“The National Association of Realtors says pending U.S. home sales rose in June in an unexpected piece of positive news for the beleaguered market.

The group’s seasonally adjusted index of pending sales for existing homes rose 5.3 percent to 89 from a downwardly revised May reading of 84.5. The index was 12 percent below year-ago levels.

Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 84.3. The index, which sunk to a record low of 83 in March, stood at 101.4 in June 2007.”

August 6, 2008 The Associated Press.

San Diego Foreclosure Update

Last week the US Congress and President Bush bailed out Fannie Mae and Freddie Mac, the nation’s two largest mortgage finance companies which own or guarantee about $5.2 trillion of the nation’s $12 trillion in mortgages. The new housing bill gives the Treasury Department authority to lend money to Fannie Mae and Freddie Mac, or buy their stock. It is called the “Housing and Economic Recovery Act of 2008.” The Treasury Department can spend up to $800 billion.

So, how does this housing bill affect foreclosures? The bill sets aside $300 billion for troubled homeowners facing foreclosure to refinance their loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

Now will this bill have an effect on foreclosures in San Diego? I do not know about you, but this provision seems pretty convoluted. Banks have to write down to 85% of the current value, and the troubled homeowner has to come up with 10% cash down-payment for the new FHA loan which is limited to $550,440. I do not think either of these two things will happen. This bill has no control over the mortgage interest rates. People are defaulting because they cannot afford the monthly mortgage payments that were initially established at low rates, but are now resetting at higher rates. I do not believe this bill will have any affect on foreclosures in San Diego.

This bill will prevent the collapse of our home mortgage financing market and allow new homeowners to obtain financing. This is good for all of you out there looking to take advantage of the falling home prices! The bill also offers a $7,500 tax credit for first time home-buyers and permanently fixes the FHA insured loan limit & Fannie and Freddie conforming loan limit to $625,500.

San Diego Weekly Foreclosure Lists

Please click on the link below to receive the latest recorded foreclosures (Notice of Defaults, Trustee Sales, & Bank Owned) for the week ending 07/28/08. The lists are searchable by zip code or city by using the find function under the edit pull down menu. If you have any questions please call me at 760-431-8724.

http://www.easyhouserewards.com/Foreclosure_List2.html

From 6/1/2008 to 7/27/2008 a whopping 337 single family homes and condos SOLD in Oceanside CA.  Other local areas Vista, San Marcos and Escondido are experiencing similar sales volume. That is an incredible number and can only mean that the Real Estate Market is far from being dead as the Fear de jour Media would have you believe.  Have you seen a headline anywhere that says “Houses selling like hotcakes”?  The fact is investors and first time buyers are stepping up to the plate in a big way while rates remain near record lows. 

Many sales are reported closed at more than list price.  To check out the action click here.  En Fuego.

Bring your pajamas and some hot chocolate.  And Teddy.

HomeDexT  June 2008 Summary Report
Single-Family Detached Homes

Rancho Santa Fe (92067), Del Mar (92014), Solana Beach (92075), Carmel
Valley (92130), and Cardiff (92007) were the least affordable areas in North San
Diego County with affordability levels below five percent.

Carlsbad (92008, 92009, 92011), Rancho Bernardo (92127), Bonsall (92003),
Escondido (92029), and Encinitas (92024) reported affordability percentages
between five and nine percent.

Carlsbad (92010), Rancho Penasquitos (92129), Rancho Bernardo (92128),
Valley Center (92082), Poway (92064), Fallbrook (92028), Pala, (92059), and
San Marcos (920 had affordability percentages between 10 and 19 percent.

Ramona (92065), Oceanside (92056, 92057), Vista (92081), and Escondido
(92025) had affordability rates between 25 percent and 27 percent. Escondido
(92026, 92027), San Marcos (92069), Oceanside (92054), and Vista (92084)
reported affordability percentages between 30 percent and 39 percent.

Vista (92083) had a 50 percent affordability percentage, the highest in North County.

Prepared for the North San Diego County Association of REALTORS® by Robert Brown, Ph.D.
Department of Economics California State University, San Marcos. Inquiries may be directed to Robert Brown
rbrown@csusm.edu

I found your weblog just now. I’m curious to find out if you know why Oceanside has been hit so hard by the current market downturn seemingly harder than other areas?
Thanks,
TL

Hi TL,

Oceanside is really in line with the over all county wide average median price decline. Every community is unique. Oceanside has a very diverse housing market. There are about 40 different neighborhoods or identifiable demographic areas within the city housing market.

Here are some terms use to describe some of the neighborhoods, in some cases their actual names Oceanfront, The Old Town Site Downtown, South O, Ranch Del Oro, Mesa, Fire Mountain, The Front Gate, The Back Gate, Tri -City, Cloud Nine, The Valley, The East Side, Morro Hills, Hennie Hills, Peacock Hills, Jefferies Ranch, The Calles, Oceana, and the list goes on.

Housing prices in some of these areas are holding up rather well. Oceanfront is always in demand, and fetches the highest price. It’s been dinged but not crushed. In addition, because of the the baby boomer demographics, age 55+ communities are in demand holding their value.

The areas that are getting hit the hardest are the communities that had a large volume of sales from 1998 to 2005. These areas are typically mid to entry level priced that sold between $400K and $600K. During this period Oceanside had a large inventory of homes that fit the description.

From 1998 to 2005 the housing market was white hot with prices rising at double digit rates. Instead of putting on the brakes and allowing things to cool lending institutions actually relaxed their qualifying requirements adding fuel to the buying frenzy. Buyers could get +100% adjustable rate mortgages with easy qualifying. These and other easy to get loans are known as SUB-PRIME because the don’t meet traditional down payment, credit and income requirements. Many homeowners who had equity used their homes as cash cows to pay bills, buy cars or toys. The rest is history in the making. Loans adjusted and highly leveraged homeowners found they couldn’t afford the new higher payments. They also found there was no way to refinance out of the situation since prices stopped going up. FORECLOSURE and SUB-PRIME became a global household name.

The market correction was a natural cause and effect action that has repeated itself many times throughout history. This is where opportunity historically appears for those willing and able to take advantage.

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