In the last 6 months of 2007 the market in MoVal seized up. Nothing was selling. At one point in late 2007 there was a 4 year supply at the rate homes were selling. By spring the prices were falling faster than IndyMac's stock price. Homes now, at least the ones that are selling are going for 50% to 60% off peak prices. They are all the way back to 2001/2002 prices. And guess what, they are selling!Last month they go rid of 322. That's not epic by any means but it sure beats the 50 a month they were selling last fall.
I don't want this to be a "yea, but who wants to live in MoVal thread". Let's just take a look at what you can get in MoVal.
First up is 13531 Somergate. This is one of the Model Homes for the tract. I visited these homes, my grandfather lives very close to them and they were great floorplans on large 1/4 acre lots. But back then they wanted about $500k for them and I just laughed. This home is 3570 sq/ft and has 6 bedrooms and 3.5 baths. It was purchased for $735k back in 2006. That was long before the models closed. They only closed the models about 6 months ago. It's now an REO and it's listed for $315K or $88 s/f. Thats a loss of 58%! This is a beautiful home and if you work in the IE this is probably a solid buy.
Around the corner in anothr new tract is 13388 Triple Crown. This is an equestrian tract so the lots are huge and the area is zoned for horses. The tract was build by Richmond America. I never like these floorplans or any other Richmond floorplans for that matter. I think they just finished the tract and they still might have one or two new homes left. These were also in the High $400s to Low $600s (without upgrades). And trust me these needed upgrades the stock builder grade stuff they came with was junk. This home is 3574 sq/ft and has 5 bedrooms and 3.5 baths. This home was purchased new in Jan 2007 for $510k. At that price I doubt there were many upgrades. It's now bank owned and also listed for $320k. Not as good a deal as the last home but for $320k it's a nice big home on a nice big lot and probably a decent buy at $92 s/f.
If those 2 are still too rich for your blood then how about 16513 Colt Way. This one is down the south end in Moreno Valley Ranch. It's very close to the MoVal RCC Campus. This home is 2605 sq/ft and has 5 bedrooms and 3 bathrooms. It says it has granite counters and from the one pic it looks very nice. The home was purchased new in 2003 for $292k. It sold again in 2006 for $495K. Now it's owned by the bank and the listing price is $205K or $76 s/f. If it sells at that price the loss will be 59%! I think this will go for more than that but I doubt it will fetch over $240k. Even at that price this is probably a reasonable buy and should make a nice starter home for a young family.
These were 3 of the REO's that hit the market today. The city is full of them! It's no surprise that the sales for Riverside County were up last month. With prices hitting 50% to 60% off in MoVal, Perris, Hemet, San Jacinto, Wildomar, Meniffee, Murrieta, and surrounding areas it's easy to see why sales are up. Don't fret, soon enough 50% to 60% off will be coming to a city near you!
10 comments:
glad to see prices are back to pre 2002, back in the days of LLU, one of my friends bought in MoVal, and it was a huge house on a culdesac lot, the opened a boba shop by UCR and they sold in 2005 just in time to make money in OC when they sold there and in MoVal when they sold in 2005. Looks like they timed the market just right in both areas.
Another buddy moved also bought next door, just a coincidence, and I am sure they are still there since he works at the VA Loma Linda, and prices when he bought in 2002 was $350K for a finished house...guess his equity is gone now, but he has a reason to be there and he got the place cheap.
Over the longer term, those seem like sustainable prices. Over the next year or so, you could see some slippage as indifferent sellers (banks and loan servicers) dump inventory at whatever the clearing price will be.
silvefrno....its not 'who wants to live in Moreno valley"....its WHO wants to live in socal. I lived there for 50 years...born and raised . The lower half of the state is a ghetto...the state is ruined. We moved to texas 4 years ago where people are swarming here from calif. The people that are gobbling up the "cheap" homes in socal are all investors...most of them are probably large corporations from japan and the middle east. Average joe already ot su cked into the homebuying scheme and cant buy...his credit is ruined.
The upswing in sales may not be the good news that everyone thinks it is.... the corporations will rent these places out to families that are condensing. There will be large numbers of people per home. This has been purported not by me, but by the experts.
Falling prices sound attractive, but as I understand it, the Mello-Roos assessment could be the same or higher than when the home first sold, meaning an even higher effective property tax rate that never, ever goes away. I guess the buyers look at buying these the way people look at leasing cars, because it's hard to imaging retiring in a home encumbered by huge HOA and Mello-Roos assessments.
MelloRoos run off in time. They are bond payments and in 30 years those homes will just have the regular old property taxes left to pay.
To the commenter saying most sales are to investors. That is actually wrong also. There are so many people who are owners buying in MoValley, Perris etc. using FHA financing that is it actually nice to see. There are lots of us investors running around buying cheap houses for our rental portfolio but a much larger percentage of the sales are to owner/users.
Man, there is so much bad information floating around out there it is no wonder people think the world is going to end.
Me, I'm up to seven rentals now, I have 3 open escrows going right now so in the next 30 days I'll be up to 10 rentals and the combined positive cash flow from all three will be $3,500 per month. Another 40 and I'll be set to go.
Correction to my post:
The combined positive cash flow from all 10 rentals will be $3,500 per month.
sounds like brianh is a "realtor'
I would just like to know how many of these homes are going to the third sector of the market.
People who are underwater at their current MoVal address and are just trying to find a home/loan they can afford.
It is easy enough to do. Hubby stays as solo trustee on underwater house. Wife has clean FICO/credit buys new affordable house. They move and stop paying the albatross underwater home. Husband gets dinged but who cares, they have a place they can survive in for decades.
brianh, can you teach me how to be successful, too. I want to babble just like you someday.
You guys might want to take it easy on BrianH. He's posted some very useful and helpful info on the blog over the last year. Not every realtor, broker or inverstor is a scumbag. Some of them are honest hard working folks that can help you when you need it. Feel free to heckle, insult and berate the scumbag portion of the industry. But we are gonna need the few decent ones so let's take it easy on them!
Thanks
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