It was looking like the banks were getting the hang of this REO problem. But then today I ran across this listing.
17864 Glen Hollow WAY, Riverside, CA 92504, this is the smallest home in the Bridle Creek development up in the Woodcrest area of Riverside. This home is a 3 bedroom, bath home, it's 2898 sq/ft and sits on an acre lot. The home looks alright but the lot is still basically dirt. This home sold new in 2005 for $699k. The bank got it back and they listed it yesterday for $614k.
Now the reason I'm a little confused by this listing is that there is another REO of the same model in this tract. That home, 17008 Birch Hill RD has been for sale since July. It started out at $699 if I remember right and they've been lowering it ever since. It's down to $529k after sitting at $545k for over a month. This home has some landscaping done, including a patio slab and BBQ. It also sits on a larger lot at 1.21 acres. So if they cannot sell this home at $529k how did the other bank figure they had a chance at $85k more.
A couple of months ago in this tract there was only one home under $700k. That home was our REO here on Birch Hill Rd. Today there are 12 homes under $700k, and of those 9 are under $650 with our REO as the prices leader at $529k. I betting on these hitting $400k in a year or two. So far these price leaders are only down about 20% to 30% below the price paid from the builder.
Now the reason I'm a little confused by this listing is that there is another REO of the same model in this tract. That home, 17008 Birch Hill RD has been for sale since July. It started out at $699 if I remember right and they've been lowering it ever since. It's down to $529k after sitting at $545k for over a month. This home has some landscaping done, including a patio slab and BBQ. It also sits on a larger lot at 1.21 acres. So if they cannot sell this home at $529k how did the other bank figure they had a chance at $85k more.
A couple of months ago in this tract there was only one home under $700k. That home was our REO here on Birch Hill Rd. Today there are 12 homes under $700k, and of those 9 are under $650 with our REO as the prices leader at $529k. I betting on these hitting $400k in a year or two. So far these price leaders are only down about 20% to 30% below the price paid from the builder.
6 comments:
That's what I don't understand. I see new listings everyday that are priced at $520,000 or so, while just down the street homes are being offered at $399,000.
I'd love to hear more about the Orangecrest area. There are homes in some sort of foreclosure on every other street. Some streets in the newer developments have at least 4 houses or so in foreclosure.
Can't wait to jump in. My husband swears prices will go down to the upper $200,000's to low $300,000's. Hope so.
Those be the poor sucka's that owe $520 and have some fantasy about a buyer coming along, falling in love with their house and offering them $150k more than the REO down the street. Of course that's never gonna happen but those poor sucka's are still gonna try in the hopes of hitting the buyer lotto. Some of them think the market is going to turn around in the spring. Yea it's gonna turn around alright. It's gonna turn from bad to worse.
Your husbands right. Orangecrest will easily see homes under $300K. hell there are already a few under $300k over near the shopping center on the allesandro side.
When do you think prices will start dropping further? It's been very slow during the holidays, of course, so I'm wondering when the price declines will pick up.
The price decline will probably be slow. Real Estate does not turn on a dime. Unless the banks suddenly decide to dump the REO backlog the home owners will be slow to lower the prices. Many are holding out in the hope the Spring will bring their salvation in the form of a wave of new buyers. There's more chance of Bush growing a brain. If sale remain in the toilet through the spring and summer that might put some pressure on both the banks and the home owners to make the big discounts. The prices of the stuff selling are already down 30% to 40%. I expect the price declines to continue another 20% to 30% giving us 50% to 60% off peak prices in the end. The end might be 2009 or 2012 or even farther out. If you are looking for a home to live in for a long period of time buy when it makes financial sense. Don't try to time the bottom. When you can buy a home you like for what it would cost to rent then it's time to buy. Don't forget to figure in the tax savings you will get when making your calculations
I will say, this decline is moving much faster here in the IE than I thought it would. I expected it to take 2 years to get to this point and we've hit in in under 1 year. The price declines did not start happening in a major way until the Spring of last year (Temecula and Murrieta started in 2006). That was when the first tightening if the subprime market hit. Later in August when the entire mortgage biz collapsed was when the price declines went parabolic.
By the way Boozer is right. I just checked and there are about a half dozen homes in Orangrest under $300k already.
The Birch Hill property may be larger (lot) but it is all slopped and sits awkward on the lot. It wouldn't be my first choice. The other property will still need to come down (alot) to put it in direct competition with Birch Hill though. I'm down the street so I see it often from Washington Street.
Orangecrest will get hit harder than Woodcrest in my opition. There are too many newer homes, including all those new Centex homes there. Many more sales took place in Orangecrest the last 5 years than Woodcrest. Woodcrest is more established (older homes) with larger lots. They will still have major price declines though, just not as much due to less forclosures. I watch the market in both religiously (daily). Woodcrest is a much better area than Orangecrest for these reasons, IMO.
Angela
I've stopped and looked at the Birch Hill house. It does have a decent slope in the back (and front) but it's still all useable land. You just can't put a tennis court back there without a whole bunch grading. There is another new Repo right across the street. If faces the KB models. It's also priced quite a bit higher than the Birch Hill home. Overall it's nice to see them moving down in price as quickly as they are. Most of the sellers are still trying to get out without losing money so the prices are still in the 2005 area. I'll start to nibble when they hit 2003. Late this year or early next me thinks....
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