Are Market Signs Pointing Up or Down?

A Look at San Diego Real Estate Drivers

An encouraging sign has been developing in the real estate market.  The number of homes available for sale in San Diego is steadily falling and now sits 15% below the number available last year.  This is the type of trend I look for as an indicator of a changing market.  It is the reverse of what we saw happen in 2005 when the market hit the top.  So, does this indicate the market bottom is finally here?  I’m not so sure.  There are four reasons I am questioning this data:

• Distressed Inventory.  50% of our sales in the county are distressed (short sales, foreclosures, or homes that have been foreclosed on in the last year).  That percentage has been over 50% for quite some time.  Since that is one-half of the current market, what happens to the supply there is key to how San Diego goes over the next couple of years.  According to the online magazine eForeclosure, Notice of Default filings started rising again in August.  With employment not getting much better, this trend will likely continue and create more inventory on the market as we enter the new year.
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Cash Flow Machine – Imperial Beach

Imperial Beach 4-Plex

12.7% Cash-on-Cash

This is one of the better ones I have seen in awhile.  It’s a 4 plex with 3 units currently rented.  Rents are $1,150 on each of the 4 2-bedroom units.   I am allowing $25k for rehab, although that will be spread out over time (increasing the return) as three units are rented and likely do not need much.   Owner pays water, and we have allocated $230 a month for that.  Total deductions for vacancies and expenses are pegged at 33%.

Shoot me an email for the financial sheet and listing so you can do a drive-by.  

If you are not on the email distribution to receive these updates daily, let me know and I would be happy to add you.

Monday Morning Coffee – A look at February Numbers

Monday Morning Coffee

San Diego Real Estate Sales – February, 2011

Good morning,

I hope you enjoyed the great weather this weekend.  Zach and I took a walk  around the neighborhood and it was nice to see some flowers blooming and hear the birds chirping away.  It was also nice to see that last neighbor taking down his Christmas lights – made me feel better about not putting the dishes away.

A quick look at San Diego home sales in February shows a continuing slow down in sales this year when compared to last year.  However, last year was bolstered by the First Time Home Buyer Tax Credit.  Until June, our numbers are going to be compared to numbers that are artificially high, so don’t put too much emphasis on year over year number.  However, just so you know what they are:  (more…)

Monday Morning Coffee – Early Look at January Numbers

Monday Morning Coffee

January  San Diego Home Sales Look to Dissappoint

Good morning,

I hope you had a nice weekend.  Things were quiet for us this weekend as the weather kept us (and potential buyers) indoors.  I am still seeing softness in the market as I will cover below.  We did close a very good investment 3-plex for a client and will be working with him to get the vacant unit painted and rented, at which point he should be able to earn 8-9% a year on his down payment.  I did spend some more time this weekend looking at other possibilities and crossed 3 off the list, but did find a duplex in Spring Valley with potential in the low $300k range.

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Monday Morning Coffee

Monday Morning Coffee

Busy News Week

Monday Morning Coffee – More Investment Opportunities

Monday Morning Coffee

Cash Flow Investments

Monday Morning Coffee – Happy New Year

Monday Morning Coffee

Happy New Year & Happy Cash Flow

San Diego Real Estate Cash Flow Opportunities – Dec 15

Four Properties Qualify as Cash Flow Machines

We have currently identified four properties that meet our criteria as Cash Flow Machines for small investors ($100k).  These are not our listings, but rather opportunities for our investors to profit long term.  Since they are not our listings, we cannot publish their addresses.  We do have a client only site that we can provide access to for clients (must have a buyer-broker agreement) that has photos as well as our write up and financial analysis of each property.  Here is the basic information on each property:

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Monday Morning Coffee

Monday Morning Coffee

October San Diego Home Sales

Good morning,

I hope everyone had a nice weekend. Cori has been feeling a bit out of sorts and it ends up she had a kidney infection, so I am pretty sure all our weekends beat hers.  As you can guess, we played it pretty quiet around the Voak House.  We did go down to Montgomery Field and watch some private planes take off.  We are flying to Tucson this week for my Dad’s 70th birthday and want to get Zach used to planes before he gets on one.  He thought they were “NNNNEEEEAAAAATTTTT!”

Unfortunately, the October sales numbers for the county are not going to be as “neat”.   We currently show 2,395 closings through the mls and though this will rise a little more, we are going to end up around 23% lower than last year.   Last October was helped by the tax credit (it was originally ending and then was extended at the last minute), so the drop compared to last year has to be taken with some skepticism.  However, we are also going to be down about 10% compared to September, which is a sharper than I had hoped (the steepest September/October drop was in 2005 at 20%, but three of the last 6 years have seen October increase over September, so this is not a great number). (more…)

Monday Morning Coffee – S-h-m-i-l-y

Monday Morning Coffee

World Series and S-h-m-i-l-y

Good morning everyone,

Hope you had a great weekend.  As a bay area transplant who missed school every birthday from 2nd thru 6th grade to go to opening day at Candlestick with as many of my friends as can fit in the back of a Oldsmobile station wagon with simulated wood paneling, it was a great weekend! (translation: Huge Giants fan)

Wish I could say the same for the real estate market.  Sales are very slow with a total of only 1,414 closed this month (16 days gone with 5 days left and last year’s total was 3,240 sold).  Foreclosures are also slow (as would be expected with the issues going on), with a total of 619 homes foreclosed on so far compared to closer to a 1200 a month average.  On the positive side, inventory is not increasing, which will help support prices a bit.

I finished the first full week of doing the radio show (Positively Wall Street on AM1000 at about 7:30) and am realizing it is going to be tough to find real estate topics to fill 3 days a week, so if you have any questions I can answer on air (and will make me sound like an expert!), please shoot them over. (more…)