photo credit: smarthero

I know, I know. Based on our posting frequency lately, you thought we left town weeks ago. Blame that one on busy. Blame this one on, well, too busy for too long. We’ll be back toward the end of the week, hopefully with renewed enthusiasm and a vengeance. Until then, I am putting our three readers in charge of holding down the fort.

(Note: The photo I bagged from Flickr shows a first class cabin which clearly does not apply to us. A girl can dream, though.)

This is the trendline for homes “under contract” (in escrow) in Scripps Ranch for the past year. The data is for both attached and detached homes. Seems to me that low inventory is not enough to keep a motivated buyer down. Homes in our little community continue to sell in an average of approximately 50 days, and the well-priced, well-prepared and marketed homes seem to be flying off the shelf.

This morning we only have 62 true active detached listings in Scripps Ranch (discounting the homes in “contingent” status awaiting lender approval of an offer), this for a community of approximately 8,000 detached homes. Good grief! We also have 60 detached homes tucked into escrow at the moment. Assuming that most stick, July may beat the May and June sales numbers yet. Seller pricing has gotten more realistic, and I believe this to be the biggest factor in the buying wind sprints we are seeing. And it doesn’t apply to just Scripps; I am seeing it up and down the I-15 corridor and in Sorrento Mesa where we have buyers currently desperately seeking homes.

So, now, I’m off to try to find something to show my buyer client this morning. Pray for me.

FHA financing, which has gained popularity with the demise of the low-down payment mortgage, requires in the case of condominiums that the projects be on HUD’s approved condominium list. Absent this, FHA financing has required in the past that either a blanket approval be obtained for the project or that the lender apply for a “spot approval” (approval for the single unit being purchased). The spot approval, while requiring certain requirements be met in order to obtain HUD’s blessings, has not proven an insurmountable undertaking during a 45-day escrow period. Plus, the level of difficulty is obviously less than getting the entire project approved, so the spot was a handy alternative for many FHA buyers and their lenders.

That’s about to change. George Souto wrote a good summary of yet another implication of the underwriting guidelines which have been changing as often as a mother of quintuplets. In short, HUD is proposing to streamline the FHA approval process for condominium projects but, at the same time, is eliminating the spot approval effective October 1, 2009.  That’s a bummer, but it’s not the big bummer.

If you are currently in escrow on a purchase for which your FHA loan has been relying on a spot approval, you may find the financing rug pulled out from under you. One of our agents this morning received word that financing for a client who is supposed to close escrow next week was just yanked, her particular lending having decided to play it safe and adopt the new policy in advance.

Since this was a completely new subject for me, I don’t know if the “just do it” approach of this particular lender signals a pandemic. But, if you are an FHA borrower in the throes of an escrow banking on spot approval, or an agent representing one, you might want to make a phone call.

We all read the reports about our local housing market. It’s up! It’s down! Yep, all that. And mostly, we have been talking about the numbers of sales lately, since few are arguing that prices are actually climbing, at least to the extent that they might suggest a trend.

We just survived a forty-eight hour period in which we closed five escrows. As agents, and buyers and sellers know, the final days of the real estate transaction are like the final minutes of a basketball game - that’s when all the action takes place. Loan document signings, utility transfers, wire transfers, and, in our case, ten moving trucks, give or take, all poised in various states of readiness. We have final walk-throughs, last minute signatures, and last minute attempts to find the remotes to the ceiling fans which, invariably, have been packed in the box marked “Chelsea’s Room” never to be seen again.

It’s glamorous, I confess.  And when we wake up to find that we have more or less survived one of these classic spurts - ours is always a business of ebbs and flows - we have some catching up to do.

I made a quick trip to the “Market Stats” pages of our web site to take a peek at the active listing inventory trends for San Diego County and the I-15 corridor this morning, and was irritated to find that no one updated the numbers for May. Heads are going to roll! Then I remembered. I’m the one who updates those numbers. Dang. I had better get cracking. Just as soon as I find a home for our newly relocated clients who are growing weary of life at the Residence Inn. Unfortunately, this is proving more easily said than done.

While I was busy having a little Spring escrow fling, something happened to the market. Our inventory went on sabbatical. I wrote recently about how so much of our active inventory wasn’t really so active at all, a lot of short-sales “pending lender approval,” and how these homes were rightly swooped into the netherworld of a new MLS “contingent” status. Contingent, of course, means “Not really for sale, so too bad for you.”  Consequently, we saw the active numbers take an overnight nose dive, but that’s only part of the story. Our real inventory is really shrinking.

Would someone please move? We are finding that we have nothing to show our buyers, and buyers are out there. Granted, they aren’t your 2005 buyers, the ones hurling blank checks at the poor homeowner who, on his way to take out the trash, simply looked like he might be moving because he was carrying big bags of stuff. Buyers still want value and, for many, value is defined as 1947 pricing, but there are as many more realistic buyers who finally see value in this market.

So what happened to the inventory? Well, people aren’t selling in the same numbers now that they were during the peak; that much is true. 2005 is still too vivid in the homeowner’s memory, and the want-to-move crowd is less inclined to bite the price bullet just yet, so we are left with the need-to-move folks. But we also saw much of the well-priced inventory get gobbled up seemingly overnight. The question is how much of this is seasonal?

I have no statistics to point to this morning (since “somebody” forgot to update them), so I’m going to rely on my feelings. It’s a girl thing. When the June numbers come out, we are going to see a surge in the number of closed sales, at least locally. And when the July numbers hit, we are going to see a decline in sales again, which will result in a lot of analysts assuming the freak-out, crash position. But you can’t close escrows when there are no homes for sale, so July sales numbers will not be indicators of anything.

I believe it is September and even October which will be key. Interest rates have been creeping, which has inspired many buyers to do their thing sooner rather than later. The first-time homebuyer tax credit will sunset this November (well, maybe). And, this Fall, it won’t be Spring anymore (duh).  It is then that we will see what consumer confidence is made of.

My prediction for San Diego housing? We have another year of volatility and continued downward pricing pressure, although the rate of decline will continue to wane. Next Spring will bring our base, at which point we will enjoy an extended stay in the land of normalcy - normal market times (measured in months, not hours), normal annual price appreciation (measured in single-digit percentages, not in numbers that sound like test scores), and normal expectations on the parts of both buyers and sellers. This is called equilibrium, and it will take one more Spring until we stop playing around.

Since Inman is a subscriber news service, I can’t link. But at great personal risk (I am not, technically, supposed to republish since the content there is supposed to be “original”), I am going to reprint the article for our two readers here. It’s a bit long, but hey, it’s the weekend. What else have you got to do?

(Note to Inman and to the presiding judge: It is still original content. I left out two or three sentences.)

If you read nothing else, please skip to the bottom where I have reprinted with permission an email I received from John Carlson, a Certified General Real Estate Appraiser from Diamond Bar, in which he shares his concerns about the state of appraisals under the new rules. His thoughts pretty much sum up the concerns of the entire appraisal community and whether you are an agent or a principle in the transaction, it’s important that you know what’s going on.

The Home Valuation Code of Conduct, according to Freddie Mac, is all about “enhancing the independence and integrity of the appraisal process.” Good ideas, those. Go, Freddie!

If you were a licensed real estate agent in 2005 (which, according to the most recent census, includes everyone over the age of eighteen except some guy from Des Moines named Carl), you undoubtedly understand the need for a code of conduct. Back in the glory days when homes, or as we liked to call them, debit cards, were in high demand, the typical conversation between the listing agent and appraiser went something like this.

Appraiser: “I have been asked to appraise the property at 347 Falling Downs. May I meet you there at 3:00 today?

Agent: “Great, yes!”

Appraiser: “What is the sale price?”

Agent: “The price is $5,257,000, which is a little higher than the price of the last one-bedroom condo that sold in the neighborhood, but it’s really nice, and we had multiple offers!”

Appraiser: “Good one! Were there any concessions?”

Agent: “Well, the buyer did offer to raise the seller’s children as his own.

Appraiser: “Alrighty, then. We should be fine.  Just bring a copy of the contract.”

So, something clearly had to be done. And this is where the Code of Conduct comes in. Who says you can’t legislate ethics? The lenders were bad, bad children. The argument is that in their youthful exuberance to give all of their money away, they established relationships with appraisers who would consistently return the magic number, all too aware of on which side their paycheck was buttered. Maybe some lenders did influence the valuation process to their own benefit and to the consumer’s detriment. Or maybe, and I’ll just throw this out there, a home’s value is in fact loosely related to what a buyer is willing to pay, and when the lenders were giving out free money, buyers were willing to pay a lot -  a lot of the lender’s money. Either way, the regulating parents have stepped in.

So, we are now living under a new lotto system for assigning appraisers. And, now, our first point of contact with the appraiser goes something like this.

Appraiser dispatcher: “We have been asked to appraise the property at 11283 Peep Holes Court.”

Agent: “You mean ‘Peoples Court’?”

Appraiser dispatcher: “Whatever. When can we get in to see it?

Agent: “When would you like to get in to see it?”

Appraiser dispatcher: “Please hold.”

On the last such call, I held at this point for exactly 13 minutes (I counted). And while I enjoyed the musical stylings of Paul Anka, I sat mildly amused with the irony that it was she who had called me.  A better woman would have hung up, but I knew she had me over a barrel. I needed that appraisal, and I was at the mercy of this person who did not really work for the buyer or his lender, much less for me or my selling client. I guess that is what true independence is all about.

Appraiser dispatcher (returning from lunch): “Where is the property located again?

Agent: “San Diego.”

Appraiser dispatcher: “That’s in California, right? Please hold.”

Paul Anka: “Havin’ my baby…”

Appraiser dispatcher:  “Our next opening is at noon on Tuesday, in the Year of the Dragon. Oh, and bring a copy of the contract.

While we used to encounter the same stable of appraisers on each outing, we now only occasionally run into one that didn’t have to stop at the Jiffy-Mart to ask directions. And when we do see the rare, familiar face, we get an earful.

Appraisers who have spent years building their reputations and their relationships are now seeing their businesses regulated into the trash can. The costs to the consumers are going up, but the income to the established appraisers is going south because of a combination of fewer assignments and lower fees. The latter is because somebody has to pay for the administration and oversight which now is typically dispensed by an appraisal management company.

And, just in case anyone even thinks about getting ornery and gaming the new system, Fannie and Freddie will be funding an Independent Valuation Protection Institute to “maintain the integrity” of the very Code of Conduct intended to maintain the integrity of the appraisal process. Perhaps we should have a system in place for maintaining the Institute’s integrity. After all, you can’t be too careful.

So, back to my IRL (in real life) grab bag. First there was the home which sold at full-price first day on the market. Our lucky quick-pick ticket gave us an appraiser who refused to actually go inside the property. It was what they call a drive-by appraisal, and I am being generous here because there was no evidence that anyone bearing even a slight resemblance to a valuation professional had been within twelve counties of this home. With no model-match sales within the last two years (what we, in the industry, might call “latent demand”), the appraiser relied on sales of homes whose only similarities were in the fact that they too had mailboxes. Our requests to provide relevant data, appeal the appraisal, and even to simply speak to the mystery appraiser were denied. It cost the seller $5,000.

More fun yet was the appraisal process for our most recent listing. This one involved an FHA appraisal and, admittedly, the level of difficulty here is slightly higher. The appraiser is also an inspector of sorts. The assigned out-of-area appraiser did his routine appraiser-guy thing. He measured and took pictures and asked for a copy of the contract. And he identified a couple of outlets which, although not a grandfathered code requirement, he said would need to be GFCI protected. The FHA likes GFCIs - a lot.

Two days later, while foolishly thinking that because the property had been appraised, we had fulfilled the requirement that the property be appraised, we took a call from a second inspector. This is routine with FHA, doing things twice. In fact, many conventional loans now involve private screenings of “Appraisal: The Redux.”  Better to be cautious. The first guy might have not have acted “independently” as the Code requires, having suffered from impaired vision due to a seller headlock or too much time spent squinting at the shiny red buttons on electrical outlets. Or maybe he didn’t act with “integrity” and lied about stuff in his report (like GFCIs).

Our second appraiser came and conquered, and as inconceivable as this might sound, he too found that we needed some outlet upgrades (the same ones). And, crazy as it may seem, his estimate of value, like the first-string appraiser-guy, was exactly what the buyer had offered to pay. Buyers are so smart!

So, off to underwriting we go, but not so fast. All of you veteran agents know that the FHA appraiser would have to first come back to make sure that those outlets of death were properly addressed, which he did. So, now, off to underwriting we go - but not so fast. What if the first appraiser did not act independently, but instead believed us when we told him that the toaster oven was really a new GFCI? What if he lacked integrity, and he didn’t really push the reset button to confirm that the new outlet was browning evenly? The second appraiser, we were told, would have to return to look at the same outlets.

Twenty-seven days into a thirty day escrow, and we are still playing tag-team appraisal. I have spent so much time looking at the wall sockets in this home that if it burned down tomorrow, I could draw up detailed electrical plans with a box of Crayons and confidence. But I don’t blame the appraisers. In trying to win the right war, a bunch of well-meaning people just picked the wrong battle. We may find a lot of unintended casualties as a result.

Imagine you are an agent with a decade or more of experience. You have gained knowledge, you have established credibility and a loyal client base from which your future business will be sustained, and then suddenly someone tells you that the system is not fair. Instead, your client database is commandeered and each person is now assigned the next licensed agent in the rotation, neighborhood specialist be damned. And then, like a relocation company, they will essentially charge you for the privilege — when your number comes up. It might be enough to inspire Carl from Des Moines to finally get that license, but for the established agent, it could hurt the bottom line.

Imagine that, and you can imagine what a lot of appraisers are feeling right now. One could argue that the appraisal management companies are the winners and the rest of us, well, that’s another story.

I was speaking with a loan officer at Wells Fargo this week when he confessed, “This was supposed to improve the quality of appraisals. What it has really done is tank the quality of the product and the levels of service. It’s a mess.”

Maybe the Valuation Protection Institute can take that up at their first meeting.

Now, from John Carlson in response:

Ms. Berg,

I read part of your article on Inman News entitled: “Appraising the new Appraisal Problem”.  Welcome to the wonderful world of the HVCC!! Courtesy of Mr. Andrew Cuomo, venerated Attorney General of N.Y.

I am a Commercial Appraiser in Diamond Bar, CA (www.jccrea.com) and am a moderator of one Appraiser’s Forum and a member of two more. My practice deals with both residential and commercial/industrial properties. If you would like I’ll forward the posts of my fellow appraisers about their experiences with the Appraisal Management Companies. (AMCs) It is a horror story. Get used to it - it’s going to get worse.

First, if you don’t know by now, AMCs are interested in two things and two things only:

1. Which appraiser can do the appraisal the fastest AND

2. Which appraiser can do the appraisal the cheapest

That’s it! Competency and experience don’t even enter into the equation. My Forum members have posted that when they are called by an AMC, the only thing they are asked are the above two things: How Fast & How Cheap. Forum members have also posted about conversations with “former” mortgage broker clients where their former clients talk about AMC appraisers traveling 100+ miles from their office to where the property to be appraised is. Think about this! Can an appraiser from 100 miles away be geographically competent to appraise a property in a neighborhood they never even knew existed before?

Did you also know that Reviews from the AMCs are coming in VERY low. Reviewers are basically “bottom feeding” Comps & correlating values toward the median value. What this means for your profession is that if you are selling a home with a large addition, or perhaps significant upgrades, there will be no consideration made for extra square footage or the upgrades. In addition, if the property you have listed is “unique” in some manner, forget any consideration for the unique qualities of the home.

Most AMCs are located far away from CA. For instance, Countrywide’s AMC, Landsafe is located in Texas. These companies are offering to “insure” their review values that they come in at - the hitch: The lender has to agree with the Reviewer’s value. You want to challenge the appraisal?? Fine, pay for another appraisal. Appraisers on our Forum are saying lenders are not challenging, but either killing a deal, or accepting the lower value.

My fellow appraisers who work with AMCs have no incentive to prepare a competent appraisal, as a matter of fact, there is a significant disincentive. Most AMCs require delivery of the completed report within 24 hours of when the appraiser sees the property. If appraisers do not meet the delivery time - they don’t get any more business! Do you really think that any AMC appraiser will pay attention to details?? I think not.

In addition, appraisers are only getting paid from $125 to $200, maybe $250 for a report. Your Clients, on their RESPA document, will see a charge of between $450 & $600. The difference between what the appraiser is paid and the total fee on the RESPA document is being pocketed by the AMC. Think about this, an appraiser now has to do twice the work to make the same money they made a year ago. You really think there is going to be attention to detail?? Residential appraisers are now a “commodity”, basically form-fillers banging out reports as fast as possible. By the way: Is this fee structure a RESPA violation, borrowers are not being informed about the fee differential - we think so - but we’re not legal experts, right?

I think it is absolutely critical for you Agents to meet whatever appraiser there is and be prepared to give the appraiser Comps. Remember, the appraiser may be coming from miles and miles away and probably won’t have access to your local MLS. Don’t try to mislead the appraiser; that could backfire on you. Present all Comps available and talk about the low ones and the high ones also. Tell the appraiser why those properties sold low & why properties sold high & provide documentation. Remember, you’re probably dealing with less experienced appraisers willing to work for “McDonalds” wages.

Finally, I think that Agents should inundate Mr. Coumo’s office with e-mails letting them know what a huge mistake this was. For some reason, Mr. Coumo thinks that AMCs have less incentive to control the appraisal process than the big, bad mortgage brokers did. Nothing could be farther from the truth. The actions of AMCs are totally unregulated and pressure on the appraiser is even more intense than ever before.

Thanks to Mr. Carlson for allowing us to repost his remarks. If you are a buyer or seller and you have been wondering why your appraisal took so long, why it cost so much, or why it was off be a factor of ten, now you know.

Steve’s Point

First, the bad news.  Sales of detached homes for May in Scripps Ranch totaled only 13 (based on the early returns) versus 28 last year, according to the Sandicor Multiple Listing Service (MLS). While these are dismal sales numbers, the good news if you are a seller is that prices are up for the third straight month (sequentially) and, if I recall from my old statistics classes correctly, that’s what we call a trend.

By all measurements, average sale price, median sale price and average/median sale price per foot, prices have climbed for three consecutive months:

Month             Avg. Sale price/price per foot      Median Sale Price/price per foot

March                    $630,454 / $260.13                             $630,000 / $258.06

April                       $693,057 / $268.69                              $687,500 / $275.61

May                       $727,423 / $278.12                               $720,000 / $285.25

This is not to say there will not be dips in the pattern. Kris and I have been saying for a while now that we expect the recovery to be one that bounces up and down off the bottom for a while until the overall economy stabilizes and we start see job and income growth in San Diego again. We are obviously not there yet. But at least we are seeing one positive sign in the 3-month sale price increases.

As of June 1, we are also seeing the inventory shrink in 92131. Currently there are only 66 detached homes for sale, an amazingly small amount of inventory (less than 1% of the total detached homes in Scripps Ranch). Even at the current slow pace of sales, this represents only an approximate 4.4 month supply. We used to call this a seller’s market, but by today’s standards I think it should suffice to call it a “balanced” market. From an agent’s standpoint, I can say that we and other agents we know have multiple buyers at the moment for this community and our biggest challenge is lack of inventory. So, while all is not yet great, at least we should take a moment to enjoy a little bit of very good news.

Kris’ Counterpoint

So, prices are going up. Woo-hoo! Only, I don’t think they are, at least not really. I know that the spirit of showing price “per square foot” was to take into account the occasional outlier that can wreak havoc on a small sample. Scripps Ranch sales, alas, are a very small sample lately, and that is the first problem with your conclusion.

The second flaw is that, while averages and medians are fun, this data doesn’t tell you what people are really buying. It tells you what the guy in the middle is buying. What we really need to know if we are to make sense of the numbers is what the herd in general is purchasing, particularly from the standpoint of size, because smaller homes will command a bigger price per square foot (we all agree on that point). Remember, inherent in the price of any home is the price of the dirt itself (the property, not the structure, being the most costly component in California).

So, and you will have to bear with me because I got a sudden urge to return to my traffic engineering roots, I decided to pull out the old distribution charts. Keeping in mind that I am not a statistician (and that I didn’t even pay much attention in class during college), I think the distribution of both sale prices and home sizes for Scripps Ranch over the past month is, if not really-really-really exciting, then curious.

I didn’t bother to plot the x axis values, because that is not really important. What is important is the visual.  You could argue that the data generally follows a normal distribution pattern. But the sale price distribution was tightest (most clustered around the mean) in March, less so in April, and much less so in May. As for the size distribution, well, there isn’t much to learn here except that April was a little whack.

Now, here is where the traffic engineering part comes in. Speed limits have been historically set based on what is called the 85^th percentile or, in English, the speed within which 85 percent of the drivers stay. (They actually do speed studies to figure this stuff out using radar guns and little clip boards; it’s really cool). The 85^th percentile, for my fellow geeky friends, is not an accident (no pun) - It is roughly equivalent to one standard deviation above the mean of the sample. So, the theory is that most reasonable people will behave within this tolerance given the particular circumstances. There will be crazies, or outliers, at the high end of the chart, but they are the exceptions and not the rules.

For the one reader remaining (who didn’t get bored three paragraphs ago and move on to read Perez Hilton), 85% of home buyers (our herd) over the past three months bought homes smaller than or less expensive than the following:

DANG IT! This means that Steve was right. Prices are going up. Never mind.

However (I have to find a counterpoint somewhere lest my husband become insufferable), what this does tell us is that the data is more scattered lately; the difference between the 85^th percentile and the median (or the standard deviation) is getting larger. Therefore we can conclude one of two things:

1.       The market is becoming more volatile, which would suggest that we aren’t yet enjoying a return to normalcy; or

2.       Buyer confidence is up, and buyers are finally boldly venturing back into the higher price ranges.

Or, it could just mean that our sample size is too small.

Any guesses?

The main story was from the Associated Press and is available online. Missing from the online version are the bits of local color which, according to the footnote, were added to the article by Union staff writer Roger Showley and appear in the tree-version. In response to the reported rise in unsold homes nationally, the article says “… in San Diego County, a different story is unfolding.” That’s the “sort of right” part.

According to Peter Dennehy, Senior vice president of Sullivan Group Realty Advisors, the inventory of unsold homes has been dropping steadily since February.”

So far, so good. Here is the trend for San Diego County homes for sale courtesy of Clarus Market Metrics. You can see it in all of its full-screen glory on our web site here.

But, Mr. Dennehy and the San Diego Union Tribune also reported:

By yesterday, (inventory of unsold homes) had fallen below the 10,000 level for the first time in four years. The 9,704 listings compares with 12,079 a month ago and represents 4.4 months of supply.

Don’t you guys read our blog?

If you did, you would have read our post yesterday about a new category which has been added to our Multiple Listing Service (MLS) — the “contingent” category. Sometime in the past month, all homes with accepted offers awaiting lender approval or accepted offers with a first right of refusal were hastily yanked from “active” status and placed in this new holding tank. Now you see them, now you don’t.

Here is what the Sandicor MLS tells us this morning. In San Diego county, there are 9,861 single-family homes and condominiums for sale, which is eerily similar to the number reported in our local rag. There are also, however, 2,860 “contingent” homes for sale in the county which last month would have shown up in the “active status” category. The total? Insert drumroll. 12721 total homes are offered for sale, which is actually a slightly larger number than reported for last month.

So, yes, inventory has been declining in the county since February. But, we did not see a 25% decline in inventory from a month ago. Compared to April, the May numbers are essentially unchanged.

Maybe this is not a big deal, but it’s fun to get your facts right.

In Scripps Ranch, we’ve been bouncing between approximately 100 and 120 active detached listings at any one time, give or take, for awhile now. As anyone who has been busy on the ultimate shopping trip knows, many of these homes were not really available. Short sales pending lender approval hang around on the active inventory list until the bank sees fit to bring closure to the process, and this typically occurs after three to six months of hand-wringing. No longer.

Our MLS recently added a new status field, the “contingent” property. Overnight, we went from 96 listings to 78; the difference represents homes for which an accepted offer has been submitted to the bank and the parties are waiting (and waiting, and waiting) for approval.

This much is a good thing — good as long as the listing agents fess up to the true status of being in a lender-controlled holding pattern. One problem is that many agents don’t, either by oversight or through a sadly popular practice of using the old “the seller didn’t sign the offer so it’s not really accepted” loophole. The latter is generally done with the idea that offers and, yes, buyer inquiries (or as some agents like to call them, “leads”) will continue to roll in for the better part of the next quarter while everyone is sitting around waiting for the loss mitigator to find the file.

There is another problem with the new contingent category, and this one may be a serious nail in the coffin for the poor guy who actually has his equity tied up in his current home or can’t afford to assume even short-term land baron status. That poor guy is most of us.

In the old days (two weeks ago), if a seller accepted an offer contingent on the buyer’s sale of his current home with the 24- to 72-hour “blow out” clause, the home would remain active in the MLS until the buyer either got his home sold or the seller found his better date. Now, contingent-on-sale homes are swooped into the purgatory of a contingent holding tank.

As sellers have had to actually break a sweat in this “buyer’s market,” we have seen sellers a little more inclined to entertain contingent offers from buyers.  By rightfully addressing a real off the market situation with pending short sales but while lumping contingent-on-sale homes into this same category, I fear we have put an end to the silliness of trying to seamlessly move from one home to another without having to cart off the children, the gold fish, and all other worldly possessions to a fun, interim stay at the Residence Inn.

Here is what Yahoo! Real Estate shows this morning for one such home in Rancho Bernardo:

Bummer if you are the listing agent or the seller.

But now I’ll digress, and only because I have this pretty pie chart and I hate to waste it. We are still in a market of value seekers. While 28% of our active detached homes for sale in Scripps Ranch are of that lender-controlled type, almost 38% of the homes in escrow fall into that category.

One might argue this is a sign that we are absorbing the distressed properties and readying to move forward. One might also be wrong. Based on the calls we are getting and what we are seeing on the streets, I don’t think we are able to see around that corner just yet.

Enter Case-Shiller. From their 2009 1st quarter home price indices via the Wall Street Journal, the rate of decline is down in some areas. Woo-hoo!

Down, however, is still down.

]]> http://sandiegohomeblog.com/2009/05/26/where-did-all-of-the-scripps-ranch-active-listings-go-oh-and-something-about-case-shiller/feed/ http://sandiegohomeblog.com/2009/05/20/easy-come-easy-go-tax-credit-wont-help-with-downpayment/ http://sandiegohomeblog.com/2009/05/20/easy-come-easy-go-tax-credit-wont-help-with-downpayment/#comments Wed, 20 May 2009 16:07:46 +0000 Kris Berg http://sandiegohomeblog.com/?p=1252 Update: The Arizona Republic reported on this on May 19th. On May 24th, four days after we posted here, our own San Diego Union Tribune ran this article announcing the exciting new down payment source and citing the previous May 12th announcement. I sense they may have an opening for a fact checker.

Update to the update: Heather says it well.

Earlier this week, Twitter was abuzz with the news that HUD would be allowing the $8000 first-time home buyer tax credit to be used toward a buyer’s down payment. Not so fast. Within hours, retractions were flying.

The email I received this morning reminded me I should probably share the latest with our three readers, just in case they missed the excitement. From Michelle Morris, PHH Home Loans:

As you know HUD made an announcement on May 12 that they were going to allow homeowners to use the $8000 tax credit as down payment monies by empowering state agencies, non profits and HUD approved Mortgagees to lend the monies to home buyers.  HUD drafted HUD Mortgage Letter (2009-15), however, the letter was never officially released. HUD has since reversed their position on allowing the monetization of the tax credit over concerns that the proposal too closely resembles the now illegal practice of seller funded down payment assistance programs.  IRS officials were also concerned that the proposal could create income tax issues.

The government may continue to seek other alternatives associated with boosting affordability and circumventing the 3.5% down payment requirement, but until further notice they have apparently killed this initiative.

So, there. Back to saving box tops.

Your home might be beautiful. Maybe it is immaculate, stylishly appointed to suit your tastes or highly upgraded with the finest materials and features. Perhaps it is all of these things. But, unless you are one in a thousand, it is not “staged.”

Staging a home for sale is not a new concept, but it is a practice that has gained steam with our more challenging market. I see many home sellers confuse staging with decorating and consequently resisting the process and the recommendations of the staging professional. But the reality is that the moment you commit to marketing your home for sale, you need to commit to transforming your home into a place that potential buyers can easily picture as their home. This means that you need to be prepared to emotionally detach.

Now wake up, and go read the rest here. You know you want to.