Friday, November 30, 2007
Note, this chart is for San Diego. I would expect the IE is not too different, if anything our low and medium ends are probably worse.
Wednesday, November 28, 2007
LOS ANGELES (Nov. 28) – Home sales decreased 40.2 percent in October in California compared with the same period a year ago, while the median price of an existing home fell 9.9 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle and upper-tier markets in the last few months,” said C.A.R. President William E. Brown. “The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing.”
Closed escrow sales of existing, single-family detached homes in California totaled 265,030 in October at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 40.2 percent from the 443,320 sales pace recorded in October 2006.
The statewide sales figure represents what the total number of homes sold during 2007 would be if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.
The median price of an existing, single-family detached home in California during October 2007 was $497,110, a 9.9 percent decrease from the revised $552,020 median for October 2006, C.A.R. reported. The October 2007 median price fell 6.4 percent compared with September’s $530,830 median price.
“We expect further weakness in sales over the next few months as the liquidity crisis plays out,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Both the state and national economies remain fundamentally sound at this time, despite recent developments in the housing market. While there have been mixed signals in recent months, economic growth is expected to continue into 2008.”
Highlights of C.A.R.’s resale housing figures for October 2007:
- C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in October 2007 was 16.3 months, compared with 6.4 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
- Thirty-year fixed-mortgage interest rates averaged 6.38 percent during October 2007, compared with 6.36 percent in October 2006, according to Freddie Mac. Adjustable-mortgage interest rates averaged 5.68 percent in October 2007 compared with 5.56 percent in October 2006.
- The median number of days it took to sell a single-family home was 59.3 days in October 2007, compared with 56.5 days for the same period a year ago.
The important numbers for us are bolded. As you can see the high desert is getting creamed. Sales are down nearly 60% and the median price is down nearly 20%
Riverside/San Berdu are slightly better with sales down nearly 35% and median down 16%.
One thing to remember is that the median is still not showing the actual depth of the price declines. It's obvious by looking at the listing prices of the aggressively priced homes that the "real" price decline is probably running between 30% and 40% in the IE. The median price is probably still being propped up by the ratio of higher priced homes that are selling. Back in the boom years there were more lower priced homes selling but today the bottom end of the market is DEAD. Most of the homes that are still selling are towards the high end. This has the effect of inflating the median. We heard a lot about this effect 6 months ago when the median prices were still going up. You don't hear much about it now that the median is finally falling. The effect is still there however and it is making the price declines appear less than the actually are.
Tuesday, November 27, 2007
I ran across these two homes in the Chase Ranch area of Corona. These are the kind of properties I will be looking for when I buy.
Home number one 3797 Via Zumaya ST, Corona was bought nearly a year before the peak of the market in late 06. Our seller picked up this 2483 sq/ft single story with 5 bedrooms and 4 baths on a 1/4 acre lot for $760k. The original owner bought it for $380k only 2 and a half years before. They DOUBLED their money in 2 1/2 years! (I will assume they put in the pool and landscaped the home so they may have only made $250K....). I wonder if the current owner though he would also double his money in two years. If so that would have made this house worth about 1.52 million. Anyway, back to reality and we all know what happens next. The bubble pops and the owner decided to bail out. He asking a little more than he paid 2 years ago. Just enough to cover the fees. Anyone think he will get it?
Let's look at his competition.
Here's a bonus home,
Now if you need something a little bigger then one block over we have this pool home.
Monday, November 26, 2007
First a look at another couple of big losers in Lake Hills Reserve. This is one of the more overpriced developments in Riverside. Homes at the peak were from the low 600's to over a million. A year later and prices are starting to plummet.
Thursday, November 22, 2007
Here's another 40% yearly loss. this one is not an 03 rollback since it was only built in 2005. Originally it sold new for $371k in 2005. This guys flips in in 06 for $485k making a quick $100k!, No bubble here folks, nothing to see, move along.... Unfortunately for the buyer history did not repeat itself. It does not indicate this is a REO or a short sale. If it isn't the poor owner is heading for the exits $186k poorer. $186k is a lot to spend to live in MoVal for a year and 4 months.
Tuesday, November 20, 2007
|RIVERSIDE COUNTY||SFR||Price||% chg||Condos||Price||% chg||$/Sq Ft|
|Desert Hot Springs||92240||18||$225||-21.10%||n/a||n/a||n/a||$139|
Overall residential construction starts were up in October BUT this is only because of a huge increase in the number of apartments/condos being built. Apartment/condo construction was up about 40%, single family construction was down over 7% compared to Sept. Once again these numbers have a large percentage or error at this early date, +/- 10%!
Since most of us are concerned with houses and not apartments or condos the news is more of the same, bad. House construction starts are down 7% (+/- 10%).
Saturday, November 17, 2007
In MoVal a decent 3 bedroom home rents for around $1300/mo to $1500/mo. Can you purchase a home for less than that? Amazingly enough in MoVal you can!
Here's a few in a decent area of the city. There are plenty of them in the scary areas of MoVal but these are in areas of the city that are fairly safe.
Back to reality for a second. At the current rate Riverside will drop below $300k median in December or January. Where should Riverside's median be? If you read the post a few months ago, using the NAR charts for Riverside I calculated the median would be between 150K and 225k if the market had been "normal" for the last 6 years.
The numbers for October were dismal. No surprise there really! We set another record low for sales, at least as far back as DataQuick records go (1988). Riverside sales were down 44% from last year and the median price was down 15%. San Berdu did not do much better with sales down 55% and the median price down 10%.
Riverside county had 2463 sales last month and there are roughly 32,300 homes for sale (on the MLS). That equates to a 13 month supply of homes. San Berdu sold 1603 and it has 22,900, giving it over 14 months of inventory.
Friday, November 16, 2007
Back to Eastvale again! There's a sad sad seller at;
His competition is the builder who is trying to unload a similar home at,
Just to rub it in the builder is also offering
BTW, I've been to Edinburgh Castle, it's a super cool place, don't miss it if you are ever in Scotland.
Thursday, November 8, 2007
19944 Krameria, This a rather typical new home in the area up for sale, 2651 sq/ft 4/4.5. It was bought new in 2006 for $615k (redfin says it was built in 2004 but this tract was not there in 2004. It looks like the owner lost it to the bank in July. He managed to hang on slightly less than a year. They are not messing around with this one and have it listed for $409,900. A staggering loss of $206k in one year or 33%.
19929 Lonestar this is a big-un, 4015 sq/ft on a 1/4 acre lot. Mr desperate seller is willing to deal on the furniture too if it helps make the sale. This home was bought new in July of 06 for $738k and it's now on the market for $549K. Assuming he can find a buyer thats a loss of $189k plus another $33k in fees for a loss of $222k in slightly over a year.
8186 Branding Iron, is a 3288 sq/ft 5 bedroom home built in 2002. It sold new for $299k (probably about what it's worth today). In 2006 it was flipped for $650k (we have a winner!). Unfortunately the new owner stretched himself a wee bit too far and lost this baby to the bank. It's now offered for $474K. That's a loss of $176k or 28% in a year.
9474 Paradise is a 4300 sq/ft REO. I don't have the original purchase price but I do have the brochure from the development. These sold from the low $700s but the bank is offering this one for $515k. The last owners may have taken the kitchen with them though..... This has to make the neighbor at 9568 Paradise PL a little tweeked as he is trying to unload his 4300 sq/ft home for $699k. He is already listing it for $56k less than the $755k he paid. But with the REO at $519k he is looking at a loss of $235k in a year (or 32%).
Homes with big big price drops are just way too easy to find in this area. Basically anything bought after 2004 is currently screwed. Next year anything bought after 2002 is probably gonna be upside down. This area is probably going to settle back to 2001/2002 prices. That would put most of these bigger homes right around $100 sq/ft.
Wednesday, November 7, 2007
Lets start with 35983 Willow Crest, is a 3300 sq/ft 5/3 sitting on a huge lot. It has a nice rock pool and landscaping. Our seller picked up his estate in Aug 2005 for $690k. He listed it TEN months ago for $750. Hoping to make a quick $50k he was.... After waiting for 5 months he got serious and whacked the price $140k, down to $609k. Still no bites so in Sept he cut another $15K off his asking price. He's asking $595 now. If he gets it he is going to lose $95k plus another $35k in fees. IF he is very LUCKY he will only lose $130K (in just over 2 years).
Back in town we have 11459 Warm Springs, this is a 2615 sq/ft 4/2.5 home near the golf course. It was sold but the deal fell through so it's back on the market as a short sale. This has also been on the market an eternity, nearly 200 days. It started out at $435k and after 3 price cuts he is now asking $388. Our desperate seller bought this in Dec 2005 for $470k. So if he manages to get his asking he is looking at a loss of about $103k.
Another home in the same area is 34610 Yale St, this is a 2462 sq/ft 4/3 home. It was purchased in Aug 2005 for $480. It's now listed for $380k. Another $100k loss plus another $23k in fees.
Yet another 100k loser at 33545 Pembrook, this one is a bank owned and needs work. Dead lawn and an empty pool. Our ex-homeowner paid $570k for this house in August 2005. The bank is trying to unload it for $464k. They will need to drop this at least another $100k before anyone even looks at it. The two homes above are bigger and in better shape and are prices over $100k less. What the hell is the bank thinking. The neighbor up the street at 33532 with the same floorplan is even under-cutting the bank by $15k.
I'm not sure if anything is actually selling in Yucaipa. Even these homes which are the lowest priced in their tracts are not selling, and some of these have been on the market for nearly a year.
Tuesday, November 6, 2007
What kind of "deals" am I talking about? Well, How about a 3000 sq/ft home built last year for $250k! That my fellow bears is $82 per sq/ft!
And to prove that it's not a fluke we have 665 DRAKE DR, this one is 3148 sq/ft and it's listed for $269k or $86 a sq/ft!
This one technically is not under $90 sq/ft but I bet if you could buy it for under it. 455 Peregrine LN This home is a big one story home that is new, as in never lived in. It's 3279 sq/ft 3 bed/3 bath and it's listed for $299k or $91 per sq/ft.
There are several others on Redfin that are in the low $90s per sq/ft that I'm sure you could pick up for under that if you wanted to live out in "hell-n-back". (no offense meant to residents of San Jacinto but the city is waaaaay out there).
Sunday, November 4, 2007
First I drove around the Mockingbird Canyon area on Friday while waiting for my car to be serviced at Walter's. I noticed A LOT of "for sale by owner" signs. These don't show up in the numbers and statistics we keep hearing. I wonder how many more homes there are actually for sale than the statistics tell us?. Second observation up there was the amount of open houses on a Friday. Who goes to open houses on Friday's? Third observation was the stunning amount of empty homes. I stopped at quite a few big expensive homes that were empty. This is just a swag, but it looked like 1 in 4 homes that are for sale up there were empty. All the model homes were empty as usual, no one looking. I did see one home I really liked and checked it out out when I got home. I stopped in and looked at the home since it looked like an REO (the lawn was dead, etc). I found it on Redfin for $900k. It looks like it sold in 2005 for 1.13M and now it's listed for 900k. It does not say it's a REO but it must be with the dead lawn and being empty. It's a cool looking house (the real house looks way better than the pics), it looks like a castle with stone walls. It's had some wild price swings over the years and I'm not sure what's going on with it. Anyway it's only 3 bedroom so, no bueno for me. Maybe I'll offer them $420 for it, just to mess with them....
Saturday me and the wife were out running errands and I tricked her into looking at some new model homes over in Canyon Crest. She hates looking at homes! The prices were $490-$600k, completely delusional! On the way home, just around the corner from my house I noticed a guy sitting on his lawn trying to sell his ATV's and his boat. He also had a For Rent sign stuck in the lawn of his house. I remember the house being for sale for the last few months. Looks like he could not find a sucker and now he needs to sell his toys. I'm sure he's not selling them to make a few more payments. More likely is that the apartment complex he's moving to has not where to keep the stuff.
I've also noticed a big increase in the amount of homes for sale in the areas I'm interested in. I was checking Redfin this evening and saw that quite a few new homes had popped into my search areas. Of course the prices on most of them are still insane but I did notice a few REO's that were listed way under the last sales price. So there is hope, it appears the banks are starting to chop the prices.