Comic Con, the annual love fest in San Diego of all things cartoon, visual arts and recently, expensive blockbuster movies, is over for 2012.  The last 4.5 days in San Diego was like a huge Halloween party, in July. The local economy is fed directly with revenues from 125,000+ people eating in restaurants, staying in hotels, & purchasing mad amounts of goods. There are locals who rent out their homes and condos, and businesses that lease out space for the off site venues. Hollywood’s movie studios send top brass to network with their ilk, and the LA Times reported these folks are wined and dined off site and never walk through the convention center itself. Comic Con has grown considerably over the years, and it is San Diego's civic leaders responsibility to keep this revenue stream flowing. The Comic Con issue is a supply demand equation....the City must provide additional supply of convention center space for the ever increasing demand of Comic Con. The 2 mayoral candidates, Filner and Demaio, have pledged no further funding for convention center expansion. I feel that would be a huge mistake and not accounting for the bigger picture.
It seems the past 3 or 4 years has seen an increase in the banner wrap ads, those huge banners that form fit the facade of The Marriott and the Hilton.  I was thinking that a forward-thinking HOA of one of the many tall residential towers should discuss a contract with a movie studio to shrink wrap their building for a week. The HOA would apply the earnings against the assessment, and help defray a monthly assessment for each homeowner.

A bright light has emerged upon the housing market in the form of sustained sales with an upwards price trajectory. Most of our neighborhoods have very low inventory, and combined with low, low interest rates, there is competition out there folks. Good news for sellers, and a call to action for buyers to be ready to place offers with proof of funds and a loan pre approval letter.

The middle market still needs the most support at this point. This segment of the marketplace has always helped fuel upper end sales, as buyers moved up in price and product. However, with jumbo loans in place (above $417,000) combined with homes not appraising at a minimum of 80% loan to value, there are no options to refinance without bringing large sums of cash to the table. Of course, the main purpose of the refinance is to lower the debt service, so cash to close is a non-starter. The option to modify the loan by lowering the interest rate, therefore removing the need for an appraisal as the basis of value, also is a non-starter because the premise of a modification is hardship on the part of the homeowner.  This is no longer a story of financial hardship for most. The foreclosures and the distress sales of the recent past are effectively behind us in California.

So, if a borrower could refinance and effect a monthly savings of $300 to $600, those funds could potentially be reinvested into the economy by a simple interest rate reduction. Will it happen? Not without some governmental action requiring lenders or Fannie/Freddie to do so. In terms of ultimate benefit to the overall good, to the economy, action of this nature would be smart & successful at little cost to the loan originators and servicers.

If you are a buyer in San Diego County right now, your options are limited. Competition is very tough among buyers for well priced homes in great condition in the sought after neighborhoods. Summer brings out the largest buyer pool of the year, and we really are not seeing the needed inventory to satisfy demand. Is it a sellers market? Yes, in certain neighborhoods, and in certain price points.

Twelve months ago in San Diego, if a buyer was offering all cash, their price was a discount from the list price. Today, all cash is typically at list price or above because buyers do not want to miss the property of their dreams. REALTOR.com ran a story on June 13 with the headline:  “INVENTORY OF FOR-SALE HOMES FALLS 20% FROM YEAR AGO”.  Keep in mind this figure is for real estate from sea to shining sea. Locally, 8 of the top 12 markets with the largest inventory drops are in California.  Phoenix, Seattle, Atlanta and Tampa are the other areas outside of CA.  Decreases in these cities as follows: Oakland 56.6%, Fresno  48.87%, Bakersfield 48.59%, San Jose 40.80%, Stockton 39.25%, San Francisco 38.90%, Riverside 37.43% and Sacramento 35.92%.

If you’ve ever been to the central valley of California, “the nations breadbasket”, then you’ll understand the sheer audacity of those areas (Fresno, Bakersfield, Stockton) to actually be ahead of the curve of other U.S. metro areas in housing. There are fewer distress sales in California today than 12 months ago, because the state Attorney General did not halt foreclosures, unlike the majority of other states. As a result, the distress was purged continuously and no inventory backlog was created. Supply and demand dictate that prices increase, albeit in small increments, as inventory thins. If you are an action ready buyer, prepare to pounce on the property you want.

For more information on San Diego County real estate, contact me.

I attended the debate yesterday afternoon at the Town & Country Hotel in Mission Valley that featured all 4 of the major candidates for San Diego Mayor.  It was well worth the cost of the lunch, as my fellow real estate colleagues, all 550 of them in that large conference room, witnessed the final debate before the June 5 primary. Nathan Fletcher resonated with the crowd and he received the loudest cheers and applause. His independence from either party in this non-partisan office race seems to be the right call this time around. Filner is too goofy, with too many jokes, and while I personally like humor, it seemed out of place up on that stage. Dumanis does not have a chance in this race, but her feistiness was actually refreshing. DeMaio appeared to be zipped tight into a Max Headroom-fashioned blue suit, and just seemed so uncomfortable and rambled out the same, memorized, motorized messages that we have been hearing from him for months.  To watch for yourself, the debate will air this Saturday, June 2, at 7 pm on local news Channel 10.  While the debate offered a format to express ideas succinctly, I think the more telling approach to their respective campaigns and commitment was participation in the Memorial Day parade in Kensington this past Monday. It’s a neighborhood event, 40+ years and running, that heads down Marlborough to Adams Avenue and lasts a little over an hour. Filner and Dumanis rode in cars and waved to the crowds, DeMaio was absent but he had a contingent walking the parade. Fletcher, he walked the route and shook hands with as many as he could reach. I was with a group of about 30 folks on the corner of Middlesex and there was widespread disappointment when we all realized that Fletcher was on the other side of the street, and as the parade moved forward he would not be able to circle back to shake our hands. And I think the people of San Diego like Fletcher because he brings an energy and motivation as well as independent thinking to a political process that has grown shopworn. San Diego is a lively, happy city, and we need leadership that understands that vibe and will be a positive advocate for our future. Nathan Fletcher gets my vote for Mayor of San Diego.

The folks at Genghis Khan Furniture are closing shop. The veritable home décor showroom sitting at the corner of Morena and Vega for 35 years, is heading to retirement. Annie and Nancy and all the good folks who served their customers so well over the years will be liquidating all inventory starting June 2.  Thousands of San Diegans have found unique pieces here for their homes, both for interiors and patios, that shutting down for good just seems wrong. The selection was 95% imported, and the past 36 months the owners have had increasing difficulty sourcing from China. So, rather than compromise on authenticity and quality, Genghis Khan is retiring. Thank you for all the great finds over the years, and best of health and happiness after you close your doors.