Thursday, July 10, 2008

Another 20% according to Bank of America

Another 20% according to Bank of America!

Bank of America Chief Executive Ken “ As for the housing market, Lewis said Bank of America's latest forecast called for a further 15% decline in home prices nationwide, with the decline going into at least the first quarter of next year.

In the case of California, Florida and other markets that had the biggest booms, a further 20% decline is more realistic”.

Personally, I think we will see more than another 20%, especially in the areas that have only fallen 20% to 25%. But assuming he is correct that will bring the median in Riverside down to $230k and in San Bernardino the median would fall to $200k.

There you have it Ladies and Gents, The chief exectutive of Bank of America thinks the median in Riveside will be $230k next winter! Yup, there's never been a better time to buy....... (sarcasm off)


Curious said...

Nice another 20% off, just got an email from Van Daele and they have a new community in eastvale that is starting in the $300's, I still like the 4365 Cabot Dr property. Golfer, what are the pros and cons of that property, is it a good buy at that price or does it still have a lot more to go down?

bigdog76 said...

Golfer X .What do you think about $105 in eastvale??

I put my first offer in below that low balled it but I dont think I will get it. It probley has over 15 offers by now. All the houses that have been selling over in eastvale have been either list or plus or minus 5-10 thousand up and under list. The banks always place the houses just right so it starts a bid war to some degree.

I keep getting into deep discussions with my agent about prices dropping more and I refer him to the blogs and posts and he is still just a salesman.

I will be right he will be wrong.
So Bank of America Exec is saying 15% going into the first quarter or by the end of next year??

golfer_X said...

The Cabot home is nice. My wifes friend lives on that street in the same floorplan. Personally I don't like that tract much because of all the trucks on Temescal Canyon. I also don't like the styling of the homes much (plus I prefer single stories). There is a big rock quarry on the other side of the golf course. God knows how much racket that thing makes when it's operating. It's always been closed when I've been over there.

On the plus side. You can walk to the Dos Lagos mall, the movie theaters and loads of good places to eat. There's a pretty good sushi place in there too! Those alone almost make up for the things I don't like about that tract. Being able to walk home after happy hour is a big plus for me.

Today at it's current price it's a decent buy. It's hard to say how much that golf course frontage is worth. If you figure it's worth $50k then that house is probably within $50k of it's bottom.

bigdog76 said...

What is everyones take about the government bailing out Freddie Mac and Fannie Mae? Just posted on MSN today. And get this the tax payers are going to pay for it.

Curious said...

thanks Golfer, any dangers from air particulates living that close to the quarry? Not sure but it doeesnt seem healthy if that quarry kicks up a lot of dust, not to mention all the exhaust from the trucks as you were saying on Temescal, thanks for answering my question, not to familiar wtih Corona since I only lived in Silverlake, Irvine, and Alhambra, so your comments help a great deal. Thanks!

dgelz said...

Centex Homes dumps plans to complete 1/2 finished master community (Orchard Glen) in Corona.

I was bored today, so I decided to take a look at the new home models in Orchard Glen in Corona (off Foothill, up at the base of the mountains). The wife and I like a couple of the models there, and have been stopping by from time to time, eager to see when the next phase of development is to begin (there are a couple of really nice lots we've been waiting on).

Currently, they're half finished with phase five of 12, then you've got buildout homes and models to sell.
Well, in talking with the idiot sales rep, I was told Centex is planning to finish the six homes currently under construction, and after that...nothing. There will not be another phase initiated. That's it! They're outta there! Wait?! B-b-b-b-but...!

The remaining land, already subdivided into unkept lots with gorgeous weeds all over the place, is going to be sold to another developer, yet no one has taken any interest in it. I can only imagine why.
I would love to know the price per acre centex paid for that land. It was bought in the boom days. So if that's the case, what kind of developer is going to be interested in buying it now at what Centex "has to" get rid of it for?

The following is all true:

I asked the Sales Freak what this was going to do the association dues the people have to pay...he said he didn't know.

I asked the Sales Freak what they were letting go of the models for...he said he didn't know.

I asked the Sales Freak if they had any of those six homes under construction up for sale. He said, "Uh, of them." I said, "What model and how much?"...he said he didn't know.

I asked the Sales Freak if he was retarded...he said he didn't know.

At any rate, another community bites the dust in Corona. Damn, that place had potential, too.
Good bye, Orchard Glen. You were so young.

Smartaleck said...

dgelz: Here's the story on Orchard Glen as far as I've heard it and press releases that you can see on the main Centex website...

Orchard Glen was sold to a couple of management groups in April. It was part of a nationwide, 8500 total lot grouping (Centex apparently has 80,000 unsold lots nationwide) and I guess the higher ups in Centex didn't know how well the development was selling - 19 units total since the beginning of the year. They do have options on the properties they did sell and are trying VERY hard to get OG back, but it seems like it's going to be a no-deal.

Who knows what the new groups will do, but considering that the lots are already graded and finished I would kinda doubt that they would just go and put a bunch of crap or leave it vacant. The educated guess is that they will bring in a new builder (Griffen/Pulte/KB/etc), possibly smaller homes and finish it out. (shrug) There actually has been a lot of interest by other said builders, but the gears have been moving somewhat slowly. Part of the problem the salesperson had is that the upper management hasn't told them a thing and to this day remains pretty dang silent at least to those who don't figure high enough on the priority scale.

As for the association, the CC&R's say that prices will remain until the development reaches certain milestones (read: phases) have been completed. That will not change even if they put different kinds of homes on the lots. The only way it changes is they go to the city with a new plan, spend a bunch of cash getting it approved/changed, and then spend a bunch more money re-grading the lots for the new plan. That doesn't make a whole lot of business sense.

All of the properties have sold, including the models, and going into the end, the waiting list was 30-40 strong. The reason I know this is I happened to be lucky enough to be there when two of the six fell out that day and we jumped.

Now addressing the main point of this article - I think I'll have to disagree. Will prices drop further? Yup, but I don't think 20%. It's possible, but there are some nice strong indicators out there that show we are pretty dang close to the bottom. Inventories are shrinking and as bigdog said, a lot of properties are getting multiple bids in only a couple of weeks. If the market could just calm down, oil continues it's trend down, dollar continues to get stronger, and keep Obama out...we'll be fine and by next year we'll be out of this.

Corona Resident said...

Hey Smartaleck.....I live in the Orchard Glen community. I moved in about a year ago on Elker and just found out about this Centex sale last Friday. Say, what is going to happen to the Mello Roos tax of $4,500/yr or so? So far it has not shown up on my tax bill. I assumed it would kick in once Centex completed the project. And Sales Freak is an absolute idiot.

Smartaleck said...

From what I heard from the loan officer we just met the other day, it looks like it's possible that Centex didn't file their end of the paperwork on the bonds and we may not have to pay Mello Roos. I tried calling the Riverside Treasurer Tax Collector or the Assesor today with no luck (bad phone tree service thing going on) to find out for sure. The paperwork we received on the tax rate is 1.05% and the Mello Roos should be on any Special Assesment paperwork we get. If you haven't gotten anything by now, it's possible Centex made a very costly boo-boo and our income just increased by $400-500 per month. Merry Christmas!