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wilson
Posts:670

11/30/2008 6:49 PM	Alert
It appears to me that SDlookup posters are more quiet and not posting as much as they have. Is it because of the financial market developments of the last month or two? Have you plans to buy/sell changed? Are you on the sidelines now because of uncertainty with financing, employment, savings for a downpayment? I thought all the bad news would have energized the bears, but the number of people looking seems to have dropped. Does a falling tide drop all boats? Or are you still on track and just waiting for the market to adjust to make your move? If so, have you dropped what you are willing to pay or looking for something bigger/better? My story: I'm looking to move to SD in 2010. I thought there might be a chance I should buy in early 2009, but now I'm convinced there will be better opportunities in 2010, so no need to pull the trigger early and then rent it out until I move. I have some money in stocks that have gone down, but most investments are conservative and not much affected. My biggest concern is selling my house, but prices have been pretty stable in my area and I'm guessing they have dropped by 10% max.

Brice
Posts:11

11/30/2008 7:12 PM	Alert
Speaking from a practical standpoint, I think we are in a waiting and watching mode ; housing prices that were "expected" to drop in SD have not to the degree they needed to for a confortable buy as well as the downturn in the economy that has effected every sector of the community makes buying impractical for those who can wait and see..............

Brian
Posts:2614

11/30/2008 7:33 PM	Alert
I think that real estate is in stage 4 of 7 in the stages of grief. 4. "DEPRESSION", REFLECTION, LONELINESS- It will be a "long period of sad reflection" http://www.recover-from-grief.com/7-stages-of-grief.html

jakob
Posts:549

11/30/2008 7:36 PM	Alert
I agree with Brice. We've entered a "boring" phase of the cycle, where the less desirable areas have already hit bottom, and there are deals aplenty, but the nice areas have had frustratingly small declines. For these areas I believe we are in for a slow multi-year decline because there are relatively fewer forced sales combined with a high demand as prices drop into new buyer levels. It's the usual sticky real estate decline scenario for the good places. Things are kind of stabilized right now. A steady state, if you will. Time is on the buyer's side for now. That, and everyone is sleeping off the turkey.

UnsureBuyer
Posts:214

11/30/2008 10:49 PM	Alert
ahem... THE SKY IS FALLING!

wilson
Posts:670

11/30/2008 11:54 PM	Alert
dang, he did it again. But, if the sky is falling why do jakob and Brice agree that upper end has not fallen as expected? I read over and over again on posts of premium properties dropping bigtime. JUst not the ones I follow. Anyone check out doma unit #303? Less than $300/sf.

greenjello
Posts:28

12/01/2008 12:22 AM	Alert
Waiting for the nicer Eastlake properties to drop more. I am looking for a place to fit my needs since I work from home...I want a nice tax write off for office space. I have capital and this will be my second home. HOWEVER, I am wondering how much to put down....I couold pay cash for the house but I think that would not be wise if it is just going to keep falling in price. SO..... in the meantime, I have memorized just about every plan, every neighborhood, every zip and can drive by any house and tell you what it looks like inside. Nothing exciting..... And yes, I am working off the turkey....5 day cleanse starts tomorrow. SIGH!

TotoMMB66
Posts:101

12/01/2008 1:33 AM	Alert
Tryptophan is a myth (well, the effects of it are). My plans have changed. I went from prospective buyer to owner. I'm not too concerned about more price slippage, at least not where I'm at. The neighborhood is stable and opportunities to buy where we wanted don't come up all that often. But I still like to pop in and see what's still happening in the world of SD real estate.

Caligirl43
Posts:148

12/01/2008 7:10 AM	Alert
I too have noticed a definite drop in posts and comments on here. Having lived in San Diego for 20 years today's prices still have me in sticker shock. Newly built houses I looked at 10 years ago are still 2-3 times as much today as they were then - so I still can only afford that retro 70s house here and not a newer one. That's why I've been focusing my search in the Temecula area - houses are literally nearly half the cost there than what they are here - and they're all newer homes, not the 70s dumps. I still do follow home prices here though in the neighborhoods I would want to live in and I have noticed they haven't changed much in several months - pretty stagnant. I see the same houses sit and sit and sit with no price drops. In my amateur opinion and best guess I think everyone - buyers, sellers, lenders, agents - are holding tight and sitting on the fence waiting to see what Obama is going to do before they make their next move.

sd_down
Posts:10

12/01/2008 8:29 AM	Alert
I agree that buyers like myself dont see low enough drops in the nice Coastal areas but I also think many people including myself see interest rates dropping lower over the next 8 to 16 months. Once banks get their books caught up alittle I see interest rates dropping to 4% maybe even alittle lower on a 30 yr fixed 20% down. Once they raise conforming loans to 547k and get rid of Jumbo Loans I see higher priced Coastal homes trying to sell faster and taking concessions and price cuts due to concerns of people being able to affford such large down payments without the jumbo loans. Who knows I may be way off but this is my optimism and hope for holding out as a renter for so long. Also I dont have to stress about my house losing possibly 10% this year just to buy now like many people think I should.

Brian
Posts:2614

12/01/2008 9:16 AM	Alert
Posted By Caligirl43 on 12/01/2008 7:10 AM I think everyone - buyers, sellers, lenders, agents - are holding tight and sitting on the fence waiting to see what Obama is going to do before they make their next move. Yes, they are sitting tight. But for how long? The carrying costs add up. It costs money to sit out the market. 1) Sellers are sitting tight opting for a slow bleed rather than bringing to escrow that big lump of money they can't afford. 2) Sellers are hoping for a big rebound that will make the whole again. BUT what happens when the rebound doesn't materialize in short order? There is no Plan B, so the only remaining option then will be foreclosure. It's a game of chess. Think strategically, not emotionally.

Brian
Posts:2614

12/01/2008 9:18 AM	Alert
Posted By wilson on 11/30/2008 6:49 PM My story: I'm looking to move to SD in 2010. I thought there might be a chance I should buy in early 2009, but now I'm convinced there will be better opportunities in 2010, so no need to pull the trigger early and then rent it out until I move. I have some money in stocks that have gone down, but most investments are conservative and not much affected. My biggest concern is selling my house, but prices have been pretty stable in my area and I'm guessing they have dropped by 10% max. Don't buy before Wilson buys. ;)

anonymouse
Posts:108

12/01/2008 9:39 AM	Alert
we signed a two-year lease this summer (our rent for a very nice, never lived-in home, is on average $1000 less than what our neighbors monthly mortgage amt). We considered buying a home on the same street about a year ago, when the price was $640k (originally selling here for an unbelievable $780k - $805k!), but decided to wait, rent, and see what the market would do. There are still 3 of the same model on this street that have never sold and are now listed at 575k, 585k, and 599k. Yes, it is a tract, but we have a very nice .25 acre yard, and our rent includes a gardener. We live and desire to stay in an area where the prices have been rather slow to drop, but we are starting to see increasing foreclosures and short sales (that actually go through) in the recent past. On word of advice from our experience - if you decide to buy or rent a home that has been vacant for a considerable amount of time (in our case 1 1/2 years) - be sure to have the seller of landlord fumigate before you move in. We found that we had a nasty black widow infestation on both the interior and exterior. yikes!

Brice
Posts:11

12/01/2008 9:43 AM	Alert
I am in Chicago, and if the SD "gold chip" properties/areas follow the same trend as they did here ( there was a "flipper boom" to rehab Lincoln Park and the Gold Coast areas and the prices all slid up to prices unheard of) it took quite awhile for the prices to come down (averaging two years) to "practical" prices, albiet the prices always remained higher then less desireable areas in retrospect. It seems to us, it's all about supply and demand as stated here adnausium. SD is very desireable for transplants like us, who enjoy the temperate weather and lifestyle. With the volitile market though, and many foreclosures yet to be on the common market, we have taken a let's see where we are in a few years approach to SD. Places like Hillcrest will always we feel hold their value, even if the value may not so much be "IN" the physical realestate but rather the areas of walkability and safety amoung other variables. The sky is NOT falling, the clouds are slowly parting.......................

jspoto
Posts:222

12/01/2008 10:39 AM	Alert
I have stopped posting as much because the same people are always saying the same things, over and over... My mortgage business is down almost 90%. In a shift of my business model, we have begun purchasing whole mortgage notes from major lenders for 45-60 cents on the dollar to current value. These are no REO's but the actual notes, so in effect we become the bank. Our exit strategy is to do real loan modifications (major reductions in principal) and then refi them into fixed FHA loans. If the owners are unable to refi and the payments are too much, we offer them cash for keys. For example, I am purchasing a note in LODI, CA for 132k. the current house value is 220k. (I am paying .60 on the dollar). The original note amount is 400k. We will modify the clients note to 209k (giving the homeowner a whopping 191k principal reduction), refi them into a 95% FHA loan. After closing closing costs we will profit a clean 70k on the deal. Not all deals go this smooth, and some we have actually lost money on by not being able to exit quickly, but at least we are finding new ways to work. This is a win win for everybody involved. the seller of the note raises capital and get the toxic asset off it's books, the homeowner stays in their house and save huge, and we make a bit as well for spending our capital and risking the transaction. There are opportunities out there, just have to find them.

dchestney
Posts:300

12/01/2008 11:00 AM	Alert
Posted By jspoto on 12/01/2008 10:39 AM In a shift of my business model. . . . This is a win win for everybody involved. the seller of the note raises capital and get the toxic asset off it's books, the homeowner stays in their house and save huge, and we make a bit as well for spending our capital and risking the transaction. This sounds like the American way of responding to a problem by making it into an opportunity. If others are doing this as well, it should also help reduce the number of foreclosures and, hence, the for-sale inventory. Do you know how prevalent this promising approach is in California?

Jack**
Posts:101

12/01/2008 11:06 AM	Alert
We've stopped looking and have our cash stashed in a fruit jar buried in the the backyard. Waiting by the side of the road, like vultures, for home prices to collapse within the next 12 months.

jakob
Posts:549

12/01/2008 11:12 AM	Alert
Great post js... I love your posts. There are always ways to make money. On FHA, when people were reporting them as the new subprime, I found an interesting web site showing default rates. https://entp.hud.gov/sfnw/public/ It's a little hard to use but you can find out default rates by state, or lender for example. If you sort by overall default rates, there are some interesting numbers. The worst is one lender "Great country mortgage" that has originated 1855 FHA loans and 955 have defaulted. 49%. In fact there are 84 originators that have default rates higher than 10%. Taxpayers are taking a major loss on these originators.

LoonyQT
Posts:931

12/01/2008 11:58 AM	Alert
I am a wannabe buyer having major issues with "who I am" and "where I want to be". ie, if you subscribe to the location-structure-price triad of real estate, and that buyers can only pick 2 of those 3 variables, I keep oscillating between structure and location since I do have a budget. Basically my 625K-ish budget will get me an "eh" house W of the 5 in N. Olde Carlsbad or I can get something for around 200/sq ft in Rancho Carillo or 165/sq ft in San Elijo. I have examined real estate up and down and round and round so much that I don't know what I want anymore. I mean, I do know what I want, but since I can't afford a nifty newer construction in Leucadia or a nice view property in Olivenhain for my budget, I'm not sure what I should actually buy given the uncertainty of the market in general. And instead of superimposing my cognitive dissonance on so many angles, I have decided not to bore everyone here by posting ad nauseum. Basically I am confused in a confused market. How's that for honesty. :-)

Brian
Posts:2614

12/01/2008 12:03 PM	Alert
Posted By jspoto on 12/01/2008 10:39 AM I am purchasing a note in LODI, CA for 132k. the current house value is 220k. (I am paying .60 on the dollar). The original note amount is 400k. We will modify the clients note to 209k (giving the homeowner a whopping 191k principal reduction), refi them into a 95% FHA loan. After closing closing costs we will profit a clean 70k on the deal. There are opportunities out there, just have to find them. I absolutely agree that there are opportunities out there. With the example above, the investor has to come up with $132k in cash. The difference with the housing bubble is that during the bubble banks could leverage 30 to 1. Conservative buyers leveraged 5 to 1. Most RE buyers leveraged 20 to 1 or more (infinity if no money down). The capital destruction during this implosion is of epic proportion. The key, now, is to have cash to invest. People who have cash will benefit tremendously in this economy. In a sustainable economy, it takes work and talent and capital to succeed. In a bubble, it's all about luck and the audacity to borrow and buy. People who profited from the bubble and saved their profits for the rainy days will do extremely well.

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