Saturday, May 17, 2008

How low can ya go?



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%.


8 comments:

golfer_X said...

By the way, I have not been ignoring ya'll. My freakin internet has been down for a few days. Verizon finally showed up this morning and fixed it.

Bigdog said...

Not a problem. I just though you were re-coping from the vacation.

I hope thoses 60sq ft prices make there way inland to Eastvale and get me down to at least maybe the 90sq ft range do you see that happen or better by the end of the year??

I see a drops usually over a 3 month period for sure not month to month.

colleeeen said...

dang. why can't there be any jobs out there for my husband? we're still stuck in south OC.

Sellin @ Da Drop said...

What does your husband do? I am in IT and I see some jobs out here. They pay less but so will you on a newer home for under 200k!

I have always said the IE will overcorrect. Way too many people living off their equity in the last 5 years now in trouble. People always said 'its not as bad as you think'. They were wrong. We are getting slammed out here. Worse than most residents ever imagined.

colleeeen said...

he's an EE/CE firmware engineer. i never find anything out there on craigslist or Monster. yeah, with houses at $200k we could absolutely afford the pay cut. but we're still double the price on this side of the hills, and we WILL NOT commute. ah well. i should just go back to school and get a nursing degree.

golfer_X said...

Lotsa nursing jobs out here. My oldest daughter is on the waiting list to get into the RCC Nursing program.

BrianH said...

FYI that Tuscany Hills/Lake Elsinore house for 184k is a mistake. The property is in escrow at a much higher price.

Empire Realty said...

I was in Desert Hot Springs and Palm Springs this last weekend and there are homes in the $50 sq/ft.

Me 2 I am giddy about homes under $75 sq/ft in the Chino Valley. If we keep dropping at $15k a month it will not take long.

Take care!
RJH