Buffet calls out Financial Leaders

Berkshire Hathaway chairman suggests Wall Street execs have gotten off lightly

Buffett used his update on subsidiary Clayton Homes, the largest producer of modular and manufactured homes, to touch off a discussion of the U.S. housing market.

Warren Buffett sees a housing-market turnaround coming. In addressing oversupply, Buffett said the economy reduced new housing starts to a number well below the rate of household formations.

“[This] means that within a year or so residential housing problems should largely be behind us.

To read the entire article go to : http://www.marketwatch.com/story/buffett-calls-out-financial-leaders-2010-02-27?pagenumber=2Buff

Old Town Real Estate is booming …again!

Two homes on opposite corners of Ocean and 7^th both have “Sale Pending” signs on them.  Combined total prices of about $9 million.

Congratulations to Jim Klinsanin’s Bay Realty and Seal Beach Realty. These were two high potential  properties on the “Gold Coast.”

Here Come The Developers Again!

The old power plant site on First street and to the San Gabriel River is  one of few possible sites left in California for an ocean-front hotel.

Its’  almost 11 acres of undeveloped land on Seal Beach’s coast and its been up for sale for almlost a year with expectations that the buyer would turn the site into a small hotel, not unlike the Seal Beach Inn; The Inn was demolished three years ago to build five upscale homes, some of which we believe are still unsold.

The owner of the land is a Limited Liability Corporation called, Bay City Partners, LLC, and they put it up for sale less than a year ago and are asking $26.5 million for the I0.7-acre parcel.  Seems like a fair mark-up since they paid $4.5 million for it in 2003.

It has been empty for nearly 30 years.

Estimates on building a 150-room hotel at the site were in the $32 million range  last year,  about $215,000 per room, Hotels on the beach in Orange County have been selling for about $460,000 per room according to estimates in August of 2008.

It goes without saying that the city has been very conscious of how that very prominent piece of land would be developed . As long ago as 1996 they voted against cramming in a lot of single family residences on the site because of: destroying views of existing homes, creating additional impact on existing traffic,  and the costs of other services. (Taxes on R-1 property rarely covers  the cost of the services provided by the city.)

Nearby resident Joel Davidson led a group of citizens who campaigned against the two story homes blocking the view of  existing residents when Bay City brought a similar plan before the council in 2003.  At that time, Rocky Gentner, a partner in the Bay City group said Davidson’s view protection ended at his property line and implied that therefore his argument was moot there’s a nice, thoughtful developer.  (Coincidentally, Bay City LLC was a prominent supporter of the pro-three story faction in the 2008 election. Since the defeat of the three story supporters the fence around the power plant property has been lined w/heavy green tarp.  Was that to block the view of the jetty, the marina’s and the landscape west of first street…. in the hopes that we wouldn’t know what we were going to lose if they got their new subdivision approved.) 

In 1996, after extensive meetings and with input from the citizens of Seal Beach, the City Council approved zoning for the property that would allow a 150 room hotel or smaller but let it be known that the open space should be substantial (about 70% )  and citizens should have access to the green space created and they did not want gated communities.  The majority of the land, some of which runs next to the San Gabriel river, would remain available for public use and as open space.

The land originally sold in 2003 (or 2000?) for a reported $4.5 million dollars. Whether Bay City LLC  are the original buyers (after the power plant removal) or not we aren’t sure, however, and and all buyers after 1996, bought it with full knowledge of the city’s zoning requirements and the neighbor’s views.

The city zoned the land as they did, and when they did, so that any prospective buyers would know that 70% of the land was to be left as open space and the city wanted a 150 room (or less) hotel for increased revenues for Seal Beach;  a desire that is even more needed in 2009.

Why Bay City has not been able to sell the land in the last year is anyone’s guess.  One reason might be the $26 and half million price tag.  A hefty price even for Seal Beach. Less than a year ago the firm marketing the land said there were several hotel developers interested and they expected the land to be sold in four to six months. Now Bay City has now come to the city with a proposal for creating 56 lots and building 35 two story homes,  21 “casitas”,  (size not available at this time) and a 75 room hotel with spa, restaurant and pool. 

This proposal seems to be even more egregious than the proposal Bay City brought before the planning  department 6 years ago. 

 

Some advice for Bay City Partners -  You should keep one thing in mind….. The citizens of Seal Beach don’t want to turn our town into another Huntington Beach. We saw what happened there.

We’ve got something magical in this city and we won’t let personal avarice take it away.

Some advice for Seal Beach residents – Watch to see where Bay City ads and/or financially supported stories appear to support the project and remember who looked for dollars rather than supporting the community. 

Seal Beach Real Estate Still in Demand

Seal Beach residential real estate demand continues to grow. Inventory of unsold properties falls.

At the end of April unsold county homes was again less than the month before and new listings were lower than they’d been since Spring of 2006.  Of the more than 10,000 homes unsold nearly 4,000 were “distressed” properties.

In Seal Beach, not surprisingly, the percentage of “distressed homes” was only four and there had been as many as 8 distressed properties in Seal Beach.

There were 360 homes for sale in Seal Beach in March but that number had fallen by April.

Although there are similarities between Seal Beach’s numbers and the county’s, Seal Beach is still a real estate anomaly in the state.  Seal Beach listings do have similar timelines regarding how long they are listed before selling but when one considers the much higher per-foot cost of Seal Beach homes it is understandable they are on the market for longer periods.  

Now that there are fewer homes for sale and more buyers for Seal Beach homes the listing times should clearly shrink, however, Seal Beach can’t be used as an indicator for what we should expect for the entire county.

PNC’s CEO on the “Stress Test” and economy

On Monday, May 12, 2009,  James Rohr, Chairman and CEO of PNC Bank was interviewed on a business show regarding the so called “stress test” that many U.S. banks recently had to go through and his thoughts on the process as well as how it impacted PNC.

In general it seemed (to this reporter) that Rohr thought the stress test was an excellent idea.  It showed “worst case” scenarios for banks;  i.e. “what if the worst possible things happened to your investments, loans, etc.  Could the bank survive?”

In the case of PNC, in order to survive a worst case scenario PNC would need another $600 million dollars.  Rohr promptly made changes in PNC’s portfolio and financial situation to make sure that by year end, or by first quarter of 2010 at the latest, PNC would have that $600 million to survive a “worst possible” situation, should it occur, which no one really expects to happen.

Not being a financial guy I was very impressed with how Mr. Rohr spoke in straight forward language I could understand. If there was a criticism of the  Obama Administration I didn’t hear it.

He said that 2009 was going to be tough for banking in general.  He believes that real estate prices will keep falling; there are many more mortgages that will fail and foreclosures that will follow but he feels that the great majority of U.S. banks will be better off in 2010 and beyond than they have been in the past.

PNC is based in Pennsylvania, however, they have branches throughout the U.S. You can go to their site and find jobs that are available all over the U.S. 

OC Homes Still Not a Bargain

According to a recent article featured in the Orange County Register, OC home prices are back to 2002 levels, however “as of March, Realtors peg the median selling price of an Orange County home at $444,520. That’s 2.54 times what the latest reading for all U.S. homes was: $175,200.”    Accounting for the OC Premium (surf, sand & sun) it appears OC home prices would still need to fall another 17% to be considered affordable.  Will this happen or is a market recovery on the way?  Only time will tell. 

To read the full article in the OC Register click here.

For Sale – 5 Income Properties – Not Yet Listed!

REAL ESTATE NEWS FLASH – This entire portfolio of properties being offered for sale, but not yet listed in the MLS. If you’ve been waiting for the opportunity to purchase income producing properties or a single family home… now is your opportunity. Here are the properties being offered

- 125 2nd Street – 4 units, (2) large 1 bedrooms, (1) 1 bed, (1) studio. Monthly income $5,465, insurance $148 monthly, water $150. Fully occupied. List price (estimated) $1.1k – $1.2k~

- 215 Ocean Avenue – Single Family, double lot, inland side of Ocean ave, second story balcony with ocean view, rear deck, expansive backyard, 2 car “off street” garage. List price (estimated) $2.2k~

-1409 Ocean Avenue – 3 units. Monthly income $4,800, insurance $144 monthly, water $150 monthly. Fully occupied. List price (estimated) $900k – $1 million.

- 313 Central Avenue – 3 units. Front house is 3 bed 1 bath, (1) 1 bed, (1) studio. Monthly income $4,425, insurance $141 monthly, water $150. Listed Price TBD.

- 238 5th Street – 3 units. Front house is 3 bed 1 bath, (1) 2 bed, (1) 3 bed apartment. Total monthly income $6,900. I believe this sits on a double lot. List price (estimated) $1.2k – $1.3k~

If you’d like more information, or to schedule a showing call Nat Ferguson directly at (562) 761-7165. These properties will not be listed for 24 hours. This is your opportunity to to beat other buyer’s to these deals.   You may also visit Nat’s website for more information.

Home Prices Looking Up for Seal Beach

Is there a market recovery on the way for Seal Beach?  According to the latest housing reports for January home prices for Seal Beach are up!  DataQuick has released their January  home sales report for Orange County.  The good news for Seal Beach is prices are up 44%, the not so suprising news is sales volume is down 20% year over year.    The median price for the Seal Beach area (zip 90740) was $755,000 in 2008 with 8 homes sold in the month of January.   To see the full report from DataQuick as featured in the OC Register click here.

Perfect 10 in Old Town Seal Beach

 Prime Old Town Location! Close to Greenbelt, Ocean and Pier. Beautiful custom home with 4 bedrooms, 3.5 baths, 3 fireplaces, family room, office, hardwood floors, patio, roof deck, stained glass windows, plantation wood shutters, kitchen island with upgraded appliances, security system, french doors, tankless water heater, central A/C and more! Bring your most discerning buyers!! This is a 10!!!

Property Listed By:  Jim Klinsanin, Baytown Realty, 562-431-1259

View More Seal Beach Listings:  Visit BaytownRealty.com

Hawaiians Investing in OC Real Estate?

Seems that Hawaiian investors who are still priced out of the real estate market in their home state are turning to Orange County for investment opportunities.   According to the article in the Honolulu Advertiser, the collapse of mainland real estate markets, particularly in California, has created tremendous investment opportunities for Hawaiian investors.

How can you tell that OC real estate is such a great opportunity right now? According to the Hawaiian Real Estate company Inet Realty….Follow the pros. Professional real estate investors lead the markets while amateur investors chase the markets. Right now, the pros are buying in OC. A leading indicator of real estate markets is the Months of Remaining Inventory (MRI). It is used to gauge the type of market at any given time. 12 months ago, OC’s MRI was at 17 months; an extremely strong buyer’s market. In less than a year, OC’s MRI is down to 5 months, considered to be a neutral market. Take one guess as to who’s buying all of that real estate? It is no longer a buyer’s market in Orange County and our investors are competing with multiple buyers on every offer they make. Inet Realty, which has offices in Honolulu and Orange County, has helped many investors reposition their real estate holdings from Oahu to Orange County and triple their returns on investment and cash flows.

So is this a marketing pitch or a true reading of the OC Real Estate market?   Maybe it’s time for the OC Real Estate agents to weigh in….

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