I was all impressed with myself when I found a member for the $600k club last week. But now we have a $760k loss and even an $830k loss. Both in The Retreat. This development is the poster child for bubbles gone mad. These latest two homes are perfect examples of greed (and very likely fraud).
22262 Jessamine Way is a 4 bedroom, 4.5 bath home, 3760 sq/ft. It sits on a 1/4 acre lot but has no golf course frontage. It looks as though it was purchased new in Feb 2006 for $901k. Only 8 months later it was flipped for $1.4 Million. It does not look like they even planted a fern or a blade of grass for the $500k profit they made. Of course this deal went south in a hurry. The bank got the home back and has been trying to unload it now since Jan. It's currently listed for $639k making this a loss of $760K from the year ago sale. They might have a problem getting the price since the new KB homes are about the same price as this REO.
8309 Sanctuary Dr. is the "Biggest Loser" so far, as far as I can tell. This home is a 4 bedroom, 4.5 bath home that is 4743 sq/ft. It also sits on 9143 s/ft lot so there is not much of a yard. This home looks to have sold new for $1.4 million in May 2006. This one was also quickly flipped for 1.5 million in Feb 2007 (what kind of idiot paid 1.5 million dollars for a tract home in Corona in 2007???). And another thing, $1.5 freakin million dollars and you get 4" square white tiles on the kitchen counters, WTF. Once again, this quickly went back to the bank. It's now listed for $670k. Making this a $830k loss in one year (less actually).
Last year I did a post (dec 8th) about the first two homes listed in The Retreat under $700k. There are 22 as of today priced under $700k and 9 of those are under $600k. Several of them are under $550k in fact 4 of them are with the lowest sitting at $500k (although it's a short sale attempt). In addition to all the resales, KB Homes has dropped the price of the new homes down under $700k, they now start around $640k. Hell they might even be lower now as the last time I checked was about 6 weeks ago.
In a way I feel sorry for anyone that bought in The Retreat thinking they were actually going to live there (sorry, but in the same way I feel sorry for the kids that ride the short bus). It's very obvious at this point that they whole tract is a big ponzi scheme on a grand scale. Flippers, speculators and greedy builders drove the prices up far higher than they should ever have been. Now it's just a matter of how far will this area fall. many of them are already past 50% and to me they still seem way too high. I think these will settle in the mid to high $400's at the low end and maybe somewhere in the $600s for the bigger better homes.