I found 4 (all bank owned) in the tract that sits below the dam holding back Lake Perris. The last time I drove through this tract it looked quite nice. It's all fairly new with a fancy entrance gate, nice parks and landscaping. It's in a handy location right off the Ramona Expressway with easy access to the 215 fwy. Probably not a bad place to live for a young family. Of course this assumes you don't mind living below a dam holding back a huge lake. A dam, that by the way they are worried about failing if there is ever a 7.5 earthquake. Since there is a major fault line running through the badlands just a few miles east of the lake, I'd say a big earthquake is a distinct possibility. Because of this flaw in the dam they reduced the level of the lake last year. And they are STILL building homes right below that sucker! But the biggest problem is that this area is foreclosure central.
Anyway back to the houses. To rent a decent 3 bedroom home in that area is about $1500/mo. These 4 homes are all listed under $225k. That would give a payment of roughly 1150/mo assuming 210k financed at 5.5%. Add in some property tax ($200/mo), insurance ($150/mo) and you end up at roughly $1500/mo. Now being a homeowner you get to write off that interest which would net you some tax savings. That would reduce the net cost by about $225/mo. That savings would cover maintenance and the $80/mo HOA fee. So these properties are very close to being a wash versus renting. The big "IF" is that IF the property values continue to decline then you would be losing money. I doubt you could buy these and make any money renting them unless you put a fair amount down but someone could buy these and live in them for about the same cost as renting. You gotta ask yourself, do you feel lucky. Well, do ya punk? Feel like betting those prices won't drop anymore?
Here are the homes,
1739 Benedetto, 4 bedroom, 2.75 bath, 2252 sqft. Purchased for $305k in June 2004. Now listed for $209k ($93 sq/ft) (Being a 4 bedroom this house might rent for more that $1500)
1449 Avila Dr, 3 bedroom, 2.5 bath, 2677 sqft. Purchased for $385k June 2006. Now listed for $215K ($80 sq/ft)
3275 El Nido pl, 3 bed, 2.5 bath, 2296 sq/ft. Purchased for $396 in Nov 2006. Now listed for $207k (90 sq/ft). A 48% loss in 16 months
2054 Mount Verdugo, 4 bed, 3 bath, 2731 sq/ft, Purchased for $435k in June 2006. Now listed for $221k ($81 sq/ft). That is a 49% drop in 18 months! This is a nice looking house, too bad it's in Perris. Again I doubt you could rent this home for $1500. It's 4 bedrooms and fairly large. This one would probably rent for closer to $2k, making buying it far cheaper than renting it. From the pics the house looks nice but the last owners did take the stove and dishwasher with them. The rest of the house looks good in the pics.
25 comments:
I've been through there a couple of times on the way to a buddy's house in Hemet.
The houses do look nice, and I would like to be that close to the motorcycle track, but from what I have seen of the area... this place will end up making Moreno Valley look like a safe place to live.
I looked at the models homes in this area a couple of years ago. It was a nice looking area and some of the houses were vey nice.
I dunno what anon is talking about. I live in Moval (in Moval ranch) and the crime is not bad at all. I moved here in 99 from La Puente and I feel WAY safer in Moval than in La Puente. Before that I lived in Carson and I think it's a worse place too. Moval aint bad at all. I've lived in a lot of different cities around the SoCal area from El Segundo to Moval. Some were better than Moval most were worse. It has some crappy areas for sure. You don't want to hang out over in Edgemont or the old dumpy areas. But most of the city is fairly new and those areas are nice. The schools do BLOW though. It has to have the worst school district Ive ever dealt with. No I take that back Long Beach was the worst, Moval is a close second though.
I've lived here 8 years. No one near me has ever been robbed or had a car stolen or broken in to. No crime at all in our immediate hood that I am aware of. I sure can't say that about LB, or LP. I had a car broken into in LB and my apartment was burgled in LP twice! and it was in a supposedly nice area too. I dunno why Moval has such a bad rep after 8 years here I can tell ya it ain't that bad. I'll take it any day over most of the cities I've lived in.
Great timing on this post. I was just in that neighborhood looking at a bank owned home yesterday. The home I looked at is not on the MLS but I used the same three listings you just posted as my target listings for what it should sell for.
Here are the stats on that area as they are fresh in my mind:
Total listings: 226
Sorted by 1700-2300 sq. feet: 90
Current Pending Sales: 31
Closed in the last 45 days: 21
New Active in the last 45 days: 72
It is a nice tidy area but it is really hard to actually sell a home there right now. However, I would pick up a rental there all day long and twice on Sunday.
435K for a house in Perris....LOL. It was a huge bubble! I have no problem with living in Perris, but my wife will kill me.
Elsinore whore, Could you buy these and actually rent them for more than the payment (assuming min down?).
Those prices are actually decent. If I were young and looking for a place I'd consider one of those. Even if the value of the home drops some more your payment is still less than renting. Plus rent is going to go up every year while your payments stay the same. Also, eventually that home will start to go up in value again.
$435k for a house in Perris is right... No bubble here folks, move along. Looking at the map though, these houses are miles from Perris. They are closer to Moreno Valley than the are to Perris. I didn't know Perris was that big.
Nice homes with pre-bubble pricing. But my big question. Where the F are you going to work? I can see this locaiton working out if you have a local job. But if one works in OC or LA or even Chino area.you are F-d as far as commute. Nice homes though.
There are TONS of jobs along the 215 fwy. There is a new DHL distribution center just opened up at March field. Pepsi and Lowes both have huge distribution centers less than 5 miles from those homes. With a $200k mortgage you don't have to commute.
I'm going off of memory here so please don't jump on my ass if I'm a couple dollars off.
If you purchase a 200k home utilizing an FHA mortgage and the HART down payment assistance program you can get into one of these with no down payment and very little out of pocket. The total monthly payment including taxes, insurance, private mortgage insurance, principal and interest would be around 1700 per month. That is approximately 200-300 more per month than renting at the moment. However, picking up a nice tidy 2003 built 2000 square foot home for around 200k makes a lot of sense economically. As soon as these home hit 175-185k and the monthly payments dip below 1500 I'm willing to bet these houses will start flying off the shelf.
If you put down 25% on a 200k purchase in this area you would probably break even.
But man I tell you, after 10 years in the mortgage industry I've never seen underwriters so bunched up in my life. It is like pulling teeth trying to get a loan funded these days.
'With a $200k mortgage you don't have to commute.'
What about the car payments, credit cards and living expenses. Still too high for blue collar workers at a Lowes warehouse.
A couple making $15/hr each should be able to buy that house and live comfortably. How do I know, because me and my wife do it and we only make slightly more than that ($65k last year). We have a house with a payment of $1400/mo (PITI). We buy a new car every 5 or 6 years so we always have one car payment. I try to keep those under $300/mo but my last one I splurged and bought a Dodge Caravan which was $420/mo. We have 2 kids so there is expense there too. And we still live just fine WITHOUT refi-ing our home or running up our credit cards. It's just amazing how people seem to think you can't get by on $60k a year. It's not that hard if you just put a little effort into spending only what you can afford. My kids don't have designer clothes. We buy almost everything at the outlet malls or when it's on sale for cheap. My kids wear Levi's or Dockers at $20/pr. We buy our clothes the same way. I can't remember that last time I paid over $20 for a pair of pants. The last suit I bought was at the Jeffery Beene outlet store and it was $70!
We don't have ATVs or RV's or boats. We go on vacation every year, usually twice for a week each. It's camping, or a week in Laughlin (hotels there on special can be $4 a night!). Which leave us enough to rent a boat or Seadoo. My kids love our vacations and so do we. Americans seem to have turned into mindless spenders. The amount of money my friends blow on useless crap boggles my mind. We live with less stress and more comfortably than some friends that make 3 times what we do.
What I want to know is, who did they bribe in order to build those houses below the dam? I drove by the area for the first time a year ago and told my colleague this was a disaster waiting to happen and it's not a matter of "if" but "when".
I don't care if prices go to $50/sqft. you couldn't pay me to live with that geological risk. Having a house collapse around you is one thing, having a dam burst above you as your house is collapsing is beyond living dangerously.
All y'all can have 'em.
Anon 7:41, you are awesome. You are absolutely right, all Americans should all live within their means instead relying on the Govmnt all the time to bail them out for overspending.
That's the same thing I thought when they started building those homes. I can't believe anyone would buy a home below an earthen dam. That's not a gazillion tons of concrete holding back that lake either, it's an earthfill dam, 128 ft high and 2 miles long. The upgrades to the dam are supposed to cost 460 million and begin in late 2008 thru 2010. Pray the "big one" does not hit until after that. The report I read said if it were to break the water would flood out and make it's way into Lake elsinore taking out lot's of property on the way.
They also built the Victoria Groves development right below the dam for Lake Mathews. The built a boat load of homes below Castaic dam too. It's just mind boggling.
Anon, I agree someone making $60 or $70k should be able to buy a $200k house and live a comfortable life. A few years back when my wife was in school we managed fine on my salary which was in that range. We had a mortgage of $1200 and two car payments and I have 3 kids (all girls). We did not have any problems paying the bills and we could easily have dealt with a $1500/mo mortgage by eating out less and buying less crap. If I had to, I guess I could have cut back on the golf and scotch (although that would have been a last resort!).
Given how long the constuction delays around the 91/215/60 interchange are taking, I'll believe dam upgrade completion when I see it...2012 sounds more optomistic :-/
Anon that makes $15 an hour...
What is amazing is you think everyone's personal financial situation is like yours. Who are you to say everyone can live on 60K? Did you see where I mentioned what if other people have credit card debt, multiple car payments etc? Everyone has a different situation. I commend your thriftyness but please, not everyone. Especially out here in the where everyone I know lived large the last 5 year by the housing ATM and sucking the HELOC. They made bad choices and now must live with it. And even the ones that are conservative want to 'just get by' making $15 hour.
We live off of one household income of 90k and live our lives (conservative) just like you. I chose to get an education so my wife can stay at home and raise my children instead of strangers. I chose to buy out here a home for 220k pre-bubble. My money goes a long way and I prefer not to live strapped paycheck to paycheck.
I want to remind everyone that pre-bubble housing prices also means that you will have pre-bubble employment levels, pre-bubble tax revenue, pre-bubble everything.
DHL depends on people having the income to afford overnight shipping. Lowes depends on people having a HELOC to fix up the house.
Pepsi depends on people willing to buy bottled water at a Starbucks premium.
Schools depend on bubble sized property taxes, the state and local budgets depend on bubble sized sales tax revenue.
The state budget has to go from over 110 billion to a pre bubble level below 70 billion. 40% of the budget is education.
Municipalities are already having problems selling bonds. The NY/NJ port authority didn't sell 20% of their last issue this week. In a year or two no city going to be able to float a bond.
We have a long way to go. We are going to shot past a homes value equal to rent. It will go well below the value of rent in the IE and other areas. Markets go both ways.
T08022802
This MLS number is a good example of what I'm talking about. It is a basic 3/2 1100 sq. footer that came on the MLS yesterday for 165k in MoValley. It appears to just need some paint, carpeting and the yard whipped back into shape.
This would be an awesome buy for a person who isn't afraid to get in there and paint before moving in. Also, in this market I can almost guaranty the bank (seller) will pay for new carpet with a relativity solid offer. You just need a aggressive agent who is not afraid to really dig in and fight.
My mother in law used to live right around the corner from that house on the corner of Rockcrest and Bay in the early 90s. That area is BAD. There is a huge apartment complex on Bay right across from those houses and it's full of low lives. Those houses are also crap and I'm kinda surprises they are still standing. They had all kinds of problems with that house.
Anon 7:39
I did not say that I thought everyone making $60k could buy a house and live on that amount. I said they "should" be able to. Now if they have run up credit cards or bought 2 new cars they have made poor choices that will not allow them to buy a home. Had they not done that they would have had enough to afford a home. You don't even need a big down payment. I bought FHA with minimum down payment (3% I think it was)
The point I tried to makes was a simple one. A family making $60k per year CAN buy a $200k house and still have enough to live on. If they choose to go another route and buy cars and run up credit cards so be it. Don't come crying to the media or government about not being able to afford a home.
Interesting. I was in a house around the corner a few weeks back and didn't get the impression that it was any worse then the majority of MoValley south of the 60. It certainly isn't as bad "feeling" as the area of Juanita and Sheila. That is a sketchy few blocks there.
The problem is the lowlifes from that apartment complex. That tract had lots of burglaries, car thefts and stuff. Her dogs were stolen twice from her back yard. She moved a few blocks away and has not had any problems in the new place. She now lives in the Serrano tract on the NW corner of Graham and Eucalyptus.
FWIW, Perris has a worse crime rate than Moreno Valley. MV is pretty similar to the nation as a whole.
The first dead cat bounce will be from the gamblers that think rent won't go down and they can cover the mortgage with rent.
Rent will go down, it always does after housing bubbles and this time will be no different.
The first dead cat bounce will be from the gamblers that think rent won't go down and they can cover the mortgage with rent.
If a person has done their homework on the past busts, or maybe lived through the 90's as a landlord they know that rents go down with housing. Pity the person who believe rents will go up and buys on that assumption. When I look at something, if right now it would rent for 1400 I figure down the road a couple years we will be dealing with 1150-1200 on the exact same house. I hope that is conservative enough.
Rents went down about 25% in the early 90's in this part of the IE. I was paying 1000/mo in 91-93. When I moved in 93 my rent went down to $780 for a similar place.
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