San Diego homes sales in October have increased year-over-year basis for the fourth straight month.  Sales have also increased for the third straight month which has not happened for this time of the year since 1992.  Foreclosures continue to represent approximately 50% of the sales.  Despite the steady drum beat of bad national economic and financial news, buyers in San Diego are pulling the trigger and buying homes.

San Diego Affordability Index is now 38.7% which represents the percent of homes on the market affordable to San Diego households earning the median income.  San Diego’s median income has increased in the past year from $69,400 to $72,100.  The Affordability Index was at it’s low at 6% in 2005.

It’s hard to predict a bottom of a market, but the data continues to suggest that the time is now.  The number of foreclosures continue to decline.  The demand for San Diego real estate is still strong.  Eventually, the supply will decrease and there will be upward pressures on housing prices in San Diego.

San Diego Weekly Foreclosure Lists 

Please click on the link below to receive the latest recorded foreclosures (Notices of Default, Trustee Sales, & Bank Owned) for the week ending 10/31/08.  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.eme01.com/files_landing_page.php

Courtesy of Ellen Kiss

I have to give credit to Ellen Kiss from Del Mar for summarizing the Fed Mortgage Bailout in terms that make it perfectly clear who the beneficiaries of this legislation really are. This is good news if you are an investor or first time buyer in the North San Diego County areas such as Carlsbad, Oceanside, Vista, and San Marcos. If you have a loan that will turn “toxic” and have qualifying income and some cash to cure the situation this is OK news, read this careful, and call me for an interpretation that applies to your situation or that of a friend. If you are a homeowner choking on debt or a job loss then “via con Dios” call me about the benefits of a short sale to avoid foreclosure.

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

Sub-prime loans. From the borrowers perspective.

So here we are beaming along. Home inventory seems to be at recent historical highs, rates are low, prices are down and buyers can get killer deals. It’s like shooting fish in a barrel… Not so fast there pilgrim… Enter the Short Sale.

“So what is a short sale?” I’m frequently asked. No the bank isn’t selling shorts…but they are in a monetary way losing them. A short sale occurs when the borrower can no longer maintain the mortgage and the value of the home is less than what is owed against it. The borrower can avoid foreclosure by finding a buyer who is willing to buy the home for less than what is owed. The lender(s) then agrees to allow the borrower to sell the home for less than what is owed, take a loss and come up “short” for the difference. This is not exactly the type of thing that appears in the business model, but that’s it in a nutshell.

In many areas of my marketplace in North San Diego short sales make up 70% of the active listing inventory. Yet short sales account for only 7% of the total sales. This amazing disparity is evident when you take into consideration that only 20% of short sale listings actually sell. In addition, short sales take 2-6 months to get bank approval and are subject to foreclosure , overbid, rejection, counter offers at a higher price or just getting lost in the shuffle at any time. And the processors at the banks loss mitigation departments could care less because you are just one of hundreds they have to deal with. So what does all this mean in the big picture?

1. A lot of homes currently listed as short sales will soon be Bank Owned.

2. It appears there are a lot more houses for sale than there really are because the vast majority of short sales are unsellable.

3. If you think you are going to buy a home that is a short sale you better not be in love with it. 2-6 months of buyer related stress?

4. Something’s fishy at the bank. They seem so efficient at losing money.

So if you think some of these details are going to put a hitch in your desire to run out buy a short sale just wait until you visit some that are for sale. Families are getting kicked out. They can’t maintain their mortgage so why should they care about the home? As a general rule they don’t. Oh, and why should they care about doing the mountain of paperwork either? To quote a recent home buyer about shopping short sale listings “It’s depressing.”