Tuesday, October 23, 2007

Lake Hills Kaboom

Lake hills Reserve is a development just south of the 91 Fwy on the hill overlooking Corona and Lake Mathews (depending on which side you're on). The homes are spendy and the last time I was up there the cheapest homes started in the Mid 500's. Most of the tracts are still trying to get $700's on up. But already the foreclosures and upside down flippers are cutting away at the prices.

Here's 16407 RIDGE FIELD DR, Riverside, CA 92503 This is a 4 bed, 3 bath, 2956 sq/ft home on a .3 acre lot (most of it useless slope). It looks like this home was purchased new last year for $659k. It's hard to tell but it looks like it was never lived in (flip gone wrong?). After 1 year and 4 months you can now pick this up for $475k. A loss of $184k or 28% in 16 months.
Some of the builders up there are starting to sweat a bit. Here's a home that did not sell for what ever reason. More than likely the buyer bailed or could not get financing. This home is huge and sits right on the hill. It should have a spectacular view from the back. It's a 5 bed/4 bath, 4094 sq/ft monster. The builder is trying to get $539k for this behemoth, or $132 sq/ft. That's quite a trend setter since most of the homes up on the hill are still trying to get between $175 and $200 sq/ft.


Anonymous said...

I have a queestion if the senate and congress increases fannie and freddies capp will that slow the kaboom

golfer_X said...

If it does I think it would be an infinitely small percentage. Even with higher caps you still have to qualify for the loans now. No more "estimating" your income, no more qualifying at teaser rates and now most lenders want actual down payments. The second problem is that the real estate pixy dust has worn off. People no longer are expecting the homes to go up in value so they are far less likely to buy that new expensive house if they don't think they can make $50K in a year. The ponzi scheme has been outed and 50% of the market is gone just because of that. Of course there will be some move up buyers, first time buyers and people that just need to move but they had better have solid credit, some cash and pay stubs or tax records. The only thing that an increase is likely to do is prolong the correction. The best thing is to let the correction run it's course. Yes it will be painful for some people but just as many will benefit from it.