Jobless rate up on housing cuts

San Diego is one of the most desirable spots in the world to live, so many can't believe why anyone would want to move out of the area or why others aren't flocking to the area. One of the main reasons is that it is too expensive and many are losing their jobs in key industries like real estate. The article below describes how declining home prices are leading to massive lay-offs all throughout the real estate industry. The real question that everyone is bracing for is how much will the declining real estate market effect the rest of San Diego.

County unemployment hits a six-month high

By Dean Calbreath
UNION-TRIBUNE STAFF WRITER

March 3, 2007

Construction and real estate layoffs helped push San Diego County's unemployment rate to its highest point since last July, according to data released yesterday by the California Employment Development Department.

The county lost 23,400 jobs from December to January, but most of the losses were caused by seasonal reductions at retail shops and restaurants related to the end of the holiday shopping season.

More significant were the cuts in the real estate industry, continuing a five-month decline. January's job cutbacks included 2,500 construction workers, 700 real estate workers and 1,100 workers at furniture and home-improvement stores.

“The housing sector is really starting to have an impact on our overall year-to-year job numbers,” said Alan Gin, economist at the University of San Diego.

Gin worried that the real estate downturn is affecting the retail market. From January 2005 to January 2006, 2,500 retail workers lost their jobs, mostly in department stores.

“When you've got fewer people working in construction and fewer people buying homes, you've got fewer people shopping in the community, and that can translate to fewer retail jobs,” Gin said.

The report showed that only 13,000 jobs were created between January 2006 and January 2007, which is low for a county this size.

“Not too long ago, we were adding about 20,000 jobs per year, and there have been times in the past when we've added as many as 50,000,” said Kelly Cunningham, an economist with the San Diego Institute for Policy Research.

The county's unemployment rate rose to 4.3 percent, compared with 3.7 percent in December, which typically has a low unemployment rate. While the jobless rate is still low by historical standards, it is slightly higher than the January 2006 rate of 4.1 percent.

In comparison, the state unemployment rate – adjusted for seasonal fluctuations – was 4.8 percent in December and January, down from 5.1 percent in January 2006.

Statewide, employers cut payrolls by 4,500 jobs from December to January, mostly due to losses in the leisure and hospitality industry, the Employment Development Department reported.

During the year ended in January, California employers added 251,400 jobs, a 1.7 percent increase, compared to a 1 percent increase in San Diego County. Statewide, construction firms added 4,900 jobs during the year. Part of that growth came from non-residential construction and part was because the housing sector grew strongly during the first half of the year.

Since the housing market peaked in August, the state has lost 9,100 residential construction jobs and 39,500 specialty trade construction contractors, as well as 3,800 real estate jobs.

Howard Roth, chief economist for the California Department of Finance, predicted that the housing market will continue to decline in the state through at least June. He said the slowdown is having an impact on the state's income tax revenue.

In January, the state took in about $8 billion in income taxes – $1 billion less than previously forecast. Roth said that part of the drop was due to declines in the money earned by real estate brokers and professionals in related industries.

“The slowdown in the California and national housing sectors is not yet over,” Roth told a meeting of San Diego's Chartered Financial Analysts on Thursday. “And it has turned out to be worse than was expected.”

On the other hand, Roth said that because San Diego was one of the first areas of the nation to experience a slowdown, it will be one of the first to stage a comeback. By 2008, the statewide market should recover, he said.

There was some good news about local employment yesterday. A survey of small businesses in the county released by Union Bank showed that 98 percent do not anticipate cutting their payrolls in 2007 and 29 percent plan to increase their staffing levels. But the number of businesses planning to hire new workers was 9 percentage points lower than last year.

“Given the optimism expressed by respondents, I am a little surprised that more businesses are not planning to add employees,” said Union Bank economist Keitaro Matsuda. “The extremely tight labor market and rising wages are perhaps making small businesses rely more on technology for productivity gains.”

Marney Cox, economist for the San Diego Association of Governments, said the county's diverse employment base will keep job growth steady, even if it is significantly slower than in previous years.

“When some pieces of our economy turn down, they're able to pass the baton to others,” he said.

He pointed to job growth in telecommunications, which reversed previous declines with the addition of 800 jobs last year, as one hopeful sign.

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

Mortgage Execs see further dip int he market

North County Times article below describes the worrisome situation that the mortgage industry finds itself following the decline in housing prices and the rise in foreclosures.

Many who continue to minimize the dire situation that real estate is in will find it harder as evidence like this surfaces. Just as the mortgage boom fueled the rising real estate prices from 200- to 2005, a mortgage bust will further draw down prices and limit the the pool of buyers that can buy the homes available.

If you are selling, focus on pricing right, but weight offers from sellers with more money down over those with closer to 100% financing. Realize that the fledgling mortgage industry will also effect your buyers and that of course, effects you. Time is not on your side, so don't waste it by holding on to a price that isn't getting any offers.


If you have tried to sell you home and haven't yet or you need to sell quickly and would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.




Prominent mortgage exec sees further dip in market

By: ANN PERRY - Staff Writer

SAN MARCOS -- The nation's troubled housing and mortgage markets will decline even further before they rebound, a prominent mortgage executive told a gathering of real estate agents at Cal State San Marcos on Friday.

Robert A. Camerota, Sr., senior vice president and manager of GMAC's Mortgage group in Coast Mesa, sketched a bleak forecast for the housing industry: falling home prices, increased foreclosures, more failed mortgage companies and increased revelations of mortgage fraud.

"We're all going to be struggling, struggling more than we are today," he said. "We're headed halfway down the mountain, and we've got a ways to go."

Camerota, who is also chairman of the California Mortgage Bankers Association, was one of seven real estate experts participating in a panel discussion called Conversations '07, sponsored by the North San Diego County Association of Realtors and the university. More than 100 real estate professionals attended the half-day event.

Some members of the panel and the audience said the real estate market in North County was relatively strong because of continued demand from buyers wanting to live in the area. In most parts of the country, housing prices have fallen since hitting a peak in 2005.

Camerota said that guidelines proposed Friday by federal regulators to tighten mortgage lending requirements and reduce problems in the "subprime" mortgage market were necessary. But, he added, they would dramatically decrease the number of new mortgage loans issued, as well as mortgages refinanced.

Subprime loans are made to borrowers, considered high risk because of their poor credit, at interest rates higher than those made to borrowers with good credit.

Camerota's company, GMAC, is one of the nation's largest subprime mortgage lenders. The increasing failure of the company's borrowers to repay subprime mortgages has cost the company more than $1 billion already and could cause General Motors, part-owner of GMAC, to take a major financial hit, according to an article distributed Friday by Dow Jones Newswires.

Revelations of mortgage fraud, the use of bogus income and tax documents by borrowers to obtain large loans, will increase, Camerota predicted. He said that, contrary to what some legislators propose, no new laws are need to combat mortgage fraud.

Instead, he said, "We need to go to the attorneys general and the district attorneys. We don't need more laws. We need more enforcement."

Camerota and other mortgage experts said they would like to see lenders be able to change the terms of existing mortgages to stave off foreclosures by the borrowers. "We're all looking for an opportunity to adjust our guidelines, to go to customers and ask what we can do to help you," he said.

He also predicted more subprime mortgage lenders would fold. He noted that New Century Financial Corp. of Irvine, one of the nation's largest, was laying off hundreds of workers on Friday. The company disclosed Friday that a federal prosecutor and the New York Stock Exchange are investigating the trading of its stock.

Realtors in attendance noted that the booming real estate market of recent years created a "perfect storm" for problems now surfacing: low interest rates, rising property values and lenient lending standards led to buyers taking on larger homes and bigger mortgages than they could afford.

One Realtor said that buyers contributed to the problem, by wanting to "keep up with the Joneses," and to buy their dream homes: "Our clients were saying, 'Supersize Me!' "

Freddie Mac Pulls Back

Here is an excellent article that discusses the effect foreclosures, sub-prime lending, and falling real estate prices are having on Federal lending guidelines. For those of you thinking about selling your home, there are a couple of implications:
1. In a short time it will likely be more difficult to to find qualified buyers. The days of 100% financing are quickly coming to a close. When you receive offers, make sure the buyers are qualified and can make a decent down payment.
2. Because buyers will likely find it harder to qualify, the pool of potential buyers will certainly shrink as well. It may be harder to find buyers and buyers will certainly be pushing for the lowest price because they can only qualify for the low end of your price range.

Bottom line, be sure to price your home right and be willing to sacrifice some money in the purchase price for a buyer who is willing to commit more money upfront and is a strong candidate to receive the needed financing.

During the housing boom that ended in 2005, money was poured into home loans that let people buy homes with little down or without verifying their incomes. Now, lenders, financiers and buyers of mortgages are pulling back.

In a sign of that wariness, Freddie Mac, one of the largest buyers of mortgages, said yesterday that it would tighten lending standards and stop buying certain kinds of risky home loans made to borrowers with weak, or subprime, credit records.

The move comes as default rates are rising, smaller lenders are starting to fail and investors are shunning bonds backed by mortgages.

The pullback will be most severely felt by minority and poor home buyers and owners, who will face trouble in refinancing adjustable rate loans that they can no longer afford. Those looking to buy homes with a small down payment or none could also be forced to pay higher interest rates and may not be able simply to declare their income without providing documentation like tax returns and paycheck stubs.

“Lenders and originators are being significantly penalized for the loose standards that we saw last year,” said Brian J. Carlin, head of fixed-income trading at JPMorgan Private Bank. “And they are going to take that out on current borrowers.”

Financiers and buyers of mortgages are more concerned about the risks of their own investments. Though some skeptics and critics had been concerned about subprime mortgages for several years, the mortgages only recently began falling out of favor on Wall Street.

The tipping points have been weakness in home prices and rising default rates among mortgages written as recently as the first half of 2006. In certain kinds of loans, the default rates six months after mortgages were issued are two or three times higher than defaults at the same stage among loans written in 2005.

Indeed, concerns about the deterioration of the subprime market have weighed on financial stocks. Those concerns persisted yesterday amid a sharp sell-off in stock markets around the world.

Although large forces in the mortgage market, Freddie Mac and its larger sister, Fannie Mae — both created by Congress — have played a small and diminishing role in the subprime business as large Wall Street institutions and hedge funds have become more active.

The mortgage agencies do not buy such loans directly from the companies that write them, as they do with prime loans. Instead, Fannie Mae and Freddie Mac buy bonds backed by subprime loans.

Even as the market was growing in recent years, the agencies were pulling back; they bought $119.8 billion of subprime bonds in 2006, down from $169.4 billion in 2005 and $175.6 billion in 2004, according to Inside Mortgage Finance, a trade publication.

But Freddie’s announcement is confirmation to other investors in mortgages that a segment of the market that was once Wall Street’s darling finds itself in the doghouse.

“Freddie is giving its stamp of approval to what the market has already done,” said Dwight Jaffee, a real estate finance professor at the University of California, Berkeley. “Already consumers were going to be finding these loans harder to get.”

In another sign of problems in the sector, the Corporation">Fremont General Corporation, a large provider of subprime mortgages through brokers and lenders, postponed filing earnings for the fourth quarter and for 2006.

Yesterday’s move by Freddie Mac comes at a time when the Democratic-controlled Congress is taking up bills to restrict what critics call “predatory lending” and measures intended to limit Freddie Mac and Fannie Mae, which have been under scrutiny in recent years because of accounting problems. The agencies were created to make it cheaper for Americans to buy homes, by buying mortgages and packaging them into tradable bonds; together, they buy one in five home mortgages issued nationally.

Freddie’s move was praised by Democratic leaders in Congress and housing advocacy groups. The groups have criticized lenders, saying they take advantage of unsophisticated home buyers by giving them loans that are more costly and onerous than they could qualify for. But the Mortgage Bankers Association of America questioned the decision, saying it would hurt minority and other underserved home buyers.

In a statement released yesterday, Fannie Mae said subprime loans represented just 2.2 percent of its business and it would not change its approach to the market until its regulator, the Office of Federal Housing Enterprise Oversight, hands down guidance on mortgages.

Richard F. Syron, Freddie’s chairman and chief executive, noted that the agencies played a small part in the subprime market, with his agency holding about $184 billion of subprime securities in its portfolio.

Still, he added, Freddie Mac and Fannie Mae would be called upon to play a bigger role as more lenders and investors pull out of the market in the coming months. He also rebutted the idea that the agency’s move would hurt borrowers.

“You have to come back to the question: Do you want someone that is in a difficult situation now to get themselves into an even more difficult situation later on because they have postponed a day of reckoning?” Mr. Syron said in a telephone interview yesterday.

Freddie will put its new, stricter standards into effect for loans written on Sept. 1 and after. The impact will be greatest on adjustable rate mortgages that have a low fixed rate for the first two or three years but that adjust to higher rates after that. Under the new guidelines, borrowers will have to qualify as if the higher rates were already in effect.

It will also “strongly recommend” that lenders collect borrowers’ taxes and insurance payments and put them in escrow for borrowers, a common practice in prime lending but one that is not uniformly followed in the subprime world.

But the Mortgage Bankers Association criticized the move, specifically Freddie’s decision not to buy bonds backed by adjustable rate mortgages if borrowers do not make enough money to make payments at the highest possible rate under the loans. Lenders will often make such loans based on borrowers’ ability to pay the low initial payments.

Kurt P. Pfotenhauer, a senior vice president with the mortgage bankers’ group, said most borrowers refinance their loans before they adjust to higher, variable rates. He also noted that though defaults were rising, only 13.5 percent of subprime borrowers were either behind on payments or in foreclosure.

“Put another way, 86.5 percent of people who have subprime ARMs are paying on time,” he said.

The Federal Reserve reported yesterday that 2.11 percent of residential loans held by banks were delinquent at the end of 2006, the highest that figure has been since 2002.

Still, other industry officials say the debate over Freddie’s new, tighter standards will most likely be moot by the time they take effect, because bankers and brokers are already well on their way to tightening the money flowing into the housing market.

First Franklin, one of the nation’s largest subprime lenders and a subsidiary of Merrill Lynch & Company, recently told mortgage brokers it does business with that it was raising the minimum credit scores for borrowers who wanted to finance 100 percent of a home’s purchase price.

All first-time home buyers will be required to put down at least 5 percent of the purchase price, or verify their income with tax documents.

Community HousingWorks, a counseling service in San Diego, has seen an influx of borrowers who are in default on adjustable rate loans that had a fixed interest rate for the first two years of the loan’s life.

Gabriel del Rio, homeownership director at the counseling service, said many of the people are stuck in a tough place because weak credit scores make it hard for them to get another loan and the falling value of homes in the area has made it harder to sell properties bought in recent years. The price of single-family homes fell 4.5 percent in San Diego in the fourth quarter, according to the National Association of Realtors.

“We are getting about one call a day, and that started in the last quarter of last year,” Mr. del Rio said. “Before then it was literally nothing. We got one or two calls a year.”

Robert Moulton, who owns a mortgage brokerage firm on Long Island, said the industry’s greatest failing was not fully anticipating or preparing for the troubles of the housing market, especially the drop in home prices in some areas. Too many people believed that home prices would not or could not fall.

Adjustable rate loans made sense as long as home prices were rising; borrowers could sell their properties for more than they bought them or refinance using their rising equity.

“When these subprime loans were written, I honestly don’t think anyone from the borrowers to the bank anticipated a collapse in real estate values,” he said.





If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

San Diego Foreclosure Rates and 100% Financing

Here is a short clip from an excellent blog maintained by Ben Jones in Arizona. The article details the decline in San Diego Real Estate and the effect sub-prime and $0 down loans had on the real estate boom and the growing number of foreclosures resulting from those loans.

The interesting thing to keep in mind is what will the effect be on lending and people able to get no money down loans. I was talking with a loan broker today and discussing how I, as a Real Estate investor, could help them. As we talked, I brought up Lease Option or Rent to Own programs. He thought that those had gone away but he remembered them being quite common in the 1980's and 1990's. Well my guess is that they will be coming back as lenders will have to conform to more strict lending guidelines and fewer borrows will qualify. If you don't understand rent to own programs, they are an excellent way to buy and sell your house. For the buyer, they offer great flexibility in the sense that you can try out a home before you buy it. What if you don't like the neighbors, or think the traffic noise is too loud? In most cases, you are stuck! I know that I wished I would have known that I was moving next to a very nosey neighbor before I moved in. They also are excellent ways of repairing your credit and making it easier for a lender to qualify you for a loan. If you are recovering from a divorce, a lay-off, or some other unfortunate event and have a good paying job, making one year's worth of payments goes a long way to help you qualify. For the Seller, it offers instant debt relief, in some cases increased cash flow and at the very least, someone else is paying off your mortgage for some time. That is not a bad deal at all. If you would like to learn more about Lease Options from the buyers and sellers perspective, sign up for my free e-course or email me directly at SDHomeSaver@gmail.com.

Now for the article...To read the entire post, click on the title of this post.

The Voice of San Diego reports from California. “The number of San Diego County homes in some level of foreclosure activity reached 1,150 last month, according to RealtyTrac. That’s up 20 percent from January 2006 and up more than 240 percent from the first month of 2005. But even as the market has slowed, the popularity of risky loans has spread. New data for San Diego County reveals that 67 percent of loans made in the first 11 months of 2006 were interest-only or negatively amortized.”

“Of that 67 percent, 30 percent were negative-amortization loans, a threefold increase since January 2004 and 30-fold jump since January 2003, according to FirstAmerican Loan Performance.”

“Last week, a San Diego-based subprime lender, Accredited Home Lenders, joined the ranks of companies vowing to tighten standards after reports of significant losses last quarter. Rick Sharga of RealtyTrac said he’s noticed the link between the lenders’ stricter regulations and the rate of foreclosure activity. ‘I think the two go hand-in-hand,’ Sharga said.”

“Now, home values have stopped appreciating and pricing in some areas has leveled or even declined. Last month, the median sale price for a home in San Diego County was 5.6 percent lower, nearly $30,000, than the $500,000 price logged in January 2006, according to DataQuick.”

“In a report published in December, the Center for Responsible Lending stated that the default rate for subprime loans made between 1998 and 2001 was 3.2 percent in San Diego County. But for the nearly 5,000 such loans originating in 2006, the center predicts that 21.4 percent are headed for default.”

“‘There are some fundamental flaws in the underwriting process that are coming back to haunt lenders,’ the centers’ Paul Leonard said. ‘The lenders seemed to count on appreciation rather than the people’s actual income.’”

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

Luxury Home Prices Slip in San Diego

Latest indication of the Real Estate market slowing in the San Diego area...

By Dan Levy

Feb. 21 (Bloomberg) -- Luxury home prices in California, the nation's most expensive real estate market, fell for the first time in two years as potential buyers waited for prices to fall and fewer sellers received multiple offers, according to a survey by San Francisco-based First Republic Bank.

The average price of a luxury home fell to $2.9 million in San Francisco, $2.35 million in Los Angeles and $2.15 million in San Diego, First Republic said. The bank's survey covers hundreds of homes in places such as Atherton, Los Gatos, Orinda and Tiburon in Northern California and Beverly Hills, Pasadena, Malibu, Del Mar and La Jolla in Southern California.

Fourth-quarter prices for a basket of high-end homes tracked by the bank's own index fell 1.5 percent in the San Francisco area and 1.3 percent in the San Diego area. That's the first quarterly drop in those cities since 2004, First Republic said. In the Los Angeles area, prices declined 0.8 percent, the first drop since 2002.

What has your experience been in selling luxury homes in the San Diego area?

To read the full article, click on the title of this post.

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

Mortgage Rates on the Way Back Up

Saving your home may mean refinancing it to get cash out. Mortgage rates are slightly increasing and may increase even more. The article below shows how interest rates are rising slowly. This is critical to understanding how you can still sell your house quickly despite interest rates rising. Sign up for my free e-course and learn how "Owner Financing" will push your listing to the top of all Buyers' list.

Freddie Mac reported that 30-year, fixed-rate mortgages rose to 6.3 percent this week from 6.28 percent last week. Last week had been the first decline in rates since early December.
Rates on 15-year, fixed-rate mortgages edged up to 6.03 percent from 6.02 percent. Five-year, adjustable-rate mortgages rose to 6.01 percent from 5.99 percent. One-year ARMs rose to 5.52 percent from 5.49 percent.

The mortgage rates do not include add-on fees known as points. Thirty-year and 15-year mortgages each carried a nationwide average fee of 0.4 point. Five-year mortgages carried an average fee of 0.5 point, while one-year mortgages carried a fee of 0.6 point.

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

How Does San Diego County Compare to Other Southern CA Counties

DataQuick recently released their homes sales statistics. The following link takes you to an excellent analysis of the DataQuick numbers and shows how San Diego County compares to other counties in Southern California.

The bottom line, San Diego has slowed and will likely continue to slow.

http://themessthatgreenspanmade.blogspot.com/2007/02/dataquick.html

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. If you would like to understand more of your options on how best to sell your home, sign up for my free e-course. It offers excellent advice on how to pick the best realtor, sell your house as a FSBO, or how best to work with an investor to sell your house. Best of luck and I look forward to hearing from you.

Realtors Fired Unexpectedly..

The below article came from the North County Times and is yet another indication of the declining housing market in San Diego. I wonder what happen to all of the listings the real estate office had? I would hate to have been one of those unfortunate home owners!

If you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. Best of luck and I look forward to hearing from you.

Hanson Realty shut down

By: - North County Times

ESCONDIDO ---- At least 40 real-estate agents and employees at Hanson Realty, the city's oldest major residential and commercial real-estate company, were let go without warning today, local real-estate professionals said.

They action was taken by McMillin Realty, a division of the Corky McMillin Companies based in San Diego, that purchased Hanson in 2001, from owner Paul Van Elderen.

Dallas Woodring, a veteran broker at Hanson, said that employees were stunned this morning at a staff meeting when told by McMillin officials that they were to be released, that the office locks would be changed immediately, the furniture would be moved out today and the phones shut off.

"They just stabbed us in the heart," Woodring said.

Woodring said that the abrupt move was not the result of the downturn in the real-estate market, but rather a long-festering difference of corporate culture between Hanson and McMillin.

McMillin blamed the closure on the declining housing market.

Hanson was planning to celebrate its 50th anniversary this summer.

San Diego County Median Home Price Analysis

The below post was taken from Dennis Kaiser's Blog, San Deigo's Real Estate Library, (http://www.realestatelibrary.com/blog/2007/02/median-home-price-ticks-up.html). He is an excellent Realtor and if you choose to sell your house with a Realtor, you would be well served to contact him.

If listing your house with a Realtor does not meet your needs and you would like to receive an instant offer on your house, go to www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com. Remember, I don't list homes, I buy them. I work hard to understand your unique situation and create an offer that meets your needs, and solves your situation. Best of luck and I look forward to hearing from you.

The median price for re-sale single-family homes in San Diego County started the year with a gain of 0.9%. Year-over-year, the median price was off 4.1%. This is the seventh month in a row year-over-year prices have declined. The median price is now 6.4% below the high of $598,000 reached in November 2005.


Home sales fell 27.5% from December. Year-over-year, sales were down 10.6%. January had the least amount of sales since we've been keeping track: January 1998. We expect sales to pick up as the spring and summer selling seasons arrive.

The median price for condos rose 1.7% to $357,000, month-over-month, off 7.8% compared to last January. The median price is now 8.9% below the high of $392,000 set in November 2005. On a positive note, condo sales were up 3.4% year-over-year. This is the first time condo sales have been higher than the year before since June 2005.

The sales price to list price for single-family homes fell 0.6 of a point to 94.4%. The ratio for condos dropped 0.6 of a point to 94.6%.

Days on market rose six to 79 days. This is the highest it has been since we've been keeping records: January 1998.

My advice? For buyers, there's plenty of inventory. Some sellers are willing to make deals, witness the sales price to list price ratio of 94.4% compared to the average since January 1998 of 96.3%. To find a seller willing to negotiate, you have to make offers.

For sellers, three words: price it right.

The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home's worth, call me.

Housing Bubble Blogs on the Rise

If you are in a position to sell your house and have looked at the slumping San Diego real estate market, your search has brought you to the right spot. This blog, like many others below, are tracking the San Diego housing market and giving you the potential seller honest, straight forward, unbiased advice on your options and the state of your local real estate market. The article below interviews many bloggers who write about the housing bubble in San Diego and offer a counter perspective on San Diego real estate.

If you are not sure if you should sell your house by yourself, list it with a Realtor, or sell to an investor, sign up for my free e-course. It discusses all of these options in detail and offers excellent advice on how to proceed with any of these options. If you would like to have an offer made on your home check out www.SDHomeSaver.com and receive and instant offer or email me directly at SDHomeSaver@gmail.com. I look forward to hearing from you...

Meet the Bubble Bloggers: Patrick Killelea of Patrick.net Part 2: Patrick.net is among bubble blog leaders Wednesday, February 14, 2007 Inman News

Editor's note: Talk of a real estate bubble, brewing for many years, has spawned an assortment of real estate blogs devoted to bubble talk and statistical analyses. These bubble sites offer a counterpoint to industry data and mainstream media coverage, and have gained a following among consumers and industry analysts alike. Several "bubble bloggers" -- some named and some choosing to remain anonymous -- have shared their views with Inman News. (Read the intro to this series, "The rise of real estate bubble blogs.")

Name: Patrick Killelea

Occupation: Engineer/programmer

Blog site: http://patrick.net/wp/

Audience: About 5,000 readers per day

Q: What makes you a real estate bubble believer, a bubble debunker, or bubble neutral?

A: Owners and real estate businesses have a large vested interest in downplaying the bubble, no matter how real. Most renters are neutral, since they would probably rent anyway and don't really win or lose regardless of what happens to owners. But there is a small contingent of renters-by-choice who are adamant bubble believers and have made a big bet on it by renting. I'm one of them.

Q: How do you define a housing bubble?

A: Easy: when the monthly loss in interest, property tax, insurance and maintenance is larger than the monthly loss from renting, there is a housing bubble. Historically, it has been cheaper to own. That's how landlords can make a profit (duh). That's no longer the case in the San Francisco Bay Area. Since it's not only cheaper to rent now, but a whopping two to three times cheaper to rent the exact same thing than to own it, we clearly have the mother of all bubbles on our hands.

Q: How does this definition fit (or not fit) the national housing market? Which regional or local housing markets have exhibited the most bubble characteristics?

A: The national housing market does seem bubbly, but I don't know national average rents compared to owning. In the San Francisco Bay Area, where I live, it's clearly an extreme bubble. Other bubbly places now deflating are Boston, New York, Florida, Las Vegas, Los Angeles, and San Diego. Places with no bubble are generally those away from the coasts, where house-price inflation did not really take hold.

Q: Which bubbles burst? Which ones have deflated? Which ones are inflating? Which are about to pop?

A: I would say Boston has certainly burst now, but may continue to decline for years. New York, not so much yet. Florida is bursting, as are Las Vegas, Los Angeles and San Diego. The San Francisco Bay Area has declined only a little over the last year, but I think prices will continue downward for five years or more. Remember that prices fell for 14 years straight in Japan. So much for "real estate always goes up." I don't think there are any areas that are still inflating, especially now that there is a lot of attention in Washington focused on lending standards. The Bay Area is at very high risk for major declines. There was no reason for prices to double, so there is no reason they cannot fall right back down. Population actually declined, jobs went away, salaries went down and yet prices went up -- excellent illustration of a bubble.

Q: Are there any common traits among the bubble markets?

A: Yes, in general the bubble markets are more affluent and on the coasts. The feeling was that it must be safe to buy on the coasts because they are wealthier, but the reality is that buyers were not looking at very simple predictor ratios, like percentage of vacant houses, the ratio of salaries to house prices, the fraction of ARM (adjustable-rate mortgage) loans that are about to adjust dramatically upward and so on. Even though the populations in these areas should know better, they are running purely on gut feeling and not on the numbers. The numbers are now overpowering gut feeling. Foreclosures are rising exponentially.

Q: What is your best evidence for or against a housing bubble?

A: I can rent a million-dollar house for a little over 2 percent per year, but I cannot borrow $1 million in cash for 2 percent. It would cost more like 6 percent to rent (i.e., borrow) $1 million in cash. This proves that buyers are overpaying for houses by about a factor of three in the Bay Area. And this does not even consider the property taxes, insurance, maintenance and broker fees.

Q: Is it possible to accurately identify the existence of a bubble before it is gone? Explain.

A: Of course. When prices are extremely high by every measure ever used, it's a bubble. Price to salary ratio, price taking inflation into account, price compared to renting, etc., (are) all very high.

Q: How are bubbles born and how do they die?

A: Low interest rates have a nonlinear effect. That is, when interest rates go down from 5 percent to 4 percent, prices increase 20 percent (one-fifth). When rates go down from 4 percent to 3 percent, prices increase 25 percent. When interest rates hit zero, anyone can borrow an infinite amount of money. Once these crazy loans affect the market prices, the bubble takes on momentum and prices rise for a while just because everyone expects them to keep rising. And then interest rates go up and it all runs in reverse.

Q: Why do people get so fired up about the concept of a housing bubble?

A: There is huge psychological tension around the massive amounts of money involved. Buyers want to believe they did the right thing and will believe it no matter what the numbers in front of their eyes are. Renters-by-choice also want to believe they did the right thing, but most renters don't give a hoot about the whole affair.

Q: Will there ever be an explanation for bubbles that we can all agree upon?

A: Sure, my explanation is correct. We should all agree on it.

Q: Will there ever be a time when the discussion about bubbles goes away? Is this just a passing fancy?

A: When all the local bubbles deflate, the discussion will go away. The reason the discussions happen is because there is cognitive dissonance between wanting to believe there is no bubble and knowing for a fact that there is.

Q: What has motivated you to participate in the bubble discussion and what have you learned?

A: The sheer irrationality of the loans and relentless spin on the part of Realtors motivated me to write the things I could not find in the mainstream press.

Think Twice Before You Refinance to Save Your Home

The below article discusses the pitfall that many homeowners find themselves in as ARM loans begin to adjust and they can't afford the payments. People used to think that ARM loans were not a problem because home prices would continue to rise and they could sell if they had to. That is no longer the case. Two lessons for homeowners here:
1. If you are in a ARM loan and are beginning to realize you can't afford your payments, refinancing what little equity you might have could spell disaster and severely limit your options. Review your loan's terms and understand what your payment will be after the loan adjusts.

2. If you are already behind on your payments, saving your credit is of primary concern. Selling your home may be a difficult decision, but consider your alternatives. Losing your home and your credit would severely limit your ability to buy another home quickly. Be careful when thinking about refinancing as a way to save your house.

If you have questions about your particular situation or want an instant offer on your house, go to www.SDHomeSaver.com or email me direct at SDHomeSaver@gmail.com.

Press release from: Thehomebuyingcenter.com Published date: 02-13-2007 11:50 AM - CET

( EMAILWIRE.COM, February 12, 2007 ) SACRAMENTO, CALIF — During the past several years in housing markets on the East and West coasts many people purchased homes that were more expensive than they could afford because they believed that they could always sell their house for a profit if their financial situation worsened. Unfortunately, for thousands of these homeowners these plans are not working out as expected.

For many people an adjustable rate mortgage was the only way they could secure a low enough monthly payment, in the short term, to afford a home. Skyrocketing home prices created a boomtown mentality and first-time homebuyers felt that if they did not get into the market they might never be able to do so. According to experts such as Patrick McGilvray, J.D., President of http://wwwTheHomeBuyingCenter.com “the chickens are beginning to come home to roost and many people who borrowed money to buy homes are suffering from payment shock as their monthly payments jump significantly. Furthermore, people who want to sell their house fast cannot do so because the residential real estate market has slowed considerably.”

Mr. McGilvray is referring to what happens when an adjustable rate mortgage’s intial low interest rate period expires and the loan readjusts. Many policy experts and government officials are calling now for an analysis of a borrower’s ability to pay their mortgage when it readjusts, not just during the initial period.

According to the Mortgage Bankers Association, 12.5 percent of riskier mortgages were delinquent in the fall of 2006 and that almost 1 million homeowners across the country lost their homes to foreclosure or missed their monthly payments from July to September.

Pam Canada, executive director of NeighborWorks Home Ownership Center in Sacramento, said of people like this, “The market did not save them…This was a nightmare with no happy ending.”

Ed Smith Jr., CEO of Plaza Financial Group, Inc. of San Diego, California said of the mortgage industry, “Lenders and brokers defended the creative loans, noting that they have helped hundreds of thousands of families own their own homes. The problem is that many consumers have not prepared an exit strategy.”

Further complicating the residential housing picture is the fact that almost half of the consumers in the United States think that a housing price crash will occur in their local real estate market sometime in the next three years.

This information was recently collected during a survey conducted by Experian and Gallup. Experian of Costa Mesa, California reported that the 47 percent of Americans who feel a crash is likely is up sharply from the 37 percent who felt this way in May of 2005 and the 42 percent who said the same thing in April of 2006.

Experts estimate that 90% of people who secured a mortgage loan based on ‘stated income’ in the past several years lied about their income. When a rational observer considers this in the context of a rising interest rate environment, and stagnant or falling home prices her or she must assume that we are seeing the early edges of what could be a very destructive economic hurricane.

If you have questions about your particular situation or want an instant offer on your house, go to www.SDHomeSaver.com or email me direct at SDHomeSaver@gmail.com.

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."

To understand your options and receive an instant offer, please visit www.SDHomeSaver.com or email me directly at SDHomeSaver@gmail.com .