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There were some very interesting points raised in this discussion today on CNBC. What do you think about the points the CNBC reporters were making? What about those made by Professor Brent White from the University of Arizona in his recent research paper ?

The lead in from the CNBC host was an interesting attempt to sensationalize Professor White's observations. Professor Brent White's basic point was corporate America and home owners are living by two different sets of rules. It is clear from all the bailout and intervention, there are two sets of rules. Financial institutions were given trillions of dollars and yet many of the banks have been unresponsive and unhelpful in countless situations with the average borrower. My thinking on this situation has changed over time due to the lack of good faith coming from bailed out banks. There is a story in the bible about a debtor that's large debt was forgiven only for that man to be harsh with someone owing him a much smaller amount of money. It did not go well for the harsh lender in that parable. It might be wise for the many "bailed out banks" to read Matthew 18.

There were 3 CNBC reporters pointing out why Professor White was wrong & they did a poor job in my opinion. I am curious to see what people think about this interview, lenders and borrowers alike. Also, was it just me, or were the looks and words coming from Michelle Caruso-Cabrera over the top? She said banks are paying too by absorbing big losses. This is true, but they have been given trillions of tax payers money with very few strings attached and they were the ones offering and approving these loans.

From a ground level perspective: In many of the short sale situations I have worked on representing home buyers & sellers alike, the banks are very slow to answer short sale request. They are very slow to answer loan modification request and it is unfortunate because everyone is suffering from the lack of commitment from lenders to accept their portion of the blame in these situations. 

There is plenty of blame to go around. In some cases, loan officers helped people select loans that were very risky & lenders made loans they should never have made. Buyers bought homes they should not have purchased and real estate agents sold homes to folks that would have been better off with smaller homes or renting. There are many borrowers that simply bought at a high price and are stuck in a bad situation, maybe a lost job or? There are many good people being hurt.

Obviously assigning blame is easy. The hard part is fixing the problem.

A couple things that come to mind are simply to make any financial firm that accepted tarp money hire enough people to get through the massive number of loan modifications and short sales that need to be completed. When a bank has been presented with a viable short sale package from a borrower the lender should be required to do an appraisal and give a price they will accept based on the market value. (If this were to happen banks would get a higher price for short sales) Also, some rules of the game would be helpful. Banks should also give borrowers and real estate agents the exact criteria they will use to accept or deny a short sale and make a commitment to have them closed in a timely manner. (This would help the banks net more money from the sale as well)

Real Estate agents should be required to be educated on short sales through some standard process and be certified to work these files. I am sure there are many more good ideas on what could be done to move through these issues and I would love to hear your thoughts...post it here or email me.

Right now is an excellent time to buy a lot and build a home in North San Diego County. Several years ago finding a builder at a reasonable price to build a custom home was difficult at best. Right now there are good builders working hard to stay afloat that are more than happy to take on projects at prices that were simply unavailable several years ago. Finding the right lot in a desirable location was not a simple feat either...but what if I told you it is possible to buy a lot and build a $1.5 million home and save the better part of a year in time and save a hundred thousand dollars or more? In Leucadia right now such an opportunity is waiting for you! Thousands and thousands of dollars have been spent making it ready to build and now it is your turn. Listed at $749,000 610 Ocean View, Leucadia Ca 92024.

We are getting darn close to finishing off 2009, so it is a good time to talk about where we are and the direction the North San Diego Coastal real estate market may be headed. I have put together a few graphs for you that will show what has unfolded over the past two years. They may be hard to see online but if you would like the information emailed to you, we are happy to reply to : loren@coastalhomefinder.com ask for November Blog Graphs.

Listening to the business news, or the evening news, it seems like their remarks about the economy and the real estate market tend to try and find a good deal of their logic for where we are headed by looking back to past market corrections. While I believe there is always value in knowing where you have been, each individual downturn in the real estate market has had it's own unique set of circumstances that throw a wrench into the mix.
This one was a doozy, a full stock market melt down took place right in the middle of this down turn. Plus, the small matter of major banks and brokerage houses falling from the weight of the shaky foundations they were built upon just accelerated the process.

So back to the graphs. The numbers. The Past and the future??? I follow pending sales & months supply of inventory to get a better directional handle on the real estate market.

With all the variables too numerous to mention, the biggest drivers that move real estate values, in my opinion, are cost of acquisition (interest rates & price paid) and momentum.  Mortgage rates may be as low as we will see them for some time. Prices are down from 20% to 60% depending on the exact neighborhood you are looking in. So, it looks like there will be upward pricing pressure on home prices in 2010, there already is at the entry level market.

The lower end of the pricing spectrum has stabilized and is moving up. The upper quadrant is still dropping. Foreclosures & short sales are keeping a lid on significant upward price moves and will continue to do so until the distress sales drop as a percentage of closed sales. One interesting thing happening is the upper tier price point of homes is seeing a sharp increase in the numbers of distress transactions. In an October 9, 2009 article in the Wall Street Journal, the story points out that the top end of the market has seen foreclosures coming from that segment go from 16% to 30%, while at the bottom tier foreclosures as a percentage have gone from being over half of the foreclosed transactions to a third of the foreclosure sales.

So where are we headed in 2010? Real Estate is truly a local market. Supply and demand in your specific community will rule the day. If you would like a pin point report detailing exactly what is happening in your market just email me loren@coastalhomefinder.com. (this is for those of you that are thinking of buying or selling soon)  If you would like a no hassle general picture just go here and get your Market Snapshot. This is delivered directly to your email, and no, we won't bug you about selling your house! We'll supply the info in an easy format to view, when you want more detailed info you can call or email us.

See Available North San Diego Coastal Foreclosure/ Pre-Foreclosures:.

A big thank you to Gary Vaynerchuk, New York Times best-selling author of Crush It!, for coming to the Carlsbad City Library Wednesday evening. Gary blessed our community by sharing his boundless energy, knowledge of marketing with new media, and his passion to help others be successful. Gary generously spoke for over an hour and stayed an additional 30 minutes for Q and A with the audience.   His new book Crush It! Why NOW is the time to cash in on your passion!  is a must read for anyone looking for inspiration and information on how to live out their passion using the new social media.  We were inspired and want to share that inspiration with the Carlsbad community. Thank you for those who gave to the two charities represtented at the event we have passed on the funds and I am sure it will be of help to each of them.  The Thanksgiving Season is here and while supplies last, a free copy of Crush It! is available to any individual or group interested by contacting us 760-602-1000 or loren@coastalhomefinder.com.

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