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.


Buttermonkey said...

X, I've been wondering the same thing for months now. All I seem to see are repo's with hilarious prices. One POS house after another with a $500,000 price tag. I just LMAO all the way down the street.

Oh, and the established areas are even funnier. In the neighborhood that I'm waiting on, everyone has decided to list their homes at $799,000, leave it on the market for 6 months at that price, take it off the MLS, then re-list it at $759,000. OMG! More LMAO! Like that $40,000 makes any difference! Try knocking off, say maybe, ten times that amount and we'll talk.

You wanna know what my theory is on this situation? I think that there are a whole lot of delusional sellers out there that are counting on the coming spring selling/buying season to save their asses. I've noticed a huge slowdown in price slashing and I'll bet you people are hopeful about spring.

Anonymous said...

I noticed big price drops right after the new year, but you are right they have seemed to stop. The next round of big price drops might not come until early summer once the banks realize that spring isn't going to make that house worth an extra $300,000.