LIVING OFF DIVIDENDS & PASSIVE INCOME

According to Hagerty’s article in the WSJ, Mortgage Woes Force Banks To Take Hits to Sell Homes,

An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.

A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes.

At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.

But Ramsey Su, a San Diego investor and former real-estate broker specializing in foreclosed properties, said prices were surprisingly low on some homes and the auction showed that “demand is not that strong.”

The soaring prices of the first half of the decade priced many people out of the market, and lenders’ recent tightening of standards has made it harder for others to get loans. A glut of condominiums also is weighing on the market. Peter Dennehy, a senior vice president at Sullivan Group Real Estate Advisors, a research firm here, estimates that at the current sales rate there are enough condos on the market to last about 29 months.

Unfortunately I was in El Centro for the weekend so I missed the auction that was held at the San Diego Convention Center. (But I did see premium gas selling for $3.99 in El Centro, sand dunes, and a gas station for sale with an estimated cash on cash return of 38% that my friend was buying).

I’ve been harping on and on for nearly 2 years how the market here is ripe for a correction. Finally, some real validation!

• San Diego Burning Most of you have probably heard that San Diego is now in a state of emergency, due to the wildfires spreading through over 150,000 acres. Nearly a million people have been evacuated and nearly 1,000 homes have burnt down. A similar event happened in 2004, but compared to this time,......
• Real Estate Forecast 2009 As a member of the school's Real Estate Club, I got a pretty interesting update on the real estate forecast for 2009. This is just the summary. The whole article was signficantly bigger. A lot of it is obvious, but it's still a good comprehensive list. Serious dislocation has resulted......
• Investing In Japanese Real Estate In a previous post I had mentioned that a Japanese REIT was going IPO. I was wondering how I could get in on the action. It seems like a good idea - the Dollar should weaken against the Yen and Japan's Real Estate should appreciate after almost a decade and......

• Real Estate Listings Decoder Planning to do a little house hunting this weekend?  Grab your local newspaper, or browse any real estate website, and you'll find the market is filled with real estate listings.  The best real estate agents are also great marketers, and they know the language to include in listings to generate......
• Using Your Phone for Real Estate Hunting The real estate market is complicated. You have agents, brokers, underwriters, your family, the economy… so many parties with a vested interest! And then you have the whole finding the house part of the equation. You need to think of a neighborhood you would like to live in and then......
• Why absolute real estate auctions are big deals On the way home from town this past weekend, we passed a farm that was going to be sold at auction. My wife saw that the sale was an absolute auction. She asked me what was so great about an absolute auction. When she said that, my ears perked up.......

[All content is copyright of Living Off Dividends & Passive Income]

Random Posts

• November 10, 2005 -- Utah Property Update
• September 14, 2006 -- How To Short A Stock
• December 18, 2005 -- Student Loan Consolidation
• May 30, 2006 -- Why Reputation Is Important
• November 20, 2007 -- Time To Invest In Milk?
• December 10, 2005 -- Further Research into Oil and a Disturbing Find on Peak Oil
• December 3, 2009 -- Interview With Jim Rogers