Carlsbad builder losing both affordable and luxury projects?
August 12th, 2008 Categories: Carlsbad Business Community, Carlsbad City, Carlsbad Real Estate
SAN DIEGO– This weekend, The North County Times reported that Carlsbad based Barrat America was close to losing its City Square project in Escondido. This once award winning project, that in August of 2007 was reported to be ‘debunking market trends’, was suppose to help anchor a revitalized and modern downtown.
City Square’s failure stems from Bank of America’s decision to freeze Barratt’s $125 million credit line, Pattinson(Barratt America CEO) said. He also questioned the bank’s motives, saying it is not interested in exploring workable solutions, such as extending the life of a loan.-North County Times, 8/10/2008
However, while in October of 2007, Barratt was announcing winning awards at one project, they apparently were not paying their sub-contractors. The NC Times article also reported that since November of 2007, 80 civil lawsuits have been filed against Barratt America and most of those have been filed by unpaid sub-contractors.
The luxury community additionally effected is Carlsbad’s Magnolia Estates. 
While looking through SANDICOR, San Diego’s MLS, for foreclosure activity, it seems as though the whole of Magnolia Estates is facing foreclosure proceedings and have lawsuits attached to them, presumably from the subcontractors looking to get paid.
Hopefully Barratt America, which has reportedly laid off 100 of its 130 employees, will be able to find new financing or work out a solution with Bank of America as neither city benefits from the blight, whether townhomes or luxury homes, decaying uninhabited.
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Carlsbad homes for sale under $500K
August 10th, 2008 Categories: Carlsbad Real Estate
CARLSBAD– As with most any news about the housing market, there are two sides. For current homeowners, we have watched the market fall and take our appreciation with it.
But for BUYERS, this drop has created opportunity for you. As of this writing there are 25 single family detached homes throughout Carlsbad ranging for the Calavera hills area to the coast. While some are in bad shape, other are in move in condition and are waiting for you.
Here is the list of CARLSBAD HOMES FOR SALE UNDER $500,000 that will be kept updated.
There are seven pages, so please make sure to use the scroll feature located at the bottom left corner.
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Carlsbad desalination plant gets coastal commission approval
August 6th, 2008 Categories: Carlsbad Beaches, Carlsbad Business Community, Carlsbad City
CARLSBAD– After a 10+ hour meeting today held at Oceanside city hall, the California coastal commission gave final approval to the desalination plant that was proposed to be built on the Encinas power plant site.
The plant will produce approximately 50 million gallons of freshwater a day from 100 million gallons of seawater. The plant will actually pump in excess of 300 million, what is is not sent through the reverse osmosis process is used to dilute the brine left over from the 
process.
To offset damage to marine life from the plant operation there will be 55.4 acre habitat restoration site to be built in two phases. One the size of Poseidon’s proposed 37 acres in the first two years and then an additional 18.4 acres added within the next five years.
With regard to a carbon offsets requirement, Poseidon stated that they will use as much solar power as possible. Also, there may be an actual energy usage reduction if you take in to account that pumps, theoretically, will no longer be necessary to bring 50 million gallons of water to San Diego daily from northern Caliornia.
The project will now go to theCalifornia State Lands commission which meets August 22nd in Los Angeles. If approved there, construction on the project should begin in mid 2009.
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Affordable 3 bedroom Carlsbad home with pool under 500K
August 5th, 2008 Categories: Carlsbad Beaches, Carlsbad Outdoor Events, Carlsbad Real Estate, Carlsbad Village
CARLSBAD– Okay, for all of you who have been sitting on the fence waiting for your opportunity to buy in Carlsbad, here it 
is!! This is not a short sale or a bank owned home.
Located just off the lagoon near Laguna Riviera park and Kelly elementary school, while great for anyone, this would make a wonderful family home where the kids could grow. Additionally, the master bedroom is located downstairs with its own backyard access just off the patio with spa.
To see this home call me at 760–415–3329
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Mayor’s back Carlsbad Desal Plant
August 2nd, 2008 Categories: Carlsbad Business Community, Carlsbad City, Carlsbad Outdoor Events
CARLSBAD– Seven regional Mayors, including Carlsbad’s Bud Lewis, got together and held a news conference Friday to ask the California Coastal Commission to finalize the conditional permit it approved in November of 2007 for the Carlsbad desalinization plant. The plant would be built on the site of the current Encinas power plant which I have written about here and here.
Funny thing, but in one of the posts I have linked above I stated that, while I think the plant needs to be built, it will create an attitude in city government that the Pacific Ocean is an unlimited supply of fresh water and in turn this philosophy will fuel continued area population expansion. Well, that and an economic turnaround.
“First, more building will take place because the thought that the Pacific Ocean is huge and we can always build another plant will permeate the governmental minds.”– Brian Long, 11/18/2007
Well how about this quote from Jerry Sanders from the San Diego Union Tribune article dated 8/1/2007.
“Seawater desalination will provide a drought-proof water supply,” Sanders said
NICE!!!
The commission will be meeting this Wednesday, 9:00 at Oceanside City Hall which is located at 300 N. Coast Highway. I would be VERY surprised if this did not get approved. Besides the water it will add much needed jobs and dollars to our community.
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Just how accurate is the Case Schiller home index for San Diego
July 31st, 2008 Categories: Carlsbad Business Community, Carlsbad Real Estate
SAN DIEGO– It was reported that the most recent Standard & Poor’s/Case-Schiller index showed a a one year price decline in San Diego of 23.2%. This ranked San Diego fifth worse of the 20 metro areas covered by the index. Now this is in no way good news, but more importantly I do not believe it is accurate news.
This index differs from other pricing surveys by looking at repeat sales of the same house which seems like a more accurate way of tracking trends as it does not bring new homes sales into the equation. The problem with this system however, and increasingly more so now, is it does not take in to account the condition of the home and I will explain why that is more important now than ever.
See in June foreclosed homes made up 40% of home sales in San Diego and since the majority of these homes would have a recent sales history they would be used in the index. Now the depreciation would be easy to figure out, but again, the condition of the home being sold in foreclosure would 
be a completely different animal than the home sold 2–5 years ago.
Take the example of this Carlsbad home pictured above that I wrote about here. It sold in December of 2003 for $500,000 and is now back on the market as a REO home that has been foreclosed on. I believe it will sell for somewhere in the low 400’s so not while the close to the 23% reported by Case/ Schiller, certainly a loss. But what is not taken into account is the home has been stripped of all its appliances including the garage door opener, the hot water heater and all kitchen appliances including the garbage disposal. Additionally sinks have been removed, a builtin vanity, plumbing, all the light fixtures, and more. The fences are now falling over, the back fence is gone, molding has been stripped away from the sliders and carpet has been cut out. 
So my question here is, is this depreciation an accurate indicator of the overall real estate market or the damage and cost of a foreclosed home? When buying a used car, mileage and condition are taken into account and should be in this case. If you plugged this theory onto cars, you could say Honda Civics are now worth $6500 based on same car sales which would not be true. Remember 40% of home sales were FORECLOSURES.
This is not a unique situation that I am using to make a point. I have been in foreclosed homes that had actual fungus growing out of the walls because the owner took all the shower fixtures and water was dripping down the interior wall. In past market downturns I have heard stories of owners doing very destructive thigs such as pouring cement in the tolets and sinks to try to ruin the in slab plumbing. In fact one of the main provisions of the Housing Bill that President signed into law yesterday establishes a fund for communities to use to buy and maintain foreclosed properties to try to limit blight.
“As a $4 billion package to help municipalities deal with foreclosure-related blight hangs fire in the US Senate, US mayors met last weekend in Miami to vent about the scourge of abandoned homes. Cash-strapped cities are now scrambling – often using on-the-fly ingenuity – to rescue neighborhoods suddenly vulnerable to crime and stunned by millions of dollars in lost equity wrought by loose credit, opportunistic
speculators, and predatory lending.”
“Some 44.5 million homes in the US now stand next to an empty house, resulting in a drop of at least $5,000 in property value per house. By that calculation, a total loss of home value of $220 billion across the US can be attributed to the vacancy problem.”
“‘This is a man-made disaster that’s had more dramatic impacts on real estate markets than natural disasters [have],’ says Bruce Katz, a housing analyst at the Brookings Institution, a think tank in Washington. ‘In a way, we have a lot of mini-Katrinas across the country.’”– Christian Science Monitor, July 1, 2008
Is the real estate market in the midst of a down turn? Absolutley. Is it as bad as it is being made out? I think not. Sure some areas are getting hit very hard, but I beleive it is more a reflection of the product not the market. For all you buyers that were waiting for prices to come down, now is your time.
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Nothing extreme about this foreclosure
July 29th, 2008 Categories: Carlsbad Real Estate
Georgia– Back in 2005, 1800 volunteers and ABC’s Extreme Home Makeover, built the Harper family of Georgia a 4 bedroom 5000+ square foot mansion free of charge. The company, Beazer Construction, also paid off the families mortgage and gave them $100,000.
Well the mansion must not have been enough for the Harpers or the 100k, because the Harpers are now facing foreclosure. Besides the 100K the Harpers took out to separate new loans for $125,000 and $450,000. So their ‘income’ in 3.5 years was a mere $625,000 and now they’re broke.
A foreclosure notice appeared last Friday, a $450,000 second mortgage they took out less than 15 months ago was in default…. Lake City mayor Willie Oswalt was among the 1,800 volunteers helping “Extreme Makeover: Home Edition” build the Harper’s new home 3 ½ years ago. Beazer Homes of Atlanta was the main sponsor. The mayor said he is baffled.
“Beazer gave them $100,000 cash, paid their mortgage off and they still can’t make it,” said Oswalt. Harper told Channel 2
they invested the loan proceeds in a construction business and the business hasn’t been good. She didn’t say how much of the money is left.
“What’s going to happen is instead of keep paying my mortgage, I’m going to take my money and not pay my mortgage because I’m being harassed,” said Harper.– GeorgiaBankrutcyblog.com
As bad as this is, they really did nothing different then millions of homeowners across the nation. House as ATM. Additionally this is not the first home built by the show that has been foreclosed on.
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Carlsbad’s Sammy’s WoodFire pizza burns
July 29th, 2008 Categories: Carlsbad Business Community, Carlsbad South
CARLSBAD– About 8:00 this morning, firefighters were called to Sammy’s WoodFire pizza in Carlsbad after a police officer heard some type of explosion and saw smoke. It took approximately 46 firefighters from Carlsbad, Vista, Oceanside and Encinitas to help extinguish the blaze which was put out by 9:45. There were three employees in the restaurant at the time but everyone was able to get out of the building without incident. To read more go here.
I spent about two years at Bellefleur Restaurant as executive Sous Chef 
and we had an oak grill and pizza oven. In the couple years I was there we had the fire department out three or four times as the creosote build up from burning so much wood would overwhelm the vent system. When the restaurant was sold, the wood grill was replaced with gas and while not capable to produce such flavorful food it is a much safer alternative.
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How the housing bill may effect Carlsbad’s real estate market
July 28th, 2008 Categories: Carlsbad City, Carlsbad Real Estate
CARLSBAD– Well congress pulled a weekend session and passed the housing bill intended to buoy our sinking housing market. President Bush has already indicated he would in turn sign this in to law. I have been asked by quite a few people what I thought about the bill over the last several weeks, but have withheld any real opinion until I could read more about it and digest that information. So here are my thoughts.
Probably the real impact of the bill nationwide will be the portion that allows the FHA to insure and help refinance, into fixed rate, some 400,000 loans for homeowners that are in some part of the foreclosure process. Two things here however. The homeowners would have to show that they can indeed afford the payment and the banks would have to accept any loss. The problem I see with this is that most of these homeowners will not be able to afford the new payment especially if 
they got loans based on stated income or had a change in their ‘economic’ picture such as disability, loss of job, taking on more consumer debt, etc. Additionally, there is a clause in the bill that protects lenders from investor lawsuits over loss revenue caused from restructuring loans. This is probably the most beneficial to the consumer group as a whole of this portion.
The 3.9 billion earmarked for buying and or maintaining/ rehabing foreclosed homes will go to companies with government ties so I really don’t see this as being very beneficial to the populous. This will benefit some companies with the right connections and quite honestly I just see opportunity for abuse. Hopefully the money will go to housing non profits that have a strong history of benefiting the community. Did you read about the Iraq prison in todays paper?
Now the 15 billion earmarked for housing tax breaks will help quite with a tax credit up to 10% of the purchase price up to 
$7500. In order to earn this credit, the home purchase must fall between April 9, 2008 and July 1, 2009. However, from what I have been able to find this is a credit for low income and first time buyers only. Additionally, this credit will have to be paid back in equal payments over 15 years. So this really is 0% loan. Also, as with most everything associated with tax filings there are income restrictions.
What I believe will have the greatest impact on Carlsbad’s real estate 
market is the provision that makes the increase in the loan amount the FHA can insure permanent. Currently the FHA can insure loans up to $625,000 in high cost market areas. This amount used to be $417,000 and was set to revert back at the end of the year. Why this is important to us, is that the borrower can get a more favorable because of the assurance to cover the loan from the FHA. In July the average single family home sold in the combined zip codes of Carlsbad was over $730,000, so this is very important to us.
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Carlsbad’s foreclosure market
July 24th, 2008 Categories: Carlsbad Business Community, Carlsbad Real Estate
SAN DIEGO– The problem with getting two newspapers delivered at home, is my ‘bad’ news comes in two doses. On occasion though, it is interesting how the same situation is portrayed in completely different ways.
This Sunday both the San Diego Union and the North County Times had lead articles about the causes and impact of the foreclosure market.
The San Diego Union states, “This year’s free fall in home values– as much as 40% in some cases– can,
in many cases, be traced to disproportionate share of risky loans doled out”. The paper looked at the ratio of subprime loans to prime loans in the 15 highest deprecating neighborhoods in San Diego. It is worth mentioning that in every zip code however, the percentage of resale homes originating from foreclosure was higher than the percentage of subprime loans. I think the North County Times article may have the answer.
In the North County Times article titled Beyond Subprime, they cited a study by the Federal Reserve with regard to type of loan versus depreciation and their impact on foreclosure. The study states that homeowners whose homes have depreciated more than 20% were 14 times more likely to go into foreclosure, while subprime borrowers were only 6 times more likely to go into forclosure. The study’s conclusion was that depreciation was a 
greater factor in foreclosure than type of borrower.
Thomas Kelly of JPMorgan Chase stated that, “Some people could afford it(the house), but chose not to, and the biggest impact is falling home prices.”-North County Times, July 20,2008
The biggest impact of foreclosures is they continue to drag the market down almost feeding on themselves. It really is a classic ‘domino effect’.
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