Bailout – Market Trends & My Two Cents!

Hello,

The phone has been ringing and the emails have been coming in about the bailout, the stimulus package and new market reports. So I thought I would send a quick email with my quick thoughts and a few good properties to consider. (See properties and Market Trends below.)

Foreclosure Bailout: Personally, I think this will delay the inevitable and slow down foreclosures that should and will occur in most cases. The administrations foreclosure plan does not cover the vast majority of mortgages that were used in California during the boom years. Owners that are in trouble are so far underwater that even with reduced payments it doesn’t make sense for them to hold onto their house and they know it. It’s just now they can live for free for a year. Lastly, our experience with the lenders is that they are so backed up, understaffed, underprepared and in denial that they are not making sound business decisions. There is a substantial disconnect on this end of the business. Keep in mind, this is for owners attempting to do a short sale or loan modification. It does create great opportunity in the bank owned and foreclosure market for buyers. It just will delay the new inventory coming to the market about 3-6 months from when it should have come on.

Another point I wanted to address is San Diego, for whatever reason, is always about 18-24 months ahead of the rest of the country. The reality is that we have taken as substantial hit on values the last three years while this is new for other markets . We are seeing sales surge in the low end ($100K-$400K) and hold stable in the midrange. I do think that the higher end, $1,200,000 and over inventory will be the market that really struggles this year. I recently did some research for the entry level market in Oceanside, Escondido, Vista and San Marcos and was shocked. Properties are selling for over 100% of list price, in under 30 days and FAST. The active listing to pending ration was close to 1 to 1. This is very surprising for buyers thinking that nothing is selling and they have complete control. These are homes that have dropped up to 60% in value, the cost to own is less than rent and investors can cashflow these properties. Do your research on your market and you might be surprised to see what you find. The difference between high end coastal and the entry level to mid level is very different. Email me if you would like to see the numbers that I put together.

Here are the current MLS statistics as of today.

Active Listings: 15,003

Pending Sales: 6,089

We have had a stable inventory, if not declining, and stable pending sales for some time. The misleading part of this is that of the 15,000 active listings, I would say about 5,000 of them are short sales that have multiple offers but the lenders are struggling to respond effectively and the agents wont put them in pending status. Just ask all our buyers that are waiting and waiting and waiting.

We have a great new interactive Market Trends Report (Click). Check it out!!

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Check out the properties below and let us know what you think.   Click for Featured Properties

FYI. The house on Pecos is a private investor and it is not on the MLS…(Less Competition) call or email for details.

Thanks for reading!!