tag:blogger.com,1999:blog-61461847150145174462024-03-13T02:29:18.623-07:00Bloody StreetShenanigans, tomfoolery, news and insight that encompass Real Estate, and specifically, the volatile San Francisco Bay AreaD Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-6146184715014517446.post-28409411274066077362008-02-05T09:06:00.000-08:002008-12-11T00:59:12.959-08:00Project Redfin has commenced<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgy7l0DJZWgks7MDVhBczxX2YfumdXJrWEI4ac52uLI2DpiIzhj87dr7hmWJQVzuQ4ccfIJN3piz40jSB-61wBzaYJ_clzk9hqijB5o0aSZEXAKbHOSGzxUJ0QkPMql50LdFG-JnZpIBrs/s1600-h/Tropheops+sp+Red+Fin.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgy7l0DJZWgks7MDVhBczxX2YfumdXJrWEI4ac52uLI2DpiIzhj87dr7hmWJQVzuQ4ccfIJN3piz40jSB-61wBzaYJ_clzk9hqijB5o0aSZEXAKbHOSGzxUJ0QkPMql50LdFG-JnZpIBrs/s320/Tropheops+sp+Red+Fin.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5163544719500309906" /></a><br /><br /><a href="http://blog.redfin.com/sfbay/2008/02/lenders_impose_declining_markets_restrictions_in_some_areas.html" target="_blank">My virgin post at Redfin</a><br /><br />Thanks for reading. And please comment, or heckle, if you so desire!D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-59280732952141981362008-01-25T11:06:00.000-08:002008-12-11T00:59:13.888-08:00Increased conforming loan limits not much help for Bay Area homeowners and buyers<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe-S07RZbUuz3K0uM_b2pHgISUarjGjFujkRqzuhAgK7VYVySnevCK0du7euNnA6rhhewjs1Rt2saYvbrM-uaG5xmYgrEa70Xkv8yZveNpc3f1Sc72pd_4ZqvI9EbeZirry9W7NGRYRfM/s1600-h/mobush.jpg"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe-S07RZbUuz3K0uM_b2pHgISUarjGjFujkRqzuhAgK7VYVySnevCK0du7euNnA6rhhewjs1Rt2saYvbrM-uaG5xmYgrEa70Xkv8yZveNpc3f1Sc72pd_4ZqvI9EbeZirry9W7NGRYRfM/s320/mobush.jpg" alt="" id="BLOGGER_PHOTO_ID_5160088821310223474" border="0" /></a><br />If Dubya ultimately signs the proposed economic stimulus package scheduled to be on his desk by mid-February, there could be a noticeable bump in local refinancing activity, but don't expect the changes to help the intended recipients like its authors think.<br /><br />Basically, "conforming" loans are backed by quasi-government entities Freddie Mac and Fannie Mae and therefore carry lower interests than non-conforming "jumbo" loans due to assumed less risk.<br /><br />Key highlights of the proposal are:<br /><br />--Conforming loan limit would be raised from $417k currently to 125% of the local median home price (<a href="http://www.dqnews.com/RRBay0108.shtm" target="_blank">December Bay Area median is $587,500</a>, therefore 125% of median = $734,375) or a maximum of $729,750. It will likely drop below the maximum by the time this is passed due to a decreasing median trend.<br /><br />--If passed, the increase currently stands to be only temporary - expiring at the end of 2008. Of course, it could be extended depending on the state of the economy.<br /><br />--On a typical $700k Bay Area home purchase (20% down) and based on current rates and a 30 year fixed rate mortgage, this change would lower monthly payments by approximately $460 per month. That is substantial.<br /><br /><br />Problem 1:<br />What they don't seem to understand is that the people in real trouble cannot qualify to refinance using these conforming loans due to much tighter qualifying restrictions and a maximum 80% loan-to-value ratio (i.e. 20% down payment for purchase or 20% equity for refi). The ones in trouble purchased in the last 12-18 months and put little to zero down to begin with. Even if they put 15-20% down, they defintely have less than that in equity now anyway, so there is no refinance option for them with conforming.<br /><br />Problem 2:<br />Of the people who are looking to buy their first home or who have been waiting on the sidelines to get back in the game, most are not looking to, or are unable to, put 20% down. You could argue that point, but it's definitely the minority of the potential buyers out there. And don't forget conforming loans carry much tighter restrictions than non-conforming jumbo loans (i.e. 35% maximum debt-to-income ratio, full documentation of employment and verification of assets). How many of the buyers in recent years could then or can now legitimately meet these terms? Yep, you know the answer - not many!<br /><br />Now, for people who bought 4 to 5+ years ago and are still in that home likely have 20%+ equity and are good candidates for refinancing if they have not already done so, which many have. I think this is the only significant positive effect that can play out if passed. But again, it doesn't help the troubled recent buyers and those who have already refinanced to the moon.<br /><br />This thing will have a lot less effect than the geniuses who put it together think it will. And depending on how the markets react and adjust to this over the coming weeks and months, it might not even carry the nice low interest rate spread over jumbos as it does now. Some smart people are already predicting that.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com2tag:blogger.com,1999:blog-6146184715014517446.post-84346085318234820162008-01-25T10:34:00.000-08:002008-01-25T11:08:19.649-08:00Sad but true<a href="http://www.sfgate.com/comics/fiore" target="_blank">America for sale</a>D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-23167240568328028542008-01-23T10:45:00.000-08:002008-12-11T00:59:14.228-08:00Bloody Street moving on.....<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWPCwxIjFYhMm1XLaU5MQTsv2Hkr0UwVS3WWu-xAgz4Rom2mzfEp-5wpRrw-cit4fbfSU_SHNaVqetlNyjO4nS0X3L1xh1UxJ083T49z9W4DFQRpUkNNLH-aqI0PGsI0z2LPZzqxIcrek/s1600-h/Asskick.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWPCwxIjFYhMm1XLaU5MQTsv2Hkr0UwVS3WWu-xAgz4Rom2mzfEp-5wpRrw-cit4fbfSU_SHNaVqetlNyjO4nS0X3L1xh1UxJ083T49z9W4DFQRpUkNNLH-aqI0PGsI0z2LPZzqxIcrek/s320/Asskick.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5158747734951916498" /></a><br />Yours truly has officially sold out and accepted a real (i.e. paying) blogger gig writing for <a href="http://blog.redfin.com/sfbay" target="_blank">Redfin Sweet Digs</a> starting sometime in February. My "territory" will be San Francisco-North, consisting of SOMA/South Beach on up to Marina/North Beach. The main focus will be neighborhood data, new and interesting properties/developments, and hopefully some big picture stuff (which you readers know I like to write about) and how it might relate to San Francisco and the Bay Area.<br /><br />My goal is to continue some coverage here of the east bay, and focus on SF with Redfin.<br /><br />Stay tuned, and thanks for reading!D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com2tag:blogger.com,1999:blog-6146184715014517446.post-35909632222790069952008-01-17T08:45:00.000-08:002008-12-11T00:59:14.528-08:00South Beach's newest conversion: One South Park<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguuqU4CK0i6GxbNUBqADSmUgX3uFYc_t5a7lZHTHe0qyjHs8-9uGho-RnZ1aAVGOQpFR8utp6LO9SzHbtWjKt8Y2GdkQaRHdCYkRgAgVyJ0-gR8c3a_pT3q9VA4qT78_VNO7hkZmPEgzY/s1600-h/332636_7.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguuqU4CK0i6GxbNUBqADSmUgX3uFYc_t5a7lZHTHe0qyjHs8-9uGho-RnZ1aAVGOQpFR8utp6LO9SzHbtWjKt8Y2GdkQaRHdCYkRgAgVyJ0-gR8c3a_pT3q9VA4qT78_VNO7hkZmPEgzY/s320/332636_7.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5156323686465213426" /></a><br />Though many followers over at <a href="http://www.socketsite.com/archives/2007/12/one_1_south_park_sales_update_and_a_few_more_prices.html" target="_blank">socketsite</a> have been claiming that prices are exorbitant for many of these no view, sardine can units with bums and addicts as neighbors, twelve of the 35 units at <a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1221932" target="_blank">One South Park</a> have <a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/13/REHS.DTL" target="_blank">officially closed escrow as of January 13</a>. Contrary to the naysayers, they are getting pretty much what they are asking for at an average of $986/sq ft.<br /><br />Not uncommon with developments such as this, <a href="http://www.santafepartners.com/OneSouthPark/floorplans/Floor4.html" target="_blank">their own figures of sales and pending sales</a> do not match the public records. They are off by three "sales" (15 claimed vs 12 on record) but maybe we'll give them the benefit of the doubt on this for now. They also list two as "pending" with the remaining 18 available for sale.<br /><br />While the closed sales have been right at or near original asking prices, the project is still less than half sold out and they began accepting reservations as far back as June of last year. They can't be excited with the 18+ units currently available at this time and after many have canceled their reservations. Yet there has been no sign of price reductions or incentives like many other developments have started to offer. Can this project compete with the <a href="http://www.the-infinity.com/" target="_blank">Infinity</a> and <a href="http://www.onerinconhill.com/index.asp?kw=G_OneRinconHill<br />" target="_blank">One Rincon Hill</a> on a $/sq ft basis? These next couple months will be interesting to see how this project fares.<br /><br />My conclusion: This is a tough call. I feel projects like these are unique enough and in a great location (for some) to sell, as it isn't a huge development with 100+ units for the market to absorb. But the trends are there (falling) and at these prices I think people are really starting to sit back and ask themselves if they should really be buying at or near the top of the market. <br /><br />I predict slow sales here in Q1 and price reductions and/or incentives in March or April. <br /><br />Although I have not toured this building personally, I have to agree with the socketsite reader's label of sardine can. I highly doubt I would be pleasantly surprised with the space by seeing it in person.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiopPByIIWBH45UmpbwZRUJYbRSDh9L9SESgu7rrZ1MRhSauC65XjElK12sfqkRAjwn24ofY2QYx589uWXkQ0YXHzSsM5fgA-X5Q7BII5IcZhc3eAP-PMxkMr7HP6jS96PGjFrQPpxj9Cc/s1600-h/332636_2_7.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiopPByIIWBH45UmpbwZRUJYbRSDh9L9SESgu7rrZ1MRhSauC65XjElK12sfqkRAjwn24ofY2QYx589uWXkQ0YXHzSsM5fgA-X5Q7BII5IcZhc3eAP-PMxkMr7HP6jS96PGjFrQPpxj9Cc/s320/332636_2_7.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5156338628656436226" /></a><br />Vitals:<br />-<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1221932" target="_blank">Redfin listing</a><br />-<a href="http://www.santafepartners.com/home.html" target="_blank">Developer: Santa Fe Partners</a><br />-<a href="http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N575838830,-N214026,-N,-A,-N11809004" target="_blank">MLS listing</a><br />-<a href="http://www.google.com/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=1+south+park+94107&sll=37.758822,-122.412474&sspn=0.007464,0.020084&ie=UTF8&ll=37.784351,-122.392867&spn=0.007462,0.020084&z=16&iwloc=addr&om=0" target="_blank">Google Maps</a><br /><br />Readers: What say you?<br /><br /><br />dgD Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-70823058521004074562008-01-10T22:00:00.000-08:002008-12-11T00:59:15.072-08:00Preview of upcoming Sunday East Bay home tourI have offered some friends of mine a tour of some Oakland and Berkeley neighborhoods this Sunday, including some open houses, to show them what you can get right now for $500k up to $1M. I thought I would provide a preview of some of the homes on my list here with what my perceptions are before and after. Obviously, I am assuming all of these to be holding open houses on Sunday! Here's what I have on tap so far:<br /> <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDgSRa1K6MJ-Rm7SIYxlh-n5Yle7raj8K1Rba1GcH9R4mdmPxRfepAJcY29mRGmvYE5Xl-xMrF3uELGRX3yDSV5ViNxSLNCkzOZ5i9MG09uqVtONABHW2TXvPWwONVJB799kcPCtdKU-M/s1600-h/pierpoint.jpg"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDgSRa1K6MJ-Rm7SIYxlh-n5Yle7raj8K1Rba1GcH9R4mdmPxRfepAJcY29mRGmvYE5Xl-xMrF3uELGRX3yDSV5ViNxSLNCkzOZ5i9MG09uqVtONABHW2TXvPWwONVJB799kcPCtdKU-M/s320/pierpoint.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5154136787902338002" /></a><br /><br />5059 Pierpoint Ave in the Montclair district of the Oakland hills, and not far from <a href="http://www.montclairvillage.com/" target="_blank">Montclair Village</a>, is a contemporary home built in 2007. With 3 beds/3baths, 2800 sq ft, and dramatic loft-like ceilings and spaces, this is a home I am excited to tour.<br />-<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1322819" target="_blank">redfin</a><br />-<a href="http://www.pacunion.com/40311833" target="_blank">broker's listing</a><br />-<a href="http://www.google.com/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=5059+Pierpoint+Ave,+Oakland,+CA+94602&sll=37.758822,-122.412474&sspn=0.007464,0.020084&ie=UTF8&ll=37.8127,-122.196507&spn=0.007459,0.020084&z=16&iwloc=addr&om=1" target="_blank">google maps</a><br /><br /><br /><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpXq14rwBLCTODBZaiUcbU4T0YnakkUL5P77DbLzRE_xUMHUUnZ2Q4pdnparrETkXS7GcoKJv3_zAZaxumSrdqh_hP3fCOnHe2w3_zgWZCVE67OG3JQFUaokjpckddNw-It6HHOnvijgE/s1600-h/2Cortez_COL_web.jpg"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpXq14rwBLCTODBZaiUcbU4T0YnakkUL5P77DbLzRE_xUMHUUnZ2Q4pdnparrETkXS7GcoKJv3_zAZaxumSrdqh_hP3fCOnHe2w3_zgWZCVE67OG3JQFUaokjpckddNw-It6HHOnvijgE/s320/2Cortez_COL_web.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5154125586627629986" /></a><br /><br />2 Cortez Ct, also in Montclair and set just above the Village about a mile up, is a newly remodeled 3 bed/2 bath 60's rancher set on a large lot of nearly 1/4 acre. With a new master suite addition and new systems, this appears to be a very new-like home with great upgrades. <br />-<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1387106" target="_blank">redfin</a><br />-<a href="http://www.pacunion.com/40317157" target="_blank">broker's listing</a><br />-<a href="http://www.google.com/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=2+cortez+Oakland,+CA+94602&sll=37.8127,-122.196507&sspn=0.007459,0.020084&ie=UTF8&ll=37.83226,-122.201314&spn=0.007457,0.020084&z=16&iwloc=addr&om=1<br />" target="_blank">google maps</a><br /><br /><br /><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvku3qbsKcslCKMP0E_QSg6sJPzEAoX5n_R-xxw28RkQt25WvRvrPMpvy_3cKtUwQ6Z66d9dumvzFPpkJD3EhyphenhyphenRPBmD2_MaBnKSRaKMhBWjgJb9Njqiru3QuB1inQnc8dU3qrCnLL5teI/s1600-h/fairmount.jpg"><img style="float:right; margin:0 0 10px 10px;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvku3qbsKcslCKMP0E_QSg6sJPzEAoX5n_R-xxw28RkQt25WvRvrPMpvy_3cKtUwQ6Z66d9dumvzFPpkJD3EhyphenhyphenRPBmD2_MaBnKSRaKMhBWjgJb9Njqiru3QuB1inQnc8dU3qrCnLL5teI/s320/fairmount.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5154131702661059506" /></a><br /><br />112 Fairmount Ave in the Lake Merritt area of Oakland is a 3 bed/2bath craftsman built in 1924. With some updating, but definitely needing more, this house has great curb appeal and is near the new Whole Foods and Lakeside Park. I am not familiar with this area of Oakland but look forward to seeing it and the house in person.<br />-<a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1239893" target="_blank">redfin</a><br />-<a href="http://www.teampersonshomeinfo.com/listings/res/85839/index.html?sort=&group_id=40717<br />" target="_blank">broker's listing</a><br />-<a href="http://maps.google.com/maps?q=112+Fairmount+Ave.,+Oakland,+CA++94611&ie=UTF8&ll=37.817005,-122.26028&spn=0.007458,0.020084&z=16&iwloc=addr&om=1" target="_blank">google maps</a>D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com1tag:blogger.com,1999:blog-6146184715014517446.post-47519958197150899632008-01-07T02:17:00.000-08:002008-12-11T00:59:15.370-08:00Top economists meet and call for major housing correction and possible Japan-style recessionAt this weekend's annual meeting of the American Economic Association (AEA) in New Orleans, <a href="http://www.rgemonitor.com/blog/roubini/235798" target="_blank">a panel of top economists Robert Shiller, Paul Krugman, Larry White and Nouriel Roubini</a> addressed the subprime meltdown. Their consensus calls for property prices to decline 20-30% over the next several years, with 30% most likely, and the odds of a recession at much greater than 50% now. Even the boys at Merrill Lynch, Morgan Stanley and Goldman Sachs are now on the 2008 recession train. <br /><br />Shiller <a href="http://business.timesonline.co.uk/tol/business/economics/article3111659.ece" target="_blank">goes even further and says there is a real possibility of falling into a Japan-style recession</a> where housing prices continue to slump for several years. <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcSRyrIgFzsEPAbb7oVwIO59k-rTiviRUaOhzzJgu7aZqPfKIURu-NRnIqbaCIo4sFqASDD4Wgup1Fhg2265KE6Xn29XvTgto2U5u0vPJr7tunEG8hrUNe_z1fybuyqE9yWD92awqsjAg/s1600-h/powell120602.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcSRyrIgFzsEPAbb7oVwIO59k-rTiviRUaOhzzJgu7aZqPfKIURu-NRnIqbaCIo4sFqASDD4Wgup1Fhg2265KE6Xn29XvTgto2U5u0vPJr7tunEG8hrUNe_z1fybuyqE9yWD92awqsjAg/s320/powell120602.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5152685368129164050" /></a> <br />These guys are not like the chief monkey economists at the Nat'l Assoc of Realtors and Nat'l Assoc of Home Builders, where the obvious major conflict of interest exists between being a good economist and a good cheerleader. These are top economic prognosticators and professors at Yale, Harvard, etc. Shiller and Roubini were two of the most vocal calling for the subprime and housing fallout several years ago. It is scary to think some of their forecasts could even be conservative. If these guys are correct, 2009 might even be too early to get back into the real estate game, that is if you are fortunate enough to be out of it currently.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-60957336811173841762008-01-04T17:55:00.001-08:002008-12-11T00:59:15.583-08:00Stock prices are to Earnings as Home prices are to RentsWall Street analysts throw around P/E (price to earnings) ratios all the time when digging into a stock and discussing whether it is under/overvalued. Historically, stock prices and sectors basically trade within certain a range of these P/E ratios. Remember the dot-com implosion? Of course you do. Why did it happen? Basically, because there were little, zero, or even negative earnings to support the exorbitant stock prices. When the dust settled, the market eventually returned to a state of normalcy where actual earnings reflect the value of the stock.<br /><br />This fundamental principle does apply to housing values as well. As rents have climbed historically, so have home prices. Their relationship can fluctuate a little to a lot over the short- and medium-terms, sure. But not like they have in recent years. Three Fed economists (1 former, 2 current) have released a study - <a href="http://online.wsj.com/article_email/SB119931831334463571-lMyQjAxMDE4OTA5MjMwMTI4Wj.html?ref=patrick.net" target="_blank">summarized here in the Wall Street Journal</a> - proclaiming home prices need to retract 15% over the next 5 years, coupled with annual rent growth of 4%, in order to return back to normal levels. If rent growth is less than 4% or the correction period happens sooner, the drop could greatly exceed 15%. <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5Zt1UESecWT36DLF_26gLUgMP1U3mLTKRg7WTkoYdhr0D5TD_54TP1JsFoVgfhC8PQA8KiqQcnwwJA0hG90WmOmmzwYbyMSrf4MCcyPJPv43FaH0tdCfmUwdSKnLBMjc4d3IGjkhYzCE/s1600-h/NA-AO958_HOUSE_20080102200046.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5Zt1UESecWT36DLF_26gLUgMP1U3mLTKRg7WTkoYdhr0D5TD_54TP1JsFoVgfhC8PQA8KiqQcnwwJA0hG90WmOmmzwYbyMSrf4MCcyPJPv43FaH0tdCfmUwdSKnLBMjc4d3IGjkhYzCE/s320/NA-AO958_HOUSE_20080102200046.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5151819395348108002" /></a><br />Don't think you are the only one who feels it's insane that a $900k condo or house that carries $5000 in monthly debt service can only rent for $3000. It absolutely <span style="font-weight:bold;">IS</span> insane.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-42652190398290740582008-01-03T17:16:00.000-08:002008-01-08T10:40:06.939-08:00Freak Beverly Hills Realtor vs. Peter "Dr. Doom" Schiff<a href="http://www.youtube.com/watch?v=A2_Hmt-MKLA" target="_blank">See youtube video here</a>.<br /><br />Freak realtor who might be on coke: "I'm not going to bore you with all of these numbers. It's a terrific time to buy! A new home is going to cost so much more in a couple years!"<br /><br />Schiff: "This is a terrible time to buy a house. It's a great time to sell one - IF you can find a buyer!"<br /><br />Freak realtor who might be on coke (now yelling): "I completely disagree. You're misleading people - you spend too much time on Wall Street and not enough time on Main Street"<br /><br />Schiff (barely able to contain his laughter): "Ma'am, I'm the only person who's not misled people on real estate over the years. I'm one of the few people who told people to ignore the cheerleading of realtors"<br /><br />At this point, the show ends. And I'm sure the freak realtor who might be on coke made a beeline straight to the ladies room if ya know what I mean.<br /><br /><br />Peter Schiff regularly appears on CNBC, Fox News, CNN, etc. and has been coined "Dr. Doom" by the CNBC program "Bulls and Bears." He is one of the few outspoken prognosticators who called for the housing meltdown and mortgage collapse years ago. He is President of Euro Pacific Capital, a broker/dealer that specializes in foreign investments and securities.<br /><br />(video and excerpt taken from <a href="http://housingpanic.blogspot.com/" target="_blank">HousingPANIC</a>)D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-10086404171518753162008-01-01T13:44:00.000-08:002008-12-11T00:59:15.923-08:00Oakland listings that tell the story of decline<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuS12uzWs9jGDYl9J80t3BAwITi3iRYiieTiLehc-oe-j5Jud8bKvuqTKPXp0jzbND-UFrF9G5MnF1a_mb0WMj-oq3zRovpg3hpOya7h_WcPKEHsuh9AynpBlYo0FxY1azXqDY3FMXWOM/s1600-h/14225019_a905c03887_m.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuS12uzWs9jGDYl9J80t3BAwITi3iRYiieTiLehc-oe-j5Jud8bKvuqTKPXp0jzbND-UFrF9G5MnF1a_mb0WMj-oq3zRovpg3hpOya7h_WcPKEHsuh9AynpBlYo0FxY1azXqDY3FMXWOM/s320/14225019_a905c03887_m.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5150705126212702722" /></a><br />While San Francisco pricing has held up rather well thus far and is gearing up for its coming decline in 2008, Oakland is altogether a different story. Its noticeable slide started in 2007 and has many current listings that show how bad it already has become. The following addresses surely haven't been helped by the credit crunch that began in August 2007 or the November/December holiday season, but I predict these many a short sale are indicative of things to come in 2008.<br /><br /><a href="http://grubbco.mlsb.com/idx/detail.cfm?cid=42&pid=40308599&bid=1&st=2&return=1" target="_blank">7049 Thornhill Dr</a> is an example of a home that is ready for a price reduction after being listed for 54 days now. Purchased in April 2005 for $850k, they are already looking at a loss of $40k+ after commissions paid, and that assumes a full price offer. I personally toured this 4 bed/2 bath, 1920 sq ft home on a 1/4 acre lot in the Oakland Hills back in early December. It can use a little bit of updating here and there, but is a nice livable home with a fantastic, expansive rear deck and downsloped yard. It should see a price reduction soon.<br /><br /><a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1253076" target="_blank">6144 Valley View Rd</a> is a Montclair home that was purchased for $610k back in November 2003, and has been listed for $625k for 64 days without a price reduction. Not much for pictures, but you can count on a house that begs for updating on a large 1/4+ acre lot in a nice area of Montclair. You could've pretty much bought anything in the Bay Area in 2003 and sold in 2005 or 2006 and profited $100k+, and in many cases, $200-300k+. Not anymore - oh how quickly the tide can turn.<br /><br /><a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1340976" target="_blank">6615 Snake Rd</a> is an interesting listing. Listed for $674,900 and currently bank-owned, it changed hands for $865k back in March 2006. Then just 3 months ago in early October it sold for $734k. Talk about a continuous downward spiral, this home isn't even turnkey complete. It looks to be mostly remodeled and needing some finishing, but the bottom line is this: a 4 bed/3 bath, almost 1900 sq ft view home high in the Oakland Hills on a well-known street can be had for $200k less than what it sold for nearly two years ago. The previous owners who paid $865k are damn lucky they got $734k just three months ago! <br /><br />There are many other listings like these, some in even worse financial shape.<br /><br />Happy 2008! (as long as you aren't trying to sell a house in Oakland)D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-90800610615782301112007-12-28T03:00:00.001-08:002008-01-01T12:09:49.515-08:00Capital Gains rule changed for married joint-filersMost homeowners know that you can claim capital gains tax-free of up to $250,000 for single-filers and up to $500,000 for married joint-filers, so long as you have occupied your home for any of two of the last five years. But when a married homeowner dies and leaves his/her spouse with the house, what the IRS has been "enforcing" until now has not exactly been fair or easy to deal with, especially in the midst of a grieving period. <br /><br />With Congress' final tax bill of 2007 being passed, this has been changed for the benefit of the surviving spouses. They now have up to two years to claim the full $500,000 exemption. <br /><br />Prior to this bill, the spouse could only claim the full $500,000 gain in the year that a joint return was filed. So the property would have to be sold by the end of that calendar year in which the the death occurred, and if it happened late in the year that would make for a difficult haste to get the house sold. Not something likely to be high on the priority list of a grieving spouse.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-78498397251491436732007-12-28T02:07:00.000-08:002008-12-11T00:59:16.358-08:00Home price declines accelerating across the nationThe closely watched <a href="http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_122622.pdf" target="_blank">Standard & Poors/Case-Shiller Home Price Indices</a> were released on Wednesday, revealing the 10th consecutive month of negative annual returns and the 23rd consecutive month of decelerating returns across the nation. <br /><br />This highly regarded analysis of real estate values for 20 of the largest metro areas in the U.S. uses a repeat-sales methodology, unlike the National Association of Realtors which uses median values for its ultimately skewed figures. The Case-Shiller method eliminates "non-arms length" transactions and other questionable data points to create their indices. <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqAoQo07lBy0y7QRSWOQjk9Xm_OlVFNXnT1lFSDOYOfJZHsYZpb_CYUS5GJnq0OxSWwTUPun_WD0fZMJXEhGv_d8GsUhAW8gIj645QAwTQnxIl6kSS4-jp6SXb5T1FokuUHIf5dP48U-U/s1600-h/1227-biz-webclrHOMES.gif"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqAoQo07lBy0y7QRSWOQjk9Xm_OlVFNXnT1lFSDOYOfJZHsYZpb_CYUS5GJnq0OxSWwTUPun_WD0fZMJXEhGv_d8GsUhAW8gIj645QAwTQnxIl6kSS4-jp6SXb5T1FokuUHIf5dP48U-U/s320/1227-biz-webclrHOMES.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5148977514272592306" /></a><br />Prices are down 6.7% annually for their Composite-10 and 6.1% for the Composite-20, using data through October of 10 and 20 of the largest MSAs, respectively. The 6.7% annual drop is the largest in the 20 years the Case-Shiller indices have been calculated, with the previous being 6.3% in April 1991. <br /><br />On a monthly basis, prices fell 1.4% for both indices - the largest monthly decline in over seven years. Only Portland, Charlotte and Seattle have positive annual gains through October, but all three are experiencing accelerating monthly declines. Eleven of the 20 MSAs recorded their largest monthly decline in 20 years in October. That just cannot be good when it's spread across all regions of the country. <br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD1TWWAI5MbSAcj4d7Io7v1zlLFmuPjN4ySFMDkQuJC-fgbJKoAa-jF1dXEq3XWMSOeE8CJmpCPfz41TWACgiiT8XPaMyh7NkIE4yzLeqEyhoC70EOa8e3kt_5_MkEc0_VO4PnNku1D6I/s1600-h/thumb_480_case_shiller_october_2007.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjD1TWWAI5MbSAcj4d7Io7v1zlLFmuPjN4ySFMDkQuJC-fgbJKoAa-jF1dXEq3XWMSOeE8CJmpCPfz41TWACgiiT8XPaMyh7NkIE4yzLeqEyhoC70EOa8e3kt_5_MkEc0_VO4PnNku1D6I/s320/thumb_480_case_shiller_october_2007.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5149680815167312338" /></a><br />The San Francisco MSA (San Francisco, Marin, Alameda, Contra Costa and San Mateo counties) revealed a 6.2% annual price decline with a 2.1% drop from September to October. <br /><br />Some of these negative records should be broken in the coming months and year. Stay tuned as the Case-Shiller indices will be closely monitored right here. And if you are a betting man or woman, you can even put your money where your mouth is by <a href="http://www.cme.com/trading/prd/re/housing_FA.html" target="_blank">buying housing futures or options on futures</a> via the Chicago Mercantile Exchange using these same indices. Now there is a platform to bet on the rise and fall of real estate values without actually owning real estate. <br /><br />What a country.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-20529485346346352612007-12-24T01:31:00.000-08:002007-12-27T02:11:22.862-08:00Just another good reason to pursue short sale opportunitiesOn December 20th Congress passed and GW signed the "Mortgage Forgiveness Debt Relief Act" much to the liking of short sellers and would-be buyers alike. This now prohibits the IRS from demanding income tax payments from homeowners who sell their property for less than the amount owed i.e. a short sale. Prior to this legislation, which goes into effect immediately, sellers would be hit with a tax bill based on the amount forgiven by their lender. The lender was required to file a Form 1099 with the IRS to alert it of the home seller's forgiven debt, which was treated as income, which seems strange as it was never actually received by the home seller. Talk about no mercy.<br /><br />This long-awaited change is a positive for both sellers and buyers/investors as it removes a large hurdle to consider for struggling homeowners who need to sell, and investors who are potentially wasting time with people who might not end up selling due to the tax implications.<br /><br />A rare win-win.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-50149227418193884482007-12-21T02:09:00.000-08:002007-12-21T02:33:57.198-08:00Bay Area sales numbers plummet; prices mixed but mostly downIf leading indicators mean anything to you - and they should - then the Bay Area took another big step in November in the wrong direction (for sellers and owners anyway). <br /><br /><a href="http://www.dqnews.com/RRBay1207.shtm" target="_blank">DataQuick's November report</a> shows a 20 year low in sales volume for the month at 5,217 sales - almost 800 fewer sales than the previous low in 1990. This is down a sharp 36.2% from 8,042 sales in November 2006. And sales have decreased on a year-over-year basis now for 34 consecutive months. It remains yet to be seen just how big of an impact the credit crunch, and specifically the jumbo sector, has had on recent numbers. Notwithstanding can anyone say "trend"?<br /><br />Prices are already coming down across the board from recent peaks - from a 21.9% drop in Solano County to a 2.4% decrease in San Francisco, which has shown the most stability thus far. The median price for the nine-county Bay Area region is down 5.4% to $629,000 from its peak of $665,000 in June and July of this year. <br /><br />Hang on for an interesting 2008, kids.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-75237045976525276552007-12-19T03:38:00.000-08:002007-12-19T03:49:02.773-08:00Update on 721 Rosal in OaklandJump <a href="http://bloodystreet.blogspot.com/2007/12/downward-spiral-in-oakland.html" target="_blank">here</a> for the update on this interesting home in the Crocker Highlands district of Oakland.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-36923946813541306392007-12-19T01:53:00.000-08:002007-12-19T03:49:16.587-08:00Are Fed's proposed ideas to regulate lending industry any good? Actually... maybeThe Federal Reserve is proposing numerous changes in lending practices to cut down on questionable underwriting and protect people from lenders, and quite frankly, themselves. Most of the ideas make sense, but they are dependent on implementation and then enforcement. The key topics are as follows, along with my thoughts, of course:<br /><br /><blockquote><span style="font-weight:bold;">Prohibit giving people unaffordable loans.</span></blockquote><br />This has good intentions as the jist of it is to qualify buyers' affordability based on the reset rate of an ARM, and not on the teaser/introductory rate. Now, my question is what are they going to consider the threshold of "affordability" and will it be an appropriate benchmark? Reserving final judgment for that. <br /><br /><blockquote><span style="font-weight:bold;">Restrict use of "liar" loans.</span></blockquote><br />I have mixed feelings on this as it will do some good and some harm to unintended recipients. Yes, many buyers used this product and gladly paid the slightly higher rate to get more house than they should have during the boom. But this product is also the only option for many newly self-employed professionals, so this could cut many of them out of the picture unintentionally. Again, good intentions by the Fed with this.<br /><br /><blockquote><span style="font-weight:bold;">Prohibit or limit prepayment penalties.</span></blockquote><br />This is a no-brainer and good for all buyers and owners. Just another clause that guaranteed higher fees or a prolonged higher rate for lenders.<br /><br /><blockquote><span style="font-weight:bold;">Curb or better disclose broker incentives.</span></blockquote><br />Another strong proposal from the Fed, if implemented this should prevent or limit brokers from increasing your rate above what you should qualify for. This is a direct attack on what is known in the mortgage industry as the "yield spread premium" - fairly self-explanatory - and pays said broker a nice premium for jacking up your rate.<br /><br /><blockquote><span style="font-weight:bold;">Require or encourage escrowing of taxes and insurance.</span></blockquote><br />Not a terrible idea, but I am one who does not like to give anyone an interest-free loan at any time, and that is what this is. My simplified take is this: if you are responsible enough to be able to purchase a home - and assuming all of these other rules whittle that down to a qualified pool - then you should really be able to manage your finances and pay your insurance and taxes when they are due, no matter when that is.<br /><br /><blockquote><span style="font-weight:bold;">Prohibit coercion of appraisers.</span></blockquote><br />This one has been attacked already in California with the passing of SB223 in November, making it a federal crime to coerce an appraiser. Might as well make it a national/federal crime.<br /><br /><blockquote><span style="font-weight:bold;">Prohibit loan servicers from engaging in unfair practices.</span></blockquote><br />This deals with the administrative angle and general customer service. Basically, credit the customer's account the day the payment comes in, and don't double- and triple-charge for the same late fee more than once. Wait... is this a wireless phone bill we are talking about? Next.<br /><br /><blockquote><span style="font-weight:bold;">Require better disclosure overall.</span></blockquote><br />Though vague and generalized at this juncture, this is a necessary attack on the incomplete and misleading mortgage advertisements we have all heard, seen, or read. If you have ever turned on the radio in the Bay Area, you most certainly should have heard Wesley Hoagland of Lenox Financial touting his 1% loans with no closing costs, free appraisals and the fact that it is "the biggest no-brainer in the history of mankind." Seriously.<br /><br /><br /><br />These proposed changes are apparently open to public comment for 90 days, at which time the Fed will review comments and then make decisions on implementation. Overall, I have to say it's a good start, but it's too little too late for this phase of the real estate cycle/credit meltdown. They are basically working on what will transpire in 5-10 years from now.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-9114242715395876822007-12-18T01:25:00.000-08:002008-12-11T00:59:16.811-08:00Marin mansion to set record with $65M sale<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuAfYOKVMaXpfH4XFl46EOfDK-5t6vK1AWvCtwt1dLng8FBj46hBkWHIGRumghV-y4WH-SAfXbJAMTkShDPlxXOg8o0uwVpHaw47CEK83dgm1VpnNp_VbuuH_hPVJ_939gwDeUp2Fa5Bc/s1600-h/OA-AP091_PrivPr_20071213173354.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuAfYOKVMaXpfH4XFl46EOfDK-5t6vK1AWvCtwt1dLng8FBj46hBkWHIGRumghV-y4WH-SAfXbJAMTkShDPlxXOg8o0uwVpHaw47CEK83dgm1VpnNp_VbuuH_hPVJ_939gwDeUp2Fa5Bc/s320/OA-AP091_PrivPr_20071213173354.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5145241880567550258" /></a><br /><a href="http://online.wsj.com/article/SB119757552962127329.html?mod=pj_main_hs_coll" target="_blank">Locksley Hall</a> on the island of Belvedere in Marin County is under contract for the full asking price of $65M, and is set to close escrow in January. This is believed to be a record sales price in Northern California.<br /><br />Not a bad "fixer upper" investment for the owner who purchased the property in 1995 for $5.5M and then sunk $32M in renovation costs. The rich get richer...<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ9DaifDLYtyNu2lZcEzPxMR_Qp5e24b-SbxQs6KvMm4VdibHM9_8geFjOQ33KjsmSsj50eEAN8gt5ewcKE2oN7GV7QMjPA5xAGR1MItmHK5gaKcUK5puB-EPd-mhapKJb-21Z1wBsenM/s1600-h/OA-AP090_PrivPr_20071213173353.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQ9DaifDLYtyNu2lZcEzPxMR_Qp5e24b-SbxQs6KvMm4VdibHM9_8geFjOQ33KjsmSsj50eEAN8gt5ewcKE2oN7GV7QMjPA5xAGR1MItmHK5gaKcUK5puB-EPd-mhapKJb-21Z1wBsenM/s320/OA-AP090_PrivPr_20071213173353.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5145243581374599490" /></a>D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-74362332565832117532007-12-17T00:32:00.000-08:002008-12-11T00:59:16.964-08:00I surely don't feel sorry for these investors<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiShAFQ1zcO3h0cHTWG9sCBZjlI_1QzLKjl4osXytsbL56MPwvYPiaZG1kG4hYZiLGFE70C0x-eqKVqefO4rxssRV22QPAFi9_IZhHNdtv13GQkgwTrsvafXM971lumxAsxSapd-U5JVXY/s1600-h/DanielsSadLook.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiShAFQ1zcO3h0cHTWG9sCBZjlI_1QzLKjl4osXytsbL56MPwvYPiaZG1kG4hYZiLGFE70C0x-eqKVqefO4rxssRV22QPAFi9_IZhHNdtv13GQkgwTrsvafXM971lumxAsxSapd-U5JVXY/s320/DanielsSadLook.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5144888941630001442" /></a><br /><a href="http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/16/MNT0TM9V4.DTL" target="_blank">The cover article in Sunday's Chronicle</a> about investors losing homes to foreclosure reads like a poor attempt by its authors aimed at sympathy for these so-called "investors." We will be having none of that around here. These people thought the market could never go down and it didn't matter if rents could not cover their holding costs - they would more than make up for it with continued insane appreciation! <br /><br />For those of us who did get out in time, we can actually thank some of these investors for helping accelerate the run-up in prices. So to those of you who helped to increase my capital gains, I thank you now.<br /><br />These numbers are only beginning to materialize here in the Bay Area and it is a matter of time before pre-foreclosure, short sale and finally, foreclosure listings, are everywhere. San Francisco seems to be the last place that is holding up and very well might do better than most in coming years, but it isn't "insulated" as many like to suggest.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com2tag:blogger.com,1999:blog-6146184715014517446.post-22644580340317454822007-12-15T02:51:00.000-08:002007-12-15T03:24:30.116-08:00Getting bleaker by the dayWhile I feel strongly about the Bay Area housing market becoming a strong one for buyers in the coming years as prices decline sharply in nearly all local markets, I have tried to remain optimistic that the economy will slow slightly, yet remain in tact. But the more reports and statistics I read, the grimmer things look for the financial system overall. Yes, markets run up to an unsustainable level all the time, and then pull back for a correction. Nothing new there. But this latest run-up puts us in uncharted territory - combining 40-year-low interest rates with the loosest underwriting standards in the history of lending. Did you really think Richard and Suzie down the street should have "qualified" for that $1M mortgage when they earn a combined $130k/year? It didn't add up then, and it doesn't add up now. And the fallout is underway. The severity of it is what no one can put their finger on. But many are starting to really get worried about how bad it just may become, including yours truly.<br /><br />Check out this <a href="http://www.nytimes.com/2007/12/14/opinion/14krugman.html?ei=5087&em=&en=36b8826fa6894b94&ex=1197781200&pagewanted=print" target="_blank">column by Paul Krugman</a> in this past week's New York Times on why the Fed's latest attempts to rescue us from all this just might not work.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-48467821139602152832007-12-12T07:57:00.000-08:002007-12-12T22:30:18.039-08:00The real agenda with the Bush foreclosure planYou think the current administration <span style="font-weight:bold;">really</span> cares about the homeowners in danger of foreclosure? I. Think. Not... Am I surprised, and should you be? Hell. No...<br /><br /><a href="http://realtytimes.com/rtpages/20071212_bushplan.htm" target="_blank">See details here and what Treasury Sec. Henry Paulson revealed</a>.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com9tag:blogger.com,1999:blog-6146184715014517446.post-50568130348013859142007-12-11T16:58:00.000-08:002007-12-11T17:03:29.026-08:00Sub-prime mess = Crack cocaine?<a href="http://cityroom.blogs.nytimes.com/2007/12/11/the-lending-crisis-as-crack-epidemic/<br />" target="_blank">An interesting comparison</a> from the District Attorney of Brooklyn, NY.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-73817846306174202312007-12-11T01:05:00.000-08:002007-12-12T22:59:51.901-08:00Leamer says no recession..... for nowWhat do I think? I am on the fence on this one.. seriously. I have much respect for Leamer and his work at UCLA and feel strongly that his Anderson Forecast team is more impartial than any of the big brokerage houses' anaylists (ya think?). But the recession call is still too early to call. It's close, but it's still too early. The election year of '08 will answer nearly all of the questions about where this country is headed in the next several years, both politically and economically, which can be one and the same.<br /><br />We know that home sales and pricing will fall in '08, and foreclosures will continue to rise, but the employment numbers and interest rates in the first part of the year will dictate where we go. Hang on for an interesting ride...<br /><br />Read <a href="http://www.samcar.org/index.cfm/news/UCLA_economist_predicts_US_will_avoid_the_R_word_2281.htm<br /><br /><br />" target="_blank">this</a> to see what he says about California specifically.D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com2tag:blogger.com,1999:blog-6146184715014517446.post-11222563410898882342007-12-10T20:50:00.000-08:002007-12-10T21:02:20.905-08:00Current rates, volatility and the rate freezeCheck out <a href="http://www.rpm-mortgage.com/index.asp?content=loan-agent&agentid=179<br />" target="_blank">RPM Mortgage's Julian Hebron's</a> weekly rate overview:<br /><br /><blockquote>My lock alert last week proved effective, as extreme volatility continues. Fixed and ARM rates opened this week .375% to .5% higher than last week. Last Wednesday, mortgage bond yields (that lenders look to for rate pricing) were at 2-year lows, and today bond yields (and ARM but not fixed rates) are at the highest levels since the peak of the credit freeze in late-August—all of this in 4 trading days. Because of this and reasons I discuss below, I think the rates below will drop.<br /><br />FED/ECONOMIC NEWS 12/10-12/14<br /><br />When the Fed announces their rate decision tomorrow at 2:15 Eastern, I think they’ll cut the Discount Rate, a 1-to-30-day rate the Fed charges global banks for short-term loans in times of distress, by 50 basis points (.5%). This will bring the Discount Rate to 4.5%, which should finally start to mean something to cash-strapped money center banks (like UBS, Citi just this week) that continue to post bad debt write-offs. Until now, the Discount Rate hasn’t been low enough to be better than other options, but at 4.5%, it may be.<br /><br />The Fed Funds Rate, a rate Federal Reserve banks charge each other for overnight loans, will likely be cut 25 basis points (.25%) to 4.25%, although many believe it could be a 50 basis point (.5%) cut given Fed Chairman’s November 29th acknowledgement that “current stresses in financial markets make the uncertainty surrounding the [economic] outlook even greater than usual.”<br /><br />But bond trading, which takes cues from Fed rates, certainly doesn’t show expectations for 50 basis points. Friday’s jobs report showed the steepest wage growth in 2 years, which stoked inflation fears and led to a bond selloff that continued into today. This Thursday and Friday, there are 3 critical inflation reports. If the Fed Funds cut is 50bps (downward rate pressure) and inflation comes in higher (upward rate pressure), fasten your seatbelt for more rate swings.<br /><br />RATE LOCK STRATEGY<br /><br />When a deal is close to being real (e.g., when purchase offers are going out), I give definitive quotes. But on actual execution of rate locks, I’m taking more of a trader’s approach to capture opportunities amidst the volatility. With day-to-day rate swings of .25% or more, and economic fundamentals that point to lower rates over the next 25-60 days, I can (and do) capture rates on any single trading day that are better than any 25 to 200 day moving average rate. Especially lately, I've been able to capture better than the quoted rate. <br /><br />THOUGHTS ON THE RATE FREEZE<br /><br />A client told me Saturday night that a couple he knows – Jumbo A-paper borrowers with 20% equity, perfect credit, and high-paying jobs – were adamantly defending the stance that they’ll qualify to get their 5yr ARM from 2004 frozen. This profile couldn’t be further from qualifying, but it proves how confusing and disruptive to lender underwriting operations this rate freeze will be. You multiply this couple by thousands who will clog up the system “just to see” if they can qualify, and it spells trouble.<br /><br />In short, I think it’s mostly political rhetoric that has just enough credibility to come in handy during an election year. Picture your candidates stumping, and referencing the one case their assistant dug up as a success story. It might get headlines and votes, but it doesn’t unwind this housing correction any faster. I’m certainly sympathetic to borrowers who are in distress; I’m in the trenches with them daily. But government intervention in free markets is unwise and will probably prove to prolong this correction. <br /><br /></blockquote>D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-69588642264436989792007-12-10T08:33:00.000-08:002007-12-10T01:37:28.735-08:00Are mortgage rates poised to begin their incline?Check out the <a href="http://realtytimes.com/rtpages/20071210_ratewatch.htm" target="_blank">Realty Times Interest Rate Update</a>. What do you think? Time to lock in now if you are a buyer?D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com0tag:blogger.com,1999:blog-6146184715014517446.post-20794197488236406012007-12-10T02:23:00.000-08:002008-12-11T00:59:17.301-08:00Berkeley fixer a stones throw from Solano Ave Zachary's<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhP_xGKbe805XQEUkLKLet_YY_WN14nacf_kF3tAShlUgqrSXO2JQ0TNiH0E_t6zbMyXVdA3BBd-U5u4QhY-oHo-VSKPPh627FWk6GG8cx0vM8YlyYJmX1hLMSsRsYxa5lksGW9IRhP0gA/s1600-h/solanoave.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhP_xGKbe805XQEUkLKLet_YY_WN14nacf_kF3tAShlUgqrSXO2JQ0TNiH0E_t6zbMyXVdA3BBd-U5u4QhY-oHo-VSKPPh627FWk6GG8cx0vM8YlyYJmX1hLMSsRsYxa5lksGW9IRhP0gA/s320/solanoave.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5142289347653514946" /></a><br /><a href="http://www.1850catalina.com/" target="_blank">This spacious bungalow</a> sits on a nice corner lot in a great neighborhood known as Thousand Oaks where you can actually see the backside of Zachary's pizza up the street. With a little work and sweat equity, this 1265 sq ft, 2 bed/2 bath home can be brought back to life. Based on the high amount of interest at the open house and fab location, I expect this to sell quickly and likely above asking price. <br /><br />I predict a selling price of at least $650k, maybe up to $700k.<br /><br /><a href="http://www.google.com/maps?f=q&hl=en&geocode=&time=&date=&ttype=&q=1850+catalina+albany+ca&sll=37.758822,-122.412474&sspn=0.007464,0.020084&ie=UTF8&ll=37.893686,-122.278519&spn=0.007451,0.020084&z=16&iwloc=addr&om=1" target="_blank">Google Map It</a>D Gordonhttp://www.blogger.com/profile/14262598464932230834noreply@blogger.com1