Jumbo Loans are Back with a Bang to Fuel the Luxury Real Estate Market

by Selena Cowell
Is the luxury real estate market on the mend? Home sales and prices are gradually rising in those places where the wealthy would like to plant their mailboxes–such as Chicago’s North Shore, the San Francisco Bay area, the haute Hamptons and the Rancho Santa Fe and La Jolla areas near San Diego.

According to recent reports,  national sales of properties in the  $75,000 and $1 million range are up by 38.7%  compared to a year ago. Meanwhile,  properties priced over $million are up by 25.7%, according to the National Association of Realtors. The good news is that the luxury real estate market is being driven by another resurgence–the jumbo mortgage loan.

These loans are typically over $417,000, the usual limit for qualifying by agencies like Freddie Mac and Fannie Mae. Jumbo mortgage loans are gradually coming back to the market after they all but disappeared in the wake of the credit crisis of 2008. Although most lenders had stopped making new jumbo loans, they’re back in the market again.

Presently, the credit markets are comparatively stable and the lenders who lend such big loans to the most efficient homebuyers now see that jumbos are one of the most profitable ways of making money with the low cost deposits. The secondary market investors are starting to regain their taste for the high-yielding loans. The jumbo mortgage loans are being offered at interest rates that are barely higher than those offered by the conventional mortgage loans.

If you’re about to take out a jumbo mortgage loan, you should first calculate how much you can borrow before striking the final deal. The jumbo mortgage market might fare better than the overall mortgage market throughout 2013. Our preferred lender for jumbo mortgages in San Diego is WJ Bradley Mortgage in La Jolla–and Jenny Nguyen, who can be reached at either 858-877-8008 or858-799-0747, If income and/or assets are no barrier, you should have no diffiulty in finding mortgage loans up to $10 million-or more.

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Between Rancho Santa Fe and the beaches in Encinitas sits an irreplaceable plot of land that surely belongs to another century.

The wide and expansive rear lawn backs up to pasture, wetlands and forest beyond.  Family of deer come grazing and cows come to visit when the lawnmower is at work.

Late afternoons, it is not unusual to see colorful hot air balloons gliding across the sky–and the stars at night twinkle just a little brighter than in the surrounding suburbs. Love the ocean? Encinitas and Cardiff beaches are just a couple of miles away.

• The 4-bedroom home itself has aged gracefully–and has many possibilities for expansion and improvement.  It could truly be a decorator’s dream-come-true.
• Oversized 3-car garage and ample guest parking.
• Close to excellent public and private schools and Mira Costa College (San Elijo Campus).
• Home feels rural, but is very close to Harvest Ranch Market, fine restaurants and upscale boutiques.

Asking price is $1,350,000.

This property is not yet in the MLS, but private showing can be arranged. For additional information, call Roberta Murphy 877-818-8197 or 760-402-9101.

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by Roberta Murphy

We have noted a decided uptick in our own luxury real estate market in San Diego.  Home shoppers from Europe, Canada, Mexico, Asia and the United States seem to have collectively decided that now is the best time to invest in coastal San Diego–in communities ranging from Coronado and downtown San Diego to La Jolla, Del Mar, Solana Beach and Rancho Santa Fe.

Apparently, this is a growing trend, as can be seen by this infographic that shows recent luxury home trends throughout the United States.  Anecdotally, we are hearing the same from luxury real estate brokers in Florida, Colorado, and other states.

As you can see, biggest gains in luxury home sales occurred in the Western states, followed by the Noetheast, the South and trailed by the Midwestern states.

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There may be lots of dismal news about the real estate economy, but there is still lots of interest in the luxury home market–and curiosity about the most expensive zip codes for median home prices.  Ever on top of these things, Forbes.com has compiled a list of the top 500 zip codes in the country and which certainly reach beyond the dominating states of California and New York.

The top 25 most expensive zip codes are controlled by California with 13 and New York with 10. New Jersey and Maryland each have one. Money and wealth, it seems, appear to gravitate toward the West or East coasts.

In the list below, cities are zip code specific and median prices are shown. Note that in some cases ranking may be separated by only a few thousand (or hundred) dollars.

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It’s a sad fact of life, but unscrupulous vultures are always ready to pick at the flesh of the most financially distressed–which more frequently these days includes the owners of luxury real estate.

Over on our San Diego real estate blog we report that San Diego County District Attorney Bonnie Dumanis is asking San Diego Realtors to help her track down and prosecute real estate fraudsters operating in our county.

We have written before about the foreclosure and loan modification scams that prey upon distressed San Diego home owners who are struggling to stay in their homes. The DA’s office is aggressively trying to warn homeowners to stay away from these San Diego real estate crooks and their fraudulent offers of mortgage and loan modification assistance–and is asking us, as San Diego Realtors, to report any suspicious activity.

All too often, unwitting and desperate home owners will pay an upfront fee to a person or company who promises to prevent foreclosure–or to modify existing mortgage loan terms. And all too often, people are paying for services they never receive–and might be better off with a do-it-yourself loan modification.

Click to continue reading….

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Magic must be in the air.

Even our middle son Eric — who has never, ever cottoned to bagged lunches — packed one the other day and probably saved at least $5. This college student works part time, but last week discovered the agony of having to pay $1,800 or so for a new bumper and rear quarter panel that met a brick wall when he was backing out of a narrow Rancho Santa Fe driveway in the dark recently. This story has little to do with the great money saving tips I am about to pass along, except I’ll insert it first:

1. Pack a healthy lunch, fill a Thermos of coffee, and spare the environment another plastic bottle by carrying water in a reusable container. Eric now saves at least $5 per day out of his pocket. Take away a couple of dollars, max, for ingredients, and you are still dollars ahead

2. Paste a sticker that says, 800-FREE-411 (or 800-373-3411) onto both your cell and home telephone. Instead of paying your telephone service up to $3.50 for a telephone number, why not listen to a 10-second commercial and get the number for free? Makes sense to me.
Click to see the 8 other great money-saving  tips.

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Once upon a time, we whispered about the “F” word creeping into luxury real estate. These days, it is common real estate talk.

The Wall Street Journal quotes Realty Trac reporting that the number of $1-plus million homes in some stage of foreclosure has ballooned to 7,968 between January and August this year. This compares to 4,214 during the same months last year.

Within these numbers, it is interesting to note the relative surge in the $2-plus million home market. This luxury group has grown the fastest: How about 499 in foreclosure process, compared to 201 for the same period last year.

These luxury foreclosures aren’t just the McMansions that proliferated in many upscale suburban communities. These homes are waterfront, behind exclusive gated communities, and in tony towns where these financial embarrassments rarely occur.

The bargains abound. The luxurious Bradenton, FL home pictured above (and listed by Patricia Tan with Prudential Palms Realty), for example, was originally listed at $3.78 million and is now under contract for $1.1 million. There again, and according to DataQuick, more than 64,300 homes priced at $1million or more were sold in 2007–which is more than triple the number for 2002.

In our local San Diego luxury real estate market, we are seeing our own casualties. According to our stats, there are 34 homes in some state of the foreclosure process in exclusive Rancho Santa Fe–with one on Via De Santa Fe valued at over $12 million. In La Jolla real estate, where prices are equally high, but with more condos and a greater population, there are 118 properties in the throes of foreclosure.

What will be the consequences to the highest end of the luxury market? There will be some fallout–and perhaps a more robust luxury home rental market, but most of these owners are well-entrenched and funded–and can afford to wait out this market crisis.

And for luxury home buyers, the market hasn’t looked this good–or offered so many choices– in several decades.

For more, read:

The Finest Foreclosures – WSJ.com

The Luxury of Frugality

Rise in Luxury Home Foreclosures, REO’s and Short Sales?

California Luxury Home Foreclosures

7 Bargaining Secrets for Luxury Home Buyers

Luxury Home Foreclosures More Common

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This is a market that sometimes brings out the creative forces in real estate. And more and more, real estate exchanges are making lots of sense in the luxury real estate market.

Earlier this evening, I had an interesting conversation with a Sotheby’s real estate agent in Northern California.

It seems he is interested in exchanging his exquisite 104 acre property just outside Carmel for a luxury home in Rancho Santa Fe, just outside San Diego. His acreage offers 380 organic citrus trees that supply local restaurants, two greenhouses that produce basil for Whole Foods markets, Zinfandel grape vines that go you-know-where, and a number of fat and field-fed Angus cattle. He also has plans for an exquisite Tuscan villa that might be built for $1.5 million.

He is seeking to move to Southern California, and to Rancho Santa Fe in particular. And knowing that Rancho Santa Fe property owners love privacy, space and quiet, he thought that perhaps an easy and compatible exchange might be accomplished.

The numbers are certainly workable. He owes less than $800,000 on this parcel, in which he has invested nearly $3 million. He is seeking a Rancho Santa Fe home valued at $1.5 to $2.8 million–and may or may not be accomplishing the transaction via a 1031 exchange.

Quite simply, Northern California landowner wishes to relocate to Rancho Santa Fe and figures that some homeowner there would love the opportunity to exchange properties with him.

Makes sense to me.
So, if you have a Rancho Santa Fe home and have dreams of a bucolic life outside Carmel and California’s premier wine country, please let me know and I’ll arrange for a proper introduction. Just give us a call at 877-818-81979 or 760-402-9101.

And if you have an unusual luxury home exchange proposal of any sort, we’d also like to hear from you!

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Who are these young and ultra-affluent buyers of homes in Rancho Santa Fe, Palm Beach, La Jolla, Aspen and Manhattan?

Robert Frank, in his best-seller Richistan, calls them instapreneurs (didn’t he coin the term?).

These are the new titans in technologies, who have benefited from a rise in financial speculation and governments that support free trade and wealth.

Instapreneurs are not plodders when it comes to accumulating wealth. They don’t develop companies to last for family generation; rather, they may launch several companies over their career life spans. And the goal for each venture is a lucrative “exit strategy” that will create the fattest windfall possible.

What are these luxury buyers seeking when searching for their trophy home?

1. They are specific in their demands as to age of property, views, room volume, luxury closets, privacy, and entertaining areas.

2. Instapreneurs often wish to be near prestigious country clubs, where they can golf, play tennis and entertain business elite.

3. In San Diego, many of these nouveau uber-wealthy demand ocean frontage, ocean noise–and silent streets. Or the highest penthouse in downtown San Diego. The want what is rare, what is singular.

4. Instapreneurs often have children, and are concerned about the quality of nearby and private schools. How the home works for the kids can be of keen importance. Instaprenerual parents want safety, space and room for kiddie galas.

5. These luxury home buyers often have special room requests, such as a library, multiple offices, servant quarters, guest houses, snoring rooms, home gyms, massage rooms, a conservatory or even a panic room.

6. These busy people often demand to be not far from a major airport because of frequent travel demands and the desire to minimize time spent away from families.

We enjoy working with these interesting folk, not just because we enjoy finding perfect property fits, but also because of the stories we get to hear. Some have been scientists, some movers and shakers in technology, and some who just had the courage to pour everything they had into an idea whose time had come.

They all inspire and the world is a better place because of these producers.

The post Nouveau Luxury Home Buyers: Instapreneurs appeared first on Luxury Home Digest.

Discriminating luxury home buyers in the San Diego area are starting to raise sophisticated eyebrows at some of the better real estate buys in luxury neighborhoods such as Rancho Santa Fe.

One of the best buys on the market these days is a magnificent 4-bedroom, 4.5-bath single story estate on two level acres that was recently remodeled. This Rancho Santa Fe Farms home features a lagoon pool, a citrus grove, fine hardwood flooring and a 4-car garage,and is now available for $2,195,000 or the price of a luxury tract home in coastal San Diego.

Rancho Santa Fe Farms is a favorite for golfers who appreciate equity membership in the Rancho Santa Fe Farms Golf Course, or for those who simply want a home sitting on some of the finest acreage in San Diego County.

Located at 15032 Rancho Santa Fe Farms Road, this residence listed by Danny Powers of Villa Sothebys International Realty will be held open this weekend. For additional information, please call Scott Murphy at 760-613-6190 or meet me at the home this afternoon!

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