Sunday, October 26, 2008

Arrrr, time to hit the high seas again!

X and the wife are off for the Halloween cruise to Ensenada. Try and behave while we are away!

Feel free to use this as an open thread to discuss whatever "floats your boat".

I start by mentioning that I went out again today to look at some opens in Norco Hills. The traffic was fairly busy but I suspect much of it was due to the Auction open houses. The REDC has an upcoming auction and there were 3 auction homes open in the area. I think this drew a lot of people that then stopped at the other opens. One or two homes looked nice and the prices are getting a bit more reasonable. 2 of the homes in Bretton Gait were under $500k and one just slightly over that. I like one of the houses on Morab and another over the hill on Crestview. One home on Oldenburg was thrashed by the previous home debtor. They took the freaking base boards, Who does that? The rest of the house was a mess too. Another looked like a pack of wolves went through it and pee'd on every sq foot of carpet. Note to realtors: Get the damn carpets cleaned!

I overheard on lady talking to a realtor, she wanted and an 80/20, 100% financing. He was doing his best to tell her those are not available any more. Don't these people read the freakin paper or watch the news?

Saturday, October 25, 2008

What will "the market" effect be?

How much do you think the stock market dive will affect the real estate market. I mean other than the banks and lending. How many people do you thing have lost a portion of their down payments. How many people are scared as their 401ks melt away? I've heard different opinions from realtors but most of them are trying to blow smoke up my arse, so their opinions don't carry much weight with me. I think the market troubles will take at least 10% of the potential buyers out of the picture. I think those buyers will be primarily the older buyers and the high end buyers though. I think the economy and job losses, or fear of job losses will take more buyers out of the picture in the near future.

Fontana, hows it doing?

It's been a while since I checked anything north of the 10 fwy. I was bored, so while sipping a nice 18 year old single malt I started checking out the listings in Fontana. Like every where else in the IE the carnage continues. One thing I did notice that stuck out is the amount of short sales in this area. It seems like 50% (or more) of the listings are shorts. If all these shorts turn into REOs (and they probably will) this area is really gonna be in the toilet.

This home is 50% off and still hasn't sold. 5917 Pine Valley Dr, Fontana. This home is in the Sierra Lakes development. It is a 4 bed, 3 bath home that is 2581 sq/ft in size. The last sale price for this home (before the bank bought it) was $580k in June 06. It has been listed for 63 days at $294K and still has not sold. That is nearly 50% off the bubble price. The listing is amusing. It says "reduced". Big woop, it went from $295k to $294k! A one freeking thousand dollar reduction, 0.3%. What a tool....

The part of Fontana south of the 10 fwy is doing even worse. Sub $100 sq/ft listing here are easy to find, like this one listed for $89 sq/ft. 17026 Via De Anza. This home is a 4 bed, 2.5 bath of 3099 sq/ft. It was last purchased in April 05 (At least a year before the peak) for $469k. It's currently listed as an REO for $275k. This one has been listed for 75 days. If the picture looks cropped a bit too tightly there's a good reason for it. There is a giant high power transmission line right behind this house. I bet that sounds cool on those foggy mornings.

Friday, October 24, 2008

What's really happening

Reader Osa posted this,

golfer_x. Why do you always show the low side of San Jacinto? Why not take a look at Trulia. 605 Wamblee (3127 sq feet) - $110 sq/ft 496 Peregrine (3127 sq feet) - $103 sq/ft. Why don't you show what is really happening

Ok, I'll take the challenge. Let's look at what is really happening in San Jacinto and these two properties in particular.

605 Wamblee Ln, San Jacinto. A 3 bedroom, 3 bath home of 3127 sq/ft. reader Osa indicates it recently sold for $110 sq/ft. Well it did, kinda. That sale was the bank foreclosing on the property. They took it back for what I will assume was the loan balance of $345,095 from poor Hector Escamilla and his wife Rebeca. It's not currently listed but the bank purchase was fairly recent so they may not have it out to a broker yet. This home sold new in 2006 for $411K. Any guesses on what it will list for? This house had been for sale by owner for quite a while. He even tried an auction without any success.

The second home is;

496 Peregrine Ln, San Jacinto. This is a 3127 sq/ft home, also with 3 beds and 3 baths. It was purchased in Sept 06 for $375K. The owner had some trouble paying for it and the bank took the home back for $324,068 in August. It listed as an REO in Sept for $205k. The price has dropped to $189,900 as of Oct 20th. The asking price is 49% less than the selling price only 2 years ago. It's currently listed for $61 sq/ft.

And that is 'What's Really Happening!"

Wednesday, October 22, 2008

very tempting....

This house hit the market today. It's in one of my favorite areas. It has a pool (the kids want a pool, dad, not so much!) and it has a synthetic putting green (oh yea, dad likes that). The price is very good for the area (currently). It is a two story and we really would prefer a single. My wife didn't like the finish on the kitchen cabinets. But when she saw the pool she gave it the thumbs up anyway. I'm quite sure this will go quick and probably for way more than the $482k it's listed for. This one is by far the best deal in the area currently. The only drawback I see is the location. It's on the corner of two busy streets. This home sold new in 2004 for $704k. It sold again in 2005 for $815k. I assume that there folks put the pool in and the rest of the lanscaping. They had it on the market for quite a while at 1.13 Million. The banks took it back for $462k. That woulda been a great deal to pick up on the court house steps! Unfortunately my checking account is about $461K short.....

So far this week I have seen at least 6 homes hit the market at prices that make me want to get off my butt and go see them. Although they are still more than I want to pay, they are getting closer. Of course who knows what they will end up selling for.

I've noticed more homes hitting the market each day too. Maybe the banks are getting caught up with that new foreclosure law. Lets hope so. It's been quite slow for the last few weeks.

I think I will take a week off, go on a cruise and ponder when to break out the low-ball cannon.

How low will they go?

How low will they go? What's your guess this month. Last year I would never have guessed that nice, newer homes would be listing under $60 a sq/ft. But here were are, and if you look, there are some very nice houses listed that low. Yup, they are in the boonies but so what, that price is darn low.

I know, I know, it seems like it's taking forever for the prices in the desirable areas to fall. But, they are desirable for reasons and those reasons will slow the price declines in those areas. It won't stop them, it wont make the fall any less it will just make it take longer.

Check out what you can get it you don't mind living in the sticks. Can these go lower?? I keep looking for one under $50 sq/ft but no luck so far.

3030 Cat Tail Ct, Hemet is a 3335 sq/ft home with 5 bedrooms and 3 baths. Built in 2005 this home sold new for nearly $450K! IN HEMET...nope no bubble here..... The bank is trying to unload this house for $190K. That's about 57% off the new price. And this is a nice looking house. Even the inside looks good (in the two pics). It has nice hardwood floors and the kitchen looks very nice. At that price this house works out at $57 a sq/ft! This house is down in the newer end of town near Diamond Valley lake.

Think that listing is a fluke? Nope, here's another one even cheaper. 1819 Overland court is in the same area as the first house. This one is a 5 bedroom 4.5 bath home with 3511 sq/ft. This one also built new in 2005 sold for $485k. It's a bank owned and it's listed for $189,900. That's $54 a sq/ft for a newish home with tile floor in the kitchen and granite counters. It even has a landscaped back yard and a small patio. FIFTY FOUR bucks a square!

Here's another, 204 Kirby St, San Jacinto $55 sq/ft

378 Overleaf, San Jacinto (REO) $51 sq/ft

1242 Enchanted, San Jacinto, (REO) $53 sq/ft

Tuesday, October 21, 2008

Sales by zip code

Here are the sales numbers by zip code. Riverside County is down to $113 sq/ft and San Berdu is at $124 sq/ft. However the median price in San Berdu is less indicating the average home sold is smaller. Lots of zip codes well under $100 sq/ft now in both Riverside and San Berdu. Unfortunately those are still in the zips most of us would rather avoid. The price per sq/ft dropped from $120 to $113 in the last month (in Riverside). That's a decline of 5.9%, that's even more than the 4.1% drop in the median price.

Countywide 3,597 $225 -39.20% $113
Banning 92220 53 $133 -49.70% $104
Beaumont 92223 75 $230 -22.30% $107
Blythe 92225 7 $195 -13.30% $127
Cabazon 92230 7 $125 -56.90% $78
Calimesa 92320 4 $217 -15.20% $146
Canyon Lake 92587 27 $244 -45.60% $130
Cathedral City 92234 62 $203 -31.40% $122
Coachella 92236 45 $170 -51.30% $99
Corona 92879 49 $284 -29.10% $145
Corona 92880 107 $365 -26.60% $128
Corona 92881 50 $375 -30.60% $165
Corona 92882 86 $305 -37.20% $165
Corona 92883 88 $330 -23.40% $133
Dsrt Hot Springs 92240 93 $120 -35.10% $76
Dsrt Hot Springs 92241 8 $173 n/a $138
Hemet 92543 49 $95 -53.90% $82
Hemet 92544 66 $137 -42.90% $89
Hemet 92545 95 $172 -40.60% $91
Idyllwild 92549 13 $241 -1.40% $177
Indian Wells 92210 5 $645 -38.50% $247
Indio 92201 103 $180 -50.30% $109
Indio 92203 59 $255 -26.20% $104
La Quinta 92253 73 $272 -36.10% $145
Lake Elsinore 92530 106 $200 -41.20% $110
Lake Elsinore 92532 58 $250 -44.60% $95
Menifee 92584 114 $232 -28.20% $100
Mira Loma 91752 46 $345 -30.40% $143
Moreno Valley 92551 86 $158 -49.00% $101
Moreno Valley 92553 130 $139 -52.60% $98
Moreno Valley 92555 104 $240 -26.20% $97
Moreno Valley 92557 104 $175 -44.40% $111
Murrieta 92562 125 $290 -25.40% $109
Murrieta 92563 147 $279 -34.90% $102
Norco 92860 22 $362 -41.10% $166
Palm Desert 92211 29 $367 -6.00% $202
Palm Desert 92260 21 $275 -36.80% $153
Palm Springs 92262 48 $317 -29.40% $165
Palm Springs 92264 17 $455 -15.00% $243
Perris 92570 44 $185 -43.00% $104
Perris 92571 159 $165 -37.30% $92
Rancho Mirage 92270 22 $500 -30.60% $221
Riverside 92501 25 $195 -39.60% $134
Riverside 92503 105 $231 -37.60% $132
Riverside 92504 58 $194 -49.10% $141
Riverside 92505 41 $234 -25.70% $147
Riverside 92506 56 $236 -35.30% $176
Riverside 92507 36 $230 -39.00% $151
Riverside 92508 59 $330 -27.60% $132
Riverside 92509 94 $220 -41.20% $136
San Jacinto 92582 42 $200 -42.90% $81
San Jacinto 92583 73 $147 -41.80% $88
Sun City 92585 44 $207 -16.80% $106
Sun City 92586 38 $153 -38.30% $109
Temecula 92591 59 $273 -27.80% $137
Temecula 92592 135 $292 -27.10% $128
Thousand Palms 92276 5 $174 -24.20% $100
Wildomar 92595 48 $270 -23.80% $104
Winchester 92596 54 $253 -29.70% $106


Countywide 2,456 $194 -38.40% $124
Adelanto 92301 59 $126 -45.70% $74
Apple Valley 92307 46 $161 -42.40% $93
Apple Valley 92308 60 $142 -46.40% $93
Barstow 92311 31 $103 -37.10% $88
Big Bear City 92314 43 $190 -24.00% $178
Big Bear Lake 92315 35 $270 -26.50% $225
Bloomington 92316 32 $185 -50.60% $126
Chino 91710 41 $325 -29.30% $206
Chino Hills 91709 51 $440 -21.40% $223
Colton 92324 45 $159 -51.50% $120
Crestline 92325 20 $147 -38.80% $173
Fawnskin 92333 5 $205 -59.20% $288
Fontana 92335 84 $175 -44.40% $136
Fontana 92336 184 $300 -29.00% $138
Fontana 92337 87 $225 -38.50% $145
Grand Terrace 92313 9 $230 -32.80% $154
Helendale 92342 12 $180 -39.90% $98
Hesperia 92344 53 $187 -54.40% $82
Hesperia 92345 128 $154 -42.10% $94
Highlands 92346 55 $207 -41.00% $132
Joshua Tree 92252 21 $119 -30.00% $86
Lake Arrowhead 92352 40 $370 -14.50% $254
Loma Linda 92354 16 $325 -28.60% $158
Lucerne Valley 92356 6 $75 -55.90% $63
Mentone 92359 6 $265 -24.30% $143
Montclair 91763 33 $262 -38.70% $178
Ontario 91761 33 $276 -32.70% $173
Ontario 91762 39 $260 -36.70% $180
Ontario 91764 44 $222 -43.90% $178
Phelan 92371 19 $190 -41.60% $101
Pinon Hills 92372 6 $260 6.80% $142
R Cucamonga 91701 36 $368 -21.80% $207
R Cucamonga 91730 34 $300 -25.00% $205
R Cucamonga 91737 18 $380 -52.50% $192
R Cucamonga 91739 41 $460 -6.80% $171
Redlands 92373 25 $354 -24.50% $222
Redlands 92374 26 $216 -38.40% $138
Rialto 92376 102 $180 -43.00% $126
Rialto 92377 44 $233 -38.70% $135
Running Springs 92382 8 $201 -9.70% $135
San Bernardino 92404 88 $133 -48.80% $101
San Bernardino 92405 49 $110 -56.00% $94
San Bernardino 92407 74 $181 -44.20% $124
San Bernardino 92408 8 $123 -60.10% $113
San Bernardino 92410 47 $99 -65.30% $86
San Bernardino 92411 16 $95 -55.50% $82
Sugarloaf 92386 13 $155 -16.20% $159
Twentynine Palms 92277 24 $119 -3.80% $89
Upland 91784 24 $510 -11.80% $192
Upland 91786 28 $320 -27.00% $215
Victorville 92392 129 $155 -47.30% $80
Victorville 92394 80 $144 -46.30% $81
Victorville 92395 75 $151 -40.70% $96
Wrightwood 92397 5 $285 -1.70% $259
Yucaipa 92399 45 $273 -8.40% $138
Yucca Valley 92284 43 $172 -7.00% $105

Monday, October 20, 2008

Sept numbers, the spin doctors are hard at work.

The Sept numbers are out and they are fabulous. Well, compared to the worst year in history they are fabulous. If you remember, last August is when the subprime market really went into full crash dive mode. The sales numbers crashed down to the lowest recorded levels. Even the difference from August to Sept was shocking in 2007. The sales went down something like 22% in just that one month period. Consequently the sales numbers for the next 6 months or so are going to look absolutely stellar.

Looking at the numbers and doing some math here's what you need to remember from this report. Disregard the fluff, Remember these key points.

1) Sales numbers are the 2nd worst since they started keeping records.
2) 70% of the sales in Riverside are foreclosures.
3) Prices are STILL dropping. The median drop from August 2008 to Sept 2008 is -4.1% in Riverside and -4.7% in San Bernardino!

So here we go with DataQuicks Sept report.

Southern California home sales shot up by an unprecedented 65 percent last month from the dismal, record lows of a year ago, when a credit crunch slammed the brakes on home financing. September sales also posted a rare gain over August as price cuts lured more buyers. Foreclosure resales rose to half of all transactions.

A total of 20,497 new and resale houses and condos closed escrow in the six-county Southland in September, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in September 2007, according to San Diego-based MDA DataQuick, a real estate information service.

Last month's sales were the highest for any month since December 2006 and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988. However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month.

This September's huge annual sales increase stems from the extraordinarily weak activity in September 2007, when sales were at a record low for that month. The year-ago sales plunged after the credit crunch that struck in August 2007 made "jumbo" mortgages for higher-end homes more expensive and harder to obtain. Sales were already hurting from the subprime mortgage industry meltdown earlier in 2007, which undermined demand for entry-level homes.

"The pitifully low September 2007 sales numbers weren't tough to beat. More impressive was that this September's sales volume bucked the seasonal norm and rose above August. Steep price declines, especially inland, have improved housing affordability quite a bit and may keep sales levels well above the record lows we saw late last year and early this year. It will depend on the severity of this economic downturn," said John Walsh, MDA DataQuick president.

"You have to view last month's sales in the proper context," he cautioned. "They represent escrow closings, which reflect purchase decisions made in mid-to-late summer. That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand."

I am impressed that they even mentioned the reason for the great "looking" numbers and I'm even more impressed by the candor in that last paragraph.

Bargain shopping continued to fuel the Southland market last month, with sales typically rising the most in areas where prices have dived and foreclosures have soared.

Fifty percent of all existing homes that closed escrow in September had been foreclosed on at some point in the prior year. That's up from 45.5 percent in August and 12.6 percent in September last year.

At the county level, such foreclosure resales ranged from 36.8 percent of September resales in Orange County to 68.9 percent in Riverside County. In Los Angeles County foreclosure resales were 39.1 percent of all resales; in San Diego 47.3 percent; San Bernardino 63.1 percent and in Ventura County 44.0 percent.

The high level of foreclosure resales helped push the Southland's median sale price down to $308,500 in September, the lowest since it was $305,000 in May 2003. Last month's median was 6.5 percent lower than $330,000 in August and 33.2 percent lower than $462,000 in September 2007. The September median stood 38.9 percent below the peak $505,000 median reached in spring and summer of last year.

Sunday, October 19, 2008

What are you seeing lately?

It's been a while since I went out looking at open houses. I had some free time this weekend since my wife got stuck working so I took a drive around looking at a few open houses. And I do mean a few. There were not many this weekend. But when I did stop it was like deja vu. It looked just like in did last October; DEAD! There was no one looking. That's very different from a couple of months ago.

It was nice to hear that some thing's haven't changed though. Here's a few of the gems I heard, "it's a great time to buy", "these deals won't last forever", "investors are snapping them up", "sales are way up, we bottomed out late last year" and the very best comment I heard all day was "The stock market is just killing the real estate market". It seems like some things nver change.

How'de that stimulus package work out?

Obviously not so good, but hey this is funny.

Friday, October 17, 2008

Real estate markets don't bounce, they splat

Here's a good interview with economist Chris Thornberg.

Take a listen to economist Chris Thornberg as he is interviewed on the housing market. Here's a few gems,

Prices in California have basically come down halfway to where they're going to end up.

In general, we would have to see about a 40-45% decline in home prices in CA just to get us back to normal levels relative to income.

If you want to sell and you need to sell, you're going to have to price it realistically.

We hear this all the time - people can't get loans, that's not actually the circumstance. If you do qualify, that is, you have the cash to put down, and your income is in line with what you're trying to borrow, and guess what, you can verify the income, you can still get a loan.

The problem is here in CA even with the drop we've seen in home prices, prices are still high relative to incomes. If you can't qualify today, it's probably good for you.

Housing markets don't bounce, they splat. They hit bottom and they stay there. You'll have a long opportunity to capitalize on those low prices once we find that bottom."

Whe asked what will it take to unfreeze this market.

It's not frozen. Quite the contrary, it's moving very rapidly, just not in the direction we like to think about. Prices will fall to the point that will eventually draw buyers back in. And then things get moving.

It's not the news people want to hear. It's certainly not the news real estate agents want to hear, because you can make a lot more money on a 500k house than a 200k house. But if the house is only worth 200k, all the wishing in the world doesn't make home prices go up again. But guess what - the value was never there in the first place.

Thursday, October 16, 2008

Could you be more wrong?

The California association of realtors has just release the forecast for next year. They are forecasting a median price drop of 6% and a sales increase of 12.5%. How do they calculate these estimates? I'm beginning to think they just pull numbers from a hat.

How did they do last year at estimating this years numbers. Well, you could have asked you cat and probably have gotten a better estimate. Last year they estimated that prices would fall 4% and sales would fall 9%. At the current rate it looks like the median sales price will drop about 32% and sales will actually increase about 12%. Thats WAY off. So, why would we think this years estimate is any better?

I doubt we will see another 32% decrease but I also doubt it will be only 6%. 6% in January might be about right, but for the year I would be willing to wager a nice bottle of single malt that the number will be closer to 20%. I'm also skeptical that the sales numbers will increase. I think with the faltering economy and tightening lending standards that the sales numbers will be flat or down slightly. I just cannot see an increase with the economy coming apart like it is. I guess we will have to wait and see who gets closer, me or the CAR.

Tuesday, October 14, 2008

Testing the new toy...WAY OT

Some of you may remember I bought a new Canon 40D a month or so ago. I also picked up a 100-400mm L series to go with it. Here's a shot I took tonight.

1/640 @ f11

The Phantom effect

There's a lot of talk on the blogosphere about "phantom Inventory". That's the new name for homes banks have taken back but are sitting on. For some unknown reason they are holding homes and not listing them as soon as they foreclose. There's much speculation as to why they are doing this. The most logical to me is that they don't want to flood the market with REO properties. This would drive the prices down even faster than the 5% per month they are currently dropping. But on the flip side if a bank holds a home for 6 months they probably have lost 15% to 20% of what they could have got by selling right away.

Case in point,

514 Wrightwood Rd, Corona. This is a former model home. It was built in 1997. It sold new for $220K when the development built out in late 97. It sold again right at the peak in Sept 2006 for $580k. The bank took the home back in Jan 2008 for $496k. Even back in Jan there is little chance they could have sold this for the balance of $496k. But they probably could have gotten close. A house just a few doors up the street sold in March for $395k. Another sold in June for $350K. And yet the banks still did not put this home on the market. I've been driving past this house for nearly a year wondering when they would list it. Well, wonder no more. It hit the market this week. Listing price, $262,500. At that price this should attract some attention. Especially from the guys that just paid $350k 4 months ago..... I'm sure this will get bid up unless it's thrashed inside. But I'm also quite certain it will not get bid up $88k to make the June buyer feel better.

The question remains though. Why did the bank wait? If they had put this home on the market back in Jan, when they took it back they probably could have gotten close to $400k for it. Now they will be lucky to get over $300k.

Monday, October 13, 2008

When upgrades go too far

In the heady days of the real estate boom the fastest way to maximize your profit was to upgrade. High end appliances, travertine, granite, and fancy landscaping were all used to maximize profits. But how much is too much? Well here's your answer:

Marble tile on the garage floor is TOO MUCH!

And layed at a 45 too! with a fancy beveled edge to boot. What the hell was this guy thinking. How many people want a marble floor in the garage?

This home is near Lake Mathews up near woodcrest/Orangecrest but unfortunately the address is in Perris. This takes the value of this home down about $150K or more. Homes over in the 90504 zip of Riverside sell for a lot more than this home will even though it's only a mile away.

This home was bought in 2005 for $631k
. It's a 5 bedroom, 3 bath home, 3725 sq/ft sitting on just over an acre of well manicured land. Gawd knows how much this guys spend on upgrades. Some of the stuff is awesome. The kitchen counters are beautiful the cabinets look low end, in the pics but I'm sure there not though). The bathroom looks like a suite at the Ballagio. They even put marble tile on the stairs. It's over the top gawdy in some respects. Actually in most respects. It makes me want to speculate that a realtor owns it!

Anyway if you want this marble palace it's offered as a short sale for $450K. The price is not that bad considering the home. Some of it would need to be toned down a bit for those of us not used to living in a marble palace. Unfortunately I think the zip code is gonna hurt him. That and the fact its a short sale.....

Tuesday, October 7, 2008

The latest from Mr. Mortgage

This one makes a good point about some of the workouts the banks are offering to upside down borrowers. The most popular workouts are ones that lower the interest rates way down for a few years but keep the principal balance of the original loan. This is just a stall tactic to keep the banks from having to post that loss on their balance sheets. % years from now house prices will still be much lower than those bubble prices. So those people will find themselves right back in the same boat. Mr. Mortgage recommends fighting for a principal reduction and a slightly higher interest rate on a 30 year fixed. That makes sense to me. But a lot of those workouts will require you to make up that rightdown amount when you sell. These mortgage workouts sound like a nice fix but in many cases the best solution is still to simply give the home back, take the credit hit and buy again a few years down the road.

Da weekly tumble

There's not much different this week than most weeks. The numbers are still falling. The core median asking price is down $15k in the last month and the county median is about the same. The high end did a little better but still dropped about 10K. The low end also lost about $10k last month. Inventory remains fairly stable after the drop in early sept that was due to the new foreclosure rules. I expect the inventory numbers will start to climb by next month as the banks catch up. The rapidly deteriorating economy will surely start having an effect on sales as well.

The Core area data is as follows;

Including Arlington, Bloomington, Box Springs, Canyon Crest, Casa Blanca, Colton, Corona, Crestmore, Fontana, Grand Terrace, Jurupa, La Sierra, Mira Loma, Moreno Valley, Norco, Perris, Rubidoux, Woodcrest

Trend10/07/20081 month3 month6 month12 month
Median Price$230,000-6.1%-13.5%-27.0%-43.1%

Historical Data

DateInventory25th Percentile50th Percentile
75th Percentile

And here's the county data for the Riv/San Berdu metropolitan areas.

Trend10/06/20081 month3 month6 month12 month
Median Price$229,900-4.2%-13.2%-24.6%-39.3%

(SFH + Condo)
25th Percentile50th Percentile
75th Percentile

They are still at it!

Unbelievable there are still scam artists out there trying to lure people into no down cash back seminars. Freakin tools!

Check out this email I got today.....

Sunday, October 5, 2008

Another tsunami approaching??

Normally housing downturns are preceded by downturns in the economy. This one wasn't because of the asset bubble. Houses became commodities rather than homes. Speculation, fraud and investor exuberance inflated the prices far beyond normal rational levels. Like all asset bubbles, it burst and prices are returning to normal levels. But what about the spillover to the rest of the economy?

Now that this has spread to the rest of the economy will there be a 2nd wave to this housing bust. The first wave is the deflation of the bubble prices currently hitting us. Once the prices return normal levels, will a 2nd wave drive them even lower? This second wave, driven by a severe US recession could take prices far lower than those normal levels. A severe US recession would put millions out of work. Many of those people are in homes they can easily afford right now, but they might lose them if they lost their jobs.

At this point a recession is all but a certainty. In California were in it, and have been for a while. The argument amongst the so called experts is now, how bad will it be. Goldman Sachs has just announced that they are now forecasting a much deeper recession that they expected earlier.

If you read the news all you know about the job losses. They are not just in housing and banking anymore. They have spread to manufacturing, service, government and just about every other sector of the job market. Auto makers, airlines and even Starbucks are laying off.

The talk now is about the coming wave of Prime and ALT A defaults. Will the talk next year be about the coming wave of defaults due to job losses. If you lose your job now, finding another will be difficult. The competition, even for menial jobs is fierce. They are getting thousands of applicants for jobs at Walmart.

Corona just announced it is eliminating 112 jobs due to budget shortfalls. The shortfalls are a result of lower property and sales tax revenues. Lake Elsinore also just had a round of layoffs. Remenber the good old days when a government job was a safe job? I'm not sure there are any safe jobs any more.

Sorry if this post is a little too "tin foil hat" for your taste. But the news these days does not fill me with optimism about the future. I think the government is far too optimistic about this crash. I don't know if they are just putting forth a brave happy face to calm people. Or if they really actually think this will be over in a year or two.

I think the US will be changed forever after this. Hopefully for the better. We have become the nation of the quick buck. A nation trying to keep up with the Jones's. And a nation of perpetual debtors. Maybe this is what we need to snap us back to reality.

Thursday, October 2, 2008

Land, way worse price declines than homes.

From the Wall Street Journal,

As it struggles through the housing crisis, home builder D.R. Horton Inc. is unloading land across California at big discounts.

Horton two weeks ago sold about 2,000 house lots in Desert Hot Springs ... for $7.8 million, according to county records. William Shopoff, a land investor ... estimates Horton paid about $110 million for the land before spending on improvements.

Who knows how much they spent on improvements. But even if they spent nothing that sale would be 7 cents on the dollar. YIKES!!

Wednesday, October 1, 2008

Before and After shots

Remember the good ole days. When everyone had a big house, a convertable vette and a Hummer?

Then something unheard of happened. The banks actually expected people to pay for it. The nerve! Well paying for it was out of the question for most average folks. And that brings us to the "after" picture.

The home looks so sad now. No Vette, no Hummer, no occupants. This house, 6347Peach Ave in Corona was purchased new in 2002 for $291K. In 2004 it sold for $560K and now it's owned by the bank. REO price is $355K. Still about $80K too much in my book. I wonder if the home paid for those fancy cars via HELOC or refis??

The plunge is spreading

I've posted about sub $100 sq/ft listing and then sub $80 sq/ft listings. But those sub $80 sq/ft listings were for the most part in areas that most of us would rather not put down roots. They have been primarily in far flung areas like Hemet, Perris, San Jacinto and Moreno Valley. They are moving though. Like ripples on a pond sub $80 sq/ft listings are creeping out. There are loads of them popping up now in Murrieta, and it probably won't be long before they start creeping into Temecula, Riverside and Corona.

Murrieta may not be your idea of the perfect town but it's much better than most of the other cities that have gone sub-$80. It is a little far off the beaten path and I would not recommend anyone move there if they cannot find work locally or within a reasonable commute (20 miles). There are a few to choose from in the Sub-$80 range or close to it. Most of them curretnly are short sales but there are REO's to choose from as well. Most of them are huge and most are fairly new. Lets take a look at a few.

26193 Palm Tree Ln is a big 4008 sq/ft, 5 bedroom/5 bath home. This puppy sold at the peak for $680K. It looks like bank took it back WAY back in Jan for $573k. It's just now hitting the market (why did they wait 9 months??). It's listed at $295K or $74 sq/ft. That is a loss of $385k or 57% from the bubble price. This is a nice looking house. The yard leaves a bit to be desired but the house looks clean and ready to move into.

39166 Shree Rd is another nice looking house in Murrieta. This one is 3586 sq/ft and has 4 bedrooms and 3.5 baths. The home was purchased new in 2006 for $632K. The bank took it back in Sept. It looks like the offered it on the court house step for $375K and not surprisingly there were no bidders. It just hit the market listed for $280K or $78 sq/ft making the loss (if it sells at asking) about $352K or 56%. I think this one will go quick, maybe even over list, it looks very nice. Notice the last occupants took the oven!

37705 Summer Wind
is a 3160 sq/ft 5 bed/3 bath REO that has been on the market for a month and a half. After a $30k price drop this home is currently listed for $260K or $82 sq/ft. Since it's been on the market a while you might be able to get it under $80.

How about a little Sweet Magnolia? This home is another REO home. It's 3066 Sq/ft and has 4 beds and 4 baths. This one looks to be a sad case. Purchased new in 2000 for $246K it was lost to the bank in August. There's no telling if this was HELOC abuse, familiy tradgedy or simple job loss. My guess is HELOC abuse since the bank took it back for more than the original loan. This is now listed $1k BELOW it's original selling price in 2000! Now that's a rolback! BTW is it just me or is that one BUTT-UGLY house.