Wednesday, April 23, 2008

Scary, Scary, Numbers

I found a very cool little tool over on the LA Times website that gives you foreclosure info per zip code. Just type in a zip code and you get the foreclosure totals for this quarter and last year's 1st quarter. It calculates the % change and it also tells you how many households per foreclosure there are in that zip. That last number was a little shocking for some of the zips. In Perris (92571) for instance, 1 in every 25 homes was foreclosed in the first quarter of this year. ONE in TWENTY FIVE!!

To save you the trouble of looking up all the zips I did most of the popular ones. take a look at some of those numbers. riverside 92503 was up 593% over last year...that's just nuts. Here at the city, zip, 1st qtr 2007 numbers, then 2008 numbers and the change. If this does not put the fear-O-god in ya, nuthin' will!

City zip 2007 2008 % change homes

Corona 92879 30 142 373% 1 in 106
Corona 92880 33 172 421% 1 in 41
Corona 92881 25 91 264% 1 in 100
Corona 92882 53 165 211% 1 in 119
Corona 92883 28 155 453% 1 in 47
Norco 92860 10 59 490% 1 in 120
Murrieta 92562 63 247 292% 1 in 86
Murrieta 92563 63 283 349% 1 in 45
MoVal 92553 57 293 414% 1 in 67
Moval 92555 51 192 276% 1 in 35
Perris 92570 21 105 400% 1 in 120
Perris 92571 50 323 546% 1 in 28
Riverside 92503 31 215 593% 1 in 110
Riverside 92504 25 126 404% 1 in 140
Riverside 92505 14 92 557% 1 in 145
Riverside 92507 13 70 438% 1 in 271
Riverside 92508 19 95 400% 1 in 84
San Jacinto 92582 16 84 425% 1 in 31
Temecula 92591 20 113 465% 1 in 115
Temecula 92592 68 230 238% 1 in 93
Winchester 92596 22 122 454% 1 in 25


ButterMonkey said...

Wow, that's a lot of foreclosure!

Question for anyone who wants to answer: I have a friend who has to sell her house as a short sale. She told me last night that because of the housing crisis, banks are making short sales easier blah blah blah. When I asked about the repercussions of a SS, she told me that if the bank agrees to it, she and her partner do NOT have to pay back the difference AND there will be no credit damage because all it will say on her credit report is "Paid in full" due to the SS being a new contract with the bank or something like that.

I sat there thinking "WTF!? How can you do something like that and just walk away scot free?" So, is she just blowing smoke up my ass, or is she really going to be able to get out of this loan with no consequences?

golfer_X said...

Most banks will not allow a short sale unless you can prove you are unable to make the payments. They also usually will not allow it if you are current on payments. So basically she has to tank her credit by missing some payments. But other than the late pays it's far less damage than a foreclosure. Short pays are still hard to pull off though, the banks are still dragging there feet.

ButterMonkey said...

X, they are current on their payments, but their 5 year ARM is set to reset soon. She told me that because they tried unsuccessfully to refinance twice and they will not be able to afford the new payments, the bank will be willing to work with them instead of losing even more money by having a foreclosure on their hands. I'm just wondering if she's being a wee bit optimistic about things or if the banks are really starting to make it that easy now.

Anonymous said...

I don;t think it's too hard to "prove" hardship..but I'm not sure.

I have a question, should I buy now in IE before the rates go up and if so where will I get the best return on my $.
I want 3,500' in a nice area, S corona, Lake Hills or LA Sierra maybe and don't want to pay over 450k. Is that feasible?

golfer_X said...

3500s/f for under $450 is not problem. Hell some of the new tracts are selling in that range. I'de be shooting for 350K for that size house myself unless it's in a spectacular area. Check the KB Bridgeport tract. There are asking a bit more than that but I'de bet they would take just about anything at this point. The last time I was in the Van Deale models in Victoria Grove they seemed very willing to deal too. I'de still wait till the fall. The rates are not going to go up much in a few months and if you can save $50k or $100k you will be WAY ahead even if the rate goes up 1/2 a percent.

Rob Dawg said...

$/sf are meaningless if you are also on the hook for Mello-Roos and HOA.

Santa Ana River Rat said...

well said dawg! looking through riverside county assessor's website, most corona homes are loaded with mello roos up the ass. norco seems a bit better in terms of tax but you'd have to put up with horse shit.

golfer_X said...

95% of the stuff built in the last 10 years in the IE has mello roos. Most of recent stuff those will add about anywhere from 1/2 to 1 percent to the total tax. It's hard to find a house that doesn't have MR unless you stick with 20 year old homes.

Personally I'de rather live in a HOA area. At least that might keep the nieghbors from parking cars on the front lawn or painting the house barney purple.

Tom S said...

A bank is generally not going to let you do a short sale with a perfect payment history. At this point, however, most banks with lots of loans in the IE know the values have tanked over the last 2 yrs. and may allow a short sale. The negotiation will come in as to how much of the difference the homeowner will have to pay in the form of an unsecured note. Your credit will take a hit and it will be marked as short sale or paid as agreed not paid in full (unless you can negotiate this item).

Rob Dawg said...

Most of recent stuff those will add about anywhere from 1/2 to 1 percent to the total tax.

This is where the other shoe drops. Those fees are based upon the assumption of "full participation." If you read the docs real carefully you discover the obligation is each and joint just like a bad marrriage. Anybody left standing is responsible for the entire Mello-Roos. Suprise.

Anonymous said...
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Anonymous said...

X I have been reading your posts for a couple weeks and I do have to say I share much of your thinking. I too am in the market for our first home, but with all these different opinions and points of views it's quite confusing.
Our target is no more than 310, I know its not much but thats all we can afford. My question is, are we going to miss the boat for waiting to see a significant price drop? We have seen homes listed one day and gone the very next day. What's going on?

Santa Ana River Rat said...

1/2 to 1 percent of tax isn't the big ugly. If you look at most of south corona, they have at least one and most up to 3 MR that'll range from $1600 extra a year to $4500 extra tax a year on top of prop 13 1% property tax. And get this, it's based upon the sqft of your home. And for corona most of their MRs have 20 year duration on it. Yeah, I'd rather pay HOA, at least I get something in return. But then areas like Eagle Glen, where you have an HOA and a killer MR or two... so pick your poison.

BerthaJean said...

eduardo: Don't be in any hurry. Prices have no where to go but down.
Things may appear to be improving over the next few months heading into summer (and the REIC will spin this as much as possible) but I will be surprised if there isn't AT LEAST another 10% drop over the next 12 monhts. An absolute bottom in SoCal is probably 2-3 years away.

BrianH said...


Have your friends get a hold of me. I don't want to do a short sale, this doesn't involve a refinance, the home stays in their name, they are and remain the owners, I don't want to buy the home and I can probably make the pain of their situation hurt less or possibly make the pain go away. Again, they own the home in their name with ZERO title changes for the next decade or beyond until the market comes back and they can then sell. No funny stuff, a straight up business transaction. If they only have ONE mortgage or equity line against their home there is a chance I can help them keep the home, not damage their credit and make a win win situation for everyone involved.

Click on my user name and then click on the "email me" link to get in touch with me.

This offer goes for anyone else who is or knows someone that has only ONE mortgage against their home, wants to keep it for the long haul and actually cares about their credit.

golfer_X said...

Eduardo, don't sweat it. Prices are not going up any time soon. And by soon, I mean in the next 5 years or more. With the tremendous amount of foreclosures on the market and coming to the market there is nowhere for prices to go but down. The competition for the best deals right now can be fierce but those are the only things moving. Banks are starting to price more and more properties low enough that they have a chance of selling. They seem to be catching on and competing for the few qualified buyers. There are still thousands of overpriced REO's though and thousands more coming. $310 should be more than enough to get yourself a nice home in a year. You can easily buy a nice home in MoVal or Murrieta for that price right now.

Martin Burtin said...

"The competition for the best deals right now can be fierce but those are the only things moving."

Yeah, I noticed this nice home on the golf course in Eagle Glen: 1642 FAIRWAY DR CORONA, CA 92883
It showed up the other day for $430K on Redfin, but was pulled after only one day. I don't understand why they would not leave it on the market for enough time for multiple offers. You think somebody came with enough cash to make the deal go immediately, or you think there is some shady stuff going on, or what? I share Eduardo's opinion that listings that appear and disappear after a very short time, seem suspect... although I don't know enough about how the game is played to say if the rules have been broken. Insight Golfer, anyone?

Anonymous said...

Eduardo and Martin.

Two scenario's for the one day listings
1. Investors/indivduals with "all cash" offers and 7-10 day closings.
2. REO agents who "pocket list" hot properties and call friends, already have buyers in place, but list on the MLS for disclosure purpose.

As golfer X has stated many times before the Tsunami is about to sweep the land, there will be "foreclosures in them hills" enough for long as you have good credit and a down payment(3-5%), 20% for rentals.

BrianH said...

I might be wrong but I'm not aware of any banks doing purchase money loans on rental/investor properties with 20% down. The lowest down I have seen is 25% with most being 30% now.

Santa Ana River Rat said...

30% sounds more realistic now. credit pool is real tight. Unless you're doing FHA or VA but that's for primary residential.

Anonymous said...

Thanks X,

Yea I think I will rent for 6mo's and get serious in November, I have to move out of the place I sold at the end of May and I feel rushed. Even with the tax I think $100 to $110 a foot in a really nice neighborhood would be safe for a primary residence.
Good info on here.

TrouserTrout said...
This comment has been removed by the author.
Anonymous said...

Thanks for all response and your honest opinions.
Re-buster, I think there is an inside game going on with these REO's. I called on one listing the very next day it was listed. The listing agent informed me that she had posted it at midnight and the bank accepted the offer at 8am that same day. Shady if you ask me. Why couldn't they wait to see if a better offer came in?

BrianH said...

Edwardo and the rest who are talking about the one day listing type stuff.

This is just my opinion so take it for what it is worth.

I bet that those homes are being sold to cash buyers that have spent the time to build a relationship with that REO agent. Those of us who are true professionals with the cash ready to deploy at a moments notice will always get the best deals right up front. That is becuase the agents knows that we are going to perform, we are big boys who are professional investors and we aren't going to be a pain in the arse up to/during and after we purchase the home.

Also, those of us who have been waiting for this market have been building these relationships for well over a year now and frankly are just a head of the game. I've been working relationships with agents for close to two years now and they are starting to pay off big time.

My best advice to you guys who want these good deals, don't have 100's of thousands sitting in a bank account and haven't been working on relationships is to build a relationship with a guy like me. We are always looking for qualified people who have the credit and down payment to buy our inventory on the spot. For example, I'm opening escrow today on a 3/2 1200 square foot home that in top shape is easily worth 165k in this market. I'm buying it for 90k and if someone I trusted wanted to take it off my hands, isn't going to jam me up by not closing and can get me my money in 30 days I would sell it for 100k. Heck, if I really liked them and they had a huge down payment I would sell it for 95k.

Don't complain about the game, you just have to know the rules and find your position in the game.

outofluckchuck said...

Brianh- With all due respect to you and all the investors in this forum, I do think you are right as to who is purchasing these homes for investment purposes. The sad thing is that we as first time home buyers are left in the dark. My wife and I have great credit, pre approved for a loan and no debt. I honestly think we would close with no problem if an opportunity came up.

Martin Burtin said...

Would not the REO Agent of a bank be in some serious hot water if they took a house off market after only one offer and in less than one day if a solid offer came in that was higher and someone above the REO Agent learned that it was refused? Ultimately the REO Agent is a bank employee, right? Beholden to the bank's investors?

golfer_X said...

i have a hard time believing that investors are buying these $400k Corona homes. There is no way in hell you can rent those and make any money at that price. Those have got to be going to the people that just want a house and think these prices are a steal. Like my moms friend that just closed on a house a couple of months ago. She was raving about the deal she got. She got a big new house, the builder threw in all kinds of extras all for only $390k. That was in late Feb. I saw this week that the builder was now selling her model for $329k. I wonder what she thinks of her deal now..... Equity burn of $30k per month!

Santa Ana River Rat said...

brianh is right about building relationships because after all people are people and will help out friends first right? But for what reason? Like the inside trading in the stock market, although it's illegal, some people believe it's only illegal if you get caught. So I'm sure there are some real estate professionals who feel the same way about preferring one customer over the other. I'm not saying it's right but that's probably what's happening all around us. I also don't doubt brianh or other "investors" are sitting on cash waiting to jump back into the market and are capable of fetching good deal because the almighty cash rulez but these investors often look for income potentials rather than quick turnaround sale. So they are usually targeting lower priced homes where the going rent will help them keep the house financed. So I don't think the real investors are looking to buy 400k home with all cash offer. Also most true investors are quite frugal, live within their means and do not flash cash all over the town and sure as hell do not buy 400k house with all cash in this kind of market.

BrianH said...

You are absolutly right. I only look at 3/2's in the 1000-1600 square foot range that can be made to cash flow out the gate as are most legitimate investors. We all kind of look for the same stuff.

Secondly, to whom ever indicated there is illegal stuff going on. Not sure where that came from so let me paint a picture. The bank says list XYZ home for $90,000. This home needs some work and may be a little outside of the comfortzone for your typical owner user buyer. A smart agent is going to let his professional buyer know about this, the price that the bank wants is "in the money" so this professional buyer person gets it. That isn't illegal and you as an owner/user didn't miss out on anything. See, what you fail to realize is we are only looking at the bottom 5% of the listings. You as an owner/user gets to look at the remaining 95% I assure you, spend a day with me and you wouldn't want what I try to buy. After a day slumming through vacant REO's I feel so dirt I have to take a second shower.