Sunday, November 2, 2008

The Retreat goes Sub-400K


My favorite bubble whipping post has gone Sub-$400k.

Last week before hitting the high seas I saw this listing. I honestly figured it would have sold by the time I got back. But it hadn't and there was an open house on it this weekend. I drove over to take a look with my wife. I expected a stripped home or another thrasher where the owners trashed it on the way out. But no, the home was actually quite nice. The fixtures and flooring were all basic stuff. No upgrades here folks. But the house was in good shape. The only bad thing was the back yard was tiny and I do mean tiny. I think you could stand in the door and touch the back wall with a broom.

The home is 8775 Gentile Wind drive. An address my wife found strangley amusing. Gentile Wind she said with a snicker.... "that's a perfect address for you". The home is a 4 bedroom 3 bath with 3333 sq/ft of living space. This is a KB home built in 2005 and selling new for $718K. They tried to get $390k for it on the courthouse steps but there were no takers so the bank now owns it. There asking price is $380K. A couple of months ago I would have said this will sell in a heart beat. But there are several other homes in this tract listed very close to $400k. If those are upgraded or have larger lots then this home may still have trouble at this price. Another huge problem for this tract is the ungodly high property tax. On top of the normal CA property tax you have about another $4500. If that's not bad enough the HOA is currently running about $120 a month ( I was quoted $230 by another agent at another open house). All together that adds another $500 to $600 a month to the monthly nut. (the picture above is the home next door but they look alike and are the same basic floorplan. This one is listed at $417k as a short sale).

I've received a few nasty-grams over the months about me being a poor, bitter, jealous renter who can't afford "The Retreat". They said sales were picking up and prices would soon recover, etc, etc. Funny stuff really, obviously from homeowners in "the retreat". Please if you feel the need to send me another one, just go get a stiff drink and skip it.

15 comments:

boxrs4sale said...

Dude, people are just bitter because they drank the kool-aid and you didn't.. Home prices in "The Retreat" will be mid 200's when this is all said and done with.

Thanks for all your hard work with this blog - my wife and I read it daily and find it very amusing :)

Tyrone said...

I tend to agree with boxrs statements. The economy is totally unravelling. Keep your powder dry.

jennalee ryan said...

welcome back...we missed your blogs

golfer_X said...

I'll be back for a few days then it's off to Vegas for the weekend! And NO Terry, I'm not going to see Barry Manillow ;-)

Michelle said...

hi x..i've been following your blog for awhile..just want to know what your thoughts are about eastvale..i've been waiting to buy in the area but there seems to be a war going on with the bank owned properties...open houses are swamped..there are a lot of houses for sale in my price range but a lot are short sales..i don't want to exceed $350k and i want a certain type of house (certain sqft/location (minimizing the smell-a little eastvale secret..houses east of hamner does not have any cow smell)/decent lot)..anyhow, by the time i get to make an offer on the house i want, it's already sold or i got overbid..prices on reos that were sold did not really drop that much over the past few months..your input will be greatly appreciated..

golfer_X said...

Whether it's Eastvale or Hemet the low priced REO's are attracting all the action. As long as all the buyers are trying to grab the lowest priced homes there are going to be bidding wars.

The prices are coming down still. You can see that easily if you look at the average $$ per sq/ft that the homes are selling for. It might not seem like it but the prices are still falling and there's nothing to indicate that they will stop falling.

If you are getting outbid then your target home is still selling for more than your target price. Is your target price reasonable? I'de like a nice single story 3000 sq/ft, 4 bedroom with a bitchin pool in Norco Hills, for $300k. Unfortunately unless there's a total meltdown that price is probably unrealistic. Most of the homes in Eastvale are still selling in the mid to high 300s, The really big homes are still selling for over $400k. There are some low 300s sales that have posted on the smaller homes (around 2500 sqft).

Another thing with REO's, you better have solid credit. The banks are not just going with the highest price. They will take a lower price if they think the higher offers have less chance of closing. Big down payments and stellar credit are what they are looking for (or all cash). If you credit rating is mediocre or you are trying to buy FHA with minimum down you are at a disadvantage in this market.

You may want to try lowballing REO's that have been on the market a while. The new listings seem to get most of the action if they are priced right.

I don't have any pearls of wisdom to offer. If the homes you want are still selling out of your price range you have few options other than to wait, lower your target or try a different area. That's probably not what you wanted to hear.

jennalee ryan said...

golfer_x, you need to sell real estate...youd be a whiz. i actually put offers in on two houses that you blogged about because you brought them to my attention and they were good deals. considering thats whats out there are investors and you know all the good deals...I think thatyou should put your passion to some good monetary use. just a suggestion...

Jack said...

haha, its funny how you get nasty-grams from retreat owners... my wife and i are actually moving in this week and we couldn't be happier - one thing i want to say is that the reasons we got into this big mess is people seeing the house solely as an investment vehicle instead of a 'home'.. the bottom may not be here yet but in the long run i don't see CA as a whole continue to drop (too many people want to live here and when LA/OC max out, the overfill will turn towards the IE)... and right now the prices in the IE are still WAY cheaper than homes in LA/OC (its ridiculous)... the homes you blog about would be million dollar homes in Irvine and other parts of the OC... because of this i feel certain areas in the IE have long term potential (the retreat being one of them) and if this is the home you will be living in for the next 10-15 years there shouldn't be too much to worry about... plus if you are a renter now paying $2000/month for rent, that is $24,000 a year - i personally don't feel that my new property will drop $48,000 in 2 years or $72,000 in 3 years... of course i'm a little more optimistic than some of the doom/gloom guys out there - plus my wife and i are doing our part to stimulate the economy and if there are more of us out there, the recover will be faster... let's all go out and spend!!! :)

Laurence said...

Michelle,

I have been watching the prices in Eastvale for almost 2 years. There was a big drop at the beginning of this year/summer but at least right now prices are relatively stable. I did a run on closings in 92880 and out of ~80 houses only 2 (the cheapest 2) closed at $350k. This is also the 2.5% percentile of pricing. So unless you have awesome luck it is very unrealistic to expect to pay "$350k max" right now which would put you ahead of 97% of all other buyers. Like Golfer said, if you want a house now your only options are to wait or to choose a different area. Eastvale is a relatively high demand area due to being right next to the 15 between the 60 and the 91. It is a very ideal location for commuting to either LA or OC. Watching the buyers I am seeing a lot of buyers coming in from LA and OC right now with good jobs. If you can handle the location, "South Corona" towards Lake Elsinore is drastically cheaper and there is almost no activity there right now.

Laurence said...

Edit to the above. I just realized the run I was looking at was for 3500 sq ft and above. Not sure what sq ft you are looking at. Obviously you'll have a lot better luck sub-3000.

golfer_X said...

Keep in mind though that the closing you are looking at are sales anywhere from a month to three months ago. A lot has happened in the last few weeks and we are moving into the slow season. The prices declines should start to pick up again. I'm not sure how much farther Eastvale has to go. I initially thought it would bottom around $100 s/f but I'm now thinking that might have been overly optimistic. That estimate was made before the stock market went into full retreat and the unemployment rate started going up. I'm inclined to think Eastvale might see $70 to $80 s/f on those larger homes before the end of 2010.


Jack, you have big-uns! Which house did you buy?

Jack said...

KB single story on Sunset Rose

Michelle said...

thanks for the feedback (x and laurence)..i'm looking for ~2700-3000 sqft and it's been hard..on the otherhand, i know prices will drop and i'm afraid that if i buy now my 20% down payment will vanish into thin air in 2 years...oh what to do oh what to do? but i'm tired of waiting to buy..

George said...

Retreat would be nice except for all the minorities that moved their with no money down loans...there are some seedy characters in there.....

George said...

PS Eastvale is even more ghetto!!!!!! Freaking dirt bowl and hope the kids dont get cancer from the cow shiit.