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Fallbrook and Bonsall

Lender-owned and short resales dominate North County market

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Properties -- either owned by lenders or subject to a short sale (the price is less than the mortgage) -- represented 74 percent of resales activity in the North County communities of Fallbrook and Bonsall in February.

That's according to report by Jerry Kalman, a Realtor with Re/Max United, who complained that such a dynamic is depressing prices throughout the region.

"All but four or five of (the 74 percent) were lender-owned properties," Kalman said. "In February, 35 transactions here (Fallbrook and Bonsall) closed escrow with a precipitous drop in average selling price down to $319,572 or $157 per-square-foot."

Kalman said "25 properties closed escrow with an average selling price of $488,059 in February 2008, 35 percent higher than the recent period."

Of the transactions not lender-owned or short sales, the average selling price was $358,426, or $179 per average square foot.

These more traditional transactions closed with prices 12 percent higher than the average.

"Entering March, 95 properties were in escrow with an average asking price of $347,375, or $165 per square foot," Kalman added. "More than half of these entered escrow in February, fueled again by bargain hunters snapping up lender-owned properties."

Kalman's report said no $1 million-plus homes were sold in Fallbrook/Bonsall in February at all, but one home in that price range that carried a notice of default did go into escrow last month.

These estate-grade properties now represent barely 20 percent of the available inventory in the two North County communities.

At the other end of the pricing spectrum, condominium activity amounted to five closed escrows in Fallbrook/Bonsall last month, and only one of these sales was not a distressed sale.

At February's end, 13 were in escrow, leaving 14 condos on the market in both communities.

Kalman noted that the inventory of available homes decreased to 381 listings by March 1 from 403 a month earlier.

"That's significant given that the high water point was 430 last year," Kalman said, adding that another inventory decrease might be imminent.

Kalman said the average listing price of properties on the market in Fallbrook and Bonsall actually was a remarkably high $749,980 in February, or $247 per-average-square foot.

That is 36 percent higher than the price per-square-foot of those of the closed escrows.

Comparing Fallbrook and Bonsall with neighboring North San Diego County communities, Kalman said the price directions were all downward except in one case.

"Homes that closed escrow here at an average of $157 price per square foot remained near $264 in Carlsbad; $176 in San Marcos and $169 in Oceanside; but slightly better than $153 in Vista and Escondido. Other than Carlsbad, all represented declines," Kalman said.

Kalman didn't have year-over-year figures immediately available but said that Carlsbad's per-square-foot price climbed from $253 in January to the $264 level in February.

"Carlsbad tends to be out of phase with the rest of the area, and the people in that city should be encouraged by last month's increase," Kalman said.

Kalman used data from the Sandicor Inc., a multiple listing service for Realtors in San Diego County that represents properties listed or sold by various brokers.

As for when the market might turn around, Kalman -- who calls himself an eternal optimist -- said the bank-owned inventory is being burned through quickly and we should begin to see a more normal market later this spring. Until then it will be slow, however.

"My sense is activity could enter 'suspended animation' as many potential sellers sit on the sidelines while they determine eligibility for government supported loan modifications," Kalman said.

Some of these proposed mortgage modifications include possible court-approved changes of interest or even principal amounts.

"It looks like one in nine homeowners will benefit from the loan modification program, but there are so many slices of this pie," Kalman said.

Kalman also said the proposed $8,000 homebuyer tax credit should help boost sales, and will coax some buyers to get off the fence.

"We should know how effective all this is going to be in a matter of weeks," Kalman said.

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