Columnist Confronts Data, 'Zillow Bogeyman'

We've all heard of Zillow. As real estate agents, we find it interesting to see what "value" they put on the homes we have listed. It is rare that we find their estimation line up with what we see from the actual comparisons we make using sold criteria from the MLS. I thought these articles summed up their misinformation wonderfully.

Zillow is in business to make money, which isn't a bad thing - we are all in business to make money. The Multiple Listing Service, though it does indeed make money, is supported by real estate agent's yearly fees, which are substantial! The use of Zillow by consumers and by real estate agents is free, unless you choose to advertise your business. Zillow makes it's money with advertising dollars, so it is important for them to keep their name in the forefront. The MLS makes it's money from agents, who input specific data to get specific answers on a specific home at a specific time period, etc. Our comparisons don't lie.

Zillow is good at what it does - draw consumers to check on the value of their home. But please do not take their values as gospel. Call us and let us use the same criteria your lender will use and the buyers who are looking for homes will be using! That is why we pay the MLS the big bucks! Read this link!

http://web03.echomail.com/remax/l.asp?t=H30&e=zvxrjvyzref~lnubb.pbz&c=8521a3db6892b7166

April Sales Highest In Eight Months!

What happened? While we were all reading and listening to the bad news, someone has been buying homes! Dataquick reported that Southern California homes sales in April are at the highest levels since August of 2007. The bulk of the sales have mainly been in homes under $500,000 as those looking for great deals took advantage of the price slump and foreclosures. Thirty-seven percent of the homes sold last month were foreclosures.

In San Diego County, Chula Vista is among the highest areas of sales activity in Southern California. We have been searching for property for a client around the $350,000 range in Chula Vista, and we are finding multiple offers being made on multiple properties of interest to our buyers. It is not only Chula Vista where we are experiencing the phenomenon of multiple offers, we are also encountering it in other areas of the county in properties under $400K. It very much feels like San Diego has decided to buy while the bargains are hot.

"Quite a few more buyers stepped off the sidelines last month to snap up homes at substantial discounts relative to the market's short-lived peak," said Marshall Prentice, DataQuick president. "It's no surprise, given the magnitude of the price declines in inland areas and the fact sales have been so amazingly low for so long. We continue to look for evidence of a sales bounce in the mid-priced and higher-end markets along the coast. If the higher conforming loan limits are making a difference in those areas it's certainly not a large one, at least not as of the end of April."

According to DataQuick, indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, and, understandably financing with adjustable-rate mortgages is way down. However, down payment sizes and flipping rates are stable, and, interestingly, non-owner occupied buying activity is increasing.

All we know is that we are happy to see our first-time buyer clients finally being able to shop for a HOME!

San Diegans: CONSIDER YOURSELF WARNED!

Who Knew? Getting the FLU in the Merry Month of May!? I certainly didn't expect this. I was completely blindsided with it this morning. Not that anyone is ever really ready to get the flu, but some inkling that it's going around town would have been nice. I would have washed my hands more often.

So you won't be caught unaware, I'll let you know what to expect if the dreaded virus finds you. You'll wake up with a bit of a headache, and all of your muscles will ache like you did too much stretching at Pilates' class (at least that is what I thought). In a couple of hours, you will begin to feel like you have been run over by a truck. Every joint in your body will be screaming at you. You will have no choice but to lie down after taking as many pain relievers as you deem safe. The headache! You won't know what hurts worse: your head or your bones. Did I mention the chills? That's what will clue you in that this is serious business and you cannot (and should not) go about your normal day. It can be 80 degrees outside and you will be shivering and feel the need to burrow under a blanket.

After several hours of shivering and moaning, and probably too many pain relievers for your liver to handle, your fever will break. The best part is that your head will no longer feel that it is ready to split (where the term "splitting headache" came from, I'd guess). You'll begin to perspire and will need to grab a glass of ice water. Apparently this means the fever has "broke." I do hope that that is a good thing and that it won't glue itself back together and strike again once all those pain relievers wear off.

Then, you will pray. You will pray that this is the "24-hour flu" and not some tortuous Asian variety that we read about during flu season that keeps its victims in bed for a week. By the way, when exactly does flu season end? For all of your sakes, I hope it ends with me.

Happy Days Are Here Again!

Bloomberg.com posted the news that Consumer Confidence fell to a 5-year low and home prices as measured by the S&P/C-S Index experienced their greatest decline since at least 2001. San Diego experienced a year-over-year decline of 19.2% Will they drop further? Some say yes; some say maybe; some say no.

So, is anyone out there buying or are they all waiting for more declines in prices? Well, SOMEBODY is buying because we have put in countless offers for buyers and EVERY SINGLE ONE has been joined by multiple offers! This holds true for bank-owned and for short sales. (Most sellers who are not selling short or facing foreclosure are still priced out of the market and seem to be holding out hoping for that one buyer to fall in love and buy their home rather than go through the hassle of buying foreclosures and short sales.)

If you are a buyer who is looking for a long-term investment, waiting for the bottom is risky. Once we KNOW we've hit "bottom," the prices will already have begun to rise. Better to shop now while inventory is up and there are less buyers hitting the market. Good luck!

Many Looking for a Good Deal!

USA Today ran a story reporting that despite the falling prices in many parts of the country and the number of foreclosures rising, there is "a small yet growing number of bargain-hunting buyers." This is something we have definitely noticed here in the East County area of San Diego.

According to to article, first-time homebuyers that have so long now been priced out of the market because of the "frenzied 2001-2005 market" are the buyers that are among those most attracted to real estate today. This is something else we are seeing with our own clients. Happily, we currently have at many first-timers who are talking to our wonderful mortgage broker, Jeff Merritt of Granite Mortgage in La Mesa, California, to see what they can qualify for! If we are happy, these buyers are jazzed and ready to roll!

In "November 2007," the article goes on to say, "39 percent of buyers were first-timers, up from 36 percent in 2006, according to NAR. The key impediment to buying? Meeting tighter bank qualifying criteria." But is that so much of a bad thing? It is excruciating for our clients to go through a short sale (in other words, they are upside down with no other way out but bankruptsy and/or foreclosure). The tougher criteria will help these new buyers not to end up in that unenviable position. Better to rent and save as much as possible than to jump the gun.

Interestingly, USA Today reported that "international buyers increasingly are looking at opportunities in the U.S. real estate market. Declines in the value of the dollar against other currencies and lower prices translate into a discount of up to 30 percent for some foreign buyers.
Investors from other states also are seeking bargains in those markets hardest hit by the real estate downturn. Some are even buying properties sight-unseen for conversion to rentals until the market heats up again – a risky proposition, according to some observers." Just today a loan officer at the bank where we were opening up a new account told us this very same thing! The good news about this, according to this loan officer, is that this international interest will stimulate the real estate economy. That is a good thing!

by Debbie

Multiple Offers? Now?

You betcha. In January, we began looking for a house to purchase with our kids as an investment. We're here in San Diego, out in the East County, and our price range was $429K or less. We definitely wanted location, location. We found one in Lakeside that we liked that was a short sale (the sellers were upside down, in other words) and a great buy. It was actually still in great condition and at least $100K under any other house in the neighborhood. We put in our offer and waited. And waited. And waited. The banks are notorious for very slow response times. In the meantime, another offer came in. Still we waited. We kept looking at houses, but couldn't beat this deal, but at least we'd have backup ideas. The bank came back $50K higher so we bowed out. We put offers in on several others and each time there were multiple offers! Surprised? So were we.

This year, each and every time one of our buyers has offered on a property, there have been multiple offers. This goes for condos under $250K and for homes under $450. This has been true for short sales or bank repos. Our buyers get frustrated. Leah, our buyers agent, has put in 7 offers for one of her buyers, and each time they have been outbid! They're still looking.

Granted we're all wanting that great buy. But what this tells us is that despite all of the doom and gloom about the economy and the real estate crisis, there are A LOT of people out looking for bargains, and that is a very good thing! So though we are definitely slower this year, we are encouraged by all this competition and will keep on keeping on!

by Debbie

Forbes.com Says San Diego Prices May Rise Over Next Half Year

Some good news, guys! And we are seeing it in buyers beginning to be active, though still afraid to get their feet wet. We bought a house for investment, and we're not alone in the industry. Our main lender contact just bought a house to fix and possibly flip, as well! It is definitely in the air! Read this excerpt from Forbes.com...

Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.

In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.

Another good sign for the coming year? Increased credit availability.

We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.

http://www.forbes.com/2008/03/31/homes-risky-property-forbeslife-cx_mw_0331realestate.html?partner=email