Buyouts:

Traditionally, buyout transactions in vintage years immediately after a recession provided some of the best returns to investors. Depressed enterprise values combined with companies in need for capital led to a low cost basis for PE funds, which in subsequent years profited from the recovery and multiple expansion ultimately realizing superior returns. However, the investing environment is quite different from previous downturns. While EBITDA multiples for PE deals came off from their peak in 2007 and bottomed out in 2009, recovery in public equity markets and increased competition for deals led to a substantial increase in EBITDA multiples in 2010.¹ With a significant amount of uncalled capital on the sidelines, GPs are eager to deploy capital in light of soon to be expired investment periods. The competition for deals is additionally increased by strategic buyers with increased cash levels on their balance sheets.

Multiples for PE deals have recovered gradually after previous downturns, leaving PE funds a window of 2 to 3 years to deploy capital. The increase of multiples from 2009 to 2010 was rather steep resulting in multiples for U.S. LBOs of 8.5x, not far off from the peak in 2007.² Any one of these factors led to higher entry EBITDA multiples / higher entry valuations for PE deals, ultimately putting pressure on returns for LPs and GPs. While cost of debt for deals remains relatively low, equity requirement to close deals is quite different from pre-Lehman requirements. Debt/EBITDA ratios for larger U.S. buyout deals increased to 5.0 in 2010, still significantly lower than 6.0 back in 2007. ² 

Historically, about 30% of PE returns were due to leverage and about 20% due to the multiple effect.³ I expect both factors to play a less prominent role going forward. Still, over half of the PE returns come from adding value on the operational level. In my opinion, the current environment favors small to mid market buyout funds relative to large and mega buyout funds. While competition for smaller deals is expected to be fierce, I consider the ability to add value on the operational level of smaller players relative to larger funds a distinct advantage at this point.

Venture Capital:

While the outlook for VC funds was quite dim after the financial crisis, increased IPO4 activity offered opportunities to realize long term investments, providing some long awaited cash flows to LPs. With performance of VC funds improving, I expect to see fund raising for VC funds to increase significantly in the next year or two. With LPs strapped for cash after the financial crisis, accessibility to thought-after funds briefly increased via secondary transactions. At this point however, meaningful allocations to top-notch funds remain a challenge. While investors might not be able to access the top players, focusing on building relationships with newer groups can be very beneficial down the road. Smaller allocations to an increased number of earlier funds mitigate the risk of a significantly underperforming fund.

However, increasing the number of allocations should also be evaluated in light of increased resources necessary to source and monitor these commitments. Late stage VC / growth capital funds are positioned to do well. Demand for capital is strong as companies find it more difficult to secure bank loans to finance their growth initiatives. On the other hand, exit opportunities for growth capital deals look promising in the form of strategic acquirers with cash-rich balance sheets. 5

Special Situations:

While the low hanging fruit for distressed / turnaround investments is gone, the current environment still offers opportunities to deploy capital. Significant progress has been made to refinance maturating debt. That being said, over $1 trillion of non-investment grade debt will mature in the U.S. and Europe over the next five years. 6

More progress to alleviate strains on corporate balance sheets has been made in the U.S. than in Europe, positioning Europe to be more deal rich for distressed managers. However, should the economy in the U.S. not improve significantly in the next year or two, I expect defaults to spike, leading to plenty of opportunities for distressed managers. Complementing opportunities in noninvestment grade debt, mezzanine capital deals have caught the attention of investors. As access to traditional bank debt remains sparse for many companies, opportunities to close mezz. deals remain plentiful. Unless the economy improves significantly and banks become more willing to offer financing for growth initiatives of companies through traditional bank debt, the window of opportunity to close attractive mezz. deals is expected to remain open for now. Bids for secondary transactions have rebounded significantly from lows in the low 40ies back in 2008 when LPs were scrambling for liquidity. While bids have recovered to 85-90% of NAV by 2010, the bids are still off from the highs in 2006 at 108%.7

Clearly, the recovery of public equity markets improved the LPs’ liquidity position. However, with the amount of uncalled capital waiting to be called, it is likely that high quality secondary opportunities will continue to materialize as LPs are searching for ways to reduce their commitments.

Conclusion:

With over 600 funds8 currently in the market, investors will have plenty of funds to choose from across a wide array of investment strategies. LPs should focus on high quality managers that have faired well in the recent downturn and have the ability to add value to portfolio companies on the operational level rather than through financial engineering. Funds, which have postponed fund raising after the financial crisis are expected to return to the markets to raise new funds. Opportunities to invest in BRIC or MIST countries can be very attractive but in some cases scalability of allocations can be an issue. Additionally, the decision whether to invest in individual limited partnerships or work with a fund of funds should be carefully considered in light of the resources needed to build and monitor an emerging / frontier markets allocation. While China got most of the investors’ attention in Asia, opportunities in Southeast Asia have become more attractive.

Roger Beutler CAIA

1 Bain & Company, Inc., Global Private Equity Report 2011

2 S&P LCD, Bain & Company, Inc.

3 Golding Capital Partners Nov. 2010

4 Dealogic, Bain & Company, Inc.

5 Neuberger Berman  Private Equity Outlook February 2011

6 BofA ML, S&P LCD, Bain & Company, Inc.

7 Neuberger Berman, Cogent, UBS

8 Pitchbook 3Q PE Presentation Desk

Bloomberg is reporting that all 83 economists that participated in a recent survey expect the Fed rate to remain unchanged, keeping it in a range of “zero to 0.25 percent, its level since December 2008” (Lanman/Tanzi, April 27,2011) throughout the end of the year.

US Dollar Index hits low benchmark

The US Dollar Index hit a 3 year low on Tuesday and continued to sink Wednesday even after positive news from the government.  This has drawn economists into multi sided debates as to what effect this will have on inflation.  Bernanke provided a post-FOMC meeting news conference on Wednesday to discuss the status of the Fed, central bank and dollar.

Positive market reaction to Bernanke press Conference

The market reacted favorably to Bernanke’s comments although the dollar extended it’s downward trend.   Bernanke answered key media questions as reported by MSNBC:

“On the dollar: “The best thing we can do to create strong fundamentals for the dollar in the medium term is to first keep inflation low, which maintains the buying power of the dollar, and second, to maintain a strong economy.””

“On zero inflation: “Attempting to maintain inflation at zero will increase the risk of experiencing an extended bout of deflation or falling wages and prices, which in turn can lead employment to fall below its maximum sustainable level for a protracted period. The goal of zero inflation is not consistent with the Federal Reserve’s dual mandate.””

Dollar deprecation leading to outside investment

A good example of recent dollar depreciation is the influx of cash from our Canada neighbors.  On Wednesday the Canadian Dollar traded at US$1.0503.  Over the last two to four weeks there have been reports of increased activity and inquiries of Canadians purchasing 2^nd homes and retirement homes in the top vacation spots throughout the country.  Including Palm Desert (CA), Florida, South Carolina and San Diego (CA).  International investment will continue to take advantage of the weak dollar; and opportunities in the struggling housing market.

Flight to hard assets as protection against inflation

Historically to protect your savings and retirement against inflation there has been a flight to assets such as real estate and commodities.  An additional reason why gold continues to climb above $1,400 an ounce and silver is following behind as it skyrockets to $42 an ounce.

What’s the overall effect?

Inflation will be an important factor in your retirement and investment planning check back here often, where we will begin providing regular summations from experts arguing both sides of the inflation debate.

Federal Funds Rate and Short term Mortgage Outlook

The Mortgage Bankers Association (MBA) predicts rates on 30-year fixed-rate mortgages could rise a bit in the second half of this year. They see this gradual rise in mortgage rates continuing, even if the Federal Funds rate does not increase for another six to 12 months, as many economists expect. That’s because both the Treasury Department and the Fed announced last month they would start selling their huge portfolios of mortgage-backed securities. Some analysts believe these moves will raise rates.

Big Week of Housing Data

This week there is lots of information coming out about the housing market.  Bloomberg and The Commerce Department have reported a jump in housing starts of 7.2%.  There is also an increase of 11% for Building Permits.  Building Permits are often used as an indicator of future orders.  While this is good short term news, we have a long way before we see significant improvement.  Heather Struck at Forbes.com (April 19, 2010) summarizes this feeling up well with her comments from Paul Dales; this report still “is not showing pace that would reflect…housing recovery”.  And lastly, the economy is still working through the buildup of shadow foreclosure inventory stated in Investor Tribune last week.

Even more important news will be Wednesday’s Existing Home Sales Report.  This report should reflect the annual rate of sales back at 5 million, definitely a good thing.

Another interesting note this week……

Repealed – 1099 Requirements for Landlord and Small Business Reporting Law

Whitehouse.gov confirmed on April 14^th that the 1099 Requirement to report spending in excess of $600 has been repealed.  A good, if simple, victory for landlords and small business owners.  The White House Blog states that this provision “would have required businesses to send 1099 forms for all purchases of goods and services over $600 annually.”  Every tile guy, handyman, brick layer and landlord can breathe a collective sigh of relief.  Not only would this have caused an increase in your paperwork, but a squeeze on every little guy doing a “small job” for a “friend”.

High energy costs affect virtually every fiber of the U.S.consumer market from the gas pump, to the clothes we wear, to the milk our children drink. In the first quarter of 2011, energy accounted for 6.1% of consumer spending, the highest level since the recession began in 2008 and before that since 1986, according to Andrew Arroyo Investment’s Market Analysis & Research.

Everyone from stock investors, to political leaders to American consumers, who drive two-thirds of all U.S. economic activity, are taking a close look at the impact of the high cost of oil and what, if anything, can be done to help ease the financial fallout.

So, what does the price of oil have to do with real estate?  Well, according to some economic analysts, because of the rising fuel prices people are becoming more conscious about where they live.  They don’t want to have that long commute.  Consequently, this makes homes in the suburban areas less desirable.  That peaceful and serene home no longer looks so appealing when you have to spend an extra $500 a month in gas!  In Atlanta, Philadelphia, San Francisco, and Minneapolis home values outside of urban areas are dropping.   A survey of real estate agents revealed that three-fourths of home buyers are now opting to live in urban areas because of the rising cost of fuel. 

Just a few years ago, people in San Diego, CA were making an exodus to the nearby cities of Murrieta, CA and Temecula, CA because they liked the idea of paying a quarter of the price that they would pay in San Diego for a mini-mansion.  Now there are many foreclosures in the area and home prices in Murrieta have fallen 31%.

Keep in mind, however, that homes in urban areas cost more, so that money you save by living closer to where you work in the city may end up just being a wash-out when you factor in a higher mortgage payment.  But then, you also save a great deal of time, which is certainly an appealing idea to anyone! 

What’s driving the price of oil?

TheUnited States is the world’s largest oil importer. Because the U.S. economy is heavily reliant on oil-based power, American businesses are more susceptible to damage from rising prices than most foreign markets.

So what’s driving the price of oil? In May 2008, the Federal Reserve Bank of Dallas² published its list of factors, noting:

• high demand from developing countries, especially China and India,
• limited supply, particularly because of OPEC’s success in restricting production,
• consumer perception that oil prices are destined to rise even higher,
• a weak dollar, which makes the price of oil cheaper for foreign markets while more expensive for Americans, and
• geo-political uncertainties in the Middle East, Nigeria, Russia, andVenezuela.

 The cost of producing oil has also increased. According to the U.S. Energy Information Administration (EIA),³ the operating expenditures associated with oil production — known as lifting costs — and those linked with exploring and developing oil fields — known as finding costs — “have increased sharply in recent years.”

How are prices set?

Crude is a commodity, a raw material like natural gas, corn, wheat, gold, coffee, and cattle used to produce other goods. The costs of extracting oil from its source could vary widely from $5.26 a barrel in the Middle East region to $63.71 forU.S. offshore crude, based on 2004-11 averages from the EIA. Petroleum is bought and sold under exotic names like Nigerian Bonny Light, North Sea Brent Blend, and West Texas Intermediate on a variety of futures markets — where traders deal for the rights to buy and sell product at a specific price on a future date — around the world and governed by the rules of a particular country.

“The energy markets are among the largest and most liquid,” says Timmer. “The oil market is no different from the stock market in that oil futures are traded on exchanges where buyers meet sellers.” For an outsider, however, locating precise figures to explain how crude is currently priced is harder to unearth than a gusher inCentral Park.

Generally, there are two ways to trade commodities: either market trading or over-the-counter trading (OTC). Market trading takes place through the New York Mercantile Exchange (NYMEX) and is self-regulated with oversight by the Commodities Futures Trading Commission (CFTC), the government agency charged with regulating the commodities markets. In contrast, OTC trading is conducted without any such regulatory controls.

Only about 25%-35% of all energy trading occurs on the NYMEX,⁴ which means up to 75% of all oil contracts go unchecked by the federal government. Because OTC trading is unregulated, the exact volume of trades — not to mention the legality — is unknown. To compound matters, despite growing activity in the commodities markets, the CFTC has a staff of less than 500, compared to 3,700 for the Securities & Exchange Commission.

Other legal escape routes allow energy trading on so-called “dark markets,” exchanges not subject to the transparency and accountability laws governing U.S.exchanges. For example, the “foreign markets loophole” lets investors buy and sell millions of barrels of U.S.-bound oil multiple times overseas before ever reaching American shores, thereby driving up the price with each change of hands.

The standards for trading crude oil and setting prices should be, theoretically, consistent among different international market regulators. However, recentU.S. congressional hearings have introduced terms like “dark markets” and “swaps loopholes” used by some investors to skirt largely toothless government controls. Oil speculators — typically hedge funds and investment banks — have come under a spotlight amid allegations of exploiting gaps in the regulatory system.

According to the CFTC, the government agency charged with regulating the commodities markets, the percentage of petrol contracts controlled by speculators has surged to 71% in 2008 from 37% in 2000.

The International Monetary Fund has concluded that speculation has played a significant role in the run-up of oil prices, according to testimony at a June 23 House Energy & Commerce subcommittee. Also at that meeting a Lehman Brothers analysis suggested that more than half of the price of a barrel of oil may be attributed to speculation. Even the Saudis, the world’s largest oil producer of 9.7 million barrels a day as of July, contend that supply-and-demand seems to be in balance and that there is no substantive basis for current price levels.⁵

At this stage, however, no one knows for sure if any improper oil transactions have been executed. In part, that’s because American authorities can neither fully police nor gain access to data in most overseas commodities markets.

Bottom Line:
High oil prices have a major impact on your wallet. Higher inflation= higher cost of goods = higher interest rates = less consumers able to qualify to purchase cars and homes. High gas prices will also take away from a homeowner’s ability to pay the bills. Any way you cut it, higher oil prices have a negative effect on your wallet.

Sources:
http://www.nytimes.com/2008/06/25/business/25exurbs.html?_r=1&oref=slogin
http://www.newsweek.com/id/144114
http://www.businessweek.com/the_thread/hotproperty/archives/2008/04/gas_prices_and.html
1. Oil at Record Highs: Will There Be Blood?, MARE, June 9, 2008.
2. Economic Letter — Insights from the Federal Reserve Bank of Dallas, Vol. 3, No. 5, May 2008.
3. What Affects Production Costs?,U.S. Energy Information Administration, January 2008.
4. Christian Science Monitor, June 24, 2008.
5. Energy Speculation: Is Greater Regulation Necessary to Stop Price Manipulation? — Part II, Subcommittee on Oversight and Investigations hearing, June 23, 2008.
6. Paul Lombino – Fidelity Investments Weekly August 15,2008

Bank REO “Shadow inventory” continues to be a topic among investors, homeowners, banks and economists.  Corelogic released their breakdown of Bank REO “shadow inventory” this week.   Corelogic estimates the “shadow inventory” at about 1.8 million units or a supply of 9 months, as represented by this graph.

Another key component is the health of US Mortgages.  Corelogics’ report is that there is an estimated 2 million current negative equity loans that are more than 50 percent upside down.

Download the full report from Corelogic by clicking here.

Investors will have another 2 to 3 years to take advantage of opportunities in the foreclosure market and Bank REOs.  Great news if you wish to acquire assets at 30 to 50% off of peak market prices, as the US Mortgage crisis continues to adjust.

How soon will Bank REO inventory begin to release is tough to predict.  Actual courthouse auction sale volume has been consistently lower than 2010 averages on a day by day basis.  The banks are not flooding the market with these foreclosures at this time.  If anything there is more pressure for banks to work with homeowners to avoid foreclosure.  This good news, as floods of homes to the marketplace could disrupt the market.

The next big news is the release of existing home sale data, which is released later in the month.  A big question on investors’ minds “Is there still a hangover in home sales from the home buyer tax credit”?  More on that with the updated reports.

Below are several charts which can help investors in spotting tops and bottoms in San Diego real estate or any other city for that matter. These charts are similar to a “rate of absorption” chart which show the supply demand curve expressed as a percentage. The higher the percentage = the higher the demand (i.e. rising prices). The lower the percentage = the less demand (i.e. falling prices).

Many Americans believe San Diego is the most desirable place to live in the United States. Fair weather, beautiful beaches and a laid back atmosphere contribute to its overall desirability. San Diego is also considered a leading indicator city for residential real estate trends.

Boston, New York, San Francisco and several cities in Florida also lead the booms and busts across the US. Although there have been many ups and downs in San Diego, investor’s have been richly rewarded investing in real estate assets in Southern California over the last three decades. That is, assuming the timing of the first investment was correct and they didn’t buy a peak like 2005- 2006.

So, are we at the bottom of the market in San Diego Real Estate prices? Let’s let the charts speak for themselves, see below.

How do the charts work?

For example, if 100 homes total are on the market in the subject territory with 50 Active and 50 Pending, the ratio is 50%. This means there is balance between the homes being listed and being purchased. If 20 homes are Active and 80 are Pending the ratio is 80%. Vice versa, if 80 homes are Active and 20 are Pending the ratio is 20%. Excel Equation = (Pendings/ (Pendings + Active).

Simple charts, powerful tools.

Real estate investment chart for residential homes in Cardiff, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Carlsbad, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Carmel Valley, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Chula Vista (91910), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Chula Vista (91911&91913), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Chula Vista (91914&91915), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Clairemont, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Coronado, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Del Mar, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Downtown San Diego, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in El Cajon (92019), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in El Cajon (92020&92021), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Encinitas, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Escondido (92025&92026), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Escondido (92027), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in La Jolla, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in La Mesa, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Lemon Grove, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Mission Hills, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Mission Valley, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Normal Heights, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in North Park, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Ocean Beach, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Oceanside (92054), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Oceanside (92056), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Oceanside (92057), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Pacific Beach, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Point Loma, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Poway, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Rancho Penasquitos, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Rancho Santa Fe, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in San Carlos, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in San Marcos, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Santa Luz, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Solana Beach, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Sorrento Valley, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Spring Valley, CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Vista (92083&92081), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Real estate investment chart for residential homes in Vista (92084), CA in San Diego California. This charts show the relationship between the Pending Homes divided by the Total Homes for sale as expressed by percentage. Total homes = the Active homes (for sale) + Pending homes (in escrow).

Charts created and provided courtesy of Andrew Arroyo Real Estate.

Need a pro to explain these charts or to help you invest? Contact Andrew Arroyo Real Estate in San Diego, CA at 858-342-9292 to speak with an investment consultant today. www.andrewarroyorealestate.com