Monday, March 31, 2008

Median asking drops another $5k this week

Here's the latest numbers from

(SFH + Condo)
25th Percentile50th Percentile
75th Percentile

Down another $5k on all three price points this week. Inventory is slightly down but it's not from sales. A lot of the non-distressed listings are being pulled from the market. I've been seeing this trend for a couple of months now in the areas that I watch. It seems at least some of the dreamers are waking up to the fact that they missed the gravy train.

Sunday, March 30, 2008

Feb sales and Medians

Here are the latest sales and median price numbers from DataQuick.

Reporting resale single family residences and condos as well as new homes
% Change is from the same month last year

Riverside County 1,962 $325,000 $410,000 -20.73%
BANNING 21 $208,000 $294,500 -29.37%
BEAUMONT 69 $304,000 $409,500 -25.76%
BLYTHE 20 $213,500 $223,250 -4.37%
CABAZON 3 $195,000 $312,500 -37.60%
CALIMESA 2 $209,000 $245,000 -14.69%
CATHEDRAL CITY 46 $268,000 $345,000 -22.32%
COACHELLA 18 $234,500 $347,500 -32.52%
CORONA 226 $430,000 $589,500 -27.06%
DESERT HOT SPRINGS 41 $239,000 $263,500 -9.30%
HEMET 94 $233,750 $320,000 -26.95%
IDYLLWILD 6 $287,500 $330,000 -12.88%
INDIAN WELLS 12 $1,162,500 $642,000 81.07%
INDIO 94 $314,500 $360,500 -12.76%
LA QUINTA 87 $432,500 $560,000 -22.77%
LAKE ELSINORE 59 $309,000 $414,000 -25.36%
MENIFEE 57 $305,000 $400,000 -23.75%
MIRA LOMA 6 $344,250 $531,250 -35.20%
MORENO VALLEY 152 $255,000 $369,500 -30.99%
MURRIETA 157 $329,750 $480,000 -31.30%
NORCO 7 $455,000 $550,000 -17.27%
PALM DESERT 113 $400,000 $430,000 -6.98%
PALM SPRINGS 80 $319,000 $407,000 -21.62%
PERRIS 64 $273,500 $394,000 -30.58%
RANCHO MIRAGE 47 $649,000 $632,500 2.61%
RIVERSIDE 200 $353,000 $415,000 -14.94%
SAN JACINTO 39 $235,000 $347,250 -32.33%
SUN CITY 55 $269,000 $349,500 -23.03%
TEMECULA 120 $361,500 $445,000 -18.76%
THOUSAND PALMS 3 $350,000 $345,000 1.45%
WHITE WATER 3 $266,000 $283,250 -6.09%
WILDOMAR 22 $358,750 $450,000 -20.28%
WINCHESTER 34 $325,000 $442,000 -26.47%

San Bernardino County 1,086 $290,000 $365,000 -20.55%
ADELANTO 34 $191,000 $290,000 -34.14%
APPLE VALLEY 69 $200,000 $295,000 -32.20%
BARSTOW 16 $141,000 $178,000 -20.79%
BIG BEAR CITY 11 $229,000 $267,500 -14.39%
BIG BEAR LAKE 15 $332,500 $399,500 -16.77%
BLOOMINGTON 5 $225,000 $405,000 -44.44%
CHINO 45 $388,000 $457,500 -15.19%
CHINO HILLS 31 $465,000 $575,000 -19.13%
COLTON 25 $273,000 $317,000 -13.88%
CREST PARK 2 $311,000 n/a n/a
CRESTLINE 11 $190,000 $185,000 2.70%
FONTANA 117 $350,000 $486,500 -28.06%
GRAND TERRACE 4 $305,000 $385,000 -20.78%
HELENDALE 8 $245,500 $295,000 -16.78%
HESPERIA 60 $225,000 $327,000 -31.19%
HIGHLAND 23 $325,000 $361,250 -10.03%
JOSHUA TREE 10 $170,000 $210,000 -19.05%
LAKE ARROWHEAD 25 $406,500 $400,000 1.63%
LOMA LINDA 10 $337,750 $423,500 -20.25%
MENTONE 9 $372,000 $325,000 14.46%
MONTCLAIR 7 $315,000 $435,000 -27.59%
MORONGO VALLEY 3 $204,000 $200,000 2.00%
NEEDLES 3 $55,000 $112,000 -50.89%
ONTARIO 46 $320,000 $425,000 -24.71%
PHELAN 11 $273,000 $395,000 -30.89%
PINON HILLS 4 $290,000 $360,000 -19.44%
RANCHO CUCAMONGA 106 $395,500 $479,750 -17.56%
REDLANDS 35 $325,000 $367,250 -11.50%
RIALTO 28 $299,000 $380,000 -21.32%
RIMFOREST 2 $322,500 $242,500 32.99%
RUNNING SPRINGS 8 $244,000 $215,000 13.49%
SAN BERNARDINO 75 $205,000 $325,000 -36.92%
SUGARLOAF 4 $164,000 $210,000 -21.90%
TWENTYNINE PALMS 25 $115,000 $152,000 -24.34%
UPLAND 26 $472,500 $485,000 -2.58%
VICTORVILLE 113 $220,000 $331,500 -33.63%
WRIGHTWOOD 6 $309,000 $255,000 21.18%
YUCAIPA 34 $327,500 $380,000 -13.82%
YUCCA VALLEY 15 $190,000 $223,000 -14.80%

Florida auctions

Florida is a year or two ahead of Southern California in it's real estate bust. It was 2005 when things slowed in Florida, 2006 the prices started to slip and 2007 just continued the fall. In SoCal were were still seeing increases in the median through mid 2007 in many areas. True, some of that was due to the mid and low priced home sales grinding to a near halt. Our price declines have primarily happened in the last year. Florida has been tanking for at least a year longer than us. What does this have to do with anything you ask? Well, check out this article from the Herald Tribune about an auction in Fort Lauderdale.

The auction, which was anticipated to take four to five hours, wound up clocking in at barely two. Two-thirds of the property on the block failed to garner a single bid.

The first property out of the gate was not a good omen: the auctioneer tried opening the bidding for 1850 South Treasure Drive in Miami Beach, a waterfront lot, at $1 million.

There was no response.

He then tried to get something started at $500,000, but again, no dice. $250,000? Still dead air. $100,000? Silence. At that point, DeCaro threw in the towel and passed the property by.

"Please come see us afterwards," he told the crowd, adding that staff from DeCaro and Sotheby's would be around after the event to field offers and potentially facilitate further negotiations.

And so it went for the majority of the properties on the block.

A six-bedroom, six-bath home in Fort Lauderdale's Coral Ridge County Club previously listed at $5.9 million couldn't fetch a bid for $3.5 million. A 3,100-square-foot penthouse on Williams Island in Aventura was listed for $5.6 million and did not even get anyone willing to start bidding at $2.5 million.

The day was not without its sales, though. A number of Wilton Station brownstones and condos that were absolute provoked some heated bidding wars. Five brownstones priced in the $500,000-to-$600,000 range all garnered bids, ranging from $230,000 to $275,000.

How long before we start to see things like this in SoCal? Right now there are still quite a few people buying. These are the folks that are afraid the prices will take off again and they will get "priced out" again. Once these guys are gone we will probably see stuff like this Florida auction. Florida is already in the Panic area of the graph. In Cali we are still mostly in the Denial area and that's a long way from the bottom.

Saturday, March 29, 2008

$247K in Eastvale?

The Fb's at 14153 Parkwood have been trying to unload their place for 172 days and counting. They started off with high hopes, listing last Oct for $599k. That was just a little late though. The market had already gone into full meltdown mode by then. Try as they might they were unable to get a bite and played the "let's chase the market down game" Having paid nearly $550k for the place in 2005 they did not have much room to maneuver and they have been trying to sell it as a short sale.

Even after all these price cuts, no luck

Oct 09, 2007 $599,900
Oct 11, 2007 $529,000
Oct 30, 2007 $524,900
Oct 31, 2007 $490,900
Nov 28, 2007 $424,000
Jan 29, 2008 $227,500
Feb 04, 2008 $424,000
Feb 07, 2008 $399,000
Mar 17, 2008 $389,000
Mar 26, 2008 $247,500

The last one reeks of desperation, so what are they up to? Well it looks to be one of these goofy auctions that will probably flop when the bank laughs at the bid price.

here is the listing description.
---------Approved------Short----Ready to close----Will be Sold to Highest Bidder this Sunday March 30th open this weekend for inspection Call for info Beautiful home in Corona features 5 Bedrooms 3 Full Bathrooms. Large spacious kitchen, inside laundry, tile and hardwood throughout, direct garage access. Best Value in all of East Valle. One Bedroom Down stairs bonus room Hard wood floors Hard scape and Island for BBQ in Back Yard needs Paint inside and ready to Move in. .. large lot

Wow, the inside of the BBQ needs paint??

I don't see any way the bank will go for this price. Obviously they are hoping it gets bid up to the point where the bank will approve the sale which is probably around the $389k asking price. Who's gonna go and place a bid? How bout Briar girl?

Friday, March 28, 2008

REO Fun in Fontucky 57% off!

Like many other parts of the IE Fontana (lovingly referred to as Fontuky by every one that doesn't live there) is tanking hard.

Here's a few REO properties in the Sierra Lakes development that are putting some serious hurt on the poor FB's that are trying to sell their houses.

16498 Medinah St is a 4 bedroom, 2.5 bath home, 2462 sq/ft on a smallish 5000 s/f lot. This home was last purchased in Aug 2005 for a whopping $570k. The bank now owns this Medinah cottage and has just listed it for $318k. Thats a loss of $252k plus fees, if they get asking (that's a 45% drop from the 05 sale price)

6229 Eaglemont is not quite as an impressive loss as the last home but it's still got a chance to fall further. The home is the same floorplan as the medinah house. It was last purchased in Aug 2005 also but this one "only" cost $490k. It's listed by the bank for $336K. It's been listed for a few months now ans has already had 3 price reductions. It looks like it's gonna need a few more!

Now for the Price Leader, 5751 Ventana Dr, is just a wee bit smaller than the first two. It's a 4 bed, 2.5 bath home that is 2325 sq/ft but this one is on a larger 7100 sq/ft lot. This one has sold an amazing 4 times since being built in 2001, 5 times if you count the bank (the latest owner). The last real sale was very near the peak in Feb 2007 when it fetched an astonishing $640k. That's $275 sq/ft for a tract home in's Fontana! Well now the bank has it and wants to unload this thing before people actually realize "it's in FONTANA". They have it listed for $279,900.

That is a loss of FIFTY SEVEN PERCENT in one year!
A loss of $360k!!

Tuesday, March 25, 2008

Riverside median asking price tracks the asking prices of what's on the market. It updates the numbers on a weekly basis. Since the begining of the year there have been 10 updates. On average, the median asking price is dropping 3K per week. It's currently sitting at $315k. If the trend holds in another 5 or 6 weeks the median asking price will once again be under $300k

Here's the data from housing tracker

Trend03/24/20081 month3 month6 month12 month
Median Price$315,000-3.7%-10.0%-17.1%-24.8%

(SFH + Condo)
25th Percentile50th Percentile
75th Percentile

Monday, March 24, 2008

Cali's February report card

The California Association of Realtors has issued it's official February report. Here's a few lowlights,

Home sales decreased 28.5 percent in February in California compared with the same period a year ago, while the median price of an existing home fell 26.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

Closed escrow sales of existing, single-family detached homes in California totaled 343,220 in February at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 28.5 percent from the revised 480,170 sales pace recorded in February 2007.

The median price of an existing, single-family detached home in California during February 2008 was $409,240, a 26.2 percent decrease from the revised $554,280 median for February 2007, C.A.R. reported. The February 2008 median price fell 4.8 percent compared with January’s revised $429,790 median price.

Riv/SanBerdu median ........... $289,660 (last month $298k, last year $397k)
%change from Jan......... -2.8%
%change from 07 ...... -27.2%
%change in sales from Jan.... -7.4%
% change in sales from 07 ....-17%

So to recap, sales down 7% from last month, down nearly 20% from last year, prices down nearly 30% from last year (ouch). Feb is a short month so some of those declines in volume might be a factor of that, although this year there were nearly the same amount of biz days in Jan and Feb.

I would expect to see sales volume picking up month over month this time of year. We are moving into spring which is one of the busier times of the year. Sales volumes usually start picking up. Don't be surprised to see headlines spouting off results like "March sales up 10%". Duh, March sales are always way up over Feb sales. But the NAR will do just about anything these days to make things seem better than they are.

Saturday, March 22, 2008

Squeezing the juice out of Orangecrest

The price declines in Orangecrest are continuing at a fairly rapid pace. It's getting easier and easier to find houses priced near the $100 sq/ft mark. This REO just hit the market with an aggressive price.

19241 Dandelion Ct is a large home with 5 bedrooms and 3 baths. It sits on a 1/4 acre lot. This home was built in early 2002 and sold new in June of 02 for $325k. It sold again in Oct 2005 for $650k. The bank got it back in Jan for $562k. It listed a couple of days ago for $390k. That's an aggressive price for a house of this size, in this area and sitting on a large lot. I think this one has a chance of finding a buyer (unless it's thrashed inside).

If it sells at the asking price this will be a 40% loss form the Oct 05 sale price or a loss of $260k.

Collateral damage

As the housing bust expands, it's effects are spilling over into other aspects of the economy. On the streets you can see the signs every where. Furniture stores closing, half empty shopping malls and fewer cars driving around with dealer plates. Do you remember that last car you saw with dealer plates? Now the governments are starting to feel the pinch. The property tax collected is starting to drop. Some of that is people just not paying it but now the counties are starting to drop the assessments as the property values drop. The property tax is not the only source of income for the government that has fallen. As the economy has worsened consumers are spending less. This has reduced the sales tax revenue collected. Combine all this and the government is facing the perfect storm. They have escalating costs due to inflation, higher energy (gas/fuel) costs and a real need to staff up in some areas but they have a huge reduction in revenue (14 to 16 billion short last I read). I'm sure you've heard by now that they are cutting back, laying off employees and raising "fees" (that's politcal talk for taxes).

What's the point of this post? I want to see if any readers are affected by this. Do you know anyone that has been affected. On Friday night we went out for our weekly sushi dinner. 2 couples sat at the table next to ours and the conversation was all about their fear of an impending layoff. The two gals were both new school teachers and both seemed sure they were going to get the pink slip any day. I have several friends in construction and even have one mortgage broker buddy. As you can imagine they aren't very optimistic at the moment.

Tuesday, March 18, 2008

I saved the world today. By Ben Bernanke

Ben Bernake thinks he is saving the world or at the very least the US of A.

Why the Fed cut's will not help us.

I received another excited letter today from a realtor I worked with a few months ago. He say's "good news, the fed dropped the interest rates again....blah blah blah". How many people think that these rate cuts will drop the interest rates we pay? It's a lot, I over heard some one at work today that thought they would be getting a better rate on a Refi they are planning on making.

News Flash, the Fed rate cuts will NOT help the mortgage rates. If anything they will do the opposite. So why is the Fed dropping the rates? They are trying to save the banking system for seizing up. Our banks have taken huge losses due to the foreclosure crisis. Many of them are in real danger of failing. The Fed is throwing money at them in an effort to stop that from happening. And like it or not he doesn't have much choice. A bunch of banks going under would probably cause a complete meltdown of the US economy if not the worlds. Think 1929!

What are the banks doing with all the money the Fed is feeding them? They are hoarding it like a squirrel in the fall hoarding nuts. They want to have the reserves to cover future losses. They are taking it and buying Treasury bonds(Borrow at 2.25% get 4% interest, great, free money!). Lending that money to you or me is the last thing they are thinking of doing with it. And if they do lend some of it they are charging higher rates to offset the added risk associated with lending in an environment like we have today. Ask yourself, would you lend anyone money to buy a house around here? Now you see why the banks are charging higher rates. It's a risk thang!

In addition to getting screwed with higher interest rates on loans and credit cards this decline in the Fed Rate is destroying the value of the dollar and increasing the rate of inflation. Both of these are costing us real money. Wonder why gas is $4 a gallon? A large part of the reason is that the dollar is worth SQUAT. We buy things using dollars. We buy oil with dollars. When dollars aren't worth much the oil costs more. As does nearly everything else we buy overseas. Many foreign companies are asking to be paid in Yen or Euros rather than dollars. (my parents just got back from Barcelona where it cost $28 us dollars to buy 2 soda's and one sandwich at a small deli). Anyone else noticed the weekly grocery bill is looking more like a car payment? It seems every time I go to Stater Bros it costs me $160, Costco is nearly double that when we go there.

I'm no economist and I don't have any theories on how the Fed can fix this mess. I do know on thing though, you, me and the rest of the taxpayers are the ones that will end up paying for it.

Monday, March 17, 2008

The Spring bounce and Happy St Paddy's day!

B of A loan rest chart. This month looks like a doozy

The first day of spring is just a couple of days away. The NAR and the CAR and the rest of the *AR's will be expecting the arrival of the "spring bounce". Unfortunately the only bounce is likely to be in the number of foreclosures. I've posted a few charts showing the reset schedules. Normally you could look at the peak months and estimate the peak foreclosures to be 6 months to a year after that. Today however a growing number of these loans are going into default long before the resets. If you look at the foreclosure listings on the market you will see that many of these homes sold in Late 2006. Those loans have already gone bad long before the scheduled resets. I'm not sure if there is any way to accurately estimate (that's an oxymoron for sure) when the foreclosures will peak, level off or even decline. If I were gonna bet a green beer on it, I'd bet it won't be for a while. My guess is that it won't start tapering off until mid or late 09.

Now, if you don't want to rely on my estimates (and I don't recommend you do), then you might want to listen to what
Princeton economist Paul Krugman has to say. "What started in subprime is likely to continue cascading into the markets and keep the economy down until 2010, economist Paul Krugman forecasts. In places like Miami or Los Angeles, you could be looking at 40% or 50% declines (in prices)."

If you are bored take a look at the Credit Suisse report from March of last year. I warn you it's a long and boring read but it does have a load of information on the mortgages originated over the last few years.

Here's a few gems from the report,

More than 60% of homes purchased in 2006 had piggyback loans attached to them in hotbeds such as Los Angeles, the Inland Empire, Las Vegas, and Sacramento. More than half of all home purchases last year had CLTVs of 95% or higher in markets such as the Inland Empire, Las Vegas, Fresno, Detroit and Fort Myers (just to name a few!).

While the share of low/no documentation loans appears to be the highest in former investor hotbeds such as California, Las Vegas and Florida, there is not much of a drop-off in other parts of the country. Based on a survey of our private homebuilders, the percentage of buyers providing limited-to-no documentation was greatest in Arizona (71% of total), California (69%), Nevada (52%) and Florida (47%), while the average for all markets in 2006 was 46%.

Low/no documentation loans increased from just 18% of total purchase originations in 2001 to 49% in 2006 according to Loan Performance. Based on a survey of our private homebuilders, the percentage of buyers providing limited-to-no documentation was similar on the new construction side of the business to the overall market, at 46% in 2006. While many believe that buyers choose to provide limited or no documentation for convenience rather than necessity, a study by the Mortgage Asset Research Institute sampling 100 stated income (low/no documentation) loans found that 60% of borrowers had “exaggerated” their income by more than 50%.

An estimated 23% of total purchase originations in 2006 were interest only or negative amortization mortgages. Similarly, according to our private builder survey, interest only and option ARMs represented 24% of new home sales in 2006.

Sunday, March 16, 2008

The market has spoken

The market has spoken and it's not good news for sellers.

Yesterday was the day of the big real estate auction in Pomona. From the few examples on the LA Times blog it looks like the IE took a beating (no surprise there). He listed a few examples from the IE and one happened to have been one that I looked at here a few months ago.

8856 Gentle Wind Corona, CA 92883. This REO is the price leader as far as the bank owned homes go. This home is 3333 Sq Ft. 3 bed 2.5 on a 1/4 acre. The previous owner purchased this in April of 2006 for $975 and lost it to the bank one year later. The Bank has been trying to Unload this thing since April. Just take a look at these price reductions.

Price Reduced: 06/01/07 -- $849,900 to $834,900
Price Reduced: 06/15/07 -- $834,900 to $824,900
Price Reduced: 07/14/07 -- $824,900 to $809,900
Price Reduced: 09/13/07 -- $809,900 to $789,900
Price Reduced: 10/12/07 -- $789,900 to $624,900

Sold at Auction for $425k!

And that my fellow blogheads is a 56.5% loss.
A loss of $550k.

Here are a few of the other IE examples he listed.

9646 53rd St., Riverside. Last listed at $329K, opening bid was $175K. Highest bid was $205K, which failed to meet the reserve; the house did not sell.

31225 Felicita Road, Temecula. Last listed at $598K, opening bid was $299K. Sold for $370K.

4350 Duskywing Road, Hemet (pictured). Last listed at $339K, opening bid was $169K. Sold for $220K. (I also ran the numbers on this one last week; it sold for $382,000 in 2005, so the decline from peak pricing on this house is 42%.

1865 Kingsford Drive, Corona. Last listed at $393K, opening bid was $196K. Sold for $240K. I ran the numbers on this one last week; it sold for $490,000 in 2005, so the decline from peak pricing on this house is 51%. That's a lot. (X comment; still probably too much for this house!)

43958 Moonlighting Drive, Hemet. Last listed for $199K, opening bid was $99K. Did not sell.

Some of these sales don't look like bargains to me. The Duskywing, Hemet house at $220 is no bargain. There are boatloads of houses in Hemet listed for right around there or less. Kingsford Dr. Corona is also no bargain. That's an older house in one of less desirable areas near the airport. Also no bargain at $240k. I don't know where that Temecula house is but $370 seems way high unless this thing is spectacular.

Saturday, March 15, 2008

Delusional seller of the week

I was beginning to think that the sellers were getting a little less delusional about pricing their homes. It's been a while since I ran across one than made me spit beer all over my keyboard and monitor. Well, I was wrong again...oh so wrong.

This week's award winner lives in the Victoria Groves tract in the southern part of the city of Riverside. It's a nice area, nearly all the homes are new, having been built in the last 10 years. Of course, this makes it a prime foreclosure area. There have been a multitude of foreclosures in the Victoria Groves tract. In addition, there's a whole bunch of short sale properties listed. There's still a lot of overpriced homes listed in the tract, but most of these are in the $500k area, or about $150 to $170 a square foot. The lower priced homes, the price leaders are the REO properties. Many of these are down in the mid 300s. There are currently 7 of them in this range with an average price per square foot of about $125.

What does our delusion seller think his 2003 vintage Riverside tract home is worth?

(That's $287 per square foot)

Ok, ok, now clean off your keyboard, I did warn you. Once again I find myself wondering what kind of agent takes a listing like this. It's not like this is some palace built amongst the normal tract homes. There is no pool, no tennis court, no 15 car garage. It's a nice enough looking house, but it's still just an average looking tract home. Even at the peak they would have had a hard time getting $850k for this place.

So, here it is, 17590 E Robusta Dr. It's a 5 bedroom, 3 bath home, 2961 sq/ft in size, sitting on a rather average 8300 sq/ft lot. Your's for the amazing price of $850k. Here is the listing description. "DON'T MISS THIS COZY HOME, LOTS OF UPGRADES IN A GATED COMMUNITY IN A VERY QUIET ELITe NEIGHBORHOOD IN RIVERSIDE. CUSTOM MADE HOME OFFICE FOR PROFESSIONALS WHO WORKS A LOT AT HOME. WAS VALUED AT 1,000,000. SELLERS ARE MOTIVATED MAKE AN OFFER." Wow, it was valued at a million dollars. By whom? the tooth fairy. Anyone want to offer $150k just to make them shoot beer out there nose (with anger and not laughter though).

Or you could have this home a couple of streets over at 17889 Orangewood. This is a 4 bedroom/3 bath home, 2642 sq/ft. It's and REO listed for $333k. You can do a lot with the extra $520k you would save. For instance you can buy this house at 17797 Cedarwood for $349k.

That still leaves you $170k to spend. That's more than enough to buy you and the wife/hubby a new 7 Series BMW each (or a couple of Hummers with spinning rims if that floats yur boat).

Thursday, March 13, 2008

I thought this stuff was all gone!

Anyone notice this ad? I saw it at the top of the blog today. I thought these types of loans were all long gone.

Here's the fine print,

*A monthly payment of $832 is based on the borrower making an interest-only payment on a $235,000 adjustable rate, 30-year mortgage loan with an initial interest rate of 4.250% (5.770% APR) and with $9,428 in fees and points due at closing.

The interest rate is fixed for 5 years and adjusts after the initial 5 year period. The interest rate continues to adjust annually thereafter, and your loan payment may increase or decrease depending on current market conditions. During the first 5 years of the loan, you may make interest-only payments or pay interest plus as much principal as you would like. After 5 years, principal and interest payments are due, and your monthly payment will increase to $1,540.07, assuming an interest rate of 6.18% (calculated at the 1 year Libor index rate of 3.93% plus a margin of 2.25%). Actual mortgage payments will vary based upon your individual situation and current interest rates, and these loan terms assume you pay all closing costs out of pocket. This loan may not be available in all states, and not all consumers will qualify for these monthly payment terms. These terms are available for a refinance loan on your primary residence with a loan-to-value ratio of 80%, and a credit score between 650 and 719. Other restrictions may apply. Until you lock your rate, APR and terms are subject to change without notice.

May Ranch $78 sq/ft

Who was it that wanted a house in May Ranch under $200k?

Here's a nice one, I expect this will get a few offers.

3272 El Nido Ave this is a 3 bedroom, 2 bath home, 2296 sq/ft in size. it says it was built in 2004. The home looks to be in really good shape (not vandalized or anything). The original selling price is not listed but the tax value is $384k so it probably sold for about 10% under that. It's listed for $179,900, or $78 sq/ft. This should pencil out as a rental if you can get it for close to the asking price.

February numbers are in.

DataQuick has released the sales numbers for Feb. Keeping with the current trend, we have set another record for the lowest sales totals.

here's what they have to say,

Southern California home sales limped along last month at the slowest pace ever for a February, the result of a market crippled by uncertainty and credit constraints. The median sale price dropped by a record 17.6 percent from a year ago, a real estate information service reported. A total of 10,777 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in February. That was up 8 percent from 9,983 the previous month but down 39 percent from 17,680 in February last year.

Last month's sales total was the second-lowest for any month in DataQuick's statistics, which go back to 1988. The prior month's total of 9,983 was the lowest ever. Since September, sales each month have been a record low for that particular month.

Of the homes that resold in February, about one-third, 33.5 percent, had been foreclosed on at some point since January 2007. A year earlier the figure was 3.5 percent. At the county level, the percent of homes resold in February that had been foreclosed on since January 2007 ranged from 25.3 percent in Orange County to 48.1 percent in Riverside County.

"Sales remained extraordinarily low, and a significant portion of what did sell was in areas beset by foreclosure activity. That's where sellers are the most motivated and price cuts are largest. Mainly it's in the inland markets, often in newer suburbs, where prices got pumped up artificially with the sort of crazy loans that no longer exist," said Marshall Prentice, DataQuick president.

Those numbers are pathetic. In Riverside they sold 30% less homes this year in Feb and there was an extra day this year. The median price is down 21% from last Feb and down about 30% from the peak median in July 2006. Next month should show a decent sales increase over this month but that's normal. Sales usually increase through May or June. But those numbers will probably be far below last years numbers. Also keep in mind that last years numbers were way down from 2006 sales numbers. Feb 2007 sales were down 32% from Feb 2006.

February Foreclosures

Inland Southern California continued to be a hotbed of foreclosure activity last month, with the number of homes repossessed by lenders increasing nearly 21-fold in Riverside County and 15-fold in San Bernardino County over a year ago.

Riverside County saw 6,103 homes go into all stages of foreclosure -- defaults, bank repossessions, and trustee auctions -- which was an increase of 92 percent over February 2007. In San Bernardino County, 4,963 homes were involved in some kind of foreclosure activity last month, more than double the number a year earlier.

The most dramatic year-to-year increase was in the number of homes repossessed by lenders because the owners could not find a way out of their financial trouble by refinancing, selling the property for enough to cover the mortgage, or getting the lender to accept a "short sale" for less than what they owed.

Bank repossessions in Riverside County soared to 1,346 last month, up from 65 in February 2007. There were 1,235 repossessions in San Bernardino County, compared to 84 a year earlier.
"The bank repossessions are off the charts because properties going into foreclosure have no equity or are worth less than their mortgages," said RealtyTrac Vice President of Marketing Rick Sharga.

Analysts said they do not expect housing to rebound until distressed properties, including bank repossessions and short sales, are gone.

"You have to clear the deadwood out," said Alan Nevin, chief economist for the California Building Industry Association.

"Some say it could be 2009 before we see some recovery in the housing market," said Bob Visini, spokesman for First American Loan Performance.

Chapman University economist Esmael Adibi said he expects foreclosures will continue at a high rate, not just because of subprime mortgages adjusting but also because of defaults on prime mortgages, such as those that allowed people to start with below-market teaser rates or to make monthly payments that did not cover their principal or interest.

Inland economist John Husing said he expects that this year, foreclosures will drive down the Inland economy. "2008 will likely be the worst year in the 44 years I have studied the Inland Empire because of the housing market," Husing said.

Tuesday, March 11, 2008

Made you look!

Some auction properties are getting people excited when they see the extra low prices listed. Of course, these are the minimum bid amounts for the action and don't reflect what the homes will sell for.

Short sales can also trick you and get your heart pumpin' a bit. You see the prices and get excited. But will the lenders actually let the properties go when they are listed at a very low price.

Here's a couple of examples in Orangecrest.

18996 Alderbrook is in the new Centex/Fox development. This home is a 4 bedroom/2.5 bath and is 2700 sq/ft. It sold new in Nov 2006 for $480k. It's listed as a "pre-foreclosure" short sale for $190k (That's $70 sq/ft). That is a 290k loss or a 61% loss if you prefer it in percentage form.. Do you think there is any chance a bank would go for this? Of course not. They bank will take it, list it for $359k. It will sit for 6 months and they will end up selling it for $250k or less.

In the same tract there is another shorty short sale at 9372 Golden Lantern (was that a super hero? the green lantern's ex?) This 3 bedroom/3bath home is 2384 sq/ft. This one is listed for $215k ($90 sq/ft). Again, there is little chance the bank will go for this sale.

I'm really not sure what these people hope to accomplish. I have a feeling that these homes will probably end up being worth around what they are listed at. I think it will take a couple of years though and I doubt the banks will be too interested in speeding up the process.

Monday, March 10, 2008

Delusional realtard of the week

Another amazing listing from a realtor. You just can't make this stuff up....

Another Corona realtor has decided to list his/her house for sale. Maybe they are bored with Corona, maybe they hit the lotto and are moving to Beverly Hills or more likely they are broke and moving to Barstow (I've read that where the next RE boom will be!).

Our realtor purchased the home, 2443 Picasso Crk in Feb 2004 for $469k. The house is a 4 bed/3 bath home and it's 3468 sq/ft. It says to see pictures of the breath taking backyard but alas there are none. Just one fuzzy shot of the front of the house. Let's hope the listing agent gets those pics up soon. Our realtor obviously didn't get the memo about the current market conditions. He has this baby listed for $825k! That's $238 sq/ft.

I give up trying to guess what these idiots are thinking. There are at least 2 other properties in the same tract selling for WAAAY less than our expert's home.

2492 Hannum Crk is a REO property just around the corner. It's a 4 bed 3.5 bath home and it's a little bigger at 3816 sq/ft. It's currently listed for $499,900. It's been on the market 38 days and has already had one $35k price reduction.

255 Nanners way is also just around the corner and this home is quite a bit bigger at 4011 sq/ft. This is also an REO priced at $510k. This home has been on the market for 125 days and has had multiple price cuts totalling $100k so far.

Now if the two REO's can't sell why list another home for $325k more than them??

He list for $325k more than 2 homes that are larger than his. I don't care how breath taking his back yard is, it's not worth $325k

Here it is!

The first sub $100 sq/ft home in Corona (that I've run across).

24983 Cliffrose St, Corona 92883. This is a big-un. It's a 5 bedroom/3 bath home, 4519 sq/ft on a minuscule 5661 sq/ft lot. It's a McMansion on a Mcpostage-stamp. This home was purchased new in March 2005 for $581k. It looks like it went to the bank in Jan for $472k. It just listed for $445k or $98 sq/ft. Even at that price this thing is way too much. The location is not very good. As mentioned in a multitude of previous posts, it's too far down the 15 fwy. The traffic blows, there is no gas stations or grocery stores nearby and the tract is overflowing with foreclosures. The lot size is big turn off for a lot of people. Those homes are nearly touching. Your neighbors snoring might keep you up an night. It's not the home for me at any price but will some other knife catcher buy it at this price??

Fannie Mae, giving away free money

I ran across this gem on MSN Money today. It explains how Fannie Mae is doing a little creative damage control in order to not get stuck having to buy back bad mortgage loans that were sold off as Mortgage Backed Securities (MBS). Banks are often required to buy back loans that they have sold to Wall St. if the loans go bad within a certain amount of time. If the banks/lenders get the loans back then they are stuck with the losses when the house is foreclosed. Obviously banks don’t want this loss on the books and it looks like Fannie Mae has concocted a method of delaying the inevitable default. I’m sure they are just praying it holds off the default until after the buyback date expires. There solution is to hand out unsecured loans to delinquent borrowers so they can bring their accounts current. They are just giving away money! Unfrikinbeleivable….Do they really expect any of these people to pay this back?

Fannie Mae's new trick (from MSN Money)
Knowing the complete scope of this credit disaster is impossible because of the absurdly pliable accounting treatment accorded to financial institutions.
Case in point: Fannie Mae. Before excerpting one of the relevant passages from the company's latest quarterly financial report, let me cut to the chase with this explanation from a friend: "They take a delinquent mortgage loan and replace the delinquent part with an unsecured loan in order to circumvent the buybacks and mark-to-market consequences." That is the reality.
Here is how Fannie goes at lengths to sugarcoat it:
"We recently introduced a new HomeSaver Advance initiative, which is a loss mitigation tool that we began implementing in the first quarter of 2008. HomeSaver Advance provides qualified borrowers with an unsecured personal loan in an amount equal to all past due payments relating to their mortgage loan, allowing borrowers to cure their payment defaults under mortgage loans without requiring modification of their mortgage loans. By permitting qualified borrowers to cure their payment defaults without requiring that we purchase the loans from the MBS (mortgage-backed security) trusts in order to modify the loans, this loss mitigation tool may reduce the number of delinquent mortgage loans that we purchase from MBS trusts in the future and the fair value losses we record in connection with those purchases."
Obfuscation cannot change the big picture. The housing bubble -- which bailed out the equity bubble -- was in essence the economy. Now that we don't have the housing ATM or the jobs it created, the economy will continue to weaken.

Sunday, March 9, 2008

The median-based price indicators for last month, Horrfying

From the Voice of San Diego,

Let's have a quick look at the median-based price indicators for last month. They were, in a word, horrifying. Between January and February, the size-adjusted median price declined 5.7 percent for single family homes and 7.7 percent for condos.

I emphasize the first clause of the above sentence. The aforementioned shellacking took place in a single month. From the September 2005 peak of the series, the size-adjusted median price is down 25.1 percent for single family homes and 28.1 percent for condos. The downtrend has accelerated of late, however, and a hefty portion of that decline has taken place in the past several months.

The "plain vanilla" median, beloved by analysts everywhere despite being just about the least accurate of the price indicators, was hit even harder. It was down 7.4 percent for single family homes and 8.1 percent for condos. Again, in a month. From the aggregate peak in November 2005 the vanilla median is down 24.1 percent for detached homes and 26.4 percent for condos

Housing market spirals, no end in sight,

NEW YORK - Nervous homeowners and economic analysts have been wondering how much worse the housing market could get. On Thursday they got an answer: Plenty.

Foreclosures are at a record high. Home equity is at a record low. The housing market is spiraling down with no end in sight — and taking people's sense of economic security with it.

For the first time since the Federal Reserve started tracking the data in 1945, the amount of debt tied up in American homes now exceeds the equity homeowners have built.

The Fed reported Thursday that homeowner equity actually slipped below 50 percent in the second quarter of last year, and fell to just below 48 percent in the fourth quarter.

And that was just one example in a day of dismal housing reports.

The Mortgage Bankers Association said foreclosures hit an all-time high in the final quarter of last year. And pending U.S. home sales — those in the gap between when a buyer signs a contract and when the deal closes — came in below analyst expectations for January and remained at the second-lowest reading on record.

Experts believe foreclosures will rise as more homeowners struggle with monthly payments as the interest rates on their mortgages adjust higher. Problems in the credit markets and eroding home values are making it harder for people to refinance their way out of unmanageable loans.
"If you're struggling with payments and you have negative equity in your home, your struggling isn't getting you very far," Elmendorf said. "It's very likely you want to stop and walk away."

Gov't fixes can't force banks to lend

Fevered talk in the capital of possible government fixes for the mortgage crisis belies an inconvenient truth of the credit market: banks simply are not eager to lend money.

Congress and the government may have a limited capacity to ease the crisis because it has gotten too advanced, experts say.

The latest signpost: Even a relatively modest legislative proposal to tighten the government's reins on mortgage finance companies Fannie Mae and Freddie Mac won't be coming together soon in the Senate Banking Committee, its chairman Sen. Christopher Dodd said Thursday.

Even with the Federal Reserve cutting a key interest rate five times in recent months, banks have been retrenching on lending. Many have suffered billions of dollars in losses from subprime mortgage securities that have sucked their capital dry. On a retail level, 55 percent of U.S. banks recently reported tightening their lending standards for mortgages to creditworthy borrowers, not those with tarnished credit histories considered high risk.

"This is just not going to be solved today,' said John Silvia, chief economist at Wachovia Corp. in Charlotte, N.C., and a former chief economist of the Senate Banking Committee. "A lot of banks just don't have the money right now" to lend.

And not for the biggest "No Shit" in the long sad history of this decade so far.

Americans poorer than a year ago
Fed reports household net worth down 3.6% in fourth quarter

Considering the impact of higher prices, a bigger debt burden and sagging home prices, Americans were poorer at the end of 2007 than they were the year before, the Federal Reserve reported Thursday.
The net worth of U.S. households fell by $533 billion, or a 3.6% annual rate, in the fourth quarter of 2007, the first time total wealth has fallen since late 2002, the Fed said.
For all of 2007, household net worth rose 3.4% to $57.7 trillion, the slowest growth in five years. After the effects of 4.1% inflation are included, real net worth fell for the year.

The Fed's flow of funds report also confirmed a sharp slowdown in borrowing by households to the slowest growth in 10 years. Household borrowing rose at a 5.6% annual rate, less than half the debt growth seen during the credit boom years in 2003 through 2005. Read the full report.

Borrowing by households for mortgages slowed to a 5% annual rate, also the lowest in 10 years. Borrowing for consumer credit -- mostly credit cards -- slowed to a 4% growth rate.
Despite the slowing in mortgage debt, households' equity in their homes fell for the third straight quarter, dropping by $286 billion, or an 11% annual rate.

The IE, still 33% overvalued

According to Global Insight and National City Economics The IE is still 33% overvalued even though the combined median (Riv/San Berdu) is down to $303k. An additional 33% drop would put our median at $203k (that's even lower than I thought it should be). The last time that this survey thought the IE was fairly valued was in the first quarter of 2003 when the median price for the IE was $189k. We peaked in mid 2006 at 63% overvalued.

You can read the methodology they used to compile this report on their site as well as the excel spreadsheet with the numbers

Friday, March 7, 2008

Fanie Mae's new conforming loan guidlines

Here's Fannie Mae's new rules for conforming loans. (from Calculated Risk). In case you didn't read about it in the Press Enterprise they did raise the conforming loan limit for Riverside to $500k. The based that on a median of $400k. I don't know why they did that other than pressure from NAR or the government. It makes no sense since the actual median is closer to $300k which would have meant no change for the IE.

1. Fixed rates can be sold to Fannie on or after April 1; ARMs on or after May 1. The loan has to be closed on or after March 1 to be subject to the following rules; inventory loans (closed from last July to March) have to be subject to a "negotiated commitment."

2. No AUS approvals. It seems they plan to update Desktop Underwriter (their automated underwriting system) before the year is out, but they haven't done so yet and they're rollin' without it.

3. For principal residences, fixed-rate loans are limited to 90% LTV/CLTV for a purchase, and 75% LTV/95% CLTV for a no-cash-out refi. ARMs are limited to 80%/80% on a purchase and 75%/90% on a no-cash-out refi. CASH OUT REFIS ARE NOT ALLOWED.

4. For second homes and investment properties, the maximum LTV/CLTV is 60% in all cases for purchases and no-cash-out refis.

5. Minimum FICO for any loan is 660, with a minimum of 700 for LTVs greater than 80%.

6. One-unit properties only.

7. On a primary residence, existing subordinate liens must be resubordinated. The new loan cannot "cash out" an existing subordinate lien.

8. No late mortgage payments in the preceding 12 months.

9. 45% maximum DTI, with ARMs qualified at fully-amortizing fully-indexed rate.

10. Full doc only.

11. For purchases, the borrower must make at least 5% of the down payment from his or her own funds.

12. A full appraisal with interior inspection is required on all loans; if the property value is more than $1 million, a field review appraisal is also required.

13. Loans are subject to all current pricing adjustments, plus another .25 for FRMs and .75 for ARMs.

What does all this mean? I'm sure a few people will benefit from this. Those will be higher income families that have a down payment and can qualify (full doc) for a loan. I doubt it will help more than a handfull of people refi since hardly anyone that purchased in the last 5 years has 25% equity in their home.

Wednesday, March 5, 2008

The Kool-Aid runs deep in Cucamonga

With the market collapsing faster than Milli-Vanilli's singing career why would anyone think they can make 220% on a home purchased in 2002? How much magic kool aid must one drink to think they can ask $850k for a home they paid $385 for only 6 years ago in today's market? Should we assume this person lives in a cave, on a remote island in the North Atlantic, to be so out of touch with today's market. No, this person is a REALTOR! Another realtor that is completely out of touch with reality. Another realtor that has watched his income fall farther than New Century's stock. Another realtor about to lose his home. To be asking this much, it's obvious he drank heavily from the Heloc kegerator.

Let's take a look at his castle,
7380 Marquis Pl, rancho Cucamonga this is a large home, 3766 sq/ft and it has 5 bedrooms and 4 baths. It's agood looking home on a decent sized lot and has a nice back yard with a pool. It was purchased new in Jan 2002 for $385k. Current asking price is $850k. Our realtor/owner is looking to make $465k in 6 years. These homes were selling in the mid to high 800's in mid 2006. But 2006 has come and gone unfortunately our realtor/owner is not willing to accept that.

Unfortunately for him the banks are under no such illusion. They are in the here and now and they own several near-by homes. Nearly right behind the realtor is 12830 Golden Leaf. This 3808 sq/ft home is an REO and it is listed for $625k. That's $225k less than realtor boy.

Nearly right across the street is 12855 Golden Leaf. Same model home, and another REO. This one is also listed for $625k.

And one block over thereis 12772 Wine Seller Ct. This is also the same model home, also an REO and this one is priced at $620. Nice looking kitchen in this one too!

There's also an even bigger home priced at $599k, 12846 Crestfield Ct although I think this one is a short sale.

The banks have set their price 28% below realtor boy. The buyers have set the price even lower because the REO homes are all just sitting on the market growing roots. They have been listed for a couple of months with no sales. Realtor boy listed his today...go figure. With 3 basically identical homes priced $225k lower he must be hoping for a miracle. He better get one of those St Joseph statues and bury it in the yard!

Tuesday, March 4, 2008

So how many are selling?

Sticking with Norco for a moment I wanted to see how many homes were pending in the Norco Hills area (Zip 92860). I searched the MLS (through for 4+ bedroom and bigger than 2000 sq/ft. It found 192 homes for sale matching that criteria and ONLY 3 pending.

I also found another sub $500k home in this tract. It's only sub by $1k but it is under. This one is owned by a realtor. He bought it new in 2004 for $585k and it's now listed for $499k. No mention if it's a short sale. I suppose it's possible he made a down payment...nah. Now I'm not going to beat up this guy too much because the listing isn't bad by realtor standards but you'd think that after 186 days on market he could find time to fix all the spelling errors in the description. I counted 7. He has whacked the price 200k so far from his original asking. And with all the money realtors have been raking in the last few years it's hard to fathom why in the world he could not drop a few bucks and at least put some grass in the back yard. 3.5 years of ownership and it's still dirt?

And in other Norco news....

Just over the Hill in Bretton Gait there are now 2 homes that have broken the $600k barrier!

1460 Morab Way
is now listed for $595k. This one is probably a short sale. They've been dropping the price about $50k per week for the last month.

1453 Paso Fino is an REO that has been on the market forrrrrever. It started out at $950 in July and is now down to $575k. This is a nice house but very ugly from the street.