog (although that is allowed with restrictions). Less than 4 months ago this sold for $189,000. See if you can get the price reduced even more!

In the city of El Cajon is a cluster of affordable homes surrounding Renette Park. 1139 Emerald is one of these and the biggest in this list at 1,024 square feet. It has 2 beds, 1.5 baths and they’re asking $155,700 which brings it to $152/sq.ft–perhaps the best bargain of the bunch. It sold for about the same price just a few months ago, so maybe there is some wiggle room in the price. No rec room but there is a pool and the HOA fee is $200/month.

1139 Emerald, El Cajon

There you have some scattered bargains around the East County. There are lots more you can find at Redfin by narrowing the search to your price range. As you study the maps, note the proximity of each listing to parks, shopping, transportation facilities, etc. If such a home tickles your fancy, go there, meet some people, and get a feel for the community. They might be your neighbors for years to come.

You can follow my East County blog or here, and Carol’s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.

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

Monday Madness – Luxury East of Interstate 5 ?

Who knew?

There are some who say there is no civilization East of Interstate 5. Others would say “Them’s fightin’ words padnuh!”. Of course there is civilization, even comfort and luxury in the Eastern regions of our county. It’s just spelled a little differently. ‘Luggjury’ to be exact and it’s seen in a different way too.

City Slicker vs Country Bumpkin

Vertical living in the city seems to stimulate some and create an illusion that nothing exists beyond the hustle and bustle of the concrete jungle, the surf & savvy of the high life. Horizontal living in the country revels in the openness, expansiveness and freedom that the lifestyle brings.

This parallels studies that show indigenous dwellers in dense forests become disoriented when faced with open spaces, and those accustomed to open spaces feel confined and confused in the dense forest.

Enough fun & philosophy, let’s consider some actual luxury homes available to you right now in San Diego’s East County.

1191 Hacienda Drive, El Cajon

For the price of a small beach house you can have all this. On 0.68 Acres you have room for central a/c, solar heated pool, self sufficient guest or mother-in-law quarters with private entrance, RV parking and lots of glass to take in the view. Buy with Redfin and Save $18,998*

Country chic doesn’t require dressing up, leaves room for family and entertaining and for all the redneck toys that make it worthwhile. It ain’t for everyone and that’s just fine.

Test yourself: which scenery do you prefer; dumpster divers or lush foliage?

 

Maybe you should buy in East County!

Luxury here tends to include horses, land, trees & gardens, a comfortable distance from neighbors, and safe schools.

You can follow my East County blog or here, and Carol’s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.

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

Extreme Diversity – Open Houses

From $80 to $1000 thousand – Something for You?

Our open house journey begins with the pathos of mobilehome living and steps up to the comfort of a million dollar home sprawling over nearly 5 acres.

10767 Jamacha Boulevard, in Spring Valley is known as Lamplighter Village to the locals. This particular listing appears cozy, comfortable, but there’s more to the story (see below)

Of course there is a pool, spa, 4 car garage, wood deck, fireplaces, central air, RV parking and all the expected amenities at the Willow Bend home and it’s open for your viewing this weekend. You may expect more on luxury East County homes in next Mondays blog.

If you look at my recent blog on mobilehomes, Goin’ Mo-bile, you’ll see some of the pros & cons of this lifestyle. Today we report on a specific example in the Lamplighter Village. According to a Rip Off Report, rents have apparently been rising beyond reason. The listing above offers no mention of the current rent or any other problems at the park, but one complainant had a lot to say: “MY INCREASE HAS BEEN 50% IN 3 1/2 YEARS …” His rent was raised in steps from AUG 02 $616.00 to OCT 05 $920.00. He was trying to sell his house even as he warned others not to buy in this park. Many homes were available there but the high rent seemed to prevent their sale.

You can follow my East County blog or here, and Carol’s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.

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

Goin’ Mo-bile!

Mobile as a Mountain, heh, heh

Mobilehomes are massively misunderstood by most. Many decades of history have failed to distinguish them from trailers and motorhomes, and now manufactured homes add to the confusion.

First, mobilehomes are not mobile. Typically they are parked, the wheels removed, a skirt placed around the base … and then they never move again until they go to the junkyard. Trailers are towed behind a car or truck for true mobile living or weekend vacations. Motorhomes are self propelled (duh!), and manufactured homes are often indistinguishable from single family homes.

Spring Valley, Lakeside, Santee and El Cajon have a number of mobilehome parks–planned communities of maybe 100 units with amenities similar to a condo development (pool, clubhouse, etc). Visit and you’ll find mostly retired folks whose children have moved on.

Like any housing mode that survives the test of time, mobilehome living offers advantages and disadvantages. Mobilehomes are typically far less expensive than homes attached to a single lot. The amenities are attractive to those who like the option of a social environment. There is a closeness among neighbors that few other options offer. Residents have a bit of land for gardening, a private parking space right next to their front door, and they don’t require an elevator to get home. OTOH, even when the house is payed for, residents continue to have to pay rent. Usually they have no control over the cost of rent and this has sometimes been a problem in Spring Valley when rents go up dramatically.

Mobilehomes might not be the best investment for most of us but the seniors and others who fill the mobilehome communities aren’t stupid. Many of them have probably made a smart move. I leave it to you to evaluate the economics- you may know someone for whom this lifestyle is ideal. Let’s have a look at some current listings…

1120 Pepper Drive, El Cajon

Includes a 3rd potential bedroom, parking for 2, carport, central air…

9902 Jamacha Blvd

Price reduced on this new home with warranty.

There’s much more to consider with mobilehomes. They are difficult to resell. There are few spaces available in California and the number decreases as property values rise and more profitable use of the land is discovered. A few mobilehome parks are owned by the residents who control costs somewhat and have more to offer when they want to sell their unit.

You can follow my East County blog or here, and Carol’s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.

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

Monday Madness – Eating Lemon Grove, part 1

Gluttony or Gourmet ?

Let me guess that you like food. In a recent survey more than 3 of 4 people confessed that they like food. Don’t be ashamed, you are not alone. Let me tell you about a local city that has more restaurants per square mile, more restaurants per person, and more restaurants than you can shake a stick at.

Lemon Grove is a compact city ten miles east of downtown San Diego with about 3.80 square miles and 24,000 people, yet there are more restaurants than all your fingers, toes and other protuberances. It’s easy to walk along Broadway from one end of town to the other. For the hungry pedestrian there are many delights. Wear loose clothing on this tour- you’ll put on some inches!

Starting at the west end at College avenue where Broadway merges with Federal Boulevard we find a cluster of eateries. Access to this center is tricky- only right turns will get you in (see map), only right turns will get you out. For now we’ll ignore the possibilities at nearby Marketplace at the Grove mall (technically they are in San Diego).

Rojelio’s Taco Shop, ‘Home of the California Burritos’, is well established with a full and fun Mexican menu. ATM & credit cards OK.

Yum Yum Donuts now offers cappuccino & breakfast sandwiches and accepts credit cards.

Not far from this tiny strip mall are a few available homes, mostly in the city of San Diego near the Marketplace. 3719 Racine Rd is a single family detached home built in 1951 with 821 sq.ft. on a 10,000 sq.ft. lot. 2 beds, 1 bath for $359k. A bit high at $437/sq.ft., ask about a lease purchase.

Boll Weevil is an old standby offering hearty burgers, beer, arcade games and pool tables. Always popular with the locals.

Also near Marketplace is 6544 Lemarand Av, single family detached built 1953 with 1,044 sq.ft, 2 beds, 1 bath for $285k. At $273/sq.ft. it may be a good deal. Listed only 22 days.

The Old Barn Steak House is a mystery. It’s been closed lately and the reasons aren’t clear, but it’s expected to re-open soon.

Finally, right across the street from Marketplace is 6550 College Grove Dr #38. For only $160k you have a condo, 2 beds, 2 bath and about the same size as the previously mentioned sf homes. Of course there is a pool and perhaps a sense of community, and of course that costs extra- about $217/mo for HOA fees.

Sushi is a Japanese restaurant, as you would expect, and very classy looking.

Go home now and work off those pounds. This is just the awful beginning and there are many, many more restaurants along the strip in Lemon Grove. Come back in a week or so for another gluttonous gander.

You can follow my East County blog or here, and Carol‘s Hillcrest, North Park and Ocean Beach blog. You’re at Redfin, the unbiased source for local real estate information.