What Happens After Our Economic Storm Passes?
The unemployment rate in San Diego County rose to a record high of 9.3 percent in March, up from 8.9 percent the previous month, the state Economic Development Department reported Friday. The March unemployment rate in San Diego County is the highest to be recorded since the way the figures are calculated was changed in 1990.
San Diego real estate market: The longer term trend still seems to be looking toward a lot more pain as there are major economic and social changes that will have to be worked out before a sustained recovery can happen and these will take many years. There are also trillions in debt that will have to be mitigated before main street recovers and that is bad news for financial institutions.The International Monetary Fund (IMF) believes we've only acknowledged $1.29 trillion of the $4 trillion in total global credit losses to date. That means we're not even a THIRD of the way through the process.
To me it seems certain that when this economic storm has passed, we will no longer hold the global economic high ground. Can't happen here? Consider that the economic high ground has changed every 250 years for the last 750 years. The Dutch lost the economic high ground to Spain. History remembers it as the Tulip Bubble. 250 years later, Spain lost it to England and England lost it to us 250 years ago. We are in the process of losing the economic high ground to China.
Each of those economic transitions was caused by the same two conditions: The losing country had accumulated more debt than their economy could support and the losing country had such incredible hubris they were unable to see it. San Diego real estate blog
California Foreclosure Sales Jump 80% in March
On March 12, 2009, I wrote a post entitled New Law Extendeds California Home Foreclosures (again). This prior post talked about California's latest 90 day foreclosure moratorium law. These mis-guided laws will result on a wave of California foreclosures rather than the past trickle we would have seen. If nothing else, this will just extend the bottoming of the San Diego/California real estate market.
The existing California foreclosure process has been tested and is a known, proven method of moving real estate property from non-payers into strong new purchasers. Currently with the California law enacted last year and the latest 90 day extension, the California foreclosure process now takes a minimum of 231 days. To bring this back to the real world, the 231 days is from the start of the process. This California foreclosure does NOT start until the homeowner has been behind a number of months on their payments. So, with all the programs to try to work out some type of loan modification, many times the actual foreclosure process does not start for many months past the first missed payment.
The initiation of the foreclosure process is further delayed by Government backed (FHA/VA) loans and Government controlled (IndyMac) lenders. In California, it is now quite common for the time a homeowner can stay in their home without making any mortgage payment to exceed 12 months!
These facts are never mentioned in most TV/newspaper stories that run stories on the plight of the troubled homeowner who is being foreclosed. To top things off, just yesterday, a Los Angeles Acorn spokesperson was saying that they were considering non-violence protests to block the on-going foreclosure evictions. San Diego real estate blog
Home Builders Has Largest Up-Tick in Five Years
The National Association of Home Builders index rose to it's largest monthly increase in the past five years. This is great news, but it still shows that only about one in seven builders thinks business is good or fair.
The reasons behind this real estate market are really no secret: mortgage rates near all-time lows, both Federal & California state home buyer tax creditsand the optim real estate buying season.
Here in California, besides the $8,000 first time home buyer's credit, California has a 5% (max. $10,000) new home credit. This combined with home mortgage rates around 4.75%, all make for a very appealing reason to get a home of your own. San Diego Realtor
San Diego Housing Turnaround
San Diego real estate market… I have the idea that many think our economic downturn will last forever, near capitulation point, so all the doom and gloom today, is to be expected. Even though I'm more optimistic than some, a mid-2009 recovery seems a bit early to me; late '09 or sometime in '10 seems more likely.
In Orange County Calif., housing economist Mark Schniepp said:
Home sales sharply higher (to their highest levels since October of 2005). Prices appear to be stabilizing in some areas; overall, prices during February were not off as sharply as they had been. For the state, off only 2.2 percent from January. We appear to be at bottom in prices or nearly at the bottom; it is a regional issue now.
It is not surprising that 1st time buyers are jumping in. For years they were crowded out by speculators armed with easy money. There is certainly a segment of pent-up demand.
All the same, the stock market appears to be bottoming out. It's getting pulled down by uncertainty more than anything; once that uncertainty is removed, it will start to recover. San Diego real estate agents
4 Keys to Buying a San Diego Bank Foreclosed Home
Thinking of buying a San Diego foreclosed home?
#1. Use a Realtor.
#2. Inspect the home prior to placing an offer.
#3. Condition your offer on a complete physical inspection.
#4. If the seller is not providing a termite clearance, either insist on one or condition your offer on your approval of a California licensed pest control inspector.
Though this video shows obvious physical damage, there can be other hidden damage that only a competent physical inspector can detect. Personally, I would never write an offer to purchase any San Diego home if it was not contingent of my approval of the physical inspection report.
Banks know nothing about the vast majority of homes they sell through foreclosure. AS IS means just that! This is where the advice of an experienced San Diego real estate professional can prove invaluable!
San Diego Real Estate Sales – Double Digit Value Drops
In the table below, www.brokerforyou.com looked at selected San Diego neighborhoods that had 20 or more closed single family homes & condominium sales in February 2009 & February 2008. The graph show the median sales prices.
Data compiled by MDA DataQuick & published in the San Diego Union-Tribune. Chart produced by www.brokerforyou.com
One should keep in mind the above chart is just for a one year period (February 2009 vs. February 2008) and San Diego home values topped out around the Summer of 2005!
Lastly, I would note that these figures do not take into account the very prevalent seller concessions (usually payment of thousands in the buyer's closing costs) necessitated by an ultra strong buyers market place.