I found some interesting information, I don't like predictions very much because they are often mistaken, but taken for what they are, it is an interesting piece of information to have.

Let me start with a brief introduction first.

Most of what I have read for the 2009 San Diego Real Estate Market is not very promising. The forecast is not a sunny one.

2008 was the year that sub prime borrowers and speculators got hurt by the real estate crisis, and San Diego had many of both. Inundating the market with Bank Owned Properties which in turn made the prices fall...continuously. Many experts are predicting that 2009 will be the year that the rest of the population joins the sub prime borrowers and the investors in their sorrows.

Up until now the hardest hit areas had been on the lower end markets that had been plagued with sub prime borrowers.

On Dec 23 Credit Suisse stated that 8 million homes will go into foreclosure from now until 2012. According to Buisnessweek this represents 16% of all US households with a mortgage. One of the major concerns now is that job losses due to the critical economic situation will force previously untouched communities and wealthier communities to start feeling the effects. Making matters a little more complicated, are the Option Arm and Alt-A loan resets that are coming in 2009 which will create a whole new wave of foreclosures coming into the market. All this at a time when according to Housing predictor marks the fourth year for California , where more people are moving out of the State than into it.


WORST MARKETS 2009
2009 Forecast
1. Detroit, MI − 24.3%
2. Riverside, CA − 23.9%
3. Stockton, CA − 23.8%
4. Los Angeles, CA − 21.7%
5. Miami , FL − 21.4%
6. Anaheim, CA − 21.1%
7. Las Vegas , NV− 19.8%
8. Fresno, CA − 19.7%
9. Phoenix, AZ − 19.6%
10. San Diego, CA − 19.5%


BEST MARKETS
2009 Forecast
1. Bloomington, IL 3.6%
2. Grand Junction, CO 3.1%
3.Billings, MT 3.1%
4.Fargo, ND 2.9%
5.Lander, WY 2.3%
6.Trenton, NJ 2.3%
7.Morgantown, WV 2.0%
8.Logan, UT 2.0%
9.Bozeman, MT 1.8%
10.Albany, GA 1.8%
11. Fairmont, WV 1.6%
12.Minot, ND 1.6%
13. Great Falls, MT 1.4%
14.Livingston, MT 1.3%
15. Bismarck, ND 1.3%
16.Missoula, MT 1.2%
17. Grand Forks, ND 1.2%
18. Paducah, KY−1.2%
19.Piedmont, SD −1.5%
20. Lawton, OK −2.1%
21. Black Hills, SD −2.1%
22.Edmond, OK −2.8%
23. Oklahoma City, OK −2.9%
24.Lincoln, NE−3.0%
25. Amarillo, TX −3.9%

I am happy to see 17 areas that have a positive forecast for 2009.

It is important to remeber that when talking about area markets there are different markets within one area, so not all of San Diego will have such a negative year just like not all of it had a terrible 2008. Also, this will be the best year for people who are considering the purchase of a new property. This is the time to start looking for a property and to get qualified for a loan. Lending rates are at historicaly low levels, and opportunities are out there. It is never a good idea to try to time the bottom of the market and from my expirience, the media and analyst are usually months behind the reality of the market, by the time we start hearing some positive news in the media, the bottom has passed and we find ourselves in the middle of an escalating market. Unless you are buying with the idea to flip a house on a short term, if the market slides down a little further after you purchased your home, it should not affect you since you will not be selling it during this time.

I have to underline the importance of understanding that this are only forecasts and nothing else, but it will be interesting to see where next year takes us, with a new president and so many variables coming into play, it will truly be a year that will keep us on our toes!

Questions regarding the economic bailout

My past three post have been a little heavy on the data, easy on the fluff. That is because for some reason I am one of those people... yes the kind that hunts for information everywhere...we gather it, store it, organize it, and some of us even try to use it later on. Imagine that!


One of my favorite parts of the process is asking questions. Yes, I love to ask questions. People who know me will attest to it and people who don't know me will get to know this fairly quickly.

So here we go. Today I thought instead of giving you information I will ask questions and see what I get... (of course you do know chances are I will go look for those answers later on and blog about them in the future).


Let's talk about the economy and the bailout... So how is it working? No, no like the Dr. Phill question, I mean, what is the process they are following to decide where they are going to allocate the money? why? and when?

Last I heard, part of the sum is going to aid the ailing national automotive industry. I am not well versed in such industry's downturn, and I do understand some of the possible disastrous consequences that would come as a result of the car makers going under, but how is handing money to an ailing company (or two or three), going to prevent them from crashing? How are we solving the problem? or are we just putting it off for a later date at an expensive cost to our taxpayers?

Let's go back to the bailout for a moment, and to a different sector in distress; Mortgages, banks, homeowners. How is the money going to actually help the homeowner with a mortgage that just reset and is pulling them under? will a bank be given money in accordance of the number of homeowners they help? will the banks be required to renegotiate the rates and conditions of homeowners in trouble? What about people who have lost or will loose their job or whose income will take a substantial downturn as a result of this economic hard times making their monthly mortgage payments too large for them? How is the money given to the institutions going to be used, is the idea for it to somehow trickle down to the homeowner who is not making their monthly payments? how?

Right now what I have seen is that affordable loans are only "new" loans. This will benefit people who want to purchase a property, and yes, that will help in part because more properties will sell due to the fact that rates are historically low. It makes more sense to purchase a home instead of renting it. Let's think about this for a moment though... to get qualified for a loan, you have to be a solid candidate and actually be able to afford it. But the people benefiting from this new amazing low rates are people in healthy financial situations, and that is great, if it came hand in hand with a plan for the banks and financial institutions to work things out with current clients that already have a mortgage, even those that are not yet, but might soon be in default.

I do know that I have seen the number of foreclosures go down and that REO agents are getting less listings from the banks, but it is too soon to know if this is because the banks are actually negotiating with the homeowners in trouble or because of the change in procedure that requires the bank to give greater notice.

And one last question that keeps going around in my mind; Where is all this money coming from? Is the government printing more money? using money originally allocated for something else? going into greater foreign debt? what are the consequences this will have down the road?

I am not proposing we do nothing or not have a bailout altogether, I want to be clear of what is being done, how it will get done, what it will accomplish and what will be the price or consequence of the actions we are taking today.

One thing is clear for me, the pendulum has swung , this situation started when we all became to trusting, we trusted in the asset managers to know what they were buying and selling, we trusted in the company's CEO's CFO's and management to be honorable people working for the best interest of the company they represented, we trusted mortgages were being given to people who could afford them and that were told what it was that they were buying into with all this out of the box "creative" new products, we trusted. Now, it is hard to get that trust back. I can't trust that the same people who allowed this situation to advanced to the point that it did will actually get us out of it. Will they start looking after Country, Company and people's well being before their own, or are they still trying to advance their personal growth and financial gain? how can we trust when AIG gets a "helping hand" and the first thing they do is have a "relaxing" $400,000.00 dollar spa outing? how many people could they have helped with that Spa package?

Just wondering...

Any thoughts on any of this are welcome and encouraged.

What is the current inventory of homes in San Diego

One question that often comes up when talking about the current condition of the Real Estate market, is the Absorption Rate. The absorption rate can be defined as the time it would take the current inventory of homes to sell given the average selling pace of the past (typically six months, averaged).
The reason we do this is because it helps us to track trends in the market and thus figure out where it is heading.
However, absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a TREND. It is advised to consistently do the numbers each month, to be able to track a trend.
So... Absorption Rate (AR) = Number of Homes LISTED divided by Average number of homes SOLD Per Month over the past six months.

I did this exercise for 5 different areas today.* Here is what I have found:
1- Chula Vista

• ACTIVE: 1453
• SOLD:**278.50
• AR:5.21

2-Rancho Santa Fe

• ACTIVE: 254
• SOLD:** 9.6
• AR: 26.45

3-Carmel Valley

• ACTIVE: 215
• SOLD:**52.66
• AR: 4.08

4-Downtown San Diego

• ACTIVE: 570
• SOLD:**34
• AR: 16.76

5-Oceanside

• ACTIVE:1090
• SOLD:**232.83
• AR: 4.68

Doing the Same excessive for San Diego as a whole we get:

• ACTIVE: 15,945
• SOLD:**2758.66
• AR:5.78

In closing, we can see that we have areas with a very high AR while others are surprisingly low for a market that is perceived as a "Buyers Market". Typically speaking, a Buyer’s market exists when the absorption rate for homes exceeds six months; a Seller’s market exists when the absorption rate is fewer than six months, although that definition varies depending the source.

Once again, Happy Holidays and let me know if you would like any topic to be addressed in future posts.

*All data taken from MLS. This information might not include all listings available and sales recorded at the county.

**Average monthly Sales from past 6 months.

Rina Podolsky

Area specific housing data for San Diego

As promised yesterday, I have more specific data for you.

I found an interesting tidbit of information I wanted to share with everyone;
According to Professor Pigginton,the single family median price per square foot was down a gruesome 6.1% between October and November which indicates a market still declining, however, he also mentions that the home inventory in San Diego has shrunk by 22% from where it was a year ago, this is relevant because it is one of the first signs of a market beginning to turn.

Now lets go ahead and look at some data for specific areas as of today:

ZIP ACTIVE PENDING SOLD* SOLD**
92101....573............109.........55...........669
91913....359............217..........86...........752
91914....179.............102.........40..........293
91911.....335............198.........49..........560
92057....406............184.........89..........975
92014....168.............11...........5 1..........33
92024....256............55...........14.........428
92037....408............66............27........497
92067....257.............13............6..........123
92130....219............63............30........569

This is only a very small sample of areas in the county, if there is any one area you would like to hear in my future postings, let me know.


For now I leave you with some questions. How do you feel about the government making this massive monetary commitments in order to bail out different industries? Do you know where this money is coming from? What does it mean for our future economy?



*Properties sold between the dates of November 20,2008 and December 20,2008
**Properties sold between January 1st,2008 and December 20, 2008


All data provided by local MLS






Best regards,



Realtor Rina

So...How is the Real estate Market???

This is a question I hear every day, and in all honesty...there is no simple answer.
The reality is that it all depends on why you are asking? it is not that the facts change, it is that the focus you have while looking at those facts creates a whole different explanation.

And as if that was not enough...we cannot talk about a Real Estate market in San Diego in general and expect to have an accurate picture of all areas. You have to clearly define what area in San Diego county you are interested in. If you look at Chula Vista it is an entire different picture than Encinitas for example.

Now having said that, let's take a look at certain current conditions that do affect the market in general.



Even though there has been talk about the banks shifting their aim from foreclosing on faulty loans to attempting to work things out and renegotiating with the homeowners who have this loans, it takes time...unfortunately for those people already going through the process of being foreclosed upon, this shift has come too little to late. And we have yet to hear from this lenders, who will be able to renegotiate, under what terms and for how long. Until this does not come to fruition we are not certain how it will affect the market



New loans are hard to qualify for and are taking much longer than expected which in turn is causing homes to stay on the market for longer periods of time and escrows to take much longer than before and in some cases to even fall through. So even though rates are at a very attractive level right now, that means nothing unless you can qualify for one, and then actually get funded.



Most sellers are more sensitive to the conditions of the current market that what they were let's say one year ago, which in turn translates to more offers being accepted and more homes going into escrow. From our experience, generally speaking if a home is priced correctly and marketed correctly it will get sold, it is just taking longer.


Now, interestingly enough, for the first time in months I have found ourselves in multiple offer situations, it might have been a coincidence and it has not happened consistently enough for me to consider it a trend, but it is a start.


So in closing, we are in a challenging market but not everything is looking grim, and I actually do believe we are reaching a turning point.

In one of my next postings I will address specific areas and data to give you some facts and numbers.

If you have any specific areas of San Diego county you would like me to address please let me know and I will do so.


Best regards for now!