How low can the prices go?
Just a few months ago I wrote a post about the first homes to crack the $100 s/f barrier. That was back in mid October 2007. So here we are only 7 months later and I am now finding homes under $70 s/f and I even found one listed under $60 s/f. Granted most of these homes are out in Hemet, San Jancinto, Wildomar, Perris and Lake Elsinore but those price declines are going to spread inward. Now don;t go getting all giddy thinking about a $60 s/f home in Chino Hills. That's probably no going to happen. What you might expect is similar percentage declines. Many of these homes are posting declines of around 60% from peak (or more). Let's take a look at a few of these.
The first one has got to be a record breaker. 22 Plaza Avilla in Lake Elsinore. This home is a 4 bed, 2.5 bath, 3208 s/f on a 9600 s/f lot. The home sold new in 2004 for $465k. It was flipped right at the peak in Oct 2006 for $650k. The bank got the home back in Feb. They listed it for $360k and have been dropping the price ever since. It's currently listed for $184,300! If it sells for that, the loss would be $465,700, or a 72% loss!!
Now if that's not some kind of record loss, I dunno what is.... (Currently it's listed for $57 s/f)
This one is not quite as impressive as the last but the loss is still substantial. 343 Pamela ct. in Hemet was built in 2002 just as the market was catching fire. It is a 5 bedroom, 3 bath home, 2921 s/f on a 7400 s/f lot. It sold new for $199,500. It sold again in May 2005 for $397k, then again in Jan 2007 for $500k. The bank took the home back in April and it's now listed for ($63 s/f) $184,900 or just less than it sold for when new . If it sells at asking the loss will be $315k or 63% in just over a year.
1873 Rosemont Cr in San Jacinto is our next example. This one appears to be a victim of the Home Equity ATM. This home is a 4 bedroom, 2.5 bath, 2258 s/f on a 6500 s/f lot. The home sold new in 2004 for $255,500. It was lost to the bank very early in the crash, in fact this one was lost before the crash really started. The bank took this home back in April 2007 for $342K. Quite a bit more than the original purchase price. So the owners obviously sucked out some cash.
The bank listed the home WAY back in June 2007 for $324k. They have been chasing the market down ever since. After 7 price drops they are now down to $150K ($66 s/f). I think they might even get it sold now! The loss is probably higher than I will estimate due to the high probability of a 2nd lender . If we go by the REO amount this home has lost $192k or 57%.