Monday, October 29, 2007

The market is BROKEN!

Here's a few examples of a market that has broken down. First a couple of nice homes at reasonable prices. Yes, still high but almost in line with what it would cost to rent something of similar size. Then we have the rest of the market, asking ridiculous, pie in the sky prices as seen by our last two homes. Unfortunately the last two homes are the norm and the first tow are the exceptions (today anyway).

$379k!

13574 MEADOWLANDS CT, Moreno Valley, CA 92555, is a 5 bed 4 bath, 3294 sq/ft mini mansion in Moreno Valley. This is out on the east side of town where the big lots and horse properties are located. This home was built new in 2005. It sold in Dec of 05 for $464k and was quickly flipped in August of 06 for $580k, netting our initial buyer a healthy $116k less fees in 8 months. This home is a bubble poster child. Here we are just 1 year, 2 months later and this home has lost 35% of it's value IF it sells at the $379k asking price. He has competition too at 13535 WILMOT ST, is the same style home one block over, Listed as a short sale at $374k. This poor fliptard paid $565k in July of 06. He's looking at a loss of $191k plus 6% ($22k) in fees. Wow, it's not everyday you get a chance to piss away over $200k in a year. These homes are actually very nice and on big 1/4 acre lots. If you don't mind living in MoVal these are about as cheap as renting something this size. God know what your electric bills in the summer will be though. These two homes are priced to move and I actually think these have a chance of selling, although the first ones been for sale for over 2 months check out this next home though.

Now here's where most sellers are currently living, it's called dreamland USA. Our first seller is only a block away from the two mini mansions at 13680 STODDARD ST. This " CHARMING HOME IN GREAT LOCATION" is a 3 bed, 2 bath, 1305 sq/ft 1985 POS. It's got a slightly larger lot but then again it's just dirt. This beauty has been listed for 102 days so far with no takers at $399k. I wonder why? Another block down we have dreamer #2 at 29046 GIFFORD AVE, this is another 3/2 but slightly bigger at 1700 sq/ft. This home was built in 1975. I didn't think there was anything out there in 75. This dreamer thinks his "classic" is worth a whopping $469k! How can a realtor even take that listing??
$399k??

$469k??

8 comments:

Rpche said...

That big house on Meadowlands Ct has an asking price of $115/square foot. Will this set comps in the area down to $115/sf or is there something else involved?

Most other houses I see in MV are at least $200/sf.

golfer_X said...

There are quite a few of the larger homes in the area getting close to $100 sq/ft. The smaller homes are not likely to drop as low on a $/sq ft basis. Bigger houses are nearly always less per sq ft than smaller ones. I can see the smaller homes (1200-2000 sq/ft)hitting $130 sq/ft. I don't think they will go much lower than that. Big homes will be $100 sq/ft before spring at the rate they are falling. At least the ones that are selling will be.

Anything that sells is going to be a comp for future sales. There is so little selling that finding a recent comp is hard. Using comps in a declining market is also a difficult thing to do. Especially a market falling apart as fast as this one. It's almost better to use other listings as comps. There are about 10 homes for sale in the tract where the first two homes are located. Most of them are $100k to $200k more than these two. What hope do those have of selling. NONE, those two listings are already comps.

Anonymous said...

My sister and her hubby bought a big house in Moreno Valley. They sold there house in Pomona and used the 200k profit as a down payment on the moreno valley house. It's close to the first two houses. They paid about 500k and have put in a pool and lots of concrete work. They easily have 600k in the place. I really wanted to warn them when they bought out there. But being family I kept my mouth shut. It sure looks like the 200k they put down is gone. Im not sure what the payments are on the house but they must be hurtin. My BIL is in construction (plumbing) and he's not working much. My sis's teachers salary is not going to pay for that house. They already have sold the Seadoos and are looking at selling the RV and the big SUV too. I know several of the nighbors had grand plans to put in pools, build patios and now they are all on hold. From thier top floor you can see most of the other yards are still just dirt. I think the whole nieghborhood is going to go down the toilet.

Anonymous said...

If they have used the 200K, for down payment then they should have 400K loan which is not too bad compared to some other people I know.

golfer_X said...

Well, that would depend on how they paid for the pool, and all those toys! My guess is HELOC or Refi. I know way too many people that did that and are now totally screwed. They could easily be into the house now for $600k. I will admit to sucking 30K of equity out of my house to buy a car but we needed reliable wheels and after reducing the interest rate my payment stayed the same with a 10 yr. fixed at 5.5%.

workhard said...

THose are some really good pics.. Lovely houses...

Idaho Real Estate

Johns said...

Well I see the last of those gems sold, eventually, for $125,000. That's like 70% off?

Johns said...
This comment has been removed by the author.