San Diego Home Foreclosures Up 66%
San Diego home foreclosures
Dataquick of La Jolla, reported that San Diego County June notices of default were up 66% over May. But, the number of default notices were down 11% from June 2008.
John Walsh, President of DataQuick said: “There is a perception that the housing market is dragging along bottom, that it probably won’t get much worse, and that the lenders need to get serious about processing the backlog of delinquencies, either with work-outs or foreclosure. We’re hearing that some lenders and servicers are doing just that, hiring more people to do the necessary paperwork. That means the foreclosure numbers will probably shoot back up during the third quarter.”
San Diego Home Foreclosure Ploy
San Diego housing market
In the San Diego housing market the undisputed hottest selling properties are bank-owned, foreclosed homes and condos.
Many San Diego home buyers are exhibiting characteristics of the famous Alan Greenspan term, “irrational exuberance.” Use of the terms, “bank owned,” “bank foreclosure,” “lender reposition,” “foreclosure sale,” etc., are sure to draw a crowd to view the property. If the property shows half-way decently, there will be offers, and sometimes multiple offers.
Adding my observation to the above facts, a number of lenders have hit on a marketing ploy to create a buying frenzy which guarantees an almost instant sale. In the majority of cases the offer(s) exceed what may have been realistically expected if the property was marketed the traditional way.
Here are some actual examples of this technique for San Diego home sales.
- On 4-8-09, a bank owned home in east Carlsbad was listed at $499,900. Based on the location, age and size of the home, I estimated the current value at $575,000 to just over $600,000. Within one day of the listing, the listing agent had multiple offers. According to the agent, the lender required it to be on the market one week before they would look at any offers. The agent speculated that based on the number of inquires, she would have 40 to 50 offers in the one week period. This home sold for $597,000. The sales price was almost 20% over the listed price. Doesn’t a sale of $97,100 over the listed price suggest that it was listed way under the market?
- A bank-owned Little Italy one bedroom condominium was listed in March for $234,900. The estimated fair current value for this condo was approximately $275,000 to $280,000. The listing agent stated that within 3 hours of the MLS listing being submitted, he had an offer. Again, the lender would not look at any offer until the condo was on the market one week. This San Diego property generated 21 offers within the 1st. week, of these, 11 were at or above the $234,900, listed price. This Little Italy condo sold at $295,600, or $60,700, approximately 26% above the listed price! I was told the accepted price was $15,000 above the next highest offer.
- A San Carlos planned-unit-development, bank-owned 4 bedroom was listed at $344,900. The estimated fair value for this condo was approximately $410,000 to $425,000. Inside of one week, this San Carlos property had an accepted offer at $410,000. This was approximately 19%, or $65,100, above the listed price!
Banks are purposely under listing property with the strategy of creating a buying frenzy to result not only in a very quick sale, but, a sale at or above the fair market value. Is this practice fair or even legal? It is on both counts. If the bank does not list it properly, they could end up with a sale way below the current fair market value. On the other hand, it isn’t fair to neophyte buyers/agents. Buyers and/or their agent who do not recognize the ploy, may be wasting quite a bit of time writing offers that in some cases, will not even be considered or countered. Also, what about shattered expectations? A number of buyers/agents may honestly believe that their full price offer has a chance of being accepted. In reality, they not only have zero chance of getting their offer accepted, but in the majority of cases, they will not even get a counter-offer.
So what is a potential buyer looking for a bank owned property bargain to do? If they are smart, the best advice would be to seek out an experienced agent and implicitly follow that agent’s advice.
San Diego Home Foreclosure … Is It Really So Bad?
In a Wall Street Journal article published on 1-31-09, Ramsel Su (a real-estate consultant and a former REO broker) made some interesting and controversial observations on the current housing market bust.The intent of modification programs to date is to create a generation of mortgage slaves. Fortunately, mortgage slaves can free themselves via foreclosure, and the masses are choosing to do so."
Personally, here in San Diego, I've seen a number of media outlets review the typical hard working family forced to move because of their home being foreclosed. These situations are indeed sad and make for interesting human interest stories.
San Diego Home Sales Up … Prices Drop 30%
A total of 19,926 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 19.2 percent from 16,720 for November, and up 50.5 percent from 13,240 for December 2007, according to MDA DataQuick.
Regionwide, foreclosure resales accounted for 55.7 percent of December's resales activity, up from 54.7 percent in November, and up from 24.3 percent in December 2007.
| Sales Volume | Median Price | |||||
| All homes | Dec-07 | Dec-08 | %Chng | Dec-07 | Dec-08 | %Chng |
| Los Angeles | 4,430 | 5,848 | 32.0% | $470,000 | $320,000 | -31.90% |
| Orange | 1,731 | 2,580 | 49.0% | $565,000 | $397,000 | -29.70% |
| Riverside | 2,503 | 4,435 | 77.2% | $355,000 | $209,000 | -41.10% |
| San Bernardino | 1,518 | 2,862 | 88.5% | $315,000 | $180,000 | -42.90% |
| San Diego | 2,468 | 3,325 | 34.7% | $430,000 | $300,000 | -30.20% |
| Ventura | 590 | 876 | 48.5% | $525,250 | $338,000 | -35.60% |
| SoCal | 13,240 | 19,926 | 50.5% | $425,000 | $278,000 | -34.60% |
San Diego Negative Home Equity
San Diego real estate mortgage bust. Much has been made of stated income, nina, ninja, etc. loans. The fact remains that the debt to income levels that were accepted during the boom time for people who could document their income exceeded 55%. Sub prime borrowers who could document their income could have DTI levels from 50-55%.
What is not talked about is that Fannie and Freddie loans could get approved with DTI levels as high as 63%. Typically a borrower would need some other strong factor such as high FICO or 6-8 months in reserve. Nevertheless, people are not walking from their homes just because they are upside down. Like most things in life there is rarely one answer, rather a multitude of factors.
Get ready for the next wave of foreclosures, just months away. This new wave of foreclosures will be prime mortgages on upper end homes. San Diego real estate agent
San Diego Home Mortgage Lenders … Hardball or Common Sense?
It's a shame, but in today's San Diego real estate environment, home lenders have taken on the personification of evil. It seems we are always hearing about San Diego banks or home mortgage lenders who do not want to work with homeowners in trouble.
Though this may have held some validity a year or two ago, it is just the opposite today. Effective July 1, 2008, a new California law mandates that the lenders try to contact and work with homeowners prior to filing a notice of default. This requirement adds about an additional 30 days before a notice of default can be filed. From the notice of default date, there is a 90 day period at the end of which is a twenty-one day advertising period. Only after this advertising of the pending foreclosure, can the actual sale or transfer of deed occur.
So with all this time, why do we still hear ‘evil lender' stories? Perhaps one reason is that many San Diego homeowners owe more than their homes are worth. They are under the misconception that they can give the deed back to the lender, avoid foreclosure and perhaps receive a less severe credit rating ding. The problem arises when there are junior liens on the property. These junior liens can be anything from an equity line to a personal loan secured by the home.
A lender may not want to take a deed in lieu of foreclosure because taking title in this manner does not extinguish any junior liens. However, a foreclosure by a senior lien holder essentially wipes out all junior liens.
Also, a borrower cannot simply transfer title to the lender without the lender's permission. Because some lenders have refused to negotiate and accept the deed in lieu of foreclosure, some creative homeowners have quitclaimed the property to the lender anyway, and have recorded the instrument without the lender's permission.
In 1993, the California legislature passed a statute to protect lenders from involuntary (and invalid) transfers of real property to the lender. The lender must record a "notice of nonacceptance of a recorded deed" in the county where the real property is located. Redelivering a grant of the real property back to the original homeowner (e.g., borrower) does not legally retransfer the title. (Cal. Civ. Code § 1058.5.)
California Home Foreclosure Filings fall 32%
San Diego Real Esate Sales Increase
San Diego Condominium Sales Price Appreciation
#1 Key To Purchasing Real Estate in the San Diego Market
San Diego California Home Sellers Lose Big
The San Diego California Real Estate Great Depression
1.2 Million Homes in Foreclosure
Survey Says Home Values Must Fall Another 14%
A Record Number of Homeowners Avoid Foreclosure in the Second Quarter
Jumbo Financing and the Impact on The San Diego Real Estate Market
san diego residential real estate
|
|