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February San Diego Home Sales

Looking at February sales numbers, there were 2059 homes sold (includes all types and relies on the hope that agents have listed homes sold as “sold” in mls). This is an 8% reduction from last year and combined with January’s 10% reduction, puts us about 400 homes behind last year at this time. The trend is likely to continue, as there are also fewer homes in escrow than there were last year.
The slower pace of sales is more than offset by the lower number of listings (37%) than we had at this time last year. This makes sense as inventory really started to dive last year in April as the banks were actively holding off the foreclosure process. Inventory was down at the end of February compared to the end of January by about 5% (550 homes), but there is already an additional 400 homes on the market on the 6th of March.
The graph below shows the last 6 years activity (I’m going to have to go to a quarterly graph soon)

Buy a Home, Real Estate Market, San Diego Real Estate Market

Monday Morning Coffee

Delaying Foreclosures to Get Re-Elected

February 28, 2010

Good morning,

I hope you had a nice weekend.  We had the open house for our Rancho Bernardo office on Friday afternoon and had a nice turnout.  Thank you to everyone who stopped by.  After being cooped up in the house Saturday, it was nice getting out for a walk with Zach before going to the office on Sunday.  Most of Sunday was spent getting data ported over to our new web site which should be up and running by the end of the week.  Things are getting really busy and with the typical spring increase in activity coupled with ramping up the new office and switching over all our web sites, sleep seems to be  a luxury right now.  Very glad the team is running smoothly right now – speaking of team, Cori is doing well enough in her recovery from the multiple back surgeries that she is back handling our property management again.  It is nice to have her involved again.

A couple of quick notes on the market.  Things seem a little slower now than they were a couple of months ago.  Not so much that homes aren’t selling, but instead of 7-8 offers, we are getting 1 or 2.  It could just be that everyone bought when they thought the tax credit was expiring, but it could also be the start of a trend.

I saw an article last week that didn’t make sense.  The headline was: Obama May Prohibit Home-Loan Forelcosures Without HAMP Review.  I know some of you out there are going to make that silly argument about that Constitution thingy we studied in school, but I think there is a clause they didn’t tell us about where the President can ignore certain parts of it if he really needs to.  The effect of a HAMP review would be to delay the foreclosures for about three months (plus another three while they get the systems in place to process everything), so another 6 months of artificially tight supply.

Then, another piece fell into place on Friday.  A colleague of mine who does a lot of work with the foreclosure departments at many large banks and loan servicers was told that the banks are being pressured to keep their foreclosures off the market until after the mid-term elections.  That made me wonder if maybe the HAMP review proposal was designed to keep the foreclosures from hitting the market until after the election in November.  

Ok, so I went back and did a quick re-read of that same Constitution we slept through in high school.  And guess what?  The whole ”ignore sections of this document if they are inconvenient to your current crises or desire to be re-elected” clause never made it in there. 

I know I am making light of a bad situation, but I think that we ought to consult the original rule book every once and awhile to make sure we are still playing the right game.

Ok, enough on the whole Government hijacking the country theme.  Let’s talk about a positive!

We’ve got a great new listing in 4S Ranch.  This home has 4 bedroom suites (1 downstairs), a loft, and a great layout for the growing family.  Due to allergies of one of the children, almost every room has engineered wood flooring and the house is spotless.  If you know anyone wanting to move into the Poway School District, please shoot them over to the site.

We have a couple more new ones, but the virtual tours are not ready yet, so I will have them next week – along with the new web site!

Enjoy the Coffee!!!

Bad Temper

There once was a little boy who had a bad temper. His father gave him a bag of nails and told him that every time he lost his temper, he must hammer a nail into the back of the fence.

The first day, the boy had driven 37 nails into the fence. Over the next few weeks, as he learned to control his anger, the number of nails hammered daily gradually dwindled down. He discovered it was easier to hold his temper than to drive those nails into the fence.

Finally the day came when the boy didn’t lose his temper at all. He told his father about it and the father suggested that the boy now pull out one nail for each day that he was able to hold his temper. The days passed and the boy was finally able to tell his father that all the nails were gone.

The father took his son by the hand and led him to the fence. He said, “You have done well, my son, but look at the holes in the fence. The fence will never be the same. When you say things in anger, they leave a scar just like this one. You can put a knife in a man and draw it out. It won’t matter how many times you say I’m sorry the wound is still there. A verbal wound is as bad as a physical one.”

 Have a Great Week!

Scott Voak

Bailout, Deficiency Judgement, Mortgage Fraud, Mortgages, Real Estate Market, San Diego Real Estate Market

Monday Morning Coffee

One West Bank & The FDIC

February 22, 2010

Good morning,

I hope you had a great weekend.  As I am typing, the sky has opened up on another rain storm in San Diego.  This could complicate things as we have 3 new listings we need to shoot photos for on Tuesday (that’s called a teaser!)  I am going to give you a couple of quick notes and let you click through for more information.  But first – HAPPY BIRTHDAY CORI!  That’s right, my wife turns, well let’s just say younger than me today.  We are looking forward to going out with our friends John and Jean to celebrate tomorrow night.

Secondly, I am VERY HAPPY to announce that I have added Adriana Amon to my team as a buyers’ agent.  Adriana lives a long stone’s throw away from me in 4S Ranch and she has a strong background as a lender prior to stepping into her agent shoes two years ago.  She is very involved in the community and we have served together on charitable foundations in the past.  I was looking for someone who combined a love for real estate with a commitment to the community and for the 4S Ranch and Del Sur areas, she was the only person I considered (so good thing she accepted!)  We are happy to have her on board and look forward to great things.

Ok,  a couple of quick points on the real estate market:

• You may have seen a video last week being sent around that was done by a couple of mortgage brokers that ripped the FDIC for selling the assets of Indy mac to One West Bank.  The terms they allege are pretty bad as One West received a guarantee that the FDIC would cover loses on every loan and the losses were calculated from the original loan balance and not what One West paid for them.  The video is here.
• The FDIC took the unusual step of answering the video as it was spreading viraly.  Their response is here.
• Then, the brokers ran a response to the response which is here.

My thoughts on this are that One West did receive a great deal and I don’t like the fact that some of the One West senior management were the same people that helped cause this crash in the first place.  However, we also have to consider that the FDIC needs to get rid of the assets of these failed banks and there are not a lot of people walking around with the experience to run this type of bank nor the access to cash needed to make this purchase.  Because of these two factors, whomever bought the assets was going to have to get a great deal (if you know a good banker, and have a couple hundred million dollars you can get a hold of, you might get a similar deal).  That said, I think it is disgusting that the bank then insisted that the  borrowers doing the short sale sign a promissory note to complete the sale – the bank was not going to take a loss at all, saddling the defaulted homeowner with a permanent anchor as they try and swim to shore is inexcusable.

My second topic is on short sales.  We are finding the following is happening:

•  There is a lot of agents that are marketing themselves as ”short sale specialists” and are doing more harm than good.  These agents are listing homes 20% under market in order to drive a bunch of offers they can take to the bank.  The problem is, that banks are getting tired of agents underselling homes and are suspicious that the buyer may be related to either the agent or the seller.  Therefore, they come back with a higher counter or just foreclose.  Unfortunately, the house sits on the market for the 6-9 months the agent is trying to get the short sale approved and brings down the value of all the homes around it.  I spoke to one agent this weekend who had done this (and received so many calls she finally would only schedule appointments by text) and her position was that she wasn’t worried about the neighborhood but only about her client.  What she didn’t realize is that this is a tactic that doesn’t w ork anymore and only hurts everyone involved.   I think as agents, we have the responsibility to do the best we can for our clients and that we can do that in a way that doesn’t destroy neighborhood values.  However, we have very low standards of entry into real estate and not all agents share this view.  If you know someone thinking of a short sale, let them know that the banks are not blindly accepting offers significantly below market price and if they just list slightly below market, they will get the offers they need.
• We have noticed a big change in lender negotiating of short sales in the last 6 weeks.  Lenders are insisting on seeing owners IRA and 401k statements even though they cannot legally go after that money.  The strategy the banks are using is that if they own the second loan and turn down the short sale causing the first lender to foreclose, the second loan can chase the borrower for the money they have lost (as long as it isn’t purchase money).  They are betting that the borrower will dip into their retirement for a portion of the loan in exchange for not being chased for years. 
• While this is troubling, I don’t find it unethical by the banks.  After all, the borrower promised to pay the loan back and the bank can negotiate as hard as they want – just make sure you have a good negotiator on your side if you are looking at a short sale.
• I believe we are at the beginning of a trend where the banks are going to be harder on defaulted borrowers.  I think that initially they were fearful that the Obama led government would come down hard on them if they did not cooperate with loan modification programs.  But now that the Home Affordable Program is looking like a pretty solid failure and Obama has lost a lot of his political power, I think the banks are getting bolder in going after people who owe them money and are not paying.  Make sure you have a good legal and negotiating team on your side when taking on your bank.

Ok, we have some new listings coming out this week, but I will wait until we have photos to show you – weather permitting, that will be next Monday.

So, enjoy the Coffee!  This time it is once again by way of my Dad in Arizona (and no, I did not check it on Snopes, it is a good story regardless!)

RED MARBLES

I was at the corner grocery store buying some early potatoes.  I noticed a small boy, delicate of bone and feature, ragged but clean, hungrily appraising a basket of freshly picked green peas. 

I paid for my potatoes but was also drawn to the display of fresh green peas. I am a pushover for creamed peas and new potatoes. Pondering the peas, I couldn’t help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to me. 

‘Hello Barry, how are you today?’ 

‘H’lo , Mr. Miller. Fine, thank ya. Jus’ admirin’ them peas. They sure look good.’ 

‘They are good, Barry. How’s your Ma?’ 

‘Fine. Gittin’ stronger alla’ time.’ 

‘Good. Anything I can help you with?’ 

‘No, Sir. Jus’ admirin’ them peas.’ 

‘Would you like to take some home ?’ asked Mr.. Miller. 

‘No, Sir. Got nuthin’ to pay for ‘em with.’ 

‘Well, what have you to trade me for some of those peas?’ 

‘All I got’s my prize marble here.’ 

‘Is that right? Let me see it’ said Miller.. 

‘Here ’tis. She’s a dandy.’ 

‘I can see that.. Hmmmmm, only thing is this one is blue and I sort of go for red. Do you have a red one like this at home ?’ the store owner asked. 

‘Not zackley but almost..’ 

‘Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble’.. Mr. Miller told the boy. 

‘Sure will. Thanks Mr. Miller.’ 

Mrs. Miller, who had been standing nearby, came over to help me.. With a smile she said, ‘There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn’t like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store..’ 

I left the store smiling to myself, impressed with this man. A short time later I moved to Colorado , but I never forgot the story of this man, the boys, and their bartering for marbles. 

Several years went by, each more rapid than the previous one. Just recently I had occasion to visit some old friends in that Idaho community and while I was there learned that Mr. Miller had died. 

They were having his visitation that evening and knowing my friends wanted to go, I agreed to accompany them. Upon arrival at the mortuary we fell into line to meet the relatives of the deceased and to offer whatever words of comfort we could. 

Ahead of us in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts….all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband’s casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her, and moved on to the casket.. 

Her misty light blue eyes followed them as, one by one; each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the mortuary awkwardly, wiping his eyes. 

Our turn came to meet Mrs. Miller. I told her who I was and reminded her of the story from those many years ago and what she had told me about her husband’s bartering for marbles. With her eyes glistening, she took my hand and led me to the casket. 

‘Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim ‘traded’ them. Now, at last, when Jim could not change his mind about colour or size…..they came to pay their debt.’ 

‘We’ve never had a great deal of the wealth of this world,’ she confided, ‘but right now, Jim would consider himself the richest man in Idaho.’ 

With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shined red marbles. 

I was at the corner grocery store buying some early potatoes.  I noticed a small boy, delicate of bone and feature, ragged but clean, hungrily appraising a basket of freshly picked green peas. I paid for my potatoes but was also drawn to the display of fresh green peas. I am a pushover for creamed peas and new potatoes. Pondering the peas, I couldn’t help overhearing the conversation between Mr. Miller (the store owner) and the ragged boy next to me. ’Hello Barry, how are you today?’ ’H'lo , Mr. Miller. Fine, thank ya. Jus’ admirin’ them peas. They sure look good.’ ’They are good, Barry. How’s your Ma?’ ’Fine. Gittin’ stronger alla’ time.’ ’Good. Anything I can help you with?’ ’No, Sir. Jus’ admirin’ them peas.’ ’Would you like to take some home ?’ asked Mr.. Miller. ’No, Sir. Got nuthin’ to pay for ‘em with.’ ’Well, what have you to trade me for some of those peas?’ ’All I got’s my prize mar ble here.’ ’Is that right? Let me see it’ said Miller.. ’Here ’tis. She’s a dandy.’ ’I can see that.. Hmmmmm, only thing is this one is blue and I sort of go for red. Do you have a red one like this at home ?’ the store owner asked. ’Not zackley but almost..’ ’Tell you what. Take this sack of peas home with you and next trip this way let me look at that red marble’.. Mr. Miller told the boy. ’Sure will. Thanks Mr. Miller.’ Mrs. Miller, who had been standing nearby, came over to help me.. With a smile she said, ‘There are two other boys like him in our community, all three are in very poor circumstances. Jim just loves to bargain with them for peas, apples, tomatoes, or whatever. When they come back with their red marbles, and they always do, he decides he doesn’t like red after all and he sends them home with a bag of produce for a green marble or an orange one, when they come on their next trip to the store..’ I left the store smiling to m yself, impressed with this man. A short time later I moved to Colorado , but I never forgot the story of this man, the boys, and their bartering for marbles. Several years went by, each more rapid than the previous one. Just recently I had occasion to visit some old friends in that Idaho community and while I was there learned that Mr. Miller had died. They were having his visitation that evening and knowing my friends wanted to go, I agreed to accompany them. Upon arrival at the mortuary we fell into line to meet the relatives of the deceased and to offer whatever words of comfort we could. Ahead of us in line were three young men. One was in an army uniform and the other two wore nice haircuts, dark suits and white shirts….all very professional looking. They approached Mrs. Miller, standing composed and smiling by her husband’s casket. Each of the young men hugged her, kissed her on the cheek, spoke briefly with her, and moved on to the casket.. Her misty lig ht blue eyes followed them as, one by one; each young man stopped briefly and placed his own warm hand over the cold pale hand in the casket. Each left the mortuary awkwardly, wiping his eyes. Our turn came to meet Mrs. Miller. I told her who I was and reminded her of the story from those many years ago and what she had told me about her husband’s bartering for marbles. With her eyes glistening, she took my hand and led me to the casket. ’Those three young men who just left were the boys I told you about. They just told me how they appreciated the things Jim ‘traded’ them. Now, at last, when Jim could not change his mind about colour or size…..they came to pay their debt.’ ’We’ve never had a great deal of the wealth of this world,’ she confided, ‘but right now, Jim would consider himself the richest man in Idaho.’ With loving gentleness she lifted the lifeless fingers of her deceased husband. Resting underneath were three exquisitely shined red marbles. 

Have a Great Week!

Scott Voak

Bailout, Monday Morning Coffee, Mortgages

Monday Morning Coffee

Greece Defaulting Could Ripple into Your Mortgage

February 14, 2010

Good morning,

I hope you had a very nice Valentines Day.  We celebrated a day early and enjoyed a quiet night at the Rancho Bernardo Inn (no 6:00 am wake-up!)  I’ve been reading a lot of various “experts” talk about what direction the market is going to go.  What I have found is the stock analyists in general say we’re going up (they sell stocks, so that makes sense).  People in the bond market say we’re going down (also makes sense as they want to sell bonds).  People selling gold, well they’ve been saying the end is near since just about the begining.  So, I don’t have any answers at this point, but I sure don’t feel very comfortable with rising debt, Greece potentially defaulting and the end of the stimulous around the corner.  My guess is that the Fed steps in and extends (although at about 1/2 the rate) the purchase of mortgages in an effort to provide a soft landing for the real estate market.

I was spending some time trying to write out in easy terms how we got into this mess (mostly hoping it would help me see how we were going to get out of it).  After about 6 hours, a client showed me a very cool web site (if he had come in the day before, I could have saved the 6 hours!).  This is the best description I have seen for how we arrived where we are today, and it is done at about the 8th grade level.

We have a new site up for our listing in the Garden Gate community of 4S Ranch.  We started showing this 4 bedroom, 2300+ sf home yesterday and currently have one offer in.  If you know someone who would be interested, please have them call me!

We also have a great 3 bedroom condo in Pacific Beach for rent.  It is located on Crown Point with a view of the water.

That’s it for this week.  Enjoy the coffee!

Just Five More Minutes
  by: Author Unknown, Source Unknown

 

While at the park one day, a woman sat down next to a man on a bench near a playground.

“That’s my son over there,” she said, pointing to a little boy in a red sweater who was gliding down the slide.

“He’s a fine looking boy” the man said. “That’s my daughter on the bike in the white dress.”

Then, looking at his watch, he called to his daughter. “What do you say we go, Melissa?”

Melissa pleaded, “Just five more minutes, Dad. Please? Just five more minutes.”

The man nodded and Melissa continued to ride her bike to her heart’s content. Minutes passed and the father stood and called again to his daughter. “Time to go now?”

Again Melissa pleaded, “Five more minutes, Dad. Just five more minutes.”

The man smiled and said, “OK.”

“My, you certainly are a patient father,” the woman responded.

The man smiled and then said, “Her older brother Tommy was killed by a drunk driver last year while he was riding his bike near here. I never spent much time with Tommy and now I’d give anything for just five more minutes with him. I’ve vowed not to make the same mistake with Melissa.

She thinks she has five more minutes to ride her bike. The truth is, I get Five more minutes to watch her play.”

Have a Great Week!

Scott Voak

Bailout, Monday Morning Coffee, Real Estate Market, San Diego Real Estate Market

Monday Morning Coffee

Short Sale Alternative

February 8, 2010

Good morning.  I hope you had a nice weekend and enjoyed the Super Bowl (in which case you don’t live in Indianapolis).  We had a busy week which included both a positive and a negative short sale experience.  Banks are starting to be more aggressive in seeking additional funds from sellers trying to short sell houses if they think they can get it and they are also less willing to delay foreclosure if they think foreclosing is in their best interests.   Details are long and probably of little interest to most of you, but if you are considering a short sale, let me know and I will fill you in.

Speaking of short sales, I have an exciting alternative for those of you who might be stuck in a situation where you could lose your home.  I have an investor who is willing to either buy your home in a short sale and rent it back to you for 3 years until you can buy it back from him (at the same price he paid) or, help you buy a different home after you short sell yours.  I met with him two weeks ago on this program and while it will not work for everyone, it will work for some.  His goal is cash flow, so the way the program works is that you pay all his loan costs, taxes, maintenance, etc. (once he buys the home, he doesn’t put any more into it) plus a monthly fee to him.  The numbers are somewhat complicated, but if you are in a home that is worth about 35-40% less than what you owe and have a good income, he might be able to help you.  If so, shoot me an email and I will get back to you.

We have one new home this week.  It is a short sale in the Gianni complex at 4S Ranch.  It is a 3 bedroom condo with very nice upgrades.  The seller is asking $399k.

That’s it, enjoy the Coffee!

Adrift by: Adam Khan, Self-Help Stuff That Works In 1982 Steven Callahan was crossing the Atlantic alone in his sailboat when it struck something and sank. He was out of the shipping lanes and floating in a life raft, alone. His supplies were few. His chances were small. Yet when three fishermen found him seventy-six days later (the longest anyone has survived a shipwreck on a life raft alone), he was alive — much skinnier than he was when he started, but alive. His account of how he survived is fascinating. His ingenuity — how he managed to catch fish, how he fixed his solar still (evaporates sea water to make fresh) — is very interesting. But the thing that caught my eye was how he managed to keep himself going when all hope seemed lost, when there seemed no point in continuing the struggle, when he was suffering greatly, when his life raft was punctured and after more than a week struggling with his weak body to fix it, it was still leaking air and wearing him out to keep pumping it up. He was starved. He was desperately dehydrated. He was thoroughly exhausted. Giving up would have seemed the only sane option. When people survive these kinds of circumstances, they do something with their minds that gives them the courage to keep going. Many people in similarly desperate circumstances give in or go mad. Something the survivors do with their thoughts helps them find the guts to carry on in spite of overwhelming odds. “I tell myself I can handle it,” wrote Callahan in his narrative. “Compared to what others have been through, I’m fortunate. I tell myself these things over and over, building up fortitude….” I wrote that down after I read it. It struck me as something important. And I’ve told myself the same thing when my own goals seemed far off or when my problems seemed too overwhelming. And every time I’ve said it, I have always come back to my senses. The truth is, our circumstances are only bad compared to something better. But others have been through much worse. I’ve read enough history to know you and I are lucky to be where we are, when we are, no matter how bad it seems to us compared to our fantasies. It’s a sane thought and worth thinking. So here, coming to us from the extreme edge of survival, are words that can give us strength. Whatever you’re going through, tell yourself you can handle it. Compared to what others have been through, you’re fortunate. Tell this to yourself over and over, and it will help you get through the rough spots with a little more fortitude.

Have a Great Week!

Scott Voak

Monday Morning Coffee, Short Sale

Monday Morning Coffee

Is the Stimulus just Delaying Another Housing Crash?

January 31, 2010

Good morning,

I hope you had a great weekend.  We had another week of fighting colds, but did manage to be fairly productive.  I was hoping to spend some time last week researching the issue of inflation vs deflation and appreciate the reports that many of you sent.  However, since two of them were over 70 pages, I didn’t get through everything.  I did find a couple of things that were interesting, one relating to the economy in general and the other specifically to the bail out.

The first was a one line quote that was so simple yet made a ton of sense.  It is often quoted that consumer spending is 70% of the economy (before the recent government stimulous).  Everyone is waiting for the consumers to start spending.  The author of this article made the point that “Consumers don’t spend.  Producers do.”  The point of his article was that consumers spent in the past because they could run up credit and use their homes as ATMs.  In the future, they are going to have to have jobs so they can pay down the bills from previous spending and then they will spend.  With over 10% unemployment (and those employed trying to pay down debts), the author’s point is it is unlikely that the 70% of our economy that is consumer driven is going to come back soon.

Relating to the bail out, an independant watchdog at the Treasury Department said that the $700B bailout might have stopped a meltdown last year, but have put us in a position for a larger meltdown as the companies that were “to big to fail” are now bigger and taking more risks because they know the government will bail them out.  Specifically in the housing area, over 90% of the loans originated lated year are backed by the government.  Which means if they fail, it isn’t private investors on the hook, but the US tax payer.  Based on the article, the only reason the market has rebounded is the massive government subsidies and tax breaks for mortgages.  It contends that once this ends, prices may fall to 8-10% below the lows of last spring.  Yikes – I think I’m going back to bed for another week.

I will spend some time this week to go through all the deflation/inflation reports.

We did have a productive week though.  We listed three new homes and put one into escrow.  In addition to the three new ones, I want to highlight one from last week again.  The homes:

Silent Short Sale – This is a 3 bedroom plus loft and office with a pool.  It is on the north side of 4S Ranch and we have one person interested in it now, but would like to have 2 or 3 to show this weekend.  We will take the best offer to the bank, so there is a chance to get a good deal on this one as it may go slightly under $700k.

5 Bedroom with a pool and a view!  We will be putting this on just after the Super Bowl.  Photos will be later this week, so I might have a site for you next Monday.  It is 3990sf and is in the Terreno development with a huge yard and sunset views.  It will be initially priced in the low to mid $900k range and is a truly unique property.

4 Bedroom Gated Community – This is a very nice plan 3 home in Garden Gate.  It is on the outside, so there is nobody behind it.  It is extremely nice inside and features the oversized island in the kitchen.  There is a full bedroom and bath downstairs.  This is a normal sale and will go fast.  We have not set pricing on it yet, but it is most likely going to go in the low to mid $600k range.

Short Sale Condo – A 3 bedroom in the Gianni complex across from Monterey Ridge Elementary.  The short sale may take some time, but if you are patient it is a good chance to get a 3 bedroom for hopefully under $400k.

 That’s it.  Enjoy the Coffee!  This one was sent to me by a client who just moved out of the area.  I was going to save it for a holiday, but – why wait.  Thanks to Shanzar for sending it to me.

Written by an Australian Dentist  

To Kill an American

You probably missed this in the rush of news, but there was actually a report that someone in Pakistan had published in a newspaper, an offer of a reward to anyone who killed an American, any American.  

So an Australian dentist wrote an editorial the following day to let everyone know what an American is . So they would know when they found one. (Good one, mate!!!!)

‘An American is English, or French, or Italian, Irish, German, Spanish , Polish, Russian or Greek. An American may also be Canadian, Mexican, African, Indian, Chinese, Japanese, Korean, Australian, Iranian, Asian, or Arab, or Pakistani or Afghan.

An American may also be a Comanche, Cherokee, Osage, Blackfoot, Navaho, Apache, Seminole or one of the many other tribes known as native Americans.

An American is Christian , or he could be Jewish, or Buddhist, or Muslim. In fact, there are more Muslims in America than in Afghanistan . The only difference is that in America they are free to worship as each of them chooses.

An American is also free to believe in no religion….. For that he will answer only to God, not to the government, or to armed thugs claiming to speak for the government and for God.

An American lives in the most prosperous land in the history of the world.
The root of that prosperity can be found in the Declaration of Independence , which recognizes the God given right of each person to the pursuit of happiness.

An American is generous. Americans have helped out just about every other nation in the world in their time of need, never asking a thing in return………

When Afghanistan was over-run by the Soviet army 20 years ago, Americans came with arms and supplies to enable the people to win back their country!

As of the morning of September 11, Americans had given more than any other nation to the poor in Afghanistan ….
The national symbol of America , The Statue of Liberty , welcomes your tired and your poor, the wretched refuse of your teeming shores, the homeless, tempest tossed. These in fact are the people who built America  

Some of them were working in the Twin Towers the morning of September 11, 2001 earning a better life for their families. It’s been told that the World Trade Center victims were from at least 30 different countries, cultures, and first languages, including those that aided and abetted the terrorists.
 So you can try to kill an American if you must.. Hitler did. So did General Tojo , and Stalin , and Mao Tse-Tung, and other blood-thirsty tyrants in the world. But, in doing so you would just be killing yourself . Because Americans are not a particular people from a particular place. They are the embodiment of the human spirit of freedom. Everyone who holds to that spirit, everywhere, is an American.

Have Great Week!

Scott Voak

858 688 0189

Monday Morning Coffee, Real Estate Market, San Diego Real Estate Market

Monday Morning Coffee

January 24, 2010

Good morning!

Hope you had a great weekend and enjoyed the sun while it made it’s welcome return (for those of you not in San Diego, 4 consecutive days of rain had the ship building engineers at NASCO looking for The Ark specifications)  Last week was a good one for us.  I did not mention it previously, but I went through a short spell (several hours) where I lost the ability to write.  I just could not make a pen move the way it was supposed to.  I went through some neurological tests and after a stressful week plus, I finally had an MRI. 

Fortunately, they found nothing wrong (something about a Homer Simpson sized brain though).  So, the Dr. has no idea.  Hey, as long as it’s not a stroke or a tumor, I can live with a confused doctor.  To celebrate this great news, I caught Zach’s cold and spent 2 days in bed…

…which gave me some reading time, and I may want to reverse my thoughts that all the money the Fed is pumping into the economy will be inflationary (my maybe not so brilliant blog from 2 weeks ago).  A couple of studies I read brought up the fact that adding money to the economy is inflationary only if it gets to the public’s pockets so we can spend it and drive prices up.  Right now, a lot of the money the Fed is injecting seems to be covering bad loans rather than entering the economy.  It certainly is not doing much for unemployment.  I need to study some more.  If anyone has some good sources, I would appreciate taking a look at them.

I have a couple of new listings this week.  The first is the one I mentioned last week.  It is a 4 bedroom in the Canyon Ridge neighborhood of 4S and it has a pool.  We still cannot get in to show it yet but do have the site up.  It has a great backyard.

We also have another of our silent short sales.  This one is on the north side of 4S Ranch and is a Silver Crest Plan 3 (3400 sf).  It has an office downstairs and a loft upstairs so it technically is a 3 bedroom, but the loft can easily be converted to a large bedroom (already has a closet).  Unique to this home is that it is one of the few on the north side of 4S Ranch with a pool.  If you are interested in seeing this one, please let me know.  The owners do not want it on the MLS at this time, so it will go out to you and to some of the better agents in the area to see if they have buyers.  It is a good opporunity to get a home at below market price.  We are pricing it originally at $700k and will take the best offer we have in 2 weeks to the bank.

We also listed a fantastic Terreno plan 3 (3,990 sf).  This home sits on one of the better lots (almost 1/3 acre) in the development and features a pool and a panoramic south-west sunset view.  There is a full bedroom suite downstairs and four additional beds upstairs.  We plan on putting it on the market after the Superbowl.  If you are interested, let me know and I will get you in as soon as it is ready.  We expect to price it in the mid $900k range.

I am working on a couple of smaller homes too, and should know on those in a couple of days.

Ok, that’s it.  Enjoy the Coffee!

This week is a continuation on the inspirational stories from people who face life with more challenges than most of us.  After last week’s follow up to the autistic basketball story, two of you sent me the story of Patrick Henry Hughes.  Thanks to Randy and Sue for bringing it to my attention:

http://www.youtube.com/watch?v=-qTiYA1WiY8&feature=related

Have a Great Week!

Scott Voak

858 688 0189

Monday Morning Coffee

Monday Morning Coffee

What Happens when the Fed stops buying MSBE’s?

Januray 17, 2010

Good morning,

I hope you had a great weekend.  We were very busy as we had 18 friends over for dinner on Friday night and went to the San Diego Association of Realtors Installation Dinner where our friend Mark Marquez was installed as President on Saturday night.  So now, it is a race for bed!

Updated my blog earlier today with a post on what is going to happen when the Fed stops buying MSBEs in March.  The short version is that the market will slow, interest rates will rise and they will step in again to resume purchases, but on a smaller scale with rates up about 1% over the year.  The long version is here.

We have a new couple of new homes this week, but due to lingering issues with the office move, I do not have single property sites up for them yet.  Both are short sales:

Palomino Plan 3 in 4S – 4550sf 6 bedroom home with a 4 car garage on a very large lot.  It is priced at $900k.  We have offers on this and will probably be off the market early in the week.

Canyon Ridge Plan 2 in 4S – 3600+ sf 4 bedroom home with an loft and an office over the garage.  This is also a large lot and has a pool (but there is an issue with underground water that needs to be dealt with or at least acknowledged).  There are no showings on this until next weekend when we will have an open house (owners are packing).  It is priced at $800k.

That’s it – I will have single property sites for them next week.

Enjoy the Coffee!

This week I am revisiting a story I posted last year for an update.  It’s the one about the autistic basketball player and hits home for Cori and I as Zach’s Fragile-X puts him on the autistism spectum.  As he is getting older, his issues are becoming more pronounced and we gain more respect every day for both our own son and other families that navigate the world of autism/Fragile-X every day.  He is almost 4, and although I prefer he take up soccer to basketball (due to my own limited skills), any way he can have a moment like this would be worth it.  Videos like this are a great source of hope for parents who have handicapped children.

Have a Great Week!

Scott

Bailout, Buy a Home, Monday Morning Coffee, Mortgages

I was looking at numbers over the last year as they related to sales values to try and figure out what effect that Fed’s purchases of Mortgage Backed Securities has been.  A major problem it getting accurate numbers is that housing prices are reported as an average or median price.  In markets that are consistent, this is a good method to use.  However, when the market changes (as it has recently) the median price especially becomes less and less meaningful.  Here’s a quick explanation:

Let’s say there are 10 houses that sell. 

• 4 are two bedroom homes that sell for $200k.
• 2 are four bedroom homes that sell for $400k.
• 4 are six bedroom homes that sell for $600k. 
• In this case, your median price is $400k (median is the price of the average home, not the average price of homes). 

 Now, let’s say the price for each home increases $50,000.  However, due to a factor such as loans being difficult or no inventory being available on 6 bedroom homes, we sell the following homes:

• 4 two bedroom homes for $250k.
• 2 four bedroom homes for $450k.
• 1 six bedroom home for $650k.
• In this case, your median price is $250k. 

Here is a simplistic example showing that the median price fell even though the price on every home increased.  It is also the reason why current data on housing prices is to be viewed a little skeptically.  My guess is that the data on median prices is under reporting the gain in housing because the shift has been towards more less expensive homes selling which brings the median down. 

So, I looked at my favorite housing micro-economy, 4S Ranch.  Here I can break houses down to similar sizes and ownership (condo vs fee simple) and look at what a slice of homes has done over several years.  In some of the data segments, there are not enough sales to be meaningful,  but in others, there is a large enough sample size to give a relatively clear picture.  A problem does come into play when one segment has several short sales or foreclosures in a quarter as they skew the prices downward.  Going through the home sales for the past year and trying to adjust for foreclosures, etc.  I come to the following conclusions (with reservation as this is not exact by any means and there is a good margin for error):

• Detached homes priced under $650k were up 5-12% (the 12% is a little shaky due to small sample size).  I would feel fairly comfortable saying these homes are up in general about 7% in the last year.
• Homes priced above $800k slumped early in the year, but have made it back to about even. 

I think a large part of the difference here is the fact that loans are much easier to get in the lower price ranges (in fact, all of the homes I have sold over $800k in the last year have been bought by buyers with large downpayments.  There are almost no loans above $700k to be had).  The only reason that loans below $700k are available at current interest rates is that the Fed has been buying them from the banks to the tune of many BBBBillions of dollars a week.  If this ends as scheduled in March, rates are going to have to rise for the following very simple reason – we have to entice someone else to buy the loans.  Here’s a fictional conversation between Bank of America and China:  Remember those BBBBillions of dollars of loans we sold you a couple of years ago?  We know it didn’t turn out real well for you what with all those defaults and foreclosures.  But….how about buying a couple hundred BBBBillion more?  It is not too hard to see that China (or any other buyer of mortgages) is going to want a higher return for taking on the risk.  A higher return for them means higher rates for you and me. 

So, if the Fed stops buying mortgages as planned in March, rates will rise rather quickly.  How high and how fast?  Well they have to rise high enough that the rest of the world will buy the loans, but not high enough that people stop buying houses.  Market “experts” think rates will rise between .75% and 2%.  If they rise 1.5%, it could take someone who qualifies for a $640k loan down to about a $495k loan.  That would take the wind right out of the housing market.  A buyer who has been looking at a $675k house an imagining the four bedrooms is not going to put the same payment into a three bedroom condo.  They will likely sit on the sidelines and we will see the number of transactions slow dramatically until prices fall enough to put our buyer back into a four bedroom house. 

So, do I think prices are neccessarily going to drop 20%?  No.  For the same reason I predicted in August that the Home Buyer Tax Credit would be extended – politicians are running the show.  I am not an economist, but I have at least a basic understanding of the markets.  However, I think it is fairly easy to predict what is going to happen – so, here it goes:

• Rates will start to rise in mid-late February (loans that start in mid February will be completed in mid March and have to be sold in late March, when the Fed is scheduled to stop buying them).
• By the end of March it will be pretty clear that rising rates have slowed down the housing market and talk will start fresh about a housing led double-dip recession.
• Democrats who control the entire political engine in Washington will very quickly realize that a summer recession with ever increasing unemployment and vacant foreclosed homes will translate into a lot of lost seats in the House of Representatives in the November election.
• By mid-April (if not sooner) the Fed will announce that they will resume buying MBSEs although on a smaller scale (this will be an attempt to create a soft landing).
• The market will stabilize again although we are not likely to see the same enthusiasm for real estate as we are seeing right now.  This is because the Fed eventually has to get out of buying all the mortgages the banks can write (don’t they?), and as they do, rates will slowly creep up.

Since I am making the prediction, it is sure to not happen, but I think we will end the year with mortgage rates about .75-1% higher than they are today and prices within 3-5% of where they are although they may bounce around a lot before settling down.

Bailout, Mortgages, Real Estate Market