It’s The Most Wonderful Time….Of The Year

For those that are coming to this blog for some thoughts on the Detroit debacle, the state of real estate in the San Diego area, or how to do a short sale, I’m afraid I don’t have anything for you today. For this is one of those days where, despite everything in the news, despite how our world continues to feel like it’s crumbling beneath our feet, I am in need of some good, positive vibes. And so, as I tend to do when the doom and gloom has rendered me sluggish and depressed as if I’d been dunked into a vat of tree sap, I will write about some simple things that always bring a smile to my face despite the harsh times that have been  pressed upon us all.augusta

1) There are few things in this world that give me more joy than the trifecta that occurs every April: The start of the baseball season, the NCAA Championship, and of course, a tradition unlike any other, The Masters. I am speaking not just of watching these sporting events, but appreciating what they represent for me year in and year out. They represent the sun staying in the sky into the early evening, a warmer ocean, flowers blooming, lawns being mowed, the smell of cigars as you drive past a ball field, cold beers on your back patio, and bbq chicken on the grill. Ahhhhhh, good times.

2) The Local Farmer’s Market. Have you been to yours recently? I love me a weekend morning trip to the farmers market to sift through the freshest produce around and converse with some local farmers. The food is delicious, incredibly inexpensive, and always inspires me to cook. And my absolute favorite stop at the farmer’s market is the sweet old German woman who sells the most flavorful eggs I’ve ever eaten. Without fail, when I buy a dozen for $2.50, she’ll hand me over my eggs, smile, and remind me in her German accent, “Eggs are goot for you”.farmersmarket2006-171

3) And lastly, something to look forward to, as always, are the summer events that every village, town, and city put on each year. In San Diego, there are TONS of things going on every weekend. Street parties, outdoor concerts, Over-The-Line Tournament, boat races, the Del Mar Fair, the Taste of Downtown, and of course, daily fireworks after sunset over the bay at Sea World. And that’s just to name a few. So many things at  our fingertips to enjoy in this city, and I intend on making the most of my summer.barbecue

So there you have it. There are things that this crappy economy can’t take away from us. There are still so many wonderful things we can rely on to bring respite from the depressing news that this debilitating economy continues to spew forth. But it sure does help to remind one’s self that things aren’t all bad. In fact, I wrote this blog much more for my own peace of mind than anyone else’s. But I hope I was able to spread a little bit of good cheer. Keep the chins up out there.

By Andrew Brentan

Low Rates, Low Prices….Still Holding Off Buying A Home?


There was a comment to the previous article earlier this week that mentioned she and her husband were planning on waiting about a year for home prices to drop even further before considering buying a home. Not a bad plan by any means considering the fact that many areas will indeed continue to drop in home prices. But it occurred to me that there may be other things one might consider before officially putting off buying a home for a year. For example, have you seen what mortgage rates are at these days? They’re absurdly low! So I thought I’d briefly discuss some things that I have been reading up on this week regarding the issue of whether to buy now or to wait.

For starters, I want to discuss home buying as opposed to refinancing because refinancing is a slightly different beast than buying a home; Mainly because it heavily involves the equity (or lack thereof) in your property. That being said, there is a different train of thought that goes with when to refinance and when to wait.  And so, without further ado……….

James Hagerty of the Wall Street Journal reported this morning that Jay Brinkman, chief economist of the Mortgage Bankers Association, said “rates on 30-year fixed rate mortgages for borrowers with strong credit scores are likely to be in the range of roughly 4.6% to 4.75% at least through the summer.” This dip in rates came after last Wednesday’s announcement by the fed that they were committed to buying an additional $750 billion in mortgage backed securities (in addition to the 500 billion already committed). So this begs the question: How long can rates possibly stay this low? Peter Thompson of Illinois Mortgage Rates and News wrote a great, in depth article on this and he goes into the three schools of thoughts on what will happen going forward:

  1. “The Fed buying will push rates steadily lower, possibly into the mid to low 4s. This is the view you hear in the media.” He goes on to say, ” This may happen, but it will take a lot more than just the Fed buying to get rates this low, and with lenders still near capacity, they are keeping more of the profit for themselves instead of passing it along to consumers.”
  2. “Rates will stay low, but closer to the range we are in now. This means rates will stay affordable longer, but may not go a lot lower.”
  3. The law of unintended consequences kicks in and instead of rates dropping, fear of inflation and the devaluation of the dollar drives rates higher than they were before. There are a lot of inflation hawks out there, and I agree that down the road we are going to have to deal with inflation. But that is in the future.”

For #1 to happen, banks would need to start cranking out loans at a ridiculous rate, which most likely isn’t going to happen. And #3 may be in the cards, but not in the immediate future, so I, like Peter, think that #2 is the most likely result. So that’s good news for homebuyers looking to hold off buying for a little longer.

The bad news is, low rates don’t make getting the loans any easier. Banks have yet to loosen their grip on the lending guidelines that have been tightened almost to the point of strangulation after the sub-prime mortgage disaster. Only borrowers who can make sizable down payments, have plenty of assets, a steady job, and impeccable credit, are getting the loans at these low rates.

So even if you are waiting for a certain market to bottom out or mortgage rates to dip even further, it cannot hurt to look into the matters of financing now. That way, when you do wish to buy, you will know what you qualify for before looking to find that perfect home.

Increase in Median Home Prices…Nothing to Get Excited About

In a valiant but largely unsuccessful effort to raise the morale of San Diegans, the Union Tribune published an article last week announcing that median home prices in San Diego rose for the first time in a year.  As it states in the article, “MDA DataQuick reported yesterday (March 16th) that the overall median price rose $5,000 to $285,000 the first monthly increase since last April, while active listings fell to their lowest level in three years.” Wooohoooo! We’ve finally hit the BOTTOM!……right?  Well let me ask you…does it feel like we’ve hit bottom? Exactly. We’ve got a ways to go yet. But the glint of stability that the Union Tribune refers to lies in the fact that while we haven’t hit bottom, an increase in median prices does provide signs that the decline is slowing.

Norm Miller, a real estate professor at the University of San Diego, was interviewed by Union Tribune writer Roger Showley, and made clear his thoughts on the matter: “In 2009 we’re not going to have the kind of disaster we had in 2007 or ’08. The softening will slow and better markets are going to stabilize sooner. Those with a lot of foreclosures–they’ll continue to decline.” Thank you Mr. Miller, this makes perfect sense. After-all, foreclosures greatly affect the values of the homes in the surrounding neighborhood. A neighborhood with a lot of foreclosures will continue to decline in value until those properties are bought up and lived in once again. Areas like La Jolla, Del Mar, and Pacific Beach, where active foreclosure listings are in the teens will stabilize much sooner than say, El Cajon, which currently has over 100 active foreclosure listings and this does not count properties that have filed for foreclosure.

So while a rise in median prices does indicate a slight glimmer of hope for the future, we must keep everything in perspective. Each town and neighborhood is being affected differently. Here’s another thought to chew on: A great deal of the foreclosures in San Diego have occurred as a result of a 2 or 3 year adjustable loan coming up for adjustment. Argent, the last bank who was offering 2 or 3 year adjustable Subprime loans, went under in August of 2007. Therefore, in this next year, the last of those loans will come up for adjustment and we’ll at least finally be rid of a root cause for so many foreclosed homes. My glimmer of hope is that the absolute bottom can’t be too far behind that.

By Andrew Brentan

$145 Million To Go Towards California Foreclosure Crisis

news-foreclosures-riseWhen the President came to California yesterday and announced that the state will receive $145 million to help communities hard-hit by the foreclosure crisis, I thought to myself, “$145 million? That’s pocket change.” I realized then, that with all the stimulus packages, and budgets plans, and financial talk that have been spattered about the news like a massive Pollock painting in the last few months, my perception of the actual worth of $145 million dollars had been greatly skewed. $145 million can go a long way, can’t it?

The funds, as the President said on Thursday, “will be used to purchase and rehabilitate vacant, foreclosed homes and resell them with affordable mortgages.” He goes on to add that the funds “will also provide mortgage assistance and rehabilitation loans for low-income and middle income families.” The program that generated these funds, “was created as part of the Housing and Economic Recovery Act of 2008, which permits state and local governments to purchase foreclosed homes at a discount and rehabilitate or redevelop them”, reports the Associated Press. “Additionally, funds will come from the massive stimulus package.” Who knows how much additional funding from the stimulus package will actually go towards California’s foreclosure problem, and who knows how far this money can go to do all the things that the program is intended to do.

After-all, according to the RealtyTrac research firm, there were filings for 80,775 foreclosures on California properties in February. Oooooowweeeee, that’s a fair bit of foreclosures. How much money are we getting again? Of course, that number is slightly skewed due to the foreclosure moratorium that took place starting at the end of November and ended towards the end of January. For those unaware, the moratorium basically just halted the foreclosure process for that time period in an effort to keep people in their homes during the holiday season. So during that time, the amount of foreclosure filings piled up. But now that it’s over, we’ve got a lot to dealObama at a town hall meeting. with. It would be interesting to get a number on the average dollar amount that will be spent per foreclosure with this money and see how big of dent the $145 million can actually make.

But I don’t mean to sound like Debbie Downer. $145 million is a fair bit of money. And hopefully a nice chunk of the money that California gets from the stimulus package will help as well. And moreover, this money will certainly help rejuvenate some neighborhoods in the state, and any bit of progress that can be made to lessen the enormity of this foreclosure crisis is a damn good thing.

By Andrew Brentan

Eric Elegado Update

How, Exactly?

Single family home constructionI don’t get it. I’m not going to complain by any means, but I don’t quite understand how the new home construction projections surged up 22% from January. Steven Bernard of the Associated Press reported this morning that, “The Commerce Department said new home construction rose to an annual rate of 583,000 in February from a revised 477,000 in January. Economists forecast construction would drop to a pace of around 450,000 units, according to Thomson Reuters. Building permits, a key measure of future activity, also rose unexpectedly.” Economists were predicting a 6% decrease, and suddenly there’s a 22% increase in projections? What gives?

Jeff Bater and Brian Blackstone of the Wall Street Journal may not have offered any explanation on the projection, but they did address my question/concern: “…some are wary a rebound in home construction will only add to the glut of inventories, particularly, new homes at higher prices-an especially tough sell in this market.” Yes gentlemen, I’m wary. Chew on these stats that they went on to rattle off: “Sales of new homes have fallen for six consecutive months through January and are down nearly 50% from January 2008, while inventories have ballooned to a supply of 13.3 months, which is driving prices lower and holding off would-be buyers.” And so I’ll pose the question again…what on earth made the projections of home construction rise 22% from last month? I feel like the Commerce Department is just playing with our emotions to build some confidence. Well, confidence with a healthy dose of skepticism…but as of today, it seems to be working.


Andrew Brentan

Momento de comprar?

San Diego (Mira Mesa community)

ZIP: 92126
Metro area: San Diego-Carlsbad-San Marcos, Calif.
Annual home sale increase: 119%
Fourth-quarter sales: 195Manuel Muniz
Median home price: $337,500
Median home price change: -13.2%
Nondistressed sales percentage: 48%

48 % de las ventas en este código postal son propiedades convencionales – No Foreclosure -; el ajuste en precio medio de vivienda es -13%. Estaremos tocando fondo? Nadie lo puede asegurar, pero este es un indicador interesante. Date la oportunidad de diversificar tu portafolio, invertir en un inmueble donde puedas vivir con tus afectos momentos inolvidables, proteger tus intereses y posicionarte para generar plusvalía en el próximo ciclo económico. La suerte se da cuando concurren en tiempo y espacio, la preparación y la oportunidad.

Publicado el BusinessWeek en línea Marzo 10 / 2009


Good News / Bad News

It is heartbreaking to think of all the people who reached the tipping point, after losing their job, losing their home, and running out of money, scrounged up their last bit of savings and bought a tent. Tent “cities” are popping up everywhere around the country. From Athens, Georgia, to Nashville, to Reno, Seattle, and maybe the largest of the burgeoning tent cities, Sacramento. Bernie “King Shmuck” Madoff is going to jail…probably for the rest of his life. I mean, the astronomical amount of gall this man must have to start a scheme and continued to grow it to the point where $64 billion dollars in other people’s money were totally lost.

Read More

A Penny For Your…..Mortgage?

Who knows what to think about anything these days? It is hard to wrap one’s head around anything when so much is happening and none of it seems to be good. And so, when I learned that Stanford Kurland, the former president of Countrywide, had started a new mortgage company, my first reaction was, ohhhhhhhh boy, here we go again. I mean, there are a boat load of lawsuits underway against Countrywide, and some of them are accusing Kurland of being one of the main guys responsible for the irresponsible lending practices that dished out billions of dollars in risky home loans, which inevitably led to Countrywide’s demise, and left thousands of people risking foreclosure.  But then I learned what his new company was doing, and my initial thoughts towards the man and his company changed.

The Private National Mortgage Acceptance Company, or simply PennyMac, buys up delinquent home mortgages that the government took over from failed banks for a fraction of what they are worth, and get a piece of what they can collect. As an example, PennyMac would buy a delinquent $500,000 mortgage for say, $180,000 (of course, in reality they are buying many mortgages at once). When they buy these mortgages for pennies on the dollar, they can afford to restructure the loan with the homeowners, slashing the interest rates, keeping the owners in their homes and making payments. And PennyMac gets to keep a share of the money coming in from these mortgage payments, which otherwise might not have been made. So this is not only helping homeowners, but it is helping the government get back some (as opposed to none) of the money from the bad mortgages they bought up.stanford-kurland-pennymac1

According to Eric Lipton in an article for the New York Times, PennyMac struck a deal with the FDIC (Federal Deposit Insurance Corporation), where “it paid $43.2 million for $560 million worth of mostly delinquent residential loans left over after the failure last year of the First National Bank of Nevada.” Lipton goes on to say that, “Under the initial terms of the FDIC deal, Penny Mac is entitled to keep 20 cents on every dollar it can collect, with the government receiving the rest. Eventually that will rise to 40 cents”. They’re doing to be doing real well. And some whom they have helped are doing well as a result also.

Lipton describes the Laverdes family had fallen three months behind on their mortgage after their furniture store began feeling the pressure of the economic crisis. They were “fearful that they might need to move their four children, three dogs and giant saltwater aquarium into a cramped apartmen, leaving behind their dream home. But a PennyMac representative instead offered to cut the interest rate on their $590,000 loan to 3 percent from 7.25 percent, cutting their monthly payments nearly in half.” Wow, go delinquent for a couple months and get rewarded with a 3% interest rate! Must be nice.

So perhaps our country needs more companies like PennyMac right now. Take some of the burden off government and banks and struggling homeowners, and turn a pretty profit while they do it. Is it too much to hope that companies like this can help stabilize the housing market? Probably, but like I said, I don’t know what to think at this point, so any beacon of light in this dismal economy and I’m going to cheer it on.

By Andrew Brentan

Fraude en Minnesota:Bernard Madof & Tom Peters

En Minnesota año con año el crudo invierno azota a los habitantes  de ese estado, sin embargo más cruda parece la realidad de miles de inversionistas que pasan a formar parte de una estadística: Víctimas de un fraude.

Madof, se promovió ante el sector judío en un Club Privado de Minneapolis con un carisma tal que generó un club dentro del club, al que muchos querían pertenecer, mas no podían entrar. Pareciera que debía primero tenerse el VoBo de Madof  para ser incluido en ese “selecto” grupo de inversionistas.

Peters, lo hizo ante la comunidad cristiana generándose una imagen de benefactor y protector de causas sociales. Filántropo que como inversor no podía perder, era un ejemplo a seguir.

La pérdida de valores ha llegado a niveles insospechados. La generación de riqueza es quizá la prioridad número uno para muchos.

Atraídos por dividendos muy por encima del promedio, fueron miles de personas que hoy enfrentan una dramática realidad. Minnesota se caracteriza por la gran concentración de personas ricas, conservadoras y generosas; numerosas organizaciones de beneficencia son apoyadas con recursos provenientes de hombres de negocios de esta ciudad, y hoy muchas sufren los estragos del fraude que victimó a sus patrocinadores. Cabe mencionar, que cientos de miles de inversionistas de diversos países, forman parte del paquete.

Diversificar, equilibrar un portafolio de inversión es importante. San Diego esta en su mejor momento para quien desea comprar. Las utilidades inmobiliarias no se darán como recientemente ocurrió – La fiesta terminó – pero el valor intrínseco de una ciudad de gran atractivo y la posibilidad de disfrutar tiempo de calidad con tus seres queridos, es indiscutible.

Si buscas oportunidades de inversión, considera hacerlo en San Diego. En el largo plazo tienes seguridad de tu inversión, crecimiento de tu portafolio y disfrute del bien. Momentos inolvidables pueden generarse en tu casa de San Diego. No lo dejes para después!

La suerte se da cuando concurren en tiempo y espacio, la preparación y la oportunidad.

A Call To Agents

A Call to Agents

My superiors, the President and CEO of Axia Real Estate Group in San Diego, have asked me to write a blog announcing that we have now expanded our business into Riverside County and that we are looking for agents to work in both Riverside and San Diego.  I said to them, “Superiors, with all do respect, this is not something to discuss on a blog. This is something to announce on the home page of the website or take out an ad in the Reader or SignOn SanDiego.”  As you can tell by the fact that I am indeed writing a blog on our business expansion, I did not win this argument. And so, without further ado, let me introduce to you, Team Aguilar of Axia Real Estate Group:

Under the direction and leadership of Carlos Aguilar (President), and Howard Blum (CEO), Axia Real Estate Group, Inc. has been helping buyers and sellers in the San Diego region for over a decade. Carlos loves using the line that he has “been in real estate longer then he would care to remember” which was voted by me, to be his most over-used line of 2008. But he has been at it for a long time — originally licensed in California in 1972. The bottom line is, the man knows everything there is to know about real estate in California and he’s a pleasure to work for and with. And even if he wasn’t the one paying my salary, I’d say the same thing.

So, now that Team Aguilar has expanded into Riverside, we are looking for experienced real estate agents to join our group and work both Riverside AND San Diego regions. Agents should be experienced, knowledgeable, and willing to follow up on leads. If you are interested, or have any questions, call Toll Free Number at (888) 317-1496 or email