Sunday, March 2, 2008

Norco Hills goes sub $500k ($500k loss)


The first sub $500k listing in the new Norco Hills development has hit the market today. I've looked at a few in this area that were in the low $500s. But this is the first listing priced under $500k that I've seen.

3221 Cutting Horse, Norco is a 4 bedroom/2.5 bath home, 3022 sq/ft on a .4 acre lot. The house looks good but the yard is still dirt and weeds. So you will need to plonk another 20k min into this home to get the back yard finished. The last sale on this home was $990k in Dec 2006. This home sold new in 2005 for $645k. This illustrates perfectly the insanity of the recent real estate bubble. To think a home could go up $345k in 18 months is just crazy. We are not talking about a home that had 300k of upgrades added. This home looks identical to the way it did the day the builder put the done stamp on it. There are no upgrades inside, there is no landscaping, no pool, no nothing. Yet this home went up $345k in 18 months. Well, now it's owned by the bank and they have it listed for $490k. That's a $500k loss (51%) in 14 months for the lenders (I am assuming this was 100% financed).

19 comments:

Peppermint Hippo said...

Now that the $500k barrier has been broken, I'm sure others in the neighborhood will soon follow. I'm waiting for homes of this calibre to break the $400k mark. Not sure if they will, but if you take values in 2000-2001 as a pre-bubble baseline, it's not that far-fetched. These newer homes didn't exist in 2000, but more rational median values certainly did.

Tyrone said...

it's not that far-fetched.

Even less far-fetched after you throw in economic/credit/market turmoil.

Money market fund assets have grown 40 percent in the past year; nearly $300 billion have been added to date in 2008.

golfer_X said...

I'm with you Hippo, Im hoping homes such as this one go back to 01 prices or there about. That would put it around $400k. These homes were not here in 01 but other similar sized homes on similar sized lots were selling in the high 300s to low 400s back then. 6 months ago I was doubtful that they would fall that far and I figured if they did it would take 3 or 4 years. 6 months ago it was hard to find anything in this area listed south of $800k. It's amazing how fast these prices are falling. It's almost scary.

Anonymous said...

These tract houses in Norco have ruined the original character of the town and turned it into yuppiedom.

pedro74 said...

What's scary, is that some jackass paid nearly a million for that plain-jane stucco shack a year ago. Scary part two, is that a lender actually thought it was a good deal and financed the purchase. Scary part three, is that some knife catcher will think this thing is a smoking hot deal and buy it. Even at $490 this POS is still at least $100k overpriced.

ice weasel said...

Last I heard millionaires were lining up to buy mansions in Norco.

The time to buy is now and the place to buy is Norco!

Anonymous said...

Oh yea, the original character of Norco is gone. But I was never a fan of dilapidated 1960's ranch homes, roads filled with ruts and holes and every other car some 1970's vintage pos truck spewing smoke out the ass end. Yea, it was way better 10 years ago.....

Peppermint Hippo said...

X, you need to profile the Edenglen development in Ontario. I'd recommend driving the project at night. Check out www.edenglen.com and www.brookfieldhomes.com. On the Brookfield site, click on "Hot Properties".

golfer_X said...

I prefer not to drive anywhere in ontario at night except The Mills. I'll take a look at those.

Anonymous said...

So now Ontario is subpar for other IE dirt people? Dont forget your Kevlar when going to 'The Mills'.

pedro74 said...

Most of Ontario is subpar alright. Unless you are driving a Chevy Impala with spinners you get funny looks driving thru most areas. It's gang banger central. I live here and it is THAT BAD!

Briar said...

That Edenglen development is just a short jog up Hamner from Eastvale. Just turn left onto Riverside. You can't miss it. The reason you can't miss it is those gigantic, immensely ugly, electric thingies. The high wires and that monstrous plant or whatever it's called. There are houses right next to it. I mentioned it once before. I can't imagine anyone ever wanting to buy something right next to that thing. You'd probably tingle every time you stepped out your back door.

Anonymous said...

'I live here and it is THAT BAD!'

It must suck to live off of Holt then! Good luck with that. South Ontario (Riverside Ave) is decent. Not snob hill but decent to raise a family.

Rob Dawg said...

I prefer not to drive anywhere in Ontario at night except The Mills.

I'm half expecting the mall to offer escorts from the freeway to the mall across the dangerous and vacant parking lot next Christmas.

Rob Dawg said...

I don't want to be an ass here but when I draw concentric circles around the mall I honestly don't see anyplace I'd want to live at 5-10-20 miles or more. After that a few foothills and mountain communities and then 40-60-100 miles and nothing again.

Lots of the neighborhoods I just insulted are probably nice but then again are they so much nicer that they justify costing 5x as much in Texas or the Carolinas?

golfer_X said...

We we have to work with what we got. Taxas and the Carolinas are a little out of the reasonable commuting distance to work for most of the folks living in Ontario. Ontario like most cities, has bad areas and good areas. Most of Onrario between the 10fwy and the 60fwy is not very good. Some of it is down right dangerous. North of the 10fwy most of Ontario is fairly safe as are most of the areas south of the 60 fwy. There are rough pockets in those areas but most of the housing is newer and those sections are decent areas. Cali has always been more expensive than Texas. If you've ever lived in Texas you'll understand why. Yea, it has some nice areas too. But most of Texas is a hot wind blown hell hole, with the occasional tornado, softball sized hail storm or biblical flood thrown in to break up the monotony of the wind.

ProblemWithCaring said...

Cali has always been more expensive than Texas. If you've ever lived in Texas you'll understand why.

I hate TX, but I get Rob's point.

Ostensibly, we all pay the “Cali tax” for the benefits of living here - we are in the club, so we "know" what they are – no need to get into ‘em.

But the "Cali tax" has to start reflecting the increasing gas prices, rotting infrastructure, higher taxes for fewer services, decaying schools and a pervasive (and permissive) gang and drug culture, that exists in areas on the periphery of urban job centers.

At a certain point, if that issue alone isn’t addressed, living in the IE becomes objectively worse than living in "TX", etc.

Anonymous said...

Yo X, I read recently that Wells Fargo has deemed the entire southern California region to be a "severly distressed" re market, so henceforth, they will require ALL customers financing a mortgage with them to put down 25% as downpayment. 25%. Is this true? If so, will other banks soon follow (BOA, countrywide, WAMU), and what kind of effect will this have on our markets here?

golfer_X said...

If all lenders start requiring 25% down it will kill the market. Hell I don't even have 25% of any of the houses I'm looking at. I might be able to scrape up 10% if I cash out some of my retirement investments. Not touching the 401k though! I'm not sure what percentage of the sales are seeing a 25% or higher down but I'd guess that it's less than 20% of the sales. FHA is still an option for lower priced homes. FHA loans only requires something like 3%. Of course FHA has some actual guidelines like income, ratios etc and at a 3% DP you will need PMI. FHA max is less than $400k so that will help drag the prices down below the limit.

Money is getting hard to get (and more expensive). Banks are getting very conservative and they are increasing the rates to offset some of the risk. This should put more downward pressure on the prices.