More Evidence of a "Buyer's Market" in San Diego

If you are thinking of selling your home or need to sell your house fast, you must understand what kind of market it is in your area. Below are just a few of the articles written every week detailing the real estate market in San Diego and the larger trends in Southern California. Don't make the mistake so many sellers do by not understanding their competition and how buyers are currently behaving. Enjoy the news and if you have any questions or want to understand more of your options in selling your home, please visit www.SDHomeSaver.com. Remember, we don't list your house, we buy it.

Febuary 13, 2007,

The LA Times in their article "It's Their Default Position" reports, “There’s a lot of speculation about where the housing market is headed. Dave Hennigan and the company he works for, Home Center Realty, don’t have the luxury of waiting to see how the story will play out. They need to make a living now, and they’re betting that things are going to get worse. Maybe much worse.”

“The roster of agents has sunk to 52, only about half of whom are active. ‘The rest are looking for side jobs at McDonald’s,’ said Home Center President Jason Bosch. ‘It happened overnight.’”

“In this queasy market, sales are slumping. Sellers remember the boom and want more money than they can get, while buyers feel they have unlimited time to make a decision. An agent’s best prospect for a sale is someone who must act now — a homeowner told by a lender to pay up or get out.”

“The new issue of the company’s 22-page listings magazine will tout nothing but distressed and foreclosed properties: 95 of them, many nearly new, each priced at around $250,000. ‘When you throw out the words ‘foreclosure,’ ’short sale,’ ‘repo,’ the buyer thinks it’s a deal,’ said president Bosch. ‘It’s still very early, but I’m convinced that’s where the market is going.’”

“Bosch thinks the residential real estate market will soon revisit the horrible days of the mid-’90s — and then get worse. ‘I have no doubt that we are entering the next phase of an unprecedented market,’ he says. ‘One that Southern California has never seen.’”

“Sure, there’s been employment growth in the area. But much of it, Bosch argues, was related to real estate. This was a boom that fed upon itself.”

“The biggest problem, Bosch believes, was created by the lenders. They used to be cautious. Sub-prime loans changed all this. As houses got more expensive, fewer buyers qualified under the traditional guidelines, so they went sub-prime.”

“Lenders would take their word on income. They no longer needed down payments. They didn’t worry that their loans would soon reset to higher interest payments. Nobody cared too much as long as prices went up, although many people in the business knew the day of reckoning wasn’t canceled but merely postponed.”

“‘To make a living, you had to push a product you didn’t believe in,’ said Aimee Quigley, a Home Center mortgage broker. ‘It was like being a defense attorney where you know your client did it, but you have to say he didn’t.’”

“Quigley says she tried to emphasize how quickly these loans would adjust, but the message rarely got through. ‘Nine out of ten times when these loans closed, we would sit there and say, ‘How long can they hold it together?’”

“If Hennigan barely knew what a default was in September, now the business is coming to him. Lenders are calling. In Fontana, he knows what to expect. No point knocking on the door. This house, like the others, is empty. The electricity is off, the grass brown.”

“It’s a foreclosure. In December 2004, there were about 12 foreclosures a week in Riverside and San Bernardino counties. In December 2006, there were 123.”

“He doesn’t have a key, but the back door is open. The carpets are stained, the living room wall has a hole punched in it, and the bedroom doors are missing. The lender will use Hennigan’s report to set a price and then turn it over to the agent to find a buyer. A little paint, a little plaster and it will go for $500,000.”

“Hennigan doesn’t know who the owners were, why they couldn’t pay or where they went. It’s much better this way. He doesn’t have to feel sorry for anyone. Instead, he can concentrate on work. ‘People are walking away from their houses,’ he says. ‘I’m giddy because I’m going to be so busy.’”

Febuary 12, 2007
The North County Times wrote in their article, "Foreclosure Up in San Diego County", The number of San Diego County "properties in some stage of foreclosure increased by more than 50 percent in January from December, according to RealtyTrac.”

“Notices of default and foreclosures rose from 759 in December to 1,150 in January. That means that every one in 904 properties was facing foreclosure. In San Diego County, 915 property owners got notice last month that they were delinquent in paying loans against their properties, an additional 165 received a notice of foreclosure sale, and 70 had been foreclosed on and repurchased by a bank.”

“While foreclosures in Riverside County actually decreased by 30 percent, from 1,698 in December to 1,196 in January, the overall outlook is weak compared with San Diego. The most recent figures shows that troubled properties accounted for one in every 489 households.”

In the Press Enterprise , "Investors File Federal Fraud Lawsuit". “A racketeering conspiracy said to have defrauded more than 700 investors in multiple states, including California, was described last week in a federal lawsuit filed by two Rialto residents who claim to have suffered losses of more than $600,000.”

“Richard Ackerman, who represents the plaintiffs in both Riverside lawsuits, said the mortgage-fraud allegations focused on one facet of the operation, raising investment cash by borrowing against residential properties that allegedly were appraised at a much higher value than their worth.”

“The plaintiffs in the latest suit, Anna Richter and Deborah Weber, said they were persuaded by the defendants to extract all the equity from their homes, which was subsequently wired to accounts that the defendants controlled. They never received the promised returns, the suit said.”

“Richter said she borrowed $187,000 on their house in Rialto that Pacific Wealth used to help her and her husband buy three more homes. In addition, she said, Pacific Wealth opened credit cards in her name on which she borrowed $76,000 in cash. She said she invested that and another $15,000 from her 401(k) for a six-month investment that Pacific Wealth was touting in foreign currency.”

“The Richters’ finances started to crumble when in December Pacific Wealth stopped making monthly payments totaling $20,000 on the three investment properties, she said.”

“The Richters lost the funds they invested, she said, and also cannot afford the $4,400-a-month mortgage payment on the home where they and their four children live. In addition, she said, they must make $1,200-a-month payments on the credit-card borrowings. She said the family is trying to get their mortgage refinanced at a lower rate and, failing that, they may move to Texas."

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