Most of the banks have accepted the fact that the value of those REPO's ain't what they were hoping it would be. Most of the REO's hitting the market are priced to reflect this fact. But there are still some banks (or brokers) that are in serious denial. While checking the new listings today I ran across these two REO properties in Greer Ranch in Murrieta.
Home number one is 27146 Red Maple St. This home is a 4 Bedroom, 3 bath home that is 3532 sq/ft is size. Judging from the poor pictures the house is nothing special, just an average tract home. The home was purchased new in Nov 2004 for $588K and it looks like it went back to the lender in March for $659K. Obviously the last owner used the home to finance his high rolling life style. Our "poor" lender thinks they are dumping this place at $610K ($173 sq/ft), Hey that's $50K less than they are into it! It must be a deal, right?
Unfortunately for them a $50K loss is wishful thinking. They are looking at a $250K loss (or more) in all likelihood. As an example of what the should have priced this house at lets look at another new listing just a block or two away. 26727 Chamomile St is a much bigger house with 5 bedrooms and 4.5 baths tucked into 4295 sq/ft. This home sold new in 2005 for $634K, then again in June 2006 for $778k. This one has also gone back to the lender but this lender is more in touch with the market. This home is listed for $410K ($95 sq/ft)
Does bank number one really think anyone is going to buy that house at $173 sq/ft when the can go down the street and get a newer, larger home for $95 sq/ft? Most of the homes in this tract are listed between $100 sq/ft and $120 sq/ft. How a broker and/or a lender can put a home on the market at $173 sq/ft is beyond me.
Now let's look at a couple of F'd home owners. Most home sellers are still in major denial, especially if they bought in the last few years. It's hard to admit you F'd up and it's even harder to throw in the towel and destroy your credit. But the facts are the facts and no amount of rubbing you lucky rabbits foot will get a home sold for 2006 prices. Many sellers are still listing the homes at wishing prices and a few like the one below (on Nuthatch) are just complete morons listing homes at the price they do.
Remember the days when prices made sense and similar homes in similar areas would all be priced within a few percent of one another. Even if one house was totally decked out with pool and fancy landscaping the premium for that home would only be 10% or 15% more than the average homes. Today's market is so screwed up that similar homes can have wildly different asking prices, especially if one is a REO or short sale.
19285 Nuthatch St in Perris and 18774 Malkoha St are examples of this. These are identical homes in the same tract. One home is all tricked out with landscaping and a pool and the other is still looking a little bare in that department. The nice house was originally listed for an unbelievable 1.1 million (in Perris, WTF dude??), Now it's down to $999k ( oh yea, that's better). Someone should call this guy and tell him his house is in PERRIS!.
The other home (Malkoha) is a short sale listing and it is priced at $380k (and it's not the cheapest house in the tract!). Granted it needs some landscaping and it does not have a pool but it's 62% less than the other house and for that extra $619K you could put in a pool, landscaping and a couple of Ferrari's.
We could sure make the inventory numbers look a lot better if all the wishing listings were removed. I have noticed lot's of them have been dropping off over the last few months but there's just so many of them to weed through when you are looking. I just wish the agents would drop those stupid listing and remove all the useless clutter from the MLS.