San Diego real estate – 2009 the Option ARM resets
Many local mortgage lenders feel that San Diego & Southern California were the prime locations for the adjustable Option ARM loans. Now, just when many believed the mortgage crisis was winding down, San Diego real estate will be facing another major obsticle.
Our first post on this problem was San Diego Real Estate … The Coming Next Wave of Foreclosures, published on 7-17-08. It took a little while, but now the major media outlets have picked up on this problem. San Diego Realtors
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San Diego Real Estate … Will Low Interest Rates Help?
Will historically low interest rates be the key to turning around or putting a bottom in place for the San Diego housing bust?
Mortgage rates are near their lowest levels in nearly 40 years. Plus, the government wants to offer new borrowers a 4.5% mortgage rate as an incentive.
Ivy Zelman, chief executive of housing-research firm Zelman & Associates, estimates that nationally, even with such a low rate, only about 67% of U.S. households can afford a house. Homeownership was nearly 68% in the third quarter, according to the Census Bureau, implying there is virtually no untapped demand for homes.
San Diego Real Estate – It Could Get Really Ugly
Did you see Fortune magazine's article (12/22/08) regarding their picks for the worst 10 real estate markets in the nation for 2009? Eight of the 10 worst markets they've called are here in California. Fortune's article projected valuation losses in the eight California cities of 21-25% for 2009 and additional 2-5% losses for 2010. Really, not what you want to hear anytime, but especially at new years.
Related other blogger's posts:
- San Diego Real Estate Bubble Caused Local Recession : The Real …
- Housing Analysis: Real Estate Prices fall again in December 2008
- The Housing Chronicles Blog: Investors returning to California's …
- The Housing Bubble Blog » Bits Bucket For January 6, 2009
- San Diego real estate blog » San Diego Real Estate Bust of 1945?
- Bubble Markets Inventory Tracking: More On the Purchase
- San_diego San Diego’s local economy was largely real estate driven in the early part of the century. The real estate bubble fueled an economy that fed real estate agents, mortgage brokers, and construction workers, and fed off itself. …
- VANCOUVER, B.C. – January 5, 2009 – The record-breaking real estate market cycle in Greater Vancouver, longer than normal at seven consecutive years, ended in 2008 amidst global economic challenges. The change brought relief from rising …
- A blog from a real estate industry writer, public speaker, and consultant with MetroIntelligence Real Estate Advisors, a division of Beacon Economics; providing commentary and news citations on regional, national and international real …
- Motivated sales, which include foreclosure auctions and banks selling homes taken over for non-payment, increased 193 percent from January to October 2008 from a year earlier, New York-based real estate data company Radar Logic Inc. …
- San Diego Real Estate Bust of 1945? by bob711 — published on December 10th, 2008. This is a must watch video, with a lot of solid points. This real estate bust is NOT fair! Already the California legislature is considering a four month …
- Number 2, it is typically still ok to buy at the peak of a "normal real estate cycle." Recall a few years back during the bubble peak a lot of folks were using the prior cycle and said, "well, we bought at the peak then and we did ok. …
San Diego Home Values Drop Over 30%
MDA DataQuick just reported median price of all homes sold fell nearly 6 percent from October to November, dipping to a 6-1/2 year low to $305,000. Since November 2007, the median price of all homes sold was off more than 30 percent. Plus, the median price was off more than 41 percent from the market peak of $517,000 in November 2005.A San Diego 2009 Real Estate Market Recovery?
San Diego real estate appreciation will never be the same without insanely-loose credit. Where will the spending for a housing recovery come from? People are tightening their belts, and it's not a temporary thing. Our lifestyles have to change, and it's going to be ugly combined with all the other factors (like $51 trillion in unfunded government liabilities).
If a San Diego housing recovery means getting back to 2005 highs, that seems unlikely in the next 2 to 3 years; maybe in 8 to 10 years. Stimulus packages and bailouts may allow the San Diego housing recovery pipe-dream to continue a little longer, but confidence is broken and mortgage lender responsibility is out the window.
I know this forecast is not something that any San Diego homeowner wants to hear right now, but it's a harsh possibility that we all have to accept.
It would be better for the news outlets, politicians, pundits, realtors, et al., to start telling people the truth, rather than filling their heads with pipe dreams, whilst they attempt to thwart reality and prolong the inevitable.
Needless to say, I hope I’m wrong and 2009 is the long awaited return to San Diego annual real estate appreciation.
Prior related posts:
San Diego Real Estate to Drop 20% in 2009?
San Diego Home Mortgage Lenders … Hardball or Common Sense?
Existing Home Sales Increase … Prices Fall
Commercial Real Estate Slump Possible in 2009
San Diego Real Esate Sales Increase
Next … Direct Housing Bailout?
New Home Construction Falls
California Home Prices Forecast to Fall 6% in 2009
San Diego Condominium Sales Price Appreciation
Emergency Rescue Package – The Devil’s in The Details
Is this a mess or what?
You live in a San Diego new housing development where all homes were sold out in 2004. You and your neighbor paid $750,000 for your identical homes. You have been paying your mortgage on time, but your neighbor is facing foreclosure. As we all know, most San Diego home values are way down from their 2005 highs. So, let's say the homes in this example are now worth $525,000 each. What happens when your neighbor gets his loan modified to $525,000 simply because he can’t afford his house?
Actual clause in the government rescue package:
Sec. 109. Foreclosure Mitigation Efforts
CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS – Upon any request arising under existing investment contracts, the Secretary shall consent, where appropriate, and considering net present value to the tax-payer, to reasonable requests for loss mitigation measures including term extensions, rate reductions, principal write downs, increases in proportion of loans within a trust or other structure allowed to be modified, or removal of other limitation on modifications.
Also, be sure to read these related posts:
Are the Rating Agencies at The Cause of Our Financial Mess?
Housing Bailout – The Real Cause?
The Paulson Plan – Still Wrong
Government Bail-Out – Risk & Reward
Housing Bail-Out … Pass or Depression