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.
Have you had success with short sales to get someone out from under? Most lending institutions have loss mitigation departments who will consider any reasonable offer.
Yep, that would be New London, Connecticut.
Second, Listing Right has nothing to do with being a realtor or real estate. Nada.
If you actually read this thread, you'd read that I'm active duty military. Starboard List... Nautical term for leaning to the right... leaning conservative... ? Get it? Quit making a fool of yourself.
More power too you but if the mortgage doesn't exceed the value and the homeowner has equity, any simple sale would do the same as you're doing, there's nothing magic and it isn't as if homes aren't selling in San Diego or even California (like some people, including ex-texans and self-loathing Californians, would hope to be true).
Bone-dry, trackless, hot desert. Lot of people there for the time being, but it won't last.
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That's great, it starts with an earthquake, birds and snakes, an aeroplane -
Lenny Bruce is not afraid. Eye of a hurricane, listen to yourself churn -
world serves its own needs, don't misserve your own needs. Feed it up a knock,
speed, grunt no, strength no. Ladder structure clatter with fear of height,
down height. Wire in a fire, represent the seven games in a government for
hire and a combat site. Left her, wasn't coming in a hurry with the furies
breathing down your neck. Team by team reporters baffled, trump, tethered
crop. Look at that low plane! Fine then. Uh oh, overflow, population,
common group, but it'll do. Save yourself, serve yourself. World serves its
own needs, listen to your heart bleed. Tell me with the rapture and the
reverent in the right - right. You vitriolic, patriotic, slam, fight, bright
light, feeling pretty psyched.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
Six o'clock - TV hour. Don't get caught in foreign tower. Slash and burn,
return, listen to yourself churn. Lock him in uniform and book burning,
blood letting. Every motive escalate. Automotive incinerate. Light a candle,
light a motive. Step down, step down. Watch a heel crush, crush. Uh oh,
this means no fear - cavalier. Renegade and steer clear! A tournament,
a tournament, a tournament of lies. Offer me solutions, offer me alternatives
and I decline.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.
The other night I tripped a nice continental drift divide. Mount St. Edelite.
Leonard Bernstein. Leonid Breshnev, Lenny Bruce and Lester Bangs.
Birthday party, cheesecake, jelly bean, boom! You symbiotic, patriotic,
slam, but neck, right? Right.
It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine...fine...
Look, do ya wanna buy a house or not? LOL!
Can you show me something in a Craftsman?
Yeah, but those usually don't kick in until the home-owner is already 3 payments in arrears. By then it is too late, and I don't like to work with those people anyway, because they are stupid. It is better to slide in there before the bank is angry. A lot of people have let credit cards slide to keep up the mortgage payment, so they don't have a problem on their house, just everywhere else. Their cars are about to be repo'd and they are terrified. I'm like a 'reset' button for these folks. Worth every penny for both sides.
Go west, young men, but stop before you get too close to the coast.
I've just had negative experiences whenever I've been to the "Inland Empire." I simply try to drive as fast as possible from Studio City/Burbank to Palm Springs without stopping. Sometimes, however, you have no choice. ;-)
Hey, how is that Justice Souther house thingy going?
That's a PR blast from a firm dealing in distressed financing (Phoenix="out of the ashes") with no indication of the scientific method used for the poll, no margin of error, no sample size or question methodology provided.
You consider yourself a sailor? What does HoMoTo mean then? If you can't answer, you ain't a real sailor.
For goodnes sake! That site is such BS!
There is NO 5,000 sq ft house for sale in San Diego for $90,000. But, of course if I get a $35 membership to the site...
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