Entries from Dan Melson's La Mesa Real Estate and Mortgage Website tagged with 'market'
New Consumer Article: Low Asking Price on Unfinanceable Properties
The new consumer article for today is Low Asking Price on Unfinanceable Properties. Almost always, the reason for an asking price well below other equivalent properties is the presence of some factor that means you cannot obtain a regular real...
New Consumer Article: Segmented Real Estate Markets And Taking Advantage of Them
The new consumer article for today is Segmented Real Estate Markets And Taking Advantage of Them. I've written about how hot the current market is in San Diego. But if you break it down into market segments and micro...
New Consumer Article: I'm Competing Against Multiple Offers. How Do I Proceed?
The new consumer article for today is I'm Competing Against Multiple Offers. How Do I Proceed?. It's an article directed at consumers, not real estate professionals, so it doesn't go over some things such as alternatives to money that are...
New Consumer Article: The Measurement Unit For Desirability Is Dollars
The new consumer article for today is The Measurement Unit For Desirability Is Dollars. It really is that simple. A good agent can make a difference, but a property that has more will cost more. It isn't rocket science, but...
Debunking the "Record Wave of Foreclosures Coming" Myth
Articles like this one: Foreclosures: 'April was a shocker' have gotten an awful lot of play in the media these last couple weeks. Here's what they're not telling you - or not explaining why it's important: This particular article...
New Consumer Article: You Want an Agency That Can Pay ENOUGH Attention to YOU
The new consumer article for today is You Want an Agency That Can Pay ENOUGH Attention to YOU. It really doesn't benefit you to list with an agency that is too busy to pay proper attention to your property, nor...
New Consumer Article: Top Twelve Things That Help You Buy a Bargain Property
The new consumer article for today is Top Twelve Things That Help You Buy a Bargain Property. If you're looking to buy a good property at a bargain price, put as many of these on your side as possible....
State of the San Diego Real Estate Market March 2009
Reminds me of this gold rush movie (one that I recommend watching if you have a chance) Okay, it's not quite like that, but correctly priced properties are flying into "Pending". It has to do with supply and demand. At...
New Consumer Article: Why It May Be Costly to Reject Paying Points
The new consumer article for today is Why It May Be Costly to Reject Paying Points. The advice "never pay points" actually started out as misleading advertising intending to keep consumers away from what in fact were better loans, but...
New Consumer Article: Confusing Past Performance and the Present Situation with Future Planning
The new consumer article for today is Confusing Past Performance and the Present Situation with Future Planning. If you are sitting on the sidelines thinking about buying property, you need to read it. If you have a property you're thinking...
New Consumer Article: Investment Property and Loan Qualification
The new consumer article for today is Investment Property and Loan Qualification. It has become exceedingly difficult to get credit for rental income when you apply for a new mortgage, with the upshot being that when the lender won't agree...
New Consumer Article: Reasons Why You Want A Buyer's Agent
The new consumer article for today is Reasons Why You Want A Buyer's Agent. Lots of people don't believe how much difference it makes, but it does. My goal on every transaction is to make a difference of ten percent...
New Consumer Article: Jumbo Loans and The Current Market (January 2009)
The new consumer article for today is Jumbo Loans and The Current Market (January 2009). There is always a tradeoff between rate and cost on mortgage loans, but lenders vary exactly what that tradeoff is in order to suit their...
New Consumer Article:"Quantity Has A Quality All Its Own"
The new consumer article for today is "Quantity Has A Quality All Its Own": Low Price. When people can get a good for less than previously, then not surprisingly they will buy more of it in the aggregate. It all...
New Consumer Article September 10, 2008
Today's new consumer article is The Are No Schools That Teach What A Good Agent Needs to Know, which directly takes on the canard that since being an agent doesn't require a college degree, therefore there's nothing special about it...
Is San Diego Market Underpriced or Overpriced? - A Thought Experiment for August 2008
Let's do a thought experiment. Any market in any commodity has two components: The demand, or willingness and ability to pay for that good, and the supply of that good. Let's consider the demand half of that first. Specifically, ability...
Pre-Payment Penalties and Second Trust Deeds
Hello Mr. Melson, Let me start off by saying that I am a big fan of your "Searchlight Crusade" website. I happened upon it a while back after I had already purchased my house. I've found a lot of...
The High Cost of Waiting To Buy A Home
A couple of weeks ago, I got an email asking Save For A Down Payment or Buy Now?, and I wrote a two part article on the subject. Part 2 of Save For A Down Payment or Buy Now? Gave...
Agents "Buying" Listings: Promising the Undeliverable and Hurting Their Clients
Quite a lot of the time when I view a property, I get requests for feedback. Usually it's an automated email. Other times, it's some office assistant who wants to fax me a form which will "only take a...
NEWSFLASH! SAN DIEGO DECLINING MARKET DESIGNATOR REMOVED!
I have just gotten an email from one of my wholesalers (who shall remain publicly unnamed) removing the "declining market" designation from San Diego loans! This particular lender is still not willing to do 100% loans, but they will...
San Diego Real Estate Market: June 2008 Advice
My advice to sellers is very simple: Hold off if you can. Things have already improved, but better times are coming once more inventory clears. The prognosis for this is very good. I'm seeing fewer short sales, at least...
The Perfect Time To Buy
There is no such thing, of course. The perfect time to buy would mean that you have all kinds of leverage, and can make sellers give you pretty much the deal you want, but prices are nonetheless rising rapidly so...
April 2008: Why Loan Rates Are Cheap
Despite all the hype, rates (or, actually, the tradeoff between rate and cost) are pretty darned good right now. I'm at home right now, but yesterday, for someone with average credit (national median) and 20% down payment or equity, I...
Sixty Second Public Service Announcement About Selling Real Estate
Here was an idea I had: Pack a list of the most important things consumers need to know about buying real estate, as packed into the words I can say in sixty seconds without sounding like an over-clocked squirrel. Here...
What $5 (and Higher) Gas Means to Suburban and Exurban Real Estate
Most of the articles and things I read about the price of gas seems to be based upon an implicit assumption that the price of gas is only as high as it is temporarily. This is not the case....
Pretending the Service Equation is Simpler Than It Is
Way back when I was just out of high school, I was doing a lot of things with my time. Working, dating, competing on the fencing team, gaming of various sorts. But every once in a while, I dropped...
Buyer's Markets: Do You Need to Sell Or Are You Part of The Problem?
One of the things that sticks out about buyer's markets is that there are two sorts of listings: Those who are willing to do whatever it takes, anything it takes, to get the property sold, and the other who apparently...
How to Tell A Good Real Estate Market Article From A Bad One
Don Henley has a fun song off his second solo album called "Driving With Your Eyes Closed". I can't find a video performance, but here's an MP3. It's got a chorus that ends with the line, "You're gonna hit something...
Jumbo Conforming Loans: Tougher Standards Than Conforming Loans
Effective April 1st and for the rest of 2008, Fannie Mae and Freddie Mac will be buying loans above the current limit of $417,000. The is a result of the economic stimulus package signed by President Bush on February 13th....
San Diego Housing Market March 2008: Heating Back Up
I know I've been predicting this for eighteen months, first from a trendline and later from watching the local market in action. I was hoping to see the recovery start last summer but that was when the national media...
The Mortgage Loan Market Controls the Real Estate Market
One of the things I keep telling folks about the real estate market, whatever area you live in, is that it is controlled by the loan market. If you want to understand where real estate in general is headed, look...
Down Payment Assistance: Buying FHA With No Money Down Doesn't Require 100% Financing!
Somebody who's only looked at the specifications for the FHA purchase program will ask me if I'm on drugs. The answer is yes, I have taken my allergy medication today, but there really are ways to purchase a property...
Changing Rates and Streamline Refinancing - Reasons to Love Zero Cost Loans and Hybrid ARMs
Rates move up and down constantly. This is one of the strongest reasons both Intelligent consumers and intelligent loan officers love zero cost loans. Every time rates drop, I call or send an e-mail to those clients who signed...
Variable or Range Pricing of Real Estate
About half the listings around here do not have a single number asking price, but rather a range in which offers will be considered. Even many agents have trouble understanding range pricing. I've seen and heard more than one agent...
Conforming Loan Limits and the Economic Stimulus Package
Sometime today, February 13, 2008, President Bush is scheduled to sign the Economic Stimulus Package into law. Maybe it's already happened by the time this publishes. I've made my opposition plain from the time it was first proposed, but it's...
The Self-Fulfilling Prophecy of Lender Fear
I knew that people, particularly first time buyers, were going to be forced into condominiums in San Diego, I just didn't know how soon. Most people, particularly first time buyers, want 100% financing. Actually, most first time buyers don't...
How Can Buyers Get the Lowest Possible Price on the Best Possible Property?
The first piece of advice I have for buyers who want to get a fantastic bargain is to find a good buyer's agent (this guy is one of the best in San Diego County). Nothing else will make as...
The Future of Real Estate Agency: Expert Consultants, Not Market Access
Expertise and attitude, not control of an informational chokepoint, is the way that things are going. Let's analyze this from both sides of the problem. The current owner looking to sell really needs a marketer. For better or worse, most...
Buyer's Markets Are A Great Time For Moving Up
I have said repeatedly that buyer's markets, particularly a buyer's market as strong as this one, is not the time to be selling a property if you have any choice. There is one exception: People looking to turn around and...
Fear and Greed Counterpoint
Quite some time ago, I wrote Fear and Greed, or How Did The Housing Bubble Get So Big?. I re-ran it just a few days ago, to once again illustrate what went wrong. But Fear and Greed can keep the...
Time for Listing Agents To Earn Their Money
One of the most common things I'm seeing as I roam about the East County looking for bargains: Agents not doing their jobs. Now single family detached homes that are priced appropriately are selling, and for appropriate prices, even at...
Foreclosures - A Good Investment?
Well, sometimes. Okay, most of the time. But not always. Foreclosures: Bargain hunters beware! Myth no. 1: A big spike in foreclosures is right around the corner... ...That's because in most of the country, anyone who has owned a home...
Real Estate and Mortgages: Back to Basics?
Over the course of the last few months, I've gotten mass messages from basically every lender I do business with, saying it's time to "get back to basics". About a week ago, my favorite A paper lender became the last...
New Proposed Federal Reserve Rules: Is This Supposed to Be Helpful Regulation?
I was thinking we were ready for a recovery here in San Diego, but if these go through unamended, that will not be the case. Just in time to be the Grinch that Stole Christmas, the Federal Reserve has...
Rejected Offers to Purchase
"overpriced house offer rejected what next" (Before I get started, I want to make it clear that I am using the same definition of worth found in this article) Well, the seller obviously didn't feel that it was overpriced. Given...
Yield Spread is a Beneficial Tool That Can Be Misused
If you read the papers and the congressional record on the current housing crisis, you might think yield spread is the central culprit for the entire meltdown. You would be wrong. Yield spread is a beneficial tool, offered voluntarily by...
San Diego Market Prognosis December 2007
Moderately good news for sellers, not so great for buyers. I wrote a few days ago about the federal government and lenders agreeing to freeze rates. This isn't a panacea, by any means. It may not help people who...
Real Estate Boycotts
I simply love: "Fear and Greed, or How Did the Housing Bubble Get so big? I'm not sure if you are aware that there is a grass-roots group that is starting a "boycott on housing." They feel that the...
The Doctrine of Delaying The Moment Of Truth
One of the worst things about the loan process, and indeed, found throughout the whole real estate industry, is the idea that if you can just delay telling the client about something they won't like, it's more likely they'll continue...
"Contractor's Specials"
I was looking through some real estate listings and saw one property described as: "Contractor's special, first time buyers and investors. House needs TLC." Does contractor's special mean u better be a contractor if you wanna buy this place? It...
Move Up Transactions Don't Just Happen
One of the things I've heard and read other agents complaining about is that they can't find qualified buyers to represent. Welcome to Unintended Consequences 101. The way that the market had been working is this: Young, often unmarried, buyers...
The Consequences of Not Shopping Multiple Lenders
Minorities get higher rates. They add that the fact minorities are more likely to borrow from institutions specializing in high-priced loans could mean they are being steered to such lenders or that some lenders are unwilling or unable to serve...
Listing: Understand Your Target Market
One of the hard things to get through to sellers is the characteristics of the sort of buyers they need in order to have a successful transaction. If a given set of prospective buyers can't afford the property, they might...
What Would I Buy With A Million Dollars?
Somebody asked me that. A dachshund puppy (or two!) would be the first item. I miss Thing, and Mellon just isn't the companion he was. She's very sweet, and devoted in her own way, but the phrase "Canine American Princess"...
Buying One Property While Selling Another
Most people don't stay in their first house their whole life. At some point, they want to move to a different home. There are several ways to approach the transaction, but you have to decide which way fits you. You...
Economics of Home Ownership in High Density Areas
This has been knocking around my head for a while, and I've written on closely related subjects before. But the idea behind this essay really just gelled in my mind within the past couple days. Here are the facts of...
The Secrets to Good Transactions
Be prepared for trouble before it happens, know how strong your position is or isn't, and don't ever overplay your hand. Real estate transactions are the largest transactions most folks get involved in. Even small percentages of $500,000 or more...
Wanting a More Expensive Property Than You Can Really Afford
This is one of the biggest issues with my local real estate market. Because the San Diego market has very high demand and limited supply of property, prices are high. A reasonable two bedroom condo runs around $300,000. A 1200...
Fear and Greed, or How Did The Housing Bubble Get So Big?
One of the occasional questions I get from people has to do with why the housing bubble got so big (or if you're one of those still in denial about it, how prices jumped so far so fast). This has...
Buyer's Markets
One of the phenomena that I am encountering is fear of the market in buyers. They are concerned that prices are falling, and that they will lose some or all of their investment. Well, the first thing to understand is...
Losing Property Value with Highly Leveraged Properties
In an article on my other site somebody wrote in the comments about going upside-down on their mortgage: What happens if the property value falls and becomes far less than the loan ammount? (POP) Lets say you get a loan...
The Affordability of Property in San Diego September 2007
Let's consider where the rates are: Ever so slightly higher than a year ago. With the Fed boosting liquidity and cutting their short term rates, I expect this to change rapidly, but let's take a look at the actual...
Listing Agents Claiming There Are Multiple Offers in a Buyer's Market
Once upon a time, this was a good way to get more money for your listing. This led to a classic tragedy of the commons. Because it didn't take hardly any extra time, and there was no reason not to...
Good Intentions and Over-Extended Homeowners
(I do use one piece of non G-rated language below. I hope you'll agree with me that it was necessary to convey the proper sentiment) USA Today had an oped, "3 ways to help borrowers without bailing them out" Their...
There's Nothing Sacred About Range Pricing in Real Estate
A few days ago, I had an agent get angry at me about an offer below a range asking price. I had submitted the offer with extensive justification as to why it was an appropriate offer. Basically, this clown had...
Debunking the Idea of "Lenders Are All The Same"
Just like Mohandas Gandhi and Genghis Khan and Attila the Hun were all human beings, lenders are all companies that make money by lending money to people who want it. That's about the limit of the truth in that statement....
Developments in the A Paper Loan Market
In the last week or so, nonconforming A paper has really been hit. While available conforming rates have actually gone down, nonconforming has gone up by over half a percent. Picking one of yesterday's rate sheet at random, I can...
San Diego Real Estate Market Prognosis August 2007
The buyer's market is rapidly aging. Properties that are priced correctly are moving, and moving well. On properties with potential for profit, they're moving fast, and sometimes getting multiple offers. Of the last twelve properties clients of mine were seriously...
Real Estate Loan Market August 2007: Subprime Meltdown Continues
While the subprime meltdown continues, A paper rates have actually dropped a little bit in recent weeks. Subprime is in a world of hurt. Lenders are fleeing the market for below average credit in droves. It seems like every day,...
You Must Be Willing To Act in Real Estate
On a very regular basis, pretty much every buyer's agent who's worth anything gets clients who have difficulty making a decision. Not too long ago, I found a solid property with great potential that nonetheless needed about $20,000 of cosmetic...
Housing Bubble
(This was originally written in July 2005, but still has a lot of relevance) On someone's website: "Besides once in California, which completely recovered in a short period of time, by the way, can someone please show me an example...
Getting Rich Quick in Real Estate
On a very regular basis these days, I'm running into people who took paid money for a get rich quick seminar and are looking to buy property for zero down and immediately sell it for a $50,000 profit. Somebody With...
Larger Loan Amounts: Tighter Rules for Lending
Most of the time, I'm talking and writing about the sort of loan the average borrower is looking for. Up to 125% of the single unit conforming loan limit of $417,000, which works out to $521,250, A paper guidelines are...
Investment Risk and Paying off the Mortgage Early
Hi Dan, I was reading your article on "should you pay off your mortgage faster?" (DM: link here DELETED It'll be a fresh 30 year loan and I'm 44 years old so this discussion has interest, I don't really...
Considering Condos, Townhomes, and PUDs
The vast majority of the population out there wants single family detached housing. The virtues and benefits of the single family residence have been extolled ad nauseum, and the drawbacks of the alternatives are the stuff of urban legend. Unfortunately,...
Real Estate is More Local Than Most People Think
When I'm doing my initial automated search for properties for my buyer clients, I always pay close attention to listings represented by agents out of the immediate area. Why? Because an agent from fifteen or twenty miles away probably has...
Leverage - Making a Decent Investment Spectacular
One of the concepts I keep seeing without a decent treatment is the concept of leveraging an investment. Real Estate has this like no other investment. You go talk to a bank about leveraging eighty to ninety or even one...
Market Resilience
Most Resilient U.S. Real Estate Markets Market corrections follow three basic recovery patterns. A V-shaped recovery where a market experiences a sharp, fast decline but comes out strong once it hits bottom; a U-shaped recovery, where prices decline gradually and...
The Tradeoff between Rate and Cost in Real Estate Loans
The question every good loan officer hates the most is "What is your lowest rate?" First off, everybody doesn't get the same choices. As I've said before, somebody who can prove they make enough money, has a history of paying...
Being Realistic Saves Money on your Mortgage
If you haven't heard about the thirty year fixed rate mortgage, welcome to planet earth and I hope we can be friends. The thirty year fixed rate loan seems to be the holy grail of all mortgages. It's what everyone...
Looking Beyond The Bubble: What's Next For Highly Appreciated Markets
(This was originally published March 31, 2006) Doing my workout this morning I asked myself what's next for the real estate market. The state of the market here locally is that prices are and have been in decline. There is...
State Of The San Diego Market April 2007
Remember how I said moths ago that I could see signs that the market might turn back this year, perhaps around the beginning of July? That's looking to be a decent guess. Making offers isn't quite the monopoly situation it...
Prepayment Penalty Now or Wait to Refinance Until It Expires?
I have an adustable rate mortgage (5.875) which is set to adjust in 8/2008. My prepayment penalty I'm told expires 7/2008. My first goal is to lock in a fixed rate asap. My second goal is to cash out...
Production Metrics versus Consumer Metrics
Every day I pass by another real estate office where the agent has a big banner outside "I SOLD 101 HOMES IN 2004!" This is what is called a production metric, and this one sounds fairly impressive at first glance,...
Virtues of the US Real Estate Loan Market
The scope of the problems that exist in the United States Mortgage market are huge. Enormously, mind-bogglingly, "How Big Is Space?" type huge. Yet, the problems are almost entirely on a retail level, when one provider works with one consumer....
Housing Bubble Death Trap
That was the wording of a search engine hit I got. It's not literally a death trap, of course, only much financial pain. But the hyperbole is forgivable in today's modern society and the state of the current market. Other...
Fixed rate, Balloon, ARM and Hybrid Loans
One of the things that always seems to be aiming to confuse mortgage consumers is advertising based upon whether the loan is fixed rate, and for how long. First, I need to acquaint you with two concepts: amortization and term....
Should I Buy A Home? Part 1: Preparation
I am considering buying a home, although I have not made up my mind on the subject. This is not due to indecision, but rather due to a lack of necessary information. There are many factors to be considered...
It Not Only Rolls Down Hill, It's Starting to Cascade
Agencies issue subprime guidance: sources At issue is whether regulators will force lenders to qualify subprime borrowers based on their ability to make the highest possible monthly payments during the life of the loan, instead of the initial lower rate,...
Refinancing When The Rates Are Higher
All too often, these days, I have to tell desperate people who've found me on the internet some bad news. Nobody can match the rates they've got at a price worth doing. This is just a sample of what I've...
Why RIGHT NOW Is the Best Time For Buyers
Prices are down 20% locally to me. It is possible, even likely, that prices may come down further. But right now, buyers have more power to make the deal they want than they will again for the next ten years....
Buyer's Strategy for the San Diego Housing Market
I've been telling people that the flat spell on rents we've had locally in San Diego is going to change. Here's the first confirmation I've seen: $1,241 average reflects biggest climb in 4 years The last few years, landlords have...
Cold Hard Numbers
(This is a somewhat redacted letter I've been sending out now for about four months) I have recently attended a talk by Gregory Smith, the county assessor, on the future of home values in San Diego. He expects prices to...
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