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.
5 comments:
They were in such a hurry to get it done. Putting everything on full tilt speed made for some expensive and wasteful mistakes. The stories I could tell you....
Towards the end the high turnover in management staffing drove the costs sky high, but it didn't matter. "Next month you could raise prices to cover."
Come on, do tell. I'de hate to move into that tract and find out later they built it on quick sand or something.
No, not built on quick sand. Just a lot of oh-oh's in forgetting permit deadlines, and basic everyday delays that forced them to spend lots of money to play catch up.
Basically they missed out on a lot of extra mark up because of the rush to build.
One thing everyone forgets is that the public infrastructure of the IE was not equipped to deal with the exploding demand. Every developer wanted to be first in line for everything, and it was not the case.
The worst part is that these agencies played catch up thinking the demand pace would be forever. Now you will see bond failures creep up, because they borrowed a lot of money for future development that will never materialize to pay for it.
Agencies are still building 200 to 500 million dollar utility projects all over the IE that are intended for a population that is never going to materialize. The worst public overspending is in the Perris Valley, but it is a problem everywhere.
Today alone there are FOUR new listings in The Retreat. 2 are REO's, one is listed as a short sale and the 4th does not say. It must be a short sale though as it is listed for nearly $600k less than they paid for it (still WAY too high). I am not sure if anything has sold in there yet this year. I know there is one pending but it's been pending forever.
I don't see any way the HOA in this tract can survive. It looks like 25% of the homes are empty and another 25% are for sale and probably not paying the HOA fees. That has to be a bit scary for the people that are going to try and stick it out.
Another one just showed up on Redfin, that's 5 today. This one is also an REO.
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