San Diego Housing Bubble News and Analysis

It's not the renters fault in the second house. They are (presumeably) paying the rent and the owner is the one not paying the bills.

In both cases the residents of the homes have permission to be in the homes.

Should the bank forclose on both properties. Probably. Is it the renters fault, especially if they've been paying their rent. No.

Be angry at the owners and the banks. Don't accuse renters of being squatters.

With the current economic climate and the amount of empty housing, squatting will be an increasing trend.

Given lenders' obvious preference for all-cash offers ... those houses may get sold, but they may not get owner occupied.

Call the sheriff.

I don't understand this comment - I was told today the economy is leveling off, there's a light at the end of the tunnel and it's not a locomotive this time.

Why would squatting increase?

squatting wont increase and you can't call the sheriff because nobody is breaking any laws, squatting references people who just move into a vacant house without permission. Neither of the anectdotal stories indicates that is happening.

paramount, we live within a bike ride of each other and within a few miles of the OP, let me ask you this since you are doubting your instincts: Do you see more vacants today than last year or the year before? It's August, what's the brown lawn percentage compared to the past two summers? There's always a back story to the story, so just trust what you see. My experience was that in the summer of 2007, brown lawns started showing up, summer 2008 they were every 6th or 7th one. Today, not so much, I can walk my dogs and only see one or two out of a few hundred. People can tell me all the stories they want but I didn't just start making notes about brown lawns and vacants, I've been a student in this class for a couple of years (as have you) and the worst is not yet to come, it is behind us.

The situation as I see it now is the system is rigged in favor of the all cash investor

The Problem before was we had Overzealous appraisers and over willing lenders.

Now it is just the opposite problem, over cautious appraisers and very reluctant lenders.

So the low balling all cash investor wins every time.

Anyway that’s the situation on the ground in TV as I see it.

If unemployed, homeless and empty houses increase. Then squatting will or atleast attempts to will increase. It's pretty much that simple. Since all those data points are still trending up its a logical conclusion.

10 second google search:

http://www.mymurrieta.com/wordpress/2009...

After investigation it was learned that the rental agreement the suspect’s provided was in fact fraudulent. Deputy James immediately recognized the female that answered the door and two of the males in the residence as those on surveillance of the armed robbery at La Mexicana Market on Monday afternoon. All eight occupants were taken back to the Victorville Police Station for questioning.

I have one friend that hasn't made a payment since Feb 08! To me it seems like the smaller banks are the ones that let this happen. I don't know if it's that they don't have the manpower, know how or what. More likely its that they can't put the losses on the balance sheet.

Here is how I see it. Each bank and each home have specific investors involved along with the Fed controlling that bank and letting them know how many homes can be released. The bank has a decision to make. Do they let homes that have the potential of losing a large percentage go into a foreclosure or do they release homes that have a higher value on paper or a smaller percentage on the losing end? I suppose they chose the latter as banks seem to have very little say at this point while the FED has all or most of the control.

Certain areas with large lots that are currently being maintained may be an asset to the bank rather than foreclosing and forcing a much bigger liability, i.e. vandalism, dead lawns and so forth. Homes up in De Luz and other areas in the hills with large lots have a much greater potential of homeowners getting free rent than a home in the middle of Redhawk as the banks are well aware of the negative equity situation in those million dollar homes in the hills that are now worth much less.

I guess every opinion is exactly that. No one really knows what the hell is going on, but it makes for some good ideas.

TG, personally I disagree with what you said about the worst being behind us as I think this fall will produce some nasty data that will throw values under the bus again. The 2nd coming of the bubble bursting is near. Be prepared!

It's true, our hood looks much better these days - we had one last hold out (brown lawn) on our street and driving home today I noticed the new owners preparing the soil for a new lawn.

socratt, everyone is entitled to an opinion, personally when I run the redfin stats for homes that have been reduced in price, it's almost exclusively customs on land, shorts and reo's, that is where the big chunks are coming out these days, the tract homes are listing for the same or even a little more these days and selling in hours.

http://www.redfin.com/zipcode/92592

click the tab for price reduced, and check some out, I think they are getting hit late becuase thier owners had more financial resources to get by for longer, but banks aren't that smart and they aren't that organized.

paramount, I'm glad you have noticed the same thing, I figured you made mental notes of houses in your hood. It's the hardest thing to impress on people who don't live here, we don't have a tsuinami on the horizon, it came through already, and the recovery is well underway, we fell first and hard, but half of the homes have changed hands for half price and the lawns are greening up again, home depot is busy again.

Anywone remember waiting hawk and matt making videos of tracts where every third lawn was brown two years ago. Two years ago L.A. news walked my hood with a reporter and showed how half the lawns were brown (that was the reson i began looking at this hood). They didn't become part of the shadow inventory, the got bought by families who live in them now. We are almost out of peak FB's, they've all been recycled. Each month, the price goes up ever so slightly, maybe 5k to the point that my model match in escrow is about 50k more than what I paid. I know nobody else will agree but we are eight months into this dead cat bounce, that's a high bounce for a cat, I'd say I have a 50% chance of having lucked into the bottom.

Purely anectdotal but on my street we are down to just four original owners, all of the rest have bought for half price in the last 12 months. The final two that were vacant or trying a short, finally repo'd, were listed and were sold in hours, the lawns are going in and anyday I'll meet the new neighbors. Of those four original owners, only one is showing any form of distress, but no nod yet, taxes are current, the other three made huge downs or paid cash and have no refi's or helocs on file, so in the next year, maybe we could have one house go and be a part of that tsunami, big deal, last year it was one a month.

socratt, I missed some of what you said as i was getting lost in my own writing. I do agree tht there will be a winter event, I actually think there may be some great bargains this winter and should be less competative. I am seeing more an more reo's listed every day, some days, they will list 6 in 92592. The prices aren't any lower and they are selling quickly, so they just keep releasing them. The overall inventory is still shrinking. In 92592, there are now only 150 non shorts or non pendings that you can buy ( a four week supply). 5 added each day, 6 sold, by november, that should change, days on market will increase and you can drive a hard bargain, plus the 8k gov't gift goes away. And this is the pure opinion part, this winter is the last chance. If I get don't buy my rental between Nov 2009 and Feb 2010, I know full well that I wont be getting one at all.

Seems there are so many waiting for this last chance Winter 2009 housing thing, It may be a little disappointing maybe.

It may even get a bit crowded at the bid.

But good luck to you all !!

If I had to guess I would say it will be more of the same in TV through the winter, then maybe a little spike coming next spring, then back to a normal market by summer 2010 (in TV).

(Normal means 70% organic "non-REO" sales to me).