Monday, September 8, 2008
Never been a better time to buy?
A phrase I here every day whenever I stop at an open house. Really? Well, not really and I can disprove that little sales pitch all day, every day. Lets take a look at one small street in Corona. These homes were built in 97 and sold in the high 100's. Some of these were fetching over $600k at the peak. There were a few REO's sitting on the market for months at the beginning of the year. They all started out asking around $500k with no takers. Once the first one dropped to $399k they started selling.
The first sale was 530 Wrightwood. It had been listed for about a year before going REO. If finally sold the very end of March for $395k. The guy probably thought he got a deal. I'm sure his Realtor told his so.
Well, not so fast. Only a couple of months later 1328 Woodvale sells for $350K, the asking price was $399. It's a slightly smaller home but the lot is better and the home was in better shape. (These homes are only about 6 houses apart.) Hmm, I wonder how much that stung $40k down the tubes!
Just to rub it in, a model match just around the corner at 1353 Hermosa also just sold for $350k. This one had also been on the market forever. They also tried to get $500k, then $400k, finally selling in July for $350k.
Now, for more bad news, especially for buyer number one. But numbers 2 and 3 are not going to like this listing much either. 1408 Hermosa just listed as and REO a couple of weeks ago. It's definitely the nicest house out of the bunch, by far. It's a model match to homes 1 and 3 and it's listed for $319k. Sure it might fetch more, we will have to wait and see. It's got to make home buyer number one dizzy though. That's about a 20% loss in 5 months! Yes, never been a better time to buy indeed.
By the way check out the description from the listing of 1408 Hermosa. This guy obviously bought The Dummies Guide to Adjectives" book. At least I don't see any spelling errors!
"Welcome to paradise! This enchanting beauty boasts a captivating private back yard featuring a phenomenal view of the golf course and city lights. This is an entertainers back yard. The luminous kitchen easily flows into the family room which highlights a cozy fireplace all emphasizing the the inviting living room and entry. 4 glorious bedrooms and extraordinary tile flooring are just some of the gifts that this beauty has to offer."
That reminds me of something Stewie from the Family Guy would say. Just imagine it read in his voice!
And there is one more also a model match to homes 1, 3 and 4. It's been listed for a couple of months at $350k. This one is a short sale so I don't count it yet. Once it goes to the lender I'm sure it will be even lower than 1408.
This is not some new tract that is imploding. This is a well established tract in a nice area of Corona with only a few REO's. Even with only a few REO's you can see that the prices are still falling at a hefty clip. I wonder how many of those buyers though they were buying at the bottom? I would bet all of them did!