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Last night I was a panelist at the 2nd annual real estate conference for the San Diego chapter of FENG (Financial Executives Networking Group).  There were about 80 people in attendance at the same venue as last year's, the UCSD Faculty Club.

The other panelists were Bruce Norris, Alan Nevin, and Gary London - unfortunately Rich Toscano couldn't make it this year.

Here are my notes:

Bruce Norris:

Bruce brought data with him highlighting the fact that we have had more foreclosures this year than sales.  His numbers showed 9,275 foreclosures in the first half of 2008, compared to 7,260 sales.

He also mention First Federal, a lender who did neg-am loans but were fairly conservative, requiring 20% down payments.  Their first big group of resetting mortgages hit in the first quarter, and when it did, 40% of the borrowers defaulted.  He also had the standard ARM reset charts in his package.

He thought we will have to see higher mortgage rates in 3+ years, perhaps as high as 8-9%, and that if you bought a house today you're payment could actually end up being less than if you waited for lower prices  (The higher rates keeping the payments the same or higher, though you paid less).  He also thought that we've seen the biggest hit already, price-wise, but that the higher-end was going to get impacted by resetting option-arms.

He thought a serious recession was inevitable, and that oil would be back under $100 per barrel by the end of the year.

Bruce buys homes for a living, fixes them up and re-sells them.  He has purchased 20 homes in the last 75 days, and said he can take a total dump and completely rehab it in three weeks, but can't sell it until he's owned for 90 days.

He paid $2.1 million for the 20 homes he bought, and the previous loans owed totaled approximately $6.6 million.

Alan Nevin:

Alan mentioned that there are 91 areas in San Diego County that are tracked by Dataquick, and that 70% of the foreclosures this year are located in just 10 of the areas - including Oceanside, Escondido, Chula Vista/Otay, and Spring Valley.  Twenty of the areas had fewer than five foreclosures each.

He said that in 2008 there will only be 3,000 single-family residences built in San Diego County, with 500 of those being ones that burned down in last year's RB fire.  New-home building has virtually stopped, after completing at least 10,000 SFRs per year in recent history.

He and Gary agreed that there is, in effect, a 'moratorium' on downtown condo building, and that it was likely that another new downtown condo project wouldn't be started until 2012 (Alan) or 2015 (Gary).

Alan also mentioned that there really aren't many high-end downtown condos, he thought most were rather ordinary - he and Gary could only list 4-6 buildings that they considered high-end.

Gary London:

Gary said that there won't be any more new SFR developments in the county, except around Otay Ranch, because we're built out.  The remaining parcels are mapped and waiting for the market to return.  The future of San Diego County is building up, not out, and that buyers will be buying smaller homes at lower prices as a result.

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Zach Fox and the North County Times is working on sponsoring a public forum in a couple of weeks - stay tuned.

Congress is going to sneak through the bill allowing the DAPs to survive.

They can say they didn't know how it worked, or didn't look into enough, up until now.  But let's be clear about what is about to happen. 

There are companies that "arrange" the down payment for buyers using FHA loans to purchase.  They provide the 3.5% down payment, and get reimbursed by the seller.  They biggest problem we've had is buyers with no skin in the game, yet this program is doing just that - allowing seller funds to be used for the buyer's down payment.

Yet Frank and his cronies are going to allow this practice to continue, probably due to intense lobbying by realtors and the companies who get paid $500 per deal to "arrange" the down payment.

If the powers that be refuse to ban the practice of the seller giving the buyers their down payment, they have sold out .  They are shamelessly supporting the very lending practices that got us here in the first place.

Here's a link sent over yesterday from the NAR president on how they plan to continue their influence on the congressional members - warning, many of you will find this offensive:

http://www.realtor.org/about_nar/presidents_report/_podcast_archive/podcast_rpac_20080909

For those waiting for the option-arm implosion, the politicians may disappoint you again.  The way these government folks are doing everything they can to keep the market afloat, don't be surprised if they prop up the neg-ams too.

From Inman News:

Whoops. I used to have the Inman News article on how Barney Frank and his congressional cronies are bringing back the DAPs, or seller-assisted down payments on FHA loans.

But Inman News has instructed me to remove it immediately, in spite of the fact that I paid $150 to be a member of Inman News, which, when I read it, meant that I could re-print their articles.  Elaine said I read it wrong, and they changed their policy anyway.

So Inman News wins!

Instead, here's a link to a brief summary:

http://news.yahoo.com/s/usnw/20080910/pl_usnw/ameridream__h_r6694_scheduled_for_markup_next_week

I have to keep these coming - CR is scooping me on my own videos!

This finally listed yesterday for $229,900:

The house on Compass has fallen out of escrow for a third time. These buyers sent over a mold report, and asked for a credit of $34,700 to proceed with their purchase. Because all reports have to be forwarded to any future buyer, and because Countrywide wanted to see & hear more about it, I filed this video report with the listing.