The realtor write-up:
Affordable opportunity. Fixer upper. As is sale.
LOL, LOL, LOL!
Featured on the Marin Pos(h) Web Site
Posted on 04/06/2006 3:14:09 PM PDT by ex-Texan
The area's home prices have a 60-percent chance of dropping, one of many factors making San Diego the riskiest real estate market in the nation, according to a quarterly report put out by a California mortgage insurer.
The report, put out by the Bay Area insurance company PMI Group, is well-respected by experts, who said it usually gives an accurate picture of the state of the nation's 50 largest home-buying markets. However, they stressed that the report is merely the latest in a long line of analyses that point to something the industry already knows: The nation's housing market is cooling, and San Diego is ahead of the curve.
"You guys are leading the nation -- congratulations," remarked Chris Thornberg, a senior analyst at the University of California, Los Angeles Anderson Forecast.
Last year at this time, the quarterly report ranked the San Diego region as the fifth-riskiest market in the nation. That report put Boston as the riskiest.
The report bases its ratings for each individual market on three factors: How well the local economy is doing; how much and how quickly home prices are appreciating; and the affordability of housing in that market.
San Diego's took a hard knock because of the third criterion. The area's homes are among the least affordable in the nation, according to PMI's data, and that means the people who buy them are more likely to default on their mortgages despite the relatively strong local economy. Hence San Diego's high-risk rating.
The area is also suffering from a slowed price appreciation.
In the last few years, San Diego's risk factor has been tempered by consistent price increases. But those increases dropped dramatically from last quarter, compounding the poor score the area received in the report.
Gary London, president of The London Group Realty Advisors in San Diego, said the report adds to the "parade of statistical indicators" showing that the real estate market is slowing. However, he doesn't think that slowdown is going to affect most homeowners, but only people on the fringes of the market.
That means people who have bought in the last year and who need to sell this year, or people who have entered into mortgages that they simply cannot afford, London said. Those people should probably be concerned at the signals the market is giving off, he said.
Indeed, even if prices do drop, London said, that's only going to open the door to a lot of people who have been watching the market from the sidelines, unwilling to get into the action. If prices drop, even slightly, he said, there are a lot of people waiting to buy.
Stephanie Corns, a spokeswoman for PMI, said the purpose of the report is to better inform home buyers and sellers about the real estate market. She said that people looking to buy a home need to consider how risky an area is before buying there. That's especially important when a buyer is considering buying their home using a non-traditional loan such as an interest-only mortgage, she said.
"Some of the exotic (loan) products transfer a lot of the risks to the borrower, so you really need to gauge what amount of risk you are comfortable taking on. Are you comfortable having a lot of risk in your mortgage and a lot of risk in your market area?"
However, Corns stressed that PMI still considers buying a home to be a safe investment on the whole, even in risky markets like San Diego. She said the company's research has shown that real estate prices always increase in the long term, so buying a house is always a sensible long-term strategy.
Alan Gin, a professor of economics at the University of San Diego's Burnham-Moores Center for Real Estate, said the report is certainly worth considering for home-buyers before they take out a mortgage, but he pointed out that the riskiness of a market is not likely to be the defining factor for a potential buyer.
"It gives you more information, but you probably shouldn't base your decision exclusively on this information," Gin said.
Topping out the top five riskiest markets in the nation were Santa Ana/Anaheim/Irvine; Boston; Nassau/Suffolk, New York; Riverside/San Bernardino; and Sacramento.
A couple of them. Paranoia and desperation.
Thank you!!!
(The /sarc tag is a form of training wheels for those unable to discern intellectual subtlety.)
So...I guess it wouldn't matter if the market dropped 10%, would it?
700 square feet???? For over 350K?????
High crime neighborhood?!??!
Yeesh!!!!!
:(
They're not mortgage companies!!!
The realtor write-up:
Affordable opportunity. Fixer upper. As is sale.
LOL, LOL, LOL!
Featured on the Marin Pos(h) Web Site
You would be amazed at how little someone will take when they are underwater on a mortgage. :-)
Why would you want to take a position that is worse than the one they were happy to get out of?
BS Alert!!! The survey was for commercial lender's opinion of the housing market!!!
Not residential mortgage lenders, but commercial and business lenders.
Is it still for sale?...What's your point?
On second thought, I extend to you the same offer I made to Ms. Petronski. (Post # 169) Do you want to buy the featured beautiful house with tar paper roof for only $ 449,000?
LOL, LOL, LOL!
Just keep repeating, "There is no housing bubble," until you turn blue.
Ooh, poor dumb$hit...I hurt your wittow feewings?
They didn't misrepresent the article, you did. They said lenders, the article explained they were commercial lenders, who don't even lend on residential property. They may have an opinion, but that's all it is, an opinion...
If you're going to be a market guru, you maybe need to know something about what you're talking about.
You know, I'm starting to get the feeling that you think there's a housing bubble.
Indeed, even if prices do drop, London said, that's only going to open the door to a lot of people who have been watching the market from the sidelines, unwilling to get into the action. If prices drop, even slightly, he said, there are a lot of people waiting to buy.Guess what happens to prices when all those people on the sidelines jump in? I guess they'd rather have a home than get caught up in some idiotic bubble mentality.
They aren't making any more land (except in Hawaii!!), this "bubble" is micro one. Central California has "cooled" to average sale time of 3 weeks instead of 1 week. Prices not down noticeably.
"The vast majority of people stay in their house less than 5 years. A 3-year arm would have saved them a ton of money."
Not if you have a buy and hold to rent strategy.
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