Jason P. Bernabei, TriCastle Realty
DEL MAR, December 12 2011 -- Goooood Monday morning not-so Sun Diego! Santa Anna winds, whipping rain, a Chargers victory, and a cup of Starbuck’s latte with whip and a pump of vanilla to start the week. Only thing is the week never really ends for those in my line of work, not if you want to succeed in this market. Is the time coming where the doom and gloom that has dominated this blogspot the past few months soon to be silenced in favor of a housing rebound? … Maybe… just maybe…
Here are some considerations. Nationally, more than 30 major markets have made modest gains in seeing the unemployed getting back to work, as well as growth in overall (non-industry) retail sales. And guess what not-so Sun Diego? America’s Finest City is one of them. In the last year alone, the percentage of unemployed adults has gone down from 10.4% to 9.7%. That means 24,000 new or returned tangible jobs in SD last year alone! This is encouraging news, as there can be no true, sustained housing rebound, neither nationally nor locally, without this kind of continued growth. Just think if we could pass a Jobs Bill! Ok, so I’m awake and smelling the coffee that I almost just choked on. Let me amend that statement: “Dear House Republicans: Can you at least EXAMINE a jobs bill and hold a REAL vote on it?!? Ya know, not the kind where your mind is made up and you’ve pledged to vote against it even before it’s been made available to you? … Isn’t this the Democratic process? Too much to ask?” Guess so…
In addition to continuing positive new numbers in unemployment, there are other factors almost working in reverse that may assist a housing rebound in 2012-13. As foreclosures continue to mount and as ascertaining mortgage lending causes potential borrowers to feel more like they are being vetted for a position with the Secret Service than for a loan, more and more folks are renting. Rising rents, nationally and locally, have pushed would-be renters into considering first-time ownership, as the out-the-door costs per month aren’t a heckuva lot different. As one of my clients said recently “I’m sick of watching my money go to rent each month, when the cost of owning a similar condo is just about the same.” She is one of the folks who qualifies for mortgage lending, has a real job with real income documentation going back more than two fiscal years, has passed the pre-qual test and has even been hard-qualed. She’s not lucky, she’s just got it together. Others who would like to buy, that would have “qualified” (an almost laughable word when juxtaposed with today’s qualification parameters) through one of the many stated income/no documentation loans that dominated the 2000s (and later doomed the economy), are finding that they can NOT NOW qualify. And this is the double entendre, the dog chasing its tail that it can never catch. So long as lending remains as tight as it has been in recent years, despite what you may think of whether it ought to be so tough to get a mortgage loan or not, growth will be limited to those who are uber-qualified.
Alas, it is a numbers game, like all things economic in nature. As several mortgage folks in my network have said to me in the past few weeks, mortgage applications are up, mostly from renters, though the percentage of those who qualify are about the same. But let’s do the easy math: more apps + same % of qualified applicants = more mortgage notes awarded. The wheels are turning towards recovery, inch by inch, month in and month out. Or maybe that sun I see peaking out from behind the rain clouds this gloomy, wind and rain-swept Monday morning is nothing more than a precursor to another false bottom. We shall see…
In the meantime, know this! As I’ve said in recent weeks, the real estate market, both locally and nationally, is prime for investors to buy, fix, and flip properties and for new home buyers who actually qualify for a home mortgage loan to get a place at prices unimaginable just five years ago. Don’t miss the wave! 2012 just might be the year this thing turns all the way back around, and when that moment in time happens, those left standing on the sidelines will watch the bus drive on by, leaving them at the altar of ongoing rental life. After all, consumer confidence and employment numbers ought truly begin to soar, when we at last see a Jobs Bill in the weeks after the Presidential Election, and I can just about guarantee you, not a day before.
Give me a holler today at jasonb@tricastle.com, and check me out each and every Monday here at www.tricastle.com for more, and tune in to “The Realty Insiders” on the tube this winter to see myself, and other local property rehabbers flip SD.
Jay’s Outlook: partly sunny
Jason P. Bernabei, TriCastle Realty
Jason P. Bernabei is a Host and contributor of The Realty Insiders. The views expressed are solely those of the author/speaker and do not reflect the views of The Realty Insiders, its subsidiaries, it's clients, or those of any affiliated business or television networks.
