“Brother Can You Spare A Dime” Edition

October 29, 2007

Marin IJ reports that people who have bought property in the past few years during the real estate boom can contact the County Assessors office and ask to be reaccessed at what will probably be a lower value as home values slide downward and people are feeling the pinch. Homeowners have until November 30th to take up the offer with the County.

Even the Southern California Real Estate Bubble Crash Site is laughing at our County Assessor-Recorder Joan Thayer for characterizing a 77% drop in home sales as a “slowdown”. My friend Marinite over at Marin Real Estate Bubble Blog as always posted some sobering data about the direction of the Marin real estate market. Median sales price and average sales price have diverged. Foreclosures in Marin went from 4 in 2006 to 41 in 2007, which represents 925%Â increase. Then there is another graph at the projections of mortgage resets that show that we have just begun to feel the fallout of lending practices in this county and elsewhere. In the later half of 2008, it looks like there will be a sharp increase in subprime resets. Then in 2010 and 2011, we will start seeing the option adjustable rate loans and Alt-A (alternative documentation or “liars loans”) loans resetting. Unless people can refinance in this tight market, there could be hard times ahead.

It looks like people are taking a voluntary or involuntary break from the real estate frenzy and renting, as rentals have went up 5.4%. Average rents in Marin run about $1647 per month. So, I guess if the situation gets any worse, rentals will be in more demand and rents will be going up.

Again, the IJ article about the rents quotes someone saying that Marin, “is one of the more stable markets in the Bay Area” what do they based that assumption on?

Whilst googling “Alt-A financing Marin” I ran across a post on Activerain Real Estate Blog by Marin realtor, Ginger Wilcox from Pacific Union in Greenbrae in response to a post about being careful in regards to  “relying on exotic loan products”:
“It is going to get worse, probably much worse. In areas like California where it is common to remove your loan contingencies weeks before close of escrow, it could be disastrous for buyers who could lose their earnest money, and for sellers who might lose the deal.”

Sounds like a safe and sound real estate market, don’t it? Yeah. uh. right.

What’s really interesting is that in May, Marinite posted news on various local lenders who were closing up shop and laying off people that were not the oft blamed sub prime companies, but Alt-A lenders who had customers with good credit.

The Marin Report assures us that, “It is important to keep in mind that real estate in Marin is location specific, and you will need to drill down to each market segment before you draw a broad conclusion as some areas continue to have strength especially those towns in southern Marin with good school districts.” I am sure she means Ross which is has the highest listing/pending sale percentage in the County at 29%. Out of 21 listings, 6 sales are pending with 15 listings being active. With the Media home price of 5,950,000 and the average price being 4,841,667, Ross is proof that the Marin County real estate market is doing just fine — just not accessible to the average homebuyer.

According to The Marin Report, the strongest segment of the market is “the luxury” segment, homes listing for 2 million or more. Stop the presses! The ultra-rich can breathe easily as the if-you-have-to-look-at-the-price-tag-you-can’t-afford-it league can buy and sell property as always. It is kind of like saying that while factory workers are being laid off by the thousands, isn’t it a relief that at least the CEO is safe with his bonuses, mansion, and golden parachute. Meanwhile, the rest of us poor-working-class-chumps and middle-class dupes need to find something below the jumbo loan cutoff or watch the real estate investment made in the past few years depreciate while mortgage resets loom.

I am SO relieved that the rich people are okay, aren’t you?

Posted in marin economy, marin real estate