I just finished doing my bi -monthly analysis of the market conditions in the San Diego region and I was struck by how many of the local zip codes have an inventory of less than 6 months.
If you have been following my blog you will probably remember that the mark to differentiate between a buyers and a sellers market is the months of inventory available for sale at a given time frame. Any market that has 6 months worth of inventory or above is considered to be a "Hot" market or a "sellers" market.
This morning I checked 21 different zip codes in the area and found that 12 out of those 21 had an inventory that was under the 6 month mark and only 4 had an inventory above the 10 month mark.
The other interesting factor that came to be apparent in this mornings research was that many of these areas with low inventories had sold for an average of 100 percent of asking price or more. Another clear sign of a Hot Market that we had not seen in a long time.
Among the areas with the lowest inventory rates are the following zip codes:
Zip Code Inventory
91010 3.83
91913 3.57
92010 2.9
92122 3.8
Two of this zip codes belong to Chula Vista, one more to Carlsbad and the last one is in University City.
It is not surprising that most of the areas with the hottest markets at this point are also the areas that had the highest drop in prices and the highest number in foreclosures and short sales in the county.
Now looking at the zip codes that currently have the highest inventory we see:
ZIP CODE INVENTORY
92014 9.35
92075 11.45
92037 12.4
92101 9.73
92067 33.4
Most of this areas are coastal areas or very expensive zip codes with multi million dollar homes that have an average selling price of around $400 to $500 dollars per square foot. This are homes that would require jumbo loans if someone wanted to purchase a home with a 20 or 30% down payment.
The one exception to this last statement would be the 92101 zip code that belongs to the Downtown San Diego region. The situation with downtown is different because of the recent overflow of new projects that have been built in the last few years, that include many high rises and multi unit condos that have inundated the market in that particular area.
So as a conclusion from this morning look at the Real Estate market latest numbers I must say that at least for now the market HAS shifted into a hot market in the low to mid range priced areas and is staying cool at the upper priced regions.
The question still remains what is driving this market upswing? many believe it is the first time home buyers fueled by the tax credit incentive that is about to go away. together with the low mortgage rates and investors jumping in to buy well priced properties at bottom prices.
I hope you find this information helpful and if you are interested in getting any more specific details regarding the data that was used for this Blog, please feel free to contact me.
rina@my858realtor.com
http://www.my858realtor.com/
www.twitter.com/rinapodolsky
http://www.mysandiegorealtor.wordpress.com/
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Showing posts with label foreclosures. Show all posts
Showing posts with label foreclosures. Show all posts
Tuesday, September 29, 2009
Wednesday, August 5, 2009
Has buying foreclosures become a speed sport?
If you are someone who has been thinking of taking advantage of the current Real Estate Market crisis and all those foreclosure properties that have been hitting the market, you are not alone, you are however thinking too much and not acting fast enough.
What I mean by that is that there are many people already out there trying to do just that, they are making offers and trying to buy these properties. You have individuals looking to buy their personal residence, small investors looking at one to four properties and you also have major investors looking to buy in bulk or at the very least very large quantities of bank owned properties also called REO's.
There are in fact so many people trying to buy them, that when you put it together with some of President Obama foreclosure prevention efforts, particularly the foreclosure moratorium, the outcome has been that it brought the inventory of homes in the $300,000 range which is the average REO listing price way down, according to the California Association of Realtors it went from a 10 month inventory to a 3.5 month inventory in one year. Nationally REO's went down 26% from June of 2008 to June of 2009.
Some areas like Sacramento which was one of the hardest hit areas by foreclosure's are even down to a 30 day inventory or less.
So, how is this translating into the actual buying process? Well,people who are looking to buy these homes basically are getting just one shot at making and offer, they have to offer what has been now called their "highest and best" gone are the days of negotiating, starting low and getting a counter offer. If you have been writing offers and trying to buy a property for the last 6 months, by now you know that if you see a good one you act on it quickly, you come in at asking price or over asking price and when you are looking you better be ready to move fast or it won't be there by the time you are ready, this means having your financing in place, pre-approval and proof of funds as well as down payment all ready to go.
When you look at what has been happening it is very interesting to see that some of the properties in this up to $500,000 price range come into the market and go into pending sometimes less that 2 hrs later. Before banks were leaving properties on the market for 3-4 months before accepting an offer, however some banks finally figured that it was costing them too much in HOA's, taxes and other fees so they are moving them very quickly.
The other reason some people have mentioned as to why are trying to get this properties out of their books quickly is because they are concerned of a new wave of foreclosures inundating the market sometime next fall.
One of the ways that they had managed to lower the number of foreclosures was by trying to do loan modifications with some of the homeowners, I have to say that from what I have seen not many of these have worked out, most people have gone to the next option which is attempting a "Short Sale". From the ones that were modified, it has been reported that 53% of them have fallen back into arrears, making Loan Modifications only a temporary extension of the problem but not a solution, and one of the reason for that concern regarding a new wave of foreclosures.
Short Sales and Loan modifications are 2 other subjects that I would like to address on a later post, there is a lot to be said about them as well.
But in closing, The market for REO's at the price point we have been addressing here is a hot market and the more information you have and the faster you can make an educated offer, the greater the chances of your success in acquiring one of these homes. You will be in a much better position if you have an experienced team and a clear strategy.
If you want any information or need any help getting started just contact us and we will be happy to help
What I mean by that is that there are many people already out there trying to do just that, they are making offers and trying to buy these properties. You have individuals looking to buy their personal residence, small investors looking at one to four properties and you also have major investors looking to buy in bulk or at the very least very large quantities of bank owned properties also called REO's.
There are in fact so many people trying to buy them, that when you put it together with some of President Obama foreclosure prevention efforts, particularly the foreclosure moratorium, the outcome has been that it brought the inventory of homes in the $300,000 range which is the average REO listing price way down, according to the California Association of Realtors it went from a 10 month inventory to a 3.5 month inventory in one year. Nationally REO's went down 26% from June of 2008 to June of 2009.
Some areas like Sacramento which was one of the hardest hit areas by foreclosure's are even down to a 30 day inventory or less.
So, how is this translating into the actual buying process? Well,people who are looking to buy these homes basically are getting just one shot at making and offer, they have to offer what has been now called their "highest and best" gone are the days of negotiating, starting low and getting a counter offer. If you have been writing offers and trying to buy a property for the last 6 months, by now you know that if you see a good one you act on it quickly, you come in at asking price or over asking price and when you are looking you better be ready to move fast or it won't be there by the time you are ready, this means having your financing in place, pre-approval and proof of funds as well as down payment all ready to go.
When you look at what has been happening it is very interesting to see that some of the properties in this up to $500,000 price range come into the market and go into pending sometimes less that 2 hrs later. Before banks were leaving properties on the market for 3-4 months before accepting an offer, however some banks finally figured that it was costing them too much in HOA's, taxes and other fees so they are moving them very quickly.
The other reason some people have mentioned as to why are trying to get this properties out of their books quickly is because they are concerned of a new wave of foreclosures inundating the market sometime next fall.
One of the ways that they had managed to lower the number of foreclosures was by trying to do loan modifications with some of the homeowners, I have to say that from what I have seen not many of these have worked out, most people have gone to the next option which is attempting a "Short Sale". From the ones that were modified, it has been reported that 53% of them have fallen back into arrears, making Loan Modifications only a temporary extension of the problem but not a solution, and one of the reason for that concern regarding a new wave of foreclosures.
Short Sales and Loan modifications are 2 other subjects that I would like to address on a later post, there is a lot to be said about them as well.
But in closing, The market for REO's at the price point we have been addressing here is a hot market and the more information you have and the faster you can make an educated offer, the greater the chances of your success in acquiring one of these homes. You will be in a much better position if you have an experienced team and a clear strategy.
If you want any information or need any help getting started just contact us and we will be happy to help
Monday, February 9, 2009
Foreclosure rates in San Diego
I received a link to an interesting foreclosure comparison chart for 2007 to 2008. The numbers show a decrease on both Notices of Default and Foreclosures, they are single digits decreases but a step on the direction we want the economy to go. It is important to understand that at this point it is not clear what is the real cause for this decrease, but given that the economy and consumer confidence shifted for the worse during last year, the most likely explanation is the fact that banks are now required to give longer notices and try to avoid foreclosures, and on the same lines, people are more aware and are trying to renegotiate with banks which at the same time have started to negotiate more with homeowners.
If you would like to see the numbers go to http://v2.sharperagent.com/Boomerang/GetFile.flx?flxnodeco&xml=%3CFile%20userid=%22A7E38D0E-5329-4F86-905F-B0BE2AF64783%22%20storeid=%229017320%22/%3E
If you have any questions please feel free to contact me.
Best,
Rina Podolsky
If you would like to see the numbers go to http://v2.sharperagent.com/Boomerang/GetFile.flx?flxnodeco&xml=%3CFile%20userid=%22A7E38D0E-5329-4F86-905F-B0BE2AF64783%22%20storeid=%229017320%22/%3E
If you have any questions please feel free to contact me.
Best,
Rina Podolsky
Saturday, December 27, 2008
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.
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.
Thursday, December 18, 2008
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!
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!
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