Buying real estate for cash in San Diego

Posted on June 27, 2011 by Gavin Linde - San Diego REALTOR

If you are sitting on cash now is a great time to start looking for properties to live in, or for investment without a doubt. You wouldn’t believe the deals right now on home in San Diego if you have cash. Don’t get me wrong there are great deals on homes in San Diego for financed buyers too, the problem is the bank is not giving out the financing like they used to. This is causing offers to be cancelled and deposits to be lost unfortunately for some home buyers.

A bank pre approval letter is just one step of submitting an offer to buy a home in San Diego, unfortunately the pre approval letter just shows you have a “better than average” chance of getting a loan and is not a guarantee. Cash on the other hand is cash, its up to you how much you offer and payment is a simple process since it is totally in your control.

Obviously, yes, and right now 30% of home sold are to cash buyers, that is way up from the 12% two years ago. USA Today published a great article about the rise and benefits of cash buyers in the current real estate market.

The benefit of cash buyers is they have the ability to move in and out of transactions easily and to some extent can dictate price. The cash buyers are buying properties they can rent out, sit on them for 5 years and then sell them at a handsome profit. For example you could buy a condo in downtown San Diego right now for $150 000, rent it out for at least $1200 per month. After subtracting the $300 for the HOA fees, you are netting $900 a month.

Now do that for 5 years, and you have already recouped $54000 of your investment. Then lets say the property goes up to $225 000 in the next five years, and you sell it, you make yourself about $129 000, not to bad right for a rental in downtown San Diego. Or you let it run another 5 years and now you have recouped $108 000 of your original $150 000, so the profit is even bigger when you sell it. I would venture to say its not a bad way to make money in the current San Diego real estate market. If you have more cash you can imagine the pay out would be bigger, and yes your cash is tied up in the property, but would you rather have it in an income generating asset or sitting in your retirement fund?

If you look at people with true wealth that can stand the test of time over generations its usually a person involved in land or housing, an inventor, luck of the market, or a revolutionary. I would highly advise people who are retiring to put some money in the housing market, the income is great, and the potential for future appreciation at these low prices are great too.

Since this San Diego real estate blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read the GL Investments Real Estate BLOG, we really appreciate it, and we look forward to getting you a new home at these amazing prices and interest rates. You can also follow us on Facebook and Twitter.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these low interest rates on San Diego real estate. Contact GL Investments today!

Thanks for reading GL Investments opinions on San Diego Real Estate, now let’s buy you a new home to live in, or for investment purposes.

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The Shadow inventory of real estate

Posted on June 25, 2011 by Gavin Linde - San Diego REALTOR

Home sales continue to drop across the United States in real estate as the home sales sink another 3.8 % from last year. To read more about this from USA Today click the link.

I am not surprised at all by this, currently financing is very hard to get, and the number of cash buyers is not enough to keep the real estate market afloat. All the cash buyers I work with are looking for steals, not deals. The deals are the prices on real estate in San Diego right now are at circa 2002 pricing, but for the cash buyers they are able to purchase homes at even lower prices due the issues with financing. What I am seeing happening is a seller lists their homes, gets multiple offers on it, the each offer falls out of escrow due to lending issues.

In steps the cash buyer and (steals)offers a low ball offer which the seller most of the time accepts since they are selling the home. What I like about the article is journalists are now talking about the “Shadow Industry”. If you read the article from USA today you will see this paragraph.

“The situation is much worse when taking into account the “shadow inventory” of homes, economists say. These are homes that are in the early stages of the foreclosure process but, because of backlogged courts or the government probes, have not hit the market for re-sale.”

This shadow industry has to hit the market at some point, and when they are all processed and on the market it will cause another huge real estate correction. I just saw a condo in UTC that sold for $178 000 in 1999, and peak at $395 000 in 2006 being offered by the bank for $202 000.

If you have the ability to get financing, and be warned you need to have money for a downpayment, or you have cash NOW is definitely a good time to be looking for a home in San Diego.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these low interest rates on San Diego real estate. Contact GL Investments today!

Since this San Diego real estate blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read the GL Investments Real Estate BLOG, we really appreciate it, and we look forward to getting you a new home at these amazing prices and interest rates. You can also follow us on Facebook and Twitter. Thanks for reading GL Investments opinions on San Diego Real Estate, now let’s buy you a new home ;)

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11 million US homeowners are underwater on their loans

Posted on June 13, 2011 by Gavin Linde - San Diego REALTOR

Great article yesterday morning on USA Today about the amount of home owners who owe more on their homes then it’s worth. To read the article please click here.

” About 11 million U.S. homeowners are underwater on their mortgages, meaning they owe more on them than their homes are worth. Of those, 2 million are so deeply underwater that market researcher CoreLogic predicts their homes will go into foreclosure or distressed sales.”

Let’s do a little reality math, we have 4 million homes taken by the bank, we have another 4.2 million that are delinquent, and another 11 million that are worth less than their note at current market value. Total that up and we have 19 million plus homes in the country that could have serious issues on the real estate market. If home prices keep falling that number of 11 million will continue to grow, and strategic defaults will increase no doubt.

In San Diego you are already seeing the prices of real estate still dropping with no bottom in sight. This morning Sign On San Diego reported that the local home sales fell yet again, to read the full article please click here.

“Numbers from DataQuick Information Systems show May’s median price for all sales in San Diego was $324,500, down 4.6 percent from last year but up 0.9 percent from April. Sales fell 20.4 percent in May from a year ago to 3,087 and dropped 5.8 percent from April.”

People are living in their homes right now and not making payments for years. The reason is the bank cannot take the losses it would incur by taking back all these toxic assets. As they get more organized they are releasing these assets and paying for the tenant to leave the home clean. When these homes hit the market they are priced to sell and lower then market value which continues to drive down the San Diego real estate prices. I am seeing more and more bank owned homes coming on to the San Diego MLS each day, it would really amaze you the quality of home you can now buy in San Diego that 5 years ago was a 1 bedroom condo at these price points.

As I tell my buyers, now is a great time to start looking for a new home, a real estate investment, or a second home. Get your loan papers in order first though, in order to submit and offer these days you need to have proof you can buy the home almost always.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these low interest rates on San Diego real estate. Contact GL Investments today!

Since this San Diego real estate blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read the GL Investments Real Estate BLOG, we really appreciate it, and we look forward to getting you a new home at these amazing prices and interest rates.

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Mortgage Rates are down again

Posted on June 13, 2011 by Gavin Linde - San Diego REALTOR

“Fixed mortgage rates dropped for an eighth straight week, but low rates have done little to boost the struggling housing market.” read more here from USA Today.

I think we are going to have to do more than lower the interest rate to get more buyers these days. It really does not matter how low it is if a potential home owner cannot get approved for a loan. It actually just irritates current home owners who see they are paying too much in interest for their existing loan.

These new loan rates are really tempting, since property prices are at close to 2002 pricing and dropping. Unfortunately the new under writing measures are very strict and thus approvals are harder to get. Most new home buyers are being encouraged to put 20% down to increase the likelihood of getting the loan but in this day and age it’s hard for people to have saved that kind of money.

One major financial institution has come up with a program for FHA buyers where they credit back 3% of the 3.5% down payment, but with high credit scores a must and almost perfect credit it makes qualifying for this type of loan challenging.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these low interest rates on San Diego real estate. Contact GL Investments today!

Since this San Diego real estate blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read the GL Investments Real Estate BLOG, we really appreciate it, and we look forward to getting you a new home at these amazing prices and interest rates.

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San Diego Real Estate Foreclosures and Delinquent home owners

Posted on June 6, 2011 by Gavin Linde - San Diego REALTOR

This past week I read two very interesting articles about the current real estate market. The first one was in USA Today about the foreclosure outlook currently, you can read the full article here http://www.usatoday.com/money/economy/housing/2011-06-02-foreclosures-may-have-crested_n.htm.

“Fewer new delinquencies will eventually set up the housing market’s recovery, but that is a long way off. About 4.2 million loans are seriously delinquent or in foreclosure. At current sales rates, it’ll take four years to absorb that inventory”.

Now that is on top of the 4 million that have already been foreclosed on, and the banks is selling these homes at a discounted rate.

The second article was from CNBC where they were talking about the government helping out delinquent home owners with principle reductions, you can read the full article here http://www.cnbc.com/id/43281199.

“One of the administration’s programs helps distressed homeowners avoid foreclosure by providing permanent loan modifications. Another program, now ramping up, gives states that have been the hardest hit by falling home prices funding to help reduce the principal of a borrower’s loan, among other things.”

To me we are band aiding the problem here, people were given loans that they could not afford and renters were made into home owners. So now with the median prices of real estate across the nation plummeting the government is scared, and they should be.

They stepped in with loan modifications the past few years, and this stat you can read in the USA today article above “Loan modifications. In April, 22.5% of loans that were more than 90 days delinquent a year ago had become current. That figure was 12.6% in April 2010, LPS says. Last year, almost 1.8 million homeowners got a home loan modification, up 42% from 2009, says the Hope Now alliance of mortgage servicers, investors and others. Loan modifications often include lower interest rates or longer loan terms.”

So do the math, that means the other 77.5 % of loans that are more than 90 days delinquent are not current, I wouldn’t say that is a good return on loan modifications.

The sooner we accept the fact that we have large amount of home owners living in homes they cannot afford the payments on, then the real estate market will begin to correct. Until then if we keep this home owners in their real estate we are just delaying the inevitable and prices will continue to drop. If you read my last article on the pricing of San Diego real estate, a good friend of mine Curtis Gabhart made a great comment, “factor in inflation and we are now in the 1990′s with regard to pricing in the San Diego real estate market”. I really think now is a great time to start looking for a new home if you are renting, and if you own think about buying another one and renting it out.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these great deals on San Diego real estate. Contact GL Investments today!

Since this blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read this, we really appreciate it, and we look forward to getting you a new home at these amazing prices.

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San Diego Real Estate at 2002 prices

Posted on June 1, 2011 by Gavin Linde - San Diego REALTOR

This week in the real estate news there is a lot of talk about the pricing of real estate nationally. One article from CNBC talked about pricing dipping below their 2009 low. You can read the full article here – http://www.cnbc.com/id/43222783

“The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.”

All good points here, we do have a large amount of real estate for sale currently and a weak demand due to loan contingencies.

Another article from Yahoo News was a little harsher with its facts, stating prices of real estate are at lowest since 2002 pricing. You can read this article here – http://news.yahoo.com/s/ap/20110531/ap_on_bi_ge/us_home_prices.

“”Folks are having so much difficulty in getting financing for a home,” said Mark Vitner, senior economist at Wells Fargo. “It may be early next year before prices hit bottom.”

Another obstacle to a rebound in prices: A delay in processing foreclosures. Homes in foreclosure sell for, on average, 20 percent discounts. When they do, they pull prices down further. But many foreclosure sales have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Once those homes are eventually foreclosed upon, they will trigger a further price drop in many markets. Those declines are “etched in stone,” said Patrick Newport, U.S. economist at IHS Global Insight”

Personally I liked this article better and the insights were spot on as far as why we are in this situation and what the future holds for the real estate market.

I decided to do my own comparison and pulled up a property on the San Diego MLS. When you look at the property below in UTC San Diego, a great area to live, and as you can see has seen tremendous ups and downs in property value. So to say San Diego is not affected by this as much I have to disagree with that, I would imagine we are spot on or pretty close with the national averages, just not worse off like Arizona and Nevada.

6216 Caminito Carrena, CA 92122

04/02/1997 sold for $110 000

03/05/2003 sold for $289 900

03/04/2005 sold for $414 000

1 bedroom, 1 and 1/2 bathroom 914 sq ft condo in UTC currently listed for $259,900

The remarks currently on this property to describe it:

“GREAT OPPORTUNITY!  Good location in complex away from street noise.  Detached garage. Laundry room with washer and dryer. Patio. Recent repairs include new paint, new carpet, removal of acoustic ceilings, new garbage disposal, and new garage door.  Close to shopping, freeways, and employment.”

So know if you are wondering what you can buy in San Diego for $260 000 let me show you a few examples.

92122 zip code – UTC – 2 results

8308 Regents Rd #1b

2 bedroom 1 bathroom for $259 900

Remarks: This ground floor condo is *clean* and well maintained.  Upgraded kitchen with Corian counters and updated cabinetry.  Open floor plan with kitchen open to dining and living rooms, all with tile flooring.  Living room opens to outdoor patio area facing pool.  Bathroom has been tastefully remodeled in tile.  Ideally located near swimming pool and close to two garaged  parking spaces in tandem.    Near UTC shopping and UCSD.

92037 zip code – La Jolla – 1 result

2600 Torrey Pines Rd #A32

1 bedroom, 2 bathroom for $255 000

Remarks: Solid one bedroom top floor unit. Nice open floor plan. Fresh paint and new carpet.  Great complex amazing location for UCSD free way close. Private with potential.  My client purchased from Dan Fouts of the Chargers.

92101 zip code – Downtown San Diego – 8 results

1970 Columbia St #3

2 bedroom, 2 bathroom for $259 900

Remarks: Great Location in Little Italy. Two full spacious baths(each have tub and shower enclosure)Nice neutral high quality tile in living area and tan carpet in both bedrooms. Secure building with exercise room, meeting lobby and common area rooftop deck. Granite counters in kitchen, stainless GE appliances. This unit is in mint condition.

92014 zip code – Delmar – 0 results

92049 zip code – Oceanside – 1 result

999 N Pacific St 3b1

1 bedroom, 1 bathroom for $255 000

Remarks: Ocean view home in the North Coast Village. Short walk to the beach. Fully furnished one bedroom and one bath unit. Private balcony off of living room. Spacious living room with cozy fireplace. Open kitchen. Well maintained tropical grounds, gym, sauna and 24 hour guard gated community.

If you read our article about one of the current loan programs available through a major financial institution – http://gl-investments.com/own-a-340k-home-san-diego-for-less-then-1percent-down/, you will see for a loan of $240 000 you can purchase a single family residence for 240k with the monthly payment of $1800 with total money out of pocket to close of $1,383 + closing costs.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these great deals on San Diego real estate.  Contact us today!

Since this blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read this, we really appreciate it

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Foreclosures in San Diego sell for up to a 34% discount

Posted on May 26, 2011 by Gavin Linde - San Diego REALTOR

If you were wondering where I came up with the statement yesterday, “We are in a for a really interesting next few years in the real estate market as the big banks try their best to move forward, foreclose, liquidate, and put the properties back on the market. These properties are then priced to sell, that effects the comps in the neighborhoods, and the result is lower real estate prices. It’s not rocket science”.

Then you need to read this article from USA Today about the discount rates on foreclosure properties compared to non distressed properties http://www.usatoday.com/money/economy/housing/2011-05-26-foreclosure-discounts_n.htm

“First-quarter foreclosures were 45% of home sales in California, while the average foreclosure discount was nearly 34%”

Right now there is not a high demand for properties since most people cannot get a loan under the current conditions. Those who can, have many choices on what they want as more of these foreclosed properties hit the market each day. These properties are not flooding the market by any means, but they are starting to be released by the major banks.

It’s taken over 4 years for this to happen, and longer with some of the banks. The reason it took so long is all the loans made by hundreds of sub prime lenders, Washington Mutual and Countrywide to mention a few, needed to processed and their current situations assessed.

Just to get an idea of how many banks failed since 2007 take a look at this http://www.calculatorplus.com/savings/advice_failed_banks.html. “Washington Mutual Bank, which failed February 2008 and with assets totaling $307 billion, is by far the largest US bank failure in recent history. ”

So now as Wells Fargo, and Bank of America who are the main holders of these foreclosed properties are stream lining their systems, these properties are being given their 30 days notices and then put back on the market. The banks are working with local realtors through asset managers to assign these properties and get them to market. To speed up the process they are giving the tenants cash incentives to leave the home in a good condition. This allows the realtor to get in, change the locks and get it on the market without having to rehab the property to much.

These properties are priced to sell, the bank is not looking to have them sit on MLS for very long, and as the article above in USA today states, these properties in California are discounted up to 34% below a normal sale.

We have over 4 million properties in foreclosure in the last 2 years, of which currently 1 in 240 California homes are in foreclosure http://www.cnbc.com/id/29655038/States_with_the_Highest_Foreclosure_Rates?slide=9, if you think that is bad look at Nevada http://www.cnbc.com/id/29655038/States_with_the_Highest_Foreclosure_Rates?slide=11.

If you are thinking of buying a home, lets first see what kind of loan you qualify for. Then we can look for a new home for you and take advantage of some of these great deals on San Diego real estate.  Contact us today!

Since this blog is pretty new, if you like our articles please click on the little mail symbol below here on the right and send it your friends. Thanks for taking the time to read this, we really appreciate it.

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The San Diego real estate prices will go lower

Posted on May 25, 2011 by Gavin Linde - San Diego REALTOR

Great article on CNBC yesterday about the real estate prices will still go lower – http://www.cnbc.com/id/43151250

Finally someone is making sense instead of all the optimism you hear out there. I don’t think we have seen the worst yet. How could we of if almost none of the 4 million properties that got foreclosed on in the last 5 years have not gone back on the market yet?

This quote is pretty clear “The housing recovery-rate is going down in twofold: “First, home prices are dropping and that’s going to make the recovery rates lower,” he said. Second, the amount of time it takes to liquidate a foreclosed property is now, on average, 26 months as opposed to 12 to 18 months, which “pushes out the timeline.”"

You have to think about this, most of the sub prime lenders are gone. These banks were bought out by the big institutions and now they have to go through all the paperwork to figure out the details of the property.

We are in a for a really interesting next few years in the real estate market as the big banks try their best to move forward, foreclose, liquidate, and put the properties back on the market. These properties are then priced to sell, that effects the comps in the neighborhoods, and the result is lower real estate prices. It’s not rocket science ;)

Like I tell all my buyers that are excited by news like this, get your loan prequals ready, make sure when you are ready your bank is ready to get you that loan. What I love about articles about this is finally the truth is coming out, and its black and white facts, not some “expert” saying everything will be fine.

We would love to show you some of these great deals, so when you are ready to buy a home, contact us so we can help you. We also work with some big institution lenders so we can refer you a loan expert too.

If you find our insights interesting please tell your friends, GL Investments is committed to providing great insights into the San Diego real estate market.

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Strategic defaults on real estate

Posted on May 24, 2011 by Gavin Linde - San Diego REALTOR

Great article today in USA today about strategic defaults and the state of your credit if you get foreclosed on – http://www.usatoday.com/money/economy/housing/2011-05-24-mortgage-defaulters_n.htm

“TransUnion, like other credit-management firms, is seeking insight into mortgage-only defaulters, who could prove to be a big market for lenders. In the past five years, almost 4 million U.S. homes have been lost to foreclosure, says market researcher RealtyTrac. A chunk of those were “strategic defaults,” in which homeowners who could afford to pay their mortgages walked because home values had tanked so much.”

I have been talking to a lot of home owners lately and the option of a strategic default has come up many times. Everyone is scared of ruining their credit, but as you see above almost 4 million homes have been foreclosed on. That is a huge amount of homes, and we will see more as the banks rate of foreclosure improves and these homes are put back on the market.

To buy a home your credit is very important, and 5 years ago you would never of seen the credit reporting agencies saying that they are looking into reason for foreclosure. They have to do this otherwise the banks will not be able to underwrite loans. Most families do not have a savings account with significant money. So coming up with 20% down would be impossible and we would have a flood on the MLS of real estate inventory and few qualified buyers. It’s refreshing to see the credit reporting agencies are realizing there are situations that happen with your credit where you made a business decision and to not penalize you as heavily so you can move forward.

I think we are going to see more strategic defaults in the San Diego real estate market. People who bought homes in the last 5 years for sure are wondering where their equity went. If you bought a home for example for a million dollars that is now selling across the street for 600k, I know that does not make you happy paying that 5k plus per month payment and the new guy is paying around 3k with these super low interest rates.

If you are looking to buy a home, you really need to talk to your bank and see what you qualify for. We work with some great banks and would love to help you, since once you know what you qualify for it really makes buying a home much simpler.

To contact us click here and one of our licensed real estate agents will get back to you.

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Foreclosures in San Diego

Posted on May 23, 2011 by Gavin Linde - San Diego REALTOR

 Buyers looking to purchase some great deals on San Diego real estate should take a look at this article in the Union Tribune where they put together a spreadsheet of the foreclosures and defaults in march and April of this year. http://www.signonsandiego.com/news/2011/may/18/search-your-zip-san-diego-foreclosure-data-april/

So as you see defaults are down, what you don’t see if that the defaults from last year are mostly still living in their homes and have not been put on the market yet. So this is just building up and building up as the banks get more organized and start releasing these properties onto the market. When this happens they will be at fair market value which will lower the median value of the houses even further.

I spoke with an owner of a one bedroom condo in Little Italy this past weekend and he said his property tax assessment went down 3 times so far in the last 2 years. The condo he bought for $290k is now selling for $180k in his building. Today there are 32 properties on the MLS under $200k in the 92101 zip code. You can see it too on Realtor.com – http://www.realtor.com/realestateandhomes-search/92101/price-175000-200000

If you are thinking of buying a home a tired of paying rent, or would like a home as investment now is definitely a good time to start looking. The next few months we will see more properties hitting the MLS for sure, and more great deals as the decline of median home values continues in our opinion.

We would love to help you with your new home purchase or help you sell your home. To contact us click here and one of our licensed real estate agents will get back to you very quickly.

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