A winner of the award for the biggest loss in the shortest time.
This home is a big-un up in the Lake Hills development (I know I seem to be picking on this development). It's 4576 sq/ft and sits on a huge lot of just over 1/2 acre. The big lot must be why the price tag was so high. It looks like it sold new in July 2006 for $918k. Then it sold again in Feb 2007 for 1.18 Million.
After only 6 months of ownership it goes on the market for $899k. That would be a loss of over $200k but after 30 days the price drops by another $300K!!! It's now listed for $599k
That is a loss of $518K or a 49.3% drop in value in 9 months (assuming it sells).
12 comments:
I must have moved to a parallel universe on my way home tonight. Because there is no way that "oridinary" home with a flippin dirt yard is ever gonna be worth 1.18 million dollars in my universe. You are making this stuff up right?
Hell, even 600k for that house is stretching the limits of my imagination. Has anyone actually been to that area. It's not that nice. You have to drive through a ghetto to get there (Home Gardens). If you go the back way up La Sierra it's not so bad but a few miles more. The hillsides are barron dirt with big ass rocks everywhere. It looks more like a set for the Martian Chronicles than a high end housing tract. I guess they think the view is worth some money. Well most of the time the only thing you can see is how bad the smog is in the IE. You'll probably sleep better at night if you don't see that.
I just cannot get my brain cells around the fact that some numbskull paid 1.anything million to live in an ordinary tract home in that area????
I agree with anon post above(what kool-aid were they drinking it must have been spiked with fraud)
Here is the latest realtor scam(see my comments on Menifee home)
The realtors are trying to create bidding wars(they call them silent auctions)to get mulitiple offers to bring to the bank/lender to attempt a short sale.
They are low balling listings to fish for e-bay types, in the hope of letting buyer emotions get the best of them......(they post on redfin,craigs list, etc)
My guess is that some moron(more than likely another realtor led investor group will push this up another 150k, even though it is not worth even 420K
These homes were nearly a million bucks right from the builder last year. This one is not a case of money back fraud or any other scam. This is a case of classic asset appreciation gone wild. This poor sap bought at the peak (actually just past the peak) into a market that was insanely overpriced.
I also agree that even at 50% off this home is still overpriced. It's big so it's never going to be cheap but to think of that thing selling for anything over $400k is just silly.
How much to rent a place like this? I am just interested to know to be able to calculate the non-kool aid price for this monster.
An average home up in Lake Hills rents for about $2k/mo. This one is quite a bit larger than the average. I would think this behemouth would go for about
$3k/mo tops.
Which all begs the question, "Who is going to pay $3k a month to rent that house in that location?"
Or make it $2k a month in rent, same question applies?
I don't see it.
Just an example of the utterly irrational thinking that helped fuel this bubble.
Lots of people will pay that, cuz that's about the going rate to rent a house of that size in that area. $2k per month is about average to rent for a nice 2500~3000 sq/ft house in Corona/Riverside. $3k is about right for a nice 3000~4000 sq/ft. I'm not sure where you are but even a decent, small 2 bedroom apt will run $1200/mo in that area.
However, $3k per/mo rent only translates into a purchase value of about $360K. That's a far cry from 1.18 million or the current asking of $600k
3000.00/month with 160 rent multiplier = $480,000 house price + $20,000 for emotion = $500,000 max. Now the question is just what IceWeasel had said, who would want to rent this place for $3,000/ month?
160x rent multiplier is kinda steep. 100 to 120 is a more normal rent multiplier. Which gives you a 360k price tag.
3K is a lot of dough to rent in Riverside. I know for a fact you can get much nicer places out there for 3K. I looked a few months ago and for that kinda money you can get a place that is landscaped with a nice pool.
I am being generous with the 160, just to be conservative....
I took a drive through Lake Hills recently after reading this blog. I must say that it was a major let down. I thought it would be much nicer considering the price. To think that someone payed 1 million+ for one of those houses is unbelievable. Its nothing more than a hill overlooking the smog riddled Riverside area with a bunch of big cookie cutter stucco boxes perched on it. AAAAND - they are STILL building houses up there even though the current homes are struggling to hold any value......amazing.
aI have seen the inside of this home nice but not worth 1.18m. About 4 or 5 months ago I placed an offer of 570k and it was not accepted. I thank them now. The area is not bad.
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