Wednesday, July 2, 2008

$280k inEastvale


In one of the early posts on the blog I stated the I thought thought the smaller homes in Eastvale would end up selling around $250k. Of course there were some doubters. I was confident in my prediction at the time and I'm still confident, although I'm begining to think I should have been less generous with my numbers. The speed of the price drops are taking me a little by surprise (still too slow for some folks though). I've seen a few listings in Eastvale under $300k but most were auctions, homes that were stripped or short sales.


This week there are a couple more. 7547 Walnut Grove is one of them. It does not indicate that this is a short sale or a REO. It looks like this is the original owner from 2001 that is selling. So there is actually a chance this guy will still make money on this house (or at least not lose his ass). It's a 3 bedroom, 3 bath home, 2462 sq/ft on a quaint 6000 s/f lot. The home is listed for $280K or $114 s/f. Currently this is the best priced home in the area so it should fetch a few offers and it will be interesting to see what it sells for. Let's hope this one sets a new trend and we see lot's more listed under $300k.

5 comments:

MountainLife said...

Golfer, I have to say that today completes the greatest vindication in my life. I sold in Moreno Valley in Dec. 2005 and have rented ever since then. People thought I was crazy. While watching CNBC today, the usual panel of permabulls looked like their dog has just died. They have had their shit-eating grins wiped from their chearleading faces. The market is in a freefall, I guess they have been taking their own advice. Someone lock the windows or look out below.

golfer_X said...

I've been watching my company stock fall like a wounded duck. Every time that freakin Cramer says buy it goes in the toilet. My head is starting to hurt. I'm glad I moved all my 401K out of stocks a few months ago. I wish I had sold in 2005 or 2006 but since I bought in 88 I'm still way fine. But I could have walked away with a wad had I sold. Fortunately I didn't fall into the trap and pull out all my "leverage".

Empire Realty said...

Yup, I have been watching my vast holdings, NOT, shrinking. MY home will be upside down within the next few months, bought in 04 and I have never had to work so hard for so little.

The bright side I see home prices diving well below the carrying costs to rental rates. I have enought cash stashed that with my credit scores and 18 years of playing this game I am ready to buy 20-200 homes. Leverage it out and shoot the moon, I will either retire well or end up in a single wide trailer in the middle of the desert.

Looking forward to going all in in the Inland Empire.

RJH

Martin Burtin said...

Empire, just for the sake of polishing my crystal ball(s), and not looking to give you a hard time...

It seems to me that prices should dip until the supply/demand dynamic kicks in. We have a huge demand here in California. Even with all the negative press, people still want to own a house, it's the American Dream. And apparently, the Illegal Alien dream as well. And investors are always circling like vultures, picking off the prime opportunities.

When rent and house payments are about equal, people will buy and investors too. If prices push lower, as they may have to in outlying areas where the commute to work is onerous, then rents too will be pushed down, as people leave rental units in favor of ownership.

The point is, I don't see rent prices staying high and housing prices dipping under them, they have an economic relationship to each other, I believe. Hoping to buy and then rent to people for more than you pay on your holding cost, is historically a long shot around here, but I suppose it could happen if credit is so tight that people can't buy.

Otherwise, if you buy a bunch of rentals at the bottom, you're probably looking at the more traditional break even scenario, and waiting for housing price appreciation to give you your main return. That might take awhile, but it's very likely to make your retirement pleasant. How do you see it different? I'm open to enlightenment.

golfer_X said...

Wanting to buy and having the ability to buy are two very different things. In the last few years all you needed was a pulse to buy a house. In normal times that's not the case. I know a lot of people that want to buy a house. But with lenders going back to the old methods of qualifying borrowers there is no way these people will ever get a loan. Those people will be stuck renting. Even if the price to buy falls below the price to rent many people will still need to rent. There's a lot more people out there with 600 Fico scores than there are with 800.
There will always be a large rental market of young people, people that move around a lot and don't want to buy, and those with crappy credit scores. There's also a lot less demand to buy when homes aren't perceived as a way to get rich quick. It's shocking how many of the current crop of buyers think the prices are going to resume their meteoric rise again. A lot of these people think they are going to make a killing. I keep hearing crap like "buy low, sell high" whispered when I am looking at open houses.

Rents might fall in the IE, they did in the early 90's when the last bust happened. But it was not that much and once all the distressed properties were gone the rents went back up again.
I think the biggest risk to a plan to buy a load of rentals is the chance of a bad recession or even depression. Unemployment is shooting up (up 2% in the IE in the last year). If it continues there will be a lot of empty rentals. Unemployed people don't usually rent.