Market update...what I'm seeing...and the NEW Ziprealty.com
Let's get right down to business...
Last Monday (Jan 23rd), there were 15,568 properties on the market in San Diego per Ziprealty.com. Today (Jan 30) there are 16,188 properties on the market. That is a 4% increase in one week! Let's not forget that about 18 months ago, there were about 3000 properties on the market.
What about the loans? The subprime I'm seeing is getting tougher and tougher to get done. I have had several people ask me about the lowered standards, and how that is impacting things. The truth is that yes, the standards have been lowered even more this year. No tradelines, no problem. BK's, no problem. But before you feel even more dejected that is this never going to end, I will tell you what the big problem is right now. It is ONE word.
The standards are pretty low right now, but the one thing that IS tightening up, is the way my lender (and others) are looking at income. With property prices in San Diego where they are, VERY few people have the W2 income needed to buy a 500-600k homes going full doc. So that leaves many borrowers having to go stated income. It was one thing when rates were at all time lows and more homes were in the 250k-400k range. You could 'get away' with stating income in the 5000-7000 per month range and have it be believable by most lenders. The problem now on those purchases, is that the homes are more expensive, and the rates are much higher. You pretty much need to state 10k+ a month to qualify for many of the 100% stated deals now.
I don't know for sure, but I'd be willing to bet the investors started noticing these high stated incomes, and quit buying loans with 'overstated' income. Since the lenders know that many of these loans are the equivalent of 'junk bonds' they sure don't want to hold them in their own portfolios...so they are scrutinizing the stated income deals much more closely today.
Let's not forget the standard assortment of junk loans that people are trying to get done. The days of refinancing and 'automatically' being able to lower your payments a few hundred bucks are over. The days of pulling cash out a few months after you bought a place are pretty much over. Rates are up, and overall it is a very tough market. From the brokers I am talking to, they are doing more A-paper loans, and lots of option-ARMs. After all, the option-ARM gives the lowest payment possible...and we all know that the 'payment' is the most important thing.
This weeked I happened to met up with some other account reps like myself who are with other companies. One of the reps told of a meeting they had with their manager. The manager wasn't too impressed with their performance, and questioned if their being in the business was "right" for them. The manager said they were not aggressive enough in the 'grey' areas. I know what that means...but I'll leave it up to you to decide for yourself. I'll go ahead and say that none of us that met together are aggressive in the 'grey' areas...maybe that is why I have been spending a lot more time on the blog lately?!?!?
On a side note, I want EVERYBODY to start using ZIPREALTY.COM when they look for property. I know you have to sign up for an account, but it is worth it. Why you ask? Well apparently they rolled some new features over the weekend. I won't get into all of them right now...but take a look at this:
ZipRealty Price Track:
Yes, my friends, ZIPREALTY added a 'price track' feature that tracks the price reductions, and shows the days on market. Not only does Ziprealty update from the MLS several times per day, they provide MUCH more comprehensive information than realtor.com. Don't worry, I have not had any problems, or been bothered by anybody from ziprealty.com trying to get me to buy. Go ahead and register...it is the closest you are going to get to the actual MLS listings. I know they haven't expanded across the whole country yet, but they are in most metro areas. And no, I'm not affiliated with them, or getting paid by them in any way. I have been using them for quite a while now because they are more accurate and provide better info than realtor.com. When I was checking the inventory levels like I do every day, I noticed the new features, so I figured I would pass this information along to YOU!
Thanks for stopping by, and I look forward to the comments!