Friday, February 29, 2008
Why, oh why, are some REO's priced so high?
Can anyone explain why in todays market, so many REO properties are listed at wishing prices. I realize the outstanding loans might be very high but that has no bearing on the current market value of these properties. I know the banks are getting BPO's (broker price opinions) before setting the listing price. Is it the brokers that are out of touch with reality or is it the banks not wanting to believe "it's that bad". There are more and more REO's hitting the market with pricing close to 2002 prices yet there are still loads of them listing at crazy wishing prices.
For example, 26727 Chamomile St Murrieta. This is in Greer Ranch, a newer high end development in between the 15 and 215 fwys. Like most new developments there are loads of homes for sale in this development. Many of these are REO's. The price leaders just listed (probably re-listed as it's been REO'd for almost 6 months) has and asking price of $149 s/ft. That's a lot of extra money over the price leaders since this home is 4300 s/f. It's listed for $639k when it should be under $500k to be in line with the current crop of REO's. Those are not selling so if they actually want to sell this beast it should probably be in the mid 400s or lower. There are way too many homes listed around $100 s/f in this area for anyone to bother with this thing.