Housing Market

Sales went down throughout the country last quarter – with the exceptions of Nevada, California, Arizona and Virginia. Apparently, sales also rose in Florida last quarter also but the National Association of Realtors statistics did not reflect that although Florida separately did announce it.

 

Our local, The Meadows and 92026 in general will not generally recover until some of those snow states get healthier.

 

Prices continue to go down – but only because almost all of the sales are foreclosures and short sales and that skew “the market.” There is no normal distribution of sales between low, middle and high, there is just “low.” That scares the larger part of the population who do not understand statistics, or markets in general,

 

Lenders are tired of holding non-performing assets in their inventory so their sales are distress sales. In any rational market distress sales are discounted, but in this market the distress sales are all there is, so those are the only ones reported, and that kills the confidence that the market needs.

REaltyTrac reports that there are 1 million homes currently in foreclosure, and that is about one of every three homes currently on the market. It is almost impossible to compete with distressed homes. My beautiful listing in Valley Center has lost two potential Buyers lately to short sales and foreclosures.

MLS Update November 17

Absolutely nothing happened in The Meadows over the past 48 hours. No new listings, no price changes, no Pendings, no Closed Escrows. It was just quiet.

 

As is common on weekends, it was quiet everywhere in the Zip Code. There were only three new listings, 10 price changes, six Pendings and four Closed Escrow. The most expensive home that closed was $465,000.

Analysis Nov. 17

In spite of the bad national economy and little prospect for an immediate turnaround, there are more “regular” people out looking.

 

My “Open House” activity at my listing in Valley Center (VC is so remote as to represent the “Worst Case Scenario”) shows a significant change – unless it was just a ‘spike.”

 

Over the past few weeks, our Open Houses had either zero, or one couple – usually one couple a MONTH. This past Sunday we had  three couples – one serious and one semi=serious.

 

O.K. – I am hoping for light at the end of the tunnel, reading tea leaves, and all that, but spotting a trend requires putting a lot of dots together, and first you have to plot the dot.

 

My Valley Center listing is $899,000, and quite remote. Traffic at that spot, and at that price, is at least interesting.

MLS Update November 13

Nothing went on in The Meadows in the past 24 hours. Absolutely nothing.

 

But it was a normal day in the Zip Code – six new listings, nine price changes, five Pending, and four Closings.

 

Boring.

Economic Crises

(This is the sort of column I normally post only on my politcal blog http://usna1957.wordpress.com but it is apropos to the housing crises as well so it is hereby submitted.)

Having turned around a computer company for the US Bankruptcy Court – one I might add had been declared impossible by the Court appointed Trustee, it is obvious to me that bankruptcy is the right course for the City of San Diego, the State of California, the Banking industry and the automobile industries.

 

Each of those entities are saddled with impossible contractual legacies – pensions, labor contracts, bad loans, voter approved mandates – each of which argues against healthy recovery. Only by removing saddles that seemed reasonable at the time they were approved, can the client recover.

 

Just take the automobile industry. The individual companies KNEW that the union contracts they were signing were unsustainable but they bought time, and each corporate CEO hoped that the bill would come due on the next CEO’s watch.

 

Then with their secure parachute, each CEO retired or took a buyout and sighed knowing that music would stop during the next administration. The next administration of course put Band-Aids on the problem hoping to delay reckoning just one more time.

 

Throwing money at the problem without fixing the underlying contractual problem, just kicks the unsustainability down the line, again.

 

Today, we hear Democrats calling for loans to help people who failed to repay their last loans, and there is zero hope that loans to auto companies will come with a proviso that the union contracts must be renegotiated to compete with foreign manufacturer’s plants in United States. I can just see California being required to actually balance its budget and end the requirement for a percentage funding of education, or San Diego being required to renegotiate existing pension plans.

 

Those are impossible political demands to a Democrat Congress, and only a Federal Bankruptcy Court can do it. That is what they do – restructure without political considerations. Tough Love!

MLS November 12 Update

A new listing in the Meadows on Meadow Glen Way East, 1,969 s.f. for $424,900.

 

That was it.

 

In the Zip Code there were three new listings, seven homes went into Pending and three homes Closed Escrow.

A Teachable Moment

While I am in the housing market, and it was that market that triggered the entire economic crises and is continuing to infect it, the rest of the failing economy can keep the housing market from recovering.

 

The housing market was caused, initially, by people getting loans for which they could not continue to pay unless the housing market continued a rapid, and unsustainable increase.

 

That was made MUCH worse by lenders packaging those toxic loans into larger packages to hide them and sell them to worldwide investors – so the first thing the $700 billion “bailout” was designed was to make good those bad packages to investors. If that was not done, the investors would stop future package buying. They had been defrauded by the lenders and if they were not made whole there would be hell to pay in the future.

 

Then the next hurdle was to stem the huge number of foreclosures, and that actually is being done. It won’t help the several hundred thousand who dumped their homes already, it will help those who are on the cusp in the future.

 

But no business – or government – put money aside for a rainy day. All governments and most businesses spent to their limit and there are no “rainy day funds” – so government will have to raise taxes on the few people who were prudent. They are the only ones with money!

 

Now credit card companies are in line for a loan, and car companies, and…

 

With credit card companies on the brink, some people are waiting for a credit card bailout – to let someone else pay for their dinners at Donavan’s, pay for their hotel stays in Kauai, pay for their…

 

There is no end to this insanity. The car companies, and the credit card companies need to declare bankruptcy so they can reorganize into a more rational and competitive enterprise. Otherwise, the non-competitive problems that cause these problems will be able to continue without change.

 

This is a great teaching moment. I hope we don’t let it pass.

Update MLS November 11

One absolutely new listings in the Meadows, and it is one of those homes in the gated community behind the Deli. 2,500 s.f. , 3/3, and $439,900 to $454,900.

 

Those homes have always been a good value because they are on 6 acres of common ground, but they are not attached homes, they are separate. And EVERYTHING on the grounds is maintained, so you can lock your front door and leave on vacation.

That was it for The Meadows

There were six new listings, 10 homes went into Pending, and six homes Closed Escrow. (The highest Closed Listing was $329,000.)

November 11 Analysis

It is noticeable that Meadows Realtors have not had a “Weekly” Caravan for more than SEVEN WEEKS!

 

We need three NEW listings on the market, and we just can’t get that many. We have a lot of retreads being relisted, but people generally are not listing homes unless they need to, and in the Meadows, few people need to.

 

One of the measures of a market is “Time on Market” – the time between listing and going into pending. In North County, the number in October was 44 days, down from 45 days in September. This is a case where both the number and the trend are significant.

 

I will try to keep you informed as to the market.

Update MLS for 10 November

There was a new listing on Meadows Glen Way East for $410,000. Well, not really new, it is a relisting under a new real estate agency.

 

(Clue: If you home is not selling – IT IS NOT YOUR REALTOR, IT IS THE MARKET!)

 

And there were no homes in The Meadows that went into Pending, or had price changes or Closed Escrow. In effect, nothing happened in the past 48 hours in The Meadows.

 

Within the Zip Code there were a lot of ‘8s” – eight new listings, eight went into Pending, eight price changes. (There were only seven Closed Escrows. Guess someone didn’t get the word.)