It’s back. Every year on this last Tuesday of the month of February, the streets of downtown San Diego shut down to accommodate the bands and the crowds for Mardis Gras and the big parade.  If you live downtown, you either love it because the event is in your back yard, or, you hate it because it’s inconvenient for you. My office is located in the heart of the Gaslamp Quarter on Fifth Avenue, so we pretty much are shut down for the day.  Mardis Gras is one of the many events that make up a year round calendar of fun offerings for San Diegans. 

By tonight, this scene will definitely change……(photo taken at 11 am 02/21/12 at Fifth Avenue at K Street)

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I have long maintained that the housing recovery is premised upon the distress inventory clearing out. The distress in foreclosures and short sales is not helped by lenders unwilling to either re-finance or modify loans of qualifying homeowners.  If the homeowner can prove income, why shouldn’t the lender re-structure the loan to accommodate a monthly payment that works? It’s a win-win. If my neighbor’s loan was an adjustable rate and re-sets from 5% to 10%, and the payment becomes a tidal wave of debt, a foreclosure might begin. Ultimately, my home’s value will decrease as a result of that neighbor’s distress. President Obama, in his State of The Union speech a few weeks back, said, “I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No red tape.”  Clearly, the devil is in the details. A huge impediment to refinancing is the lender’s appraisal. . In the scenario President Obama outlined, appraisals can =not= have any role in the refinancing process other than a place mark in the file. It can not determine value. If the lender  needs to restructure or modify an existing loan to reduce the  interest rate or extend the years…if they can create a more stable housing environment and avoid millions and billions in write offs and losses….then that would be the recovery we have been pushing for. A 30-year fixed rate mortgage under 4% is available today. Why not get started?

On Christmas Eve, in the middle of the day, chaos ensued at the Whole Foods Market on University Avenue in San Diego. Too many shoppers, with too many cars, were creating gridlock/ Despite the valet parking service as well as the traffic control officers hired for the day, it was the price of doing food shopping that day at that store. On New Years Eve, in the middle of the day, the REI store on Copley Drive drew so many buyers that the check out line stretched around the store and held steady under the kayak section  and into the shoe section. The estimated wait time to reach a cashier was 35 to 40 minutes. On New Years Day, the Hotel del Coronado was not serving meals to non-guests. “We are not accepting walk-ins,” announced the hostess at the 1500 Ocean restaurant, “Only guests of the hotel are being served.”  These are all signs of consumption by consumers with confidence. Of course, this bodes well for how we perceive the economy and thus how we spend our money. In real estate, inventory is low in most neighborhoods. Along with interest rates at the lowest they  have ever been, this points to an improved value for existing homeowners.  For starters, 2012 bodes well.

Four years is a long time to wait for a home.  Neighbors of mine began the house search with me in 2007, initially focused in Coronado because of the excellent school system. Their adorable daughter referred to our house hunting  as “looking for a yard house”, because she was born & raised in a condominium.  After a 6-month search, they concluded Coronado inventory was too limited for what they needed. The next step was to sell their existing property, a luxury 3 bedroom condo on the 18th floor at Renaissance in downtown San Diego’s Marina District. The condo was completely remodeled in 2004 and offered views of the Pacific Ocean, San Diego Bay, Coronado, Point Loma & the downtown skyline. In the winter, snow-capped Cuyamaca Peak in the Laguna Mountains was clearly visible. Problem is, the market was soft back then for luxury property. To add insult to injury, the Renaissance filed a construction defect lawsuit against the developer, as is customary within the 10-year statute of limitations; Renaissance was built in 2002.  So, with a soft market, a lawsuit, plus time off the market for a 2nd baby, and time off the market during the holidays, we sold the condo in March of this year.  Now it was crunch time – with vigor we searched resale homes in Mission Hills, Point Loma, Carmel Valley & Del Mar, and then brand new construction in Del Sur and 4S Ranch. The resale's were attractive because they were move in ready. Brand new construction was essentially a customized home.  Despite a 9-month construction timeline, which meant they would have to rent a home until the new one was built, that is the path they chose. Del Sur’s highly-prized school system was the icing on the cake. So, four years later, we closed escrow on their beautiful “yard home”.  Thus begins an exciting  chapter for this young family in a brand new home in time for the holidays.