Monday, February 25, 2008

$106 sq/ft in South Corona

South Corona seems to be taking a price beating compared to the rest of the city. I'm more than a little confused by this. South Corona is one of the nicest areas of the whole city. Some may argue but everything in So Corona is new. New school, new homes, new stores and new golf courses. It's not all roses though. The 15 fwy is damn near a parking lot night and day making commuting from there a bit of a nightmare and there's not a lot to do other than shop, golf or go to the movies. But still it's way better than North Corona (Eastvale) or Central Corona. What's killing the prices though is the fact that everything is new and many of the homes were bought at peak prices. This ultimately is leading to a tidal wave of foreclosures and short sales. Some of these are now getting tantalizingly close to $100 sq/ft.

Two more showed up today on Redfin.

25137 Coral Canyon Rd.
A 5 bedroom 2.5 bath home of 3484 sq/ft. This home is only 2 years old having been sold new in Jan 06 for $551k. This home is now owned by the bank and is listed for $370k or $106 sq/ft ( it was $158 sq ft new). That's a loss of $181k or 33%.
That's probably still a little too high for this home. There's no way it pencils out as a rental yet and even to buy this as a "home" you are looking at a very large payment and the monthly utilities on this thing will kill you.



23396 Toronja Corte is another big one. This one is located near the Trilogy development. It's a 4 bedroom, 4 bath home of 4075 sq/ft. This was purchased in Sept 2005 for $743k. Now it's listed for $479k ($118 sq/ft). That makes this loss $264k or 36% from the Sept 05 price. On the same street there is a model match to this one with an even bigger loss. 23438 Toronja Corte was purchased last in March 06 for $830k. Now it's a bank owned and it's listed for $510k. That is a loss of $320k or 39% from last sale. And these have not sold yet, the final numbers might (I mean, will probably) be even worse. Check out the price cuts on the 23438 house. Talk about chasing the market down, 7 price cuts since last June and now there is a model match $30k less on the same street. It just brings a big smile to your face, doesn't it?



18 comments:

snob from morgan hill said...

You're the man.....

glad_I_didn't said...

Holy smokes X, I can't believe you are showing that 23438 house. My wife wanted to buy that exact house last Oct when the price dropped from 670 to 615. Oh, the nagging I got about what a great deal it was and if we missed it we might never get it for that price again. blah blah blah. I think she has seen the light now. She's actually looking at the price drops and now is fantasizing about being able to afford south OC soon.

Anonymous said...

Hey Golfer,

You are right about South Corona being nicer than Eastvale or downtown Corona, but I think the downside to the Sycamore Ranch area or Trilogy is that they are so far south that it is not actually part of Corona proper and the kids have to attend Lake Elsinore schools from what I have heard. I would say anything south of Cajalco exit is Lake Elsinore district. On the upside the Crossings shopping area and the Dos Lagos Promenade shops are very nice as is the new Trader Joes. I wonder if all of these shops will stay open as the economy tanks further?

Anonymous said...

Eastvale's selling point is that it's close to Rowland Heights. A lot of Asians buy there.

golfer_X said...

Yes, some of those are quite far south. Especially Sycamore and Horsethief. Those are way down there. I don't know what schools they use. The think I don't like is there is no grocery stores or even gas stations close to those homes. You have to drive up to Tom's Farms to get gas and up to Cajalco or Dos Lagos for stores or eateries.

There was an article in the Press Enterprise a few weeks ago about the Promenade at Dos Lagos. Most of the stores in there are hurting bad. I would expect quite a few of them to closing up. I went there the Saturday before Xmas and the place was very quiet. You could park right in front of the stores without any trouble. I was a little shocked at how dead it was.

http://www.pe.com/business/local/stories/PE_Biz_D_doslagos20.4f8927f.html

Anonymous said...

Eastvale is also close to Chino Prison, do Asians like criminals too?
I don;t see that many asians in eastvale, way more mexifornians than asians

Anonymous said...

Speaking of Eastvale, I'm starting to notice a curious thing on Redfin listings.

Over the past month, I had noticed quite a few 4000/sf. 4 1/2 bath houses listing for less than $105/sf. Then they would ALL disappear within 4 days of being listed. Search for them, but they're no longer.

I just saw this listing last night:

http://www.zillow.com/HomeDetails.htm?zprop=63095285

It's 13864 Blue Ribbon Ln., 92880.

I searched for it on Redfin just now, and it's been yanked. After 2 days.

?????

Is this some sort of trick the realtors are pulling now to make the market look like it's not tanking?? By yanking the houses priced to move?

Somebody please chime in.

Anonymous said...

Wanted to add (the above post was mine also):

Who would have such power to kill a listing on Redfin even if he wanted to? Homebuilders? Stupid realtors?

BrianH said...

One thing to keep in mind if considering a very large house as a rental. Even though it may pencil out on paper as something that is profitable, when renters move out it is mega amounts of carpet, paint, etc.

If someone is going to be a landlord on the big boy houses they need to purchase them so much cheaper to offset the larger expense of maintaining that house.

FairEconomist said...

Within Corona, South Corona will be the leading edge of outer suburban slumification discussed in the Atlantic. The driving forces are the remoteness from employment and the unsuitability of these large mansions for the small typical American household. The crime and neighborhood deterioration hasn't hit yet but the fact that very few households want to spend $3000/month to live there has. There's just very little market for this kind of house.

BrianH said...

I was talking about the south end of Corona, specifically the 92883 zip code and anything south of Cajalco exit.

It is hard to image a commuter buying in that area. There (as mentioned) are not services except Toms Farm or North to Cajalco. Also, the drive south to Ortega Hwy or north to the 91 absolutely sucks. That area is seems stranded in between with nothing convenient. If you live in the Horse Thief tract you need to drive 8-10 or so miles in either direction just to get a six pack of beer and a pack of smokes. That doesn't even count going to the grocery store or Home Deport and such which are further.

Anonymous said...

It's getting ugly fast in the IE. Some areas more than others but don't be fooled. All areas will continue to get hammered. It's tempting to jump in now, especially if one is renting. But these are just low hanging green fruit. Wait a but longer for the rip ones, bigger and better, for an even lower price. The IE will over correct. Today I just saw a home in the 92509 area code built in the 90s for 199k. 2002 prices already. At this pace 1999 price are very possible for the IE in general. Wait for an even better deal.

Anonymous said...

At this point in the cycle, the main driver for price discounting is distressed sellers (mostly banks). The proportion of distressed sellers varies alot by neighborhood, with the biggest concentrations in the newer tracts. The level of distress trumps the usual suspects in pricing (amenities, commuting distance, etc.).

Also, what is with home sizes in South Corona. How many people that have to live there can afford 4,000 sf homes. I'd hate to see the AC bills in the summer. Neighborhoods w/ lots of distress and very large homes will be especially screwed. At least a 2,500 sf home can be repriced to $250K and sold to someone who can afford it.

Builders got way too far over their skis out there.

Anonymous said...

Those big 4000-5000 s/f houses will take a beating on price. Those things will end up at $75 s/f (or less) when this bottoms out. Utilities and Maintenance on those things is crazy. My 2000 s/ft house has $600 electric bills in the hottest months and I'm never home. The builders built all those big homes to maximize profits. Specuflippers bought them to maximize gains. Making 50% on a 500k house is better than 50% on a 300k house.

Right now there are still a lot of people that would buy those things if the price was right. I think in 5 years it might be a different story after the word gets out about what they cost to own. Then you might not be able to give them away. They will probably turn into boarding houses for immigrants with huge families. 20 people in one house with 10 cars parked on the front lawn.

Peppermint Hippo said...

Good post and comments. I agree South Corona is nicer but less convenient than Eastvale (we grill outdoors year-round so the smell of manure is a big turnoff). The hills in South Corona are nice, but I doubt there are enough high income "executives" and retirees to occupy all them homes. I hope the Dos Lagos Shops survive but in my opinion the project is not large enough to be a regional draw like Victoria Gardens. Consequently, it serves only locals. I wouldn't be surprised if it deteriorates into a small outlet mall as the higher end tenants exit.

Anonymous said...

I been in the area for over 10 years. When I first saw the Dos Lagos shops project, I told my wife, just watch as they go out of biz as soon as the house ATM shuts down. She looked at me like I should be wearing a tin hat but now she sports one too as I was right. First to go was the Bombay overpriced store. Next!

Anonymous said...

ALL Bombay stores are closing, not just the one in that area.

Jon Siders said...

I live in the South Corona area in the Retreat, I recently purchased here and the Dos Lagos shopping center is beautiful and has seen a big uptick in foot traffic recently. People are starting to buy again. Plus the restaurants and number of shops between The Crossings and Dos Lagos provide more than enough choices for people to not have to drive to Riverside or anywhere for necessities.
There will be more hits to the South Corona area prices, but it will come back and is close to its bottom. There has also been a big jump in pending sales within The Retreat in just the past 2 weeks.
There are a lot of people that don't want to live too far from work in the OC/Corona/Ontario areas and can't afford or don't want to live in a shoebox 1500 sq foot townhouse in the OC or a manure smelling Norco. We'll see only time will tell, but I bought to live a nice home with a 5-7 year timeline.