Monday, June 30, 2008

The weekly tumble

Here is the latest weekly median listing data from housingtracker.net. This data is for the core areas (listed below). I sometimes publish both bu they are so close together now that seems almost pointless. As you can clearly see the mid and high levels dropped another $5k this week and the low end stayed at $200k.

Riverside, California

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

Trend06/28/20081 month3 month6 month12 month
Median Price$270,000-6.2%-15.6%-28.0%-38.5%
Inventory13,666-2.8%-2.7%-3.3%-7.0%

Historical Data

DateInventory25th Percentile50th Percentile
(Median)
75th Percentile
06/28/200813,666$199,900$270,000$370,000
06/21/200814,533$199,900$274,900$375,000
06/14/200814,827$200,000$275,000$375,900
06/07/200813,660$205,000$279,900$379,900
06/01/200813,907$209,900$285,000$389,000



Foreclosure data

Now some more crazy data from the BMIT site. Here is the foreclosure data (from foreclosure.com) for Riverside and San Berdu. Take a look at this months numbers! The numbers are cumulative but this month shows a HUGE increase in the foreclosure numbers. If my math is correct Riverside has 4798 foreclosures. Last month was a stellar sales month and there were only 3444 sales. If that number is correct then there will be WAY more foreclosures than sales this month. San Berdu does not look much better

Riverside (foreclosures/pre-foreclosures)
01/2008: 5,548/13,829
02/2008: 7,629/16,633
03/2008: 7,910/18,853
04/2008: 9,415/19,960
05/2008: 10,772/20,317
06/2008: 15,570/22,447

San Berdu
01/2008: 3,462/10,247
02/2008: 5,271/12,969
03/2008: 5,478/14,787
04/2008: 6,834/15,709
05/2008: 7,969/17,277
06/2008: 11,587/17,541

Saturday, June 28, 2008

Another why bother post

The Inland Empire real estate market has been in the toilet now for 2 years. You'd think the pricing of properties these days would be fairly consistent. The current price trend is well established. Take the latest comp and subtract 12k per month since it sold and that should be your current price. But 75% of the new listings are still hitting the market too high. Many of them are ridiculously too high. I understand that the people owe more than their homes can sell for in the current market. But what they owe is irrelevant. Buyers are not going to overpay because they feel bad for an upside down seller. And no bank is going to give a loan for more than a property will appraise for. So, what is the point of even listing these homes??

Here is a perfect example I ran across today.

4931 Nottingham in Riverside just listed at $660k. The home is a 5 bedroom 3 bath one story ranch, 3281 sq/ft on just under 1/2 acre. The realtor says this "Tired of making Offers on Bank owned homes or Short Sales with little or no reply? Our Seller will responds to all reasonable offers within 72 hrs of receipt".



Ok, what would be a reasonable offer? How about we go by the last comparable sale. Fortunately there is an exact model match in the same tract that sold only a month ago. 10084 Willowbrook is the same floorplan as the Nottingham house. It sold in late May for $441k. That comp is already a month old and the current prices are dropping at about 12k per month so a reasonable price for the Nottingham home is $429K.

That is $230K less that the asking price. I wonder if they'd consider that a reasonable offer? In reality though, it is a reasonable offer based on the last comparable sale. So again I ask "what is the point of even listing a home like this?" Any Realtors out there care to chime in on why other Realtors are still taking these crazy listings?

Wednesday, June 25, 2008

Yet another forecast.....

Another report from another so-called economist has been released. This one is forecasting price declines to continue through late 2009. Looking at the numbers of this one I actually can’t rip this one apart as I usually do with most other forecasts. The numbers look feasible and the timeline also looks right to me. He is forecasting a drop of 21% this year and other drop of 6% in 2009 before prices level off. That might be a bit optimistic but shouldn’t be too far off. So far this year prices have fallen about 15% but the rate of price declines should start to shallow out a little bit since many areas have already fallen by a large amount. I don’t like his final number though. I think a final bottom of $258K is far too high. Economist John Husing makes some predictions in this article too. I ignore whatever he says since I think he’s idiot. His forecasts have been spectacularly wrong over the last couple of years.


Here’s the report from the Press Enterprise

Foreclosures that are battering Inland Southern California will continue pushing down home prices until late 2009, although the region's overall economy will improve next year, Chapman University economists are predicting.

Esmael Adibi, director of Chapman's Anderson Center for Economic Research, which on Tuesday released its midyear forecast, said he expects median home prices in Riverside and San Bernardino counties to drop an average of 21.6 percent this year compared with 2007 and to edge down an additional 5.6 percent in 2009.

Median prices in the region will bottom out about $258,000, Adibi predicted. He said the correction in prices has been exceptionally steep and quick, and by the end of 2009, it will have plummeted 37 percent from a peak of $410,000 in December 2007, based on single-family home sales tracked by the California Association of Realtors. That would roll back housing prices close to their level in February 2004.

"We have to wait until late 2009 to see home prices stop falling," Adibi said. Before that occurs, he said, jobs must increase, incomes must rise, and the existing glut of homes for sale, dominated by bank-owned properties, must shrink substantially.

Riverside and San Bernardino counties will see on average a loss of 15,827 jobs this year, or a 1.3 percent cut, because "there is still a strong negative impact from the decline in construction," both home building and commercial, Adibi said.

But he predicted that job losses this year will be partly offset next year with the addition of 7,517 jobs in non-construction employment, led by growth in education, health, hospitality and other service industries.

Chapman's forecast is for inflation to level off in 2009 and for retail to gain momentum because of some job growth, producing a 3.6 percent jump in total taxable sales to $62.8 billion.


Now, here's my forecast....

I think we will see 28% (+/- 2%) declines this year and another 10% to 15% in 2009. After that I think prices will stagnate for several years. The memory of the crash will be fresh in the minds of buyers for many years to come. This should serve to keep price increases to a minimum. I think the median will be closer to $175k in late 2009.

I’m not as optimistic as these guys on the employment numbers either. They are far too fixated on housing as being the only job loss sector. I see the job losses spreading into the retail, service, distribution and the manufacturing sectors. The high cost of fuel is cutting into the sales of boats, RVs and even luxury items like big screen TVs. This will lead to job losses in those industries and to job losses in warehousing and distribution. FedEx, UPS and DHL will make cuts as costs soar due to high fuel costs and because there will be less items being shipped as people cut back on spending. Even the service sector which is a large part of the job market in the IE will need to make some cutbacks. I expect the unemployment numbers to blow past those of the early 90s.

I think they are seriously underestimating what the high cost of fuel is going to do to the economy. The cost of fuel is driving inflation and as inflation gobbles up more and more disposable income people will eat out less, they will cut back on day trips, days at the spa, health club memberships and stuff like that(think 1970s, how often did you family eat out in the 70s?).

In addition to the private sector, governments have already put hiring freezes in place and many are actually cutting staff. Of course there will be some job gains in areas like healthcare but not enough to offset the losses of those other areas.

Tuesday, June 24, 2008

The weekly tumble

Here's the latest bad news from HousingTracker.net. This weeks median listing priced took a beating, down $5k across the board.

Trend06/23/20081 month3 month6 month12 month
Median Price$270,000-5.3%-14.3%-22.9%-32.5%
Inventory47,519+0.7%-2.5%-5.5%-8.4%


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

06/23/2008

06/16/2008

47,519

46,962

$195,225

$199,000

$270,000

$275,000

$389,00

$395,000

06/09/200847,297$199,900$279,000$399,000
06/02/200846,949$200,000$280,000$399,000
05/26/200847,187$200,000$285,000$399,000
05/19/200846,779$208,900$289,000$399,900

Monday, June 23, 2008

A $400K postage stamp

I had no idea that there were so many postage stamp developments in Riverside. The reason I have not been seeing them is my search parameters are set to only look at 2500 sq/ft homes or larger. Tonight I did a search for all home sizes and started to find a few new developments with teeny weenie homes on teeny weenie lots that are imploding.

Can you imagine spending nearly $400k for a 1300 sq/ft home on a 2600 sq/ft lot in Riverside? Apparently quite a few people thought that was a great deal. I found several of these developments in Riverside. I guess if you are not into yard work these are the way to go!

Take a look at this stupidity. This house is a short sale, for $30k more than they paid in March 2006. Now short sales are normally priced to sell (or that's the idea anyway). This guy prices his about $200k higher than the REOs in his tract are selling for.

4420 Leonard Ct in Riverside is a 3 bedroom 2.5 bath home that is 1384 sq ft. Not a bad sized starter home bu the lot is only 2600 sq/ft. This home was purchased new in 2006 for $396k and like I said the owner is trying a short sale at $420k. Ya gotta scratch your head at that price. It's a whopping $303 sq/ft!!



Just around the corner at 4438 Kristin Ct is the same model home but this REO is priced at $240k. That is still a whopping $173 sq/ft, but nearly 1/2 the price of shorty above. At $173 sq/ft this home is still way overpriced. I'm sure some poor knife catcher will buy it though. There are larger homes in this tract and there are plenty of REO's on those too. Many of the bigger homes are priced nearer $100 sq/ft. I'm not sure why they are pricing these little ones so high.



I find it amazing that anyone would buy homes in the IE on lots that tiny. With all the tracts and all the space out here there is just no reason to pack homes together like that. And lets not get into how bad the area is where this tract is located.

My neighbor is TOAST!

I certainly wondered how the young Hispanic couple next door could afford the house they bought in Dec 2006. The young lady worked at Kohls and the husband was a kitchen installer doing granite and tile. How could a couple with these jobs buy a house at the peak of the bubble? I dunno what they made but I'm sure Kohls is a minimum wage job. Even at the best of times installing counters can't pay much more than $40k. So we have a couple that probably bought a house about 8X their income (yea that's just about right...). They never really did any work to the house in the year and a half they lived in it. They never watered the lawn, painted or did any improvements (although the house was fixed up when they bought it). Last week I wake up and find them having a HUGE garage sale. Even the furniture is on the yard for sale. Putting 2 and 2 together I figure that the end is near. The next day a convoy of cars show up and for the last week they have been loading them up and taking stuff away. Today the house is empty. I suppose it will belong to the bank soon enough. Now I just have to throw some oil into the pool before it becomes a mosquito infested swamp. This is the first one on my street. I wonder how many more I will see???

Sunday, June 22, 2008

A weekend in Temecula

I spent the weekend down in Temecula with my wife and have a few observations. The wineries are still packed on weekends (I guess there's no surprise there). On Saturday night we hit the town and most of the places we saw were pretty dead (for a Saturday night anyway). Not being from the area I dunno what the crowds are usually like but up here on a Saturday night it's usually a long wait at places like the Olive Garden or BJs. We got seated right away. We had some time to kill on Sunday so the wife wanted to hit the mall. Man everything is on sale in that mall. JC pennies looked like Ross dress for less, it looked like a bomb hit it. I did pick up some great coffee table books at Barnes and Noble for $6 each, and the wife bought some bedding in Macy's for $150 (on sale from $400).

We had a great weekend. It was nice to get away and drink some delicious wine. We stopped at quite a few wineries. Most of the wine was decent but not memorable. I did particularly enjoy the White Cabernet from Wilson Creek. It's a little spendy at nearly $30 a bottle but a fantastic wine. They also had a blended white wine that was very nice (called Quartet Blanc). We picked up a couple of bottles ( I wanted a case of that white Cab but the wife smacked me down).

I see the world did not implode while I was gone although the stock market did manage another giant step backwards on Friday costing me another 1.4% on my company stock. I wonder what this week will bring. I'm not seeng much good news being reported. Auto sales are tanking, banks and financials are in the toilet and oil and food is through the roof. Did I miss anything? The good news is my stimulation package for GW should finally arrive next week. Once I get that, all will be right with the world......

Friday, June 20, 2008

Median prices by city

More numbers from DQ. These are for resale and New SFR's and condos.

City....................closed sales ..median . 07 median.. %change

Riverside County 3,281 $287,250 $407,500 -29.51%
AGUANGA 2 $316,000 $385,000 -17.92%
BANNING 19 $210,000 $285,000 -26.32%
BEAUMONT 95 $293,500 $368,000 -20.24%
BLYTHE 4 $187,000 $229,000 -18.34%
CABAZON 4 $125,000 $218,000 -42.66%
CALIMESA 7 $215,000 $361,000 -40.44%
CATHEDRAL CITY 63 $226,000 $350,000 -35.43%
COACHELLA 51 $215,500 $360,000 -40.14%
CORONA 417 $375,000 $565,000 -33.63%
DESERT HOT SPRINGS 70 $150,000 $269,500 -44.34%
HEMET 161 $200,000 $299,000 -33.11%
IDYLLWILD 7 $370,000 $312,500 18.40%
INDIAN WELLS 19 $684,000 $850,000 -19.53%
INDIO 158 $272,750 $360,000 -24.24%
LA QUINTA 140 $485,000 $532,500 -8.92%
LAKE ELSINORE 101 $260,000 $405,000 -35.80%
MENIFEE 86 $274,750 $414,000 -33.64%
MIRA LOMA 26 $385,000 $470,000 -18.09%
MORENO VALLEY 243 $218,000 $375,000 -41.87%
MURRIETA 273 $305,000 $411,000 -25.79%
NORCO 18 $469,250 $594,000 -21.00%
NUEVO 5 $227,500 $410,000 -44.51%
PALM DESERT 145 $382,500 $400,000 -4.38%
PALM SPRINGS 123 $295,000 $375,500 -21.44%
PERRIS 147 $210,000 $360,000 -41.67%
RANCHO MIRAGE 63 $525,000 $617,500 -14.98%
RIVERSIDE 322 $284,250 $394,500 -27.95%
SAN JACINTO 66 $199,863 $337,000 -40.69%
SUN CITY 111 $258,500 $340,000 -23.97%
TEMECULA 205 $320,000 $445,500 -28.17%
THOUSAND PALMS 3 $200,000 $305,000 -34.43%
WHITE WATER 4 $190,000 n/a n/a
WILDOMAR 49 $295,000 $480,250 -38.57%
WINCHESTER 70 $310,000 $451,250 -31.30%

if it's 50% in the OC, how much in the IE??

From the OC Register, an interview with Chris Thornberg.

Economist Chris Thornberg said Southern California home prices likely will continue falling until mid-to-late 2009. When the dust settles, he added, homes here could end up being worth half as much as they were at the peak of the housing boom.

“The reason prices are falling is because of gravity,” Thornberg (pictured here) told the Register after delivering the UCLA Extension Real Estate Forecast at the Skirball Cultural Center in Los Angeles. The run-up in home prices over the past decade was “ludicrous,” he said, noting that the increase wasn’t accompanied by a comparable increase in income.

By Thornberg’s math, a typical Southern California house payment equaled about a third of its owner’s gross annual income in 1999. By 2007, it equaled about 70%. “That’s why prices are coming down. They have to come down.”

Thornberg, founding partner at Beacon Economics and former UCLA economics professor, said home prices would have to fall about 40% from peak to trough to return to the historical norm. But add in the impact of rising gasoline prices, the subprime mortgage meltdown and rising foreclosures, and it’s likely prices will fall 50% peak to trough.

The S&P/Case-Shiller index shows that prices for the L.A./O.C. area are down 24% from the peak, so the region is about halfway to the bottom, Thornberg said.

In Orange County, price declines will be more severe at the bottom of the price spectrum than the top end, but “the top end is going to get hit, (too),” he said.

That will be a rude awakening for many homeowners suffering from what he called “homallucinations,” or the ability to convince oneself that while the price of everyone else’s home will fall, your neighborhood is clearly different.

Said Thornberg: “That’s what people go through — until reality kicks them in the butt.”

Thursday, June 19, 2008

Free trip to Club Fed



Did you see the reports of the big FBI mortgage fraud sweep? They arrested over 400 people all across the US for various mortgage fraud schemes. They seem to have put together a fraud task force to investigate this mess. I don't think they have enough agents to even scratch the surface. Especially in the bubbliest of markets like CA, FL, NV and AZ. I also wonder if they will tackle the fraud by buyers. My guess is that they will not unless it's massive fraud, ala Casey Serin the poster boy of bubble fraud (and he's still walking the streets). I'd really love to see a few buyers go to jail as well as the agents and brokers that helped. I doubt it's gonna happen but I'll make a birthday wish and see what happens.

I don't think people realize how much fraud was going on. And most people don't realize how much of that 300% increase in price was due to fraud. Those fraudulent cash back sales were used as comps and raised the prices across the board.

California report from DQ, sales down 10.7%

DataQuick has release the state report. Although a few areas like parts of the IE are selling above last year most of the state is still tanking. Here's my secret solution to turn this around. LOWER THE PRICES!




A total of 33,024 new and resale houses and condos were sold statewide last month. That was up 6.0 percent from 31,150 in April and down 10.7 percent from 36,975 for May last year. Last month's total made for the slowest May since 1995 when 32,223 homes sold.

Of the homes sold in May, 38.3 percent were foreclosure resales, up from a revised 37.6 percent in April and 5.4 percent in May a year ago.

The median price paid for a home last month was $339,000, down 4.2 percent from $354,000 for the month before, and down 30.0 percent from $484,000 for May a year ago when the median was at its peak. Around half the drop in median is due to depreciation, the other half due to shifts in the types of homes selling, and how those homes are financed.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,569. That was down from a revised $1,645 in April, and down from $2,266 for May a year ago. Adjusted for inflation, mortgage payments are back to where they were in mid 2003. They are 23.3 percent below the spring 1989 peak of the prior real estate cycle. They are 38.0 percent below the current cycle's peak in June 2006.

Wednesday, June 18, 2008

May resale numbers by zip code

Here are the sales numbers by zip code for May. There are a few areas that are selling well. Moreno Valley, Perris, Temecula, Murrieta and even Corona. Most of these sales are foreclosures or short sales, especially in the core areas. As you can see some of the price declines are pretty shocking considering that change is in only 12 months.



RIVERSIDE COUNTY SFR Price % chg $/Sq Ft
Banning 92220 17 $211 -26.10% $169
Beaumont 92223 43 $253 -26.00% $122
Blythe 92225 3 $199 -13.10% $132
Cabazon 92230 5 $125 -42.70% $98
Calimesa 92320 7 $215 -40.40% $159
Canyon Lake 92587 26 $310 -40.40% $132
Cathedral City 92234 53 $235 -38.30% $140
Coachella 92236 27 $192 -6.80% $104
Corona 92879 34 $330 -34.70% $162
Corona 92880 84 $385 -30.00% $131
Corona 92881 35 $375 -30.90% $178
Corona 92882 76 $385 -33.90% $163
Corona 92883 70 $330 -35.40% $147
Dsrt Hot Springs 92240 50 $143 -41.20% $88
Dsrt Hot Springs 92241 3 $110 -67.40% $136
Hemet 92543 18 $142 -36.90% $106
Hemet 92544 53 $171 -40.90% $111
Hemet 92545 67 $200 -35.50% $107
Idyllwild 92549 7 $370 23.30% $201
Indian Wells 92210 12 $750 -36.40% $249
Indio 92201 63 $230 -36.10% $131
Indio 92203 37 $273 -31.50% $150
La Quinta 92253 105 $485 -24.80% $202
Lake Elsinore 92530 50 $226 -39.70% $123
Lake Elsinore 92532 32 $285 -40.60% $109
Mecca 92254 1 $230 -14.80% $146
Menifee 92584 64 $245 -36.30% $122
Mira Loma 91752 25 $390 -28.60% $142
Moreno Valley 92551 39 $180 -50.30% $120
Moreno Valley 92553 68 $170 -53.40% $116
Moreno Valley 92555 64 $271 -35.60% $109
Moreno Valley 92557 60 $225 -37.50% $127
Mountain Center 92561 2 $210 -61.80% $118
Murrieta 92562 97 $315 -30.00% $121
Murrieta 92563 132 $295 -26.30% $113
Norco 92860 19 $469 -21.00% $188
Nuevo 92567 5 $225 -45.10% $131
Palm Desert 92211 44 $405 -5.80% $210
Palm Desert 92260 32 $452 -14.30% $199
Palm Springs 92262 33 $375 -10.90% $235
Palm Springs 92264 17 $550 -13.80% $260
Perris 92570 32 $225 -40.50% $112
Perris 92571 88 $195 -44.30% $107
Rancho Mirage 92270 26 $850 15.60% $272
Riverside 92501 14 $268 -22.50% $167
Riverside 92503 61 $276 -34.30% $139
Riverside 92504 50 $250 -34.50% $178
Riverside 92505 26 $241 -37.20% $161
Riverside 92506 44 $300 -31.00% $190
Riverside 92507 27 $260 -28.80% $167
Riverside 92508 37 $365 -27.00% $143
Riverside 92509 32 $270 -34.40% $160
San Jacinto 92582 20 $222 -42.30% $87
San Jacinto 92583 38 $188 -41.00% $109
Sun City 92585 18 $250 -26.50% $125
Sun City 92586 31 $179 -24.60% $122
Temecula 92590 1 $681 -21.80% $323
Temecula 92591 50 $299 -28.00% $138
Temecula 92592 104 $323 -28.30% $139
Thousand Palms 92276 2 $163 -31.40% $99
White Water 92282 4 $190 -38.80% $116
Wildomar 92595 33 $290 -32.90% $114
Winchester 92596 47 $287 -37.30% $113

Monday, June 16, 2008

Realtard of the month


This listing popped up today. It's by far one of the worst listings I've seen this month. Everything about it is bad. The price is just retarded, the pictures are worse than retarded and the listing information makes even less sense than the price. It looks like he just clicked every available box when making the listing.

Here it is!

16909 Ridge Cliff Dr. in the Lake Hills development in Riverside. The home is one of the big ones way up at the top. The house is 4576 sq ft and has 5 beds and 4.5 baths. It was built new in 2006 and sold for just over a million dollars (1.043M). Today the area is REO central and you might think that would affect the price this home was listed for. But you'd be wrong. Oh no, damn the foreclosures, this team of 'tards think they can get $1.3 million for this house. What did the owner do to justify a $250k increase in price? Well judging by the listing description NOTHING. I'm guessing it's exactly as he bought it, dirt yard and all.

"Exclusive Custom build Home, panoramic view any time located in the great community of the Lake Hills Reserve. Add your own touch by fully customiziing to your personal needs inside and outside."

Ok, so let me get this straight. I pay 1.3 million and I have to fully customize the inside AND outside myself???

The picture posted is the ONLY one of the house out of a total of 12 pictures (well, technically there is another of the house shrouded in fog). The rest are pictures of sunsets taken from the street in front of the house.

Now, check out the pool information from the listing,
Pool & Spa Information
  • Association Pool
  • Fenced Pool
  • Fiberglass Pool
  • Filtered Pool
  • Heated Pool
  • In Ground Pool
  • Private Pool
  • Tile Pool
  • In Ground Spa
  • Association Spa
  • Heated Spa
  • Solar Heated Spa
  • Permits for Spa
Really, it has all of those? how many pools does this house have? Oh, it doesn't have a pool. I see....

It also has a 10 car garage according to our Realtard of the month. What else jumps out at me, sheet vinyl flooring? This house looks to have more rooms than Hearst Castle if I believe the listing. Oh gawd, thats enough. This listing makes my brain hurt.

We salute you, Realtard of the month,
MARCO VIDAL!


By the way, there is a bigger house just around the corner listed for $575k. It's been listed for nearly 3 months. This house is only about $800k overpriced.

More ugly numbers

Here's the weekly update for the median listing prices from Housingtracker.net. As you can see the price reductions continue, averaging about $3k per week still. The inventory numbers continue to hold steady. Some weeks are up a few hundred and some down. Although there was a big increase in the core areas this week, putting us up nearly 7% over a month ago.



here's the county wide numbers,

Trend06/16/20081 month3 month6 month12 month
Median Price$275,000-4.8%-13.9%-21.4%-31.2%
Inventory46,962+0.4%-4.4%-7.5%-7.8%


DateInventory
(SFH + Condo)
25th Percentile50th Percentile
(Median)
75th Percentile
06/16/200846,962$199,000$275,000$395,000
06/09/200847,297$199,900$279,000$399,000
06/02/200846,949$200,000$280,000$399,000
05/26/200847,187$200,000$285,000$399,000
05/19/200846,779$208,900$289,000$399,900


And here's the core area numbers.

Trend06/14/20081 month3 month6 month12 month
Median Price$275,000-6.7%-16.6%-27.4%-37.5%
Inventory14,827+6.7%+2.7%+1.9%+6.0%


DateInventory25th Percentile50th Percentile
(Median)
75th Percentile
06/14/200814,827$200,000$275,000$375,900
06/07/200813,660$205,000$279,900$379,900
06/01/200813,907$209,900$285,000$389,000
05/28/200814,053$210,000$287,900$389,000
05/21/200814,068$212,500$289,000$389,000
05/14/200813,895$218,856$294,900$395,000

More juicy tidbits.....

There are so many ugly reports hitting the presses today it's hard to pick just a few to paraphrase. Here's a taste of the latest real estate news.

Hard hit cities like Sacramento, Phoenix and Las Vegas are set for more steep losses. Some real estate experts are bracing for price drops of as much as 50%.


(CNNMoney.com) -- With home prices plunging by more than 30% in some markets, bargain-hunters are ready to pounce.

But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as much as 50%.

This correction was inevitable, in Youngblood's opinion; home price gains had simply out-paced income by far too much to be sustained.

Historically, home prices have averaged about four times wages. Whenever homes got significantly more expensive, people could not afford to buy and home prices fell back.

But local price-to-income ratios are still out of whack even after steep price declines, which means prices have further to fall. In Los Angeles, where the ratio peaked at 22.7, according to Youngblood, it's still in the high teens. Home prices would have to come down another 40% or so to get that ratio back into the single digits.


The spring activity usually expected in Southern California's housing market was another disappointment last month. Shoppers looking for bargains helped push the region's home sales higher in May compared to April, but it was still the fewest May home sales in the last 20 years.


Is America's suburban dream collapsing into a nightmare?

Nelson also estimates that in 2025 there will be a surplus of 22 million large-lot homes that will not be left vacant in a suburban wasteland but instead occupied by lower classes who have been driven out of their once affordable inner-city apartments and houses.

The so-called McMansion, he said, will become the new multi-family home for the poor.

"What is going to happen is lower and lower-middle income families squeezed out of downtown and glamorous suburban locations are going to be pushed economically into these McMansions at the suburban fringe," said Nelson. "There will probably be 10 people living in one house."

May sales report


From dataQuick,

Southland home sales back to record low; median price slips again
June 16, 2008
La Jolla, CA--- Bargain shoppers helped push Southern California home sales higher in May compared with April - a normal, seasonal lift - but it was still the slowest May in more than 20 years. The median price paid fell a record 27 percent from a year ago, the result of sluggish high-end sales, more sellers dropping their asking prices and lenders selling off more of their aggressively priced, repossessed homes.

A total of 16,917 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in May. That was up 8.3 percent from 15,615 in April but down 14.9 percent from 19,874 in May last year, according to DataQuick Information Systems.

Although last month's sales total was the highest for any month since August 2007, when 17,755 homes sold, it was still the lowest for a May in DataQuick's statistics, which go back to 1988. Last month was also 36.5 percent lower than the May average of 26,637 sales.


Sales of post-foreclosure homes continue to dominate many inland markets. Of all the Southland homes that resold in May, 37.4 percent had been foreclosed on at some point in the prior 12 months, compared with a revised 36.2 percent in April and 5.5 percent one year ago. Across the six-county area, these "foreclosure resales" ranged from 25.6 percent of resale activity in Orange County to 56.6 percent in Riverside County.


"What horsepower this market can generate right now is mainly fueled by bargain shopping, especially by first-time buyers and investors in inland areas," said Andrew LePage, an analyst for DataQuick. "Meanwhile, sales remain especially slow in most higher-end markets, with jumbo mortgages (over $417,000) making up only a slightly higher percentage of all purchase loans in May than in April. That doesn't bode well for the high-end, where so far prices have come off their peaks but have generally held up best."

The median has dropped mainly for two reasons: depreciation, especially in inland markets, and the sharp drop off in the past nine months of home sales financed with jumbo mortgages, previously defined as over $417,000. Before the credit crunch hit in August 2007, making jumbos pricier and harder to obtain, nearly 40 percent of Southland sales were financed with them. Last month jumbos accounted for just 15.8 percent of sales, up from 15.1 percent in April.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,664 last month, down from $1,716 the previous month, and down from $2,364 a year ago. Adjusted for inflation, the current payment is 22.1 percent lower than the spring of 1989, the peak of the prior real estate cycle. It is 36.2 percent below the current cycle's peak in June 2006.

Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages is at a six-year low. Down payment sizes and flipping rates are stable, non-owner occupied buying activity has risen, DataQuick reported.

Sunday, June 15, 2008

Checking in with and old friend


2 months ago I award the delusional seller of the month award to the owner of 16340 Highgate in Riverside. Even with several comps priced in the mid 500's this dreamer priced his palace at 1.4 million.

So, what's he up to (or down to) now?

Well, after a few days at 1.4M he dropped the price to 1.2M. Of course that didn't help much being that he's still $700k over his competition. After a couple of more weeks he dropped the price another 200K to $999,999. Surprise, surprise, surprise it still didn't sell.

So how much do you think the dreamer whacked the price the next time? He could have taken notice of one of his comps at 17209 First Light, now priced at $449k. Any guesses as to how big his next price cut was?

Ready for this...... it was

ONE DOLLAR!

He dropped the freakin price from $999,999 to $999,998. Yup, that will get him a buyer for sure.

Happy Dad's day!

Hope you don't mind but today I'm going to kick back, watch the US Open and see if I can get these 3 to wait on me hand and foot (no chance of that happening though).

Saturday, June 14, 2008

What does it mean?

What does it mean when your neighbor, who bought at the peak (dec 06) has a huge garage sale and even has their furniture on the driveway for sale??? Yup, that's what saw this morning when I opened the garage door. I'm guessing a bank will soon own the house next door! I shoulda taken a picture.....

Thursday, June 12, 2008

delusion seller of the month

This one actually made me laugh out loud. As most of you know by now, The Retreat is South Corona is a favorite whipping post of mine. It perfectly illustrates the heights that the great bubble attained. It's also a perfect illustration of how bad the crash is going to be. To think that tract homes in the IE were selling for nearly 1.5 million bucks is just ludicrous and to think that one purchased in 2006 has actually gone up $400k in value is beyond comprehension.

The owner of this house has got be be on medication. The tract in which he lives is imploding. There are more brown lawns than green ones in The Retreat. Yet this bozo thinks his house is worth 3X what most of the others are listed for. It's a beautiful house to be sure but the reality of the situation is that it's probably worth 1/2 what the guy paid (or less).

Ready for a laugh?



22260 Rosemary Canyon Ct,
this 5 bedroom, 5.5 bath Mcmansion was purchased new in May of 2006 for $1.4 million bucks. The lord of the manor then spend another few shillings adding some bling to his new digs. Fast forward 2 years, the market is falling apart all around him yet he thinks his chateau has actually increase in value by nearly $400k! He is asking an unbelievable $1.795 MILLION. Oh my gawd,it still cracks me up...





There are at least 6 homes of similar size near in The Retreat that are curretnly listed. Most are between $700k and $800k. More than 50% less than king boofoo above is asking. A few of these homes are also very nice looking and one is spactakular. 8128 Tender Way is the same floor plan as Boofoo's. But this house has a back yard that is to die for and the inside easily looks as nice as the other house too. This one is listed for $750K. About 1/2 of what the poor sap paid and that's not counting the large chunk of moola he obviously spent on the killer back yard. So this house is listed for over a MILLION dollars less than boofoo's place!

There are several other exact model matches that are listed for far less too.
22302 Appleberry Ct for $785K
8170 Tender Way for $818K
8010 Sanctuary Dr for $799K
As you can see all are listed for far less than the doofus above. Anypne want to offer him $500k just to make steam come out of his ears? Again I have to scratch my head in disbelieve that a realtard actually took this listing.....WTF???

Wednesday, June 11, 2008

May foreclosure numbers are shocking

Shocking in a BAD way! California sets another new record. Lenders took back 10.4 BILLION worth of inventory in May.

Mr Mortgage has the numbers and they are ugly.





For those that are video challenged here's the text version

1. Notices of Default (NOD), the first step in the CA foreclosure process when borrowers go down 90-days in payments, were down 2.5% to 43,011 new filings. However, the average daily filings were actually up 2.4% to 2,009 per day. Last month the total was 44,100 or 1961 per day. These are from people who began missing payments in Jan and Feb. If you remember, in Jan and Feb, there was a mini refi-boom, as rates fell sharply. If not for that, the NOD count could have been much worse. Since then, rates are up sharply and mortgage application volume has been consistently falling. This means more people maybe missing payments due to the lack of financing options, which will lead to an increase in NOD’s over the next few months from these already historic levels.

The vast majority of NOD’s are first mortgages because second mortgage holders quit filing NOD’s months ago, due to values falling to levels that make it futile. If you are a second mortage holder and there is no value in the property, there is no reason to foreclose because the first mortgage holder gets it all. For this reason, second mortgage loan defaults are soaring and the loans are essentially worthless. People know that lenders have to use more tradional means of collection and are not paying their second mortgage payment. A second mortgage lender is usually completely wiped out when a home goes into foreclosure. This problem will not go away.

Roughly 75% of NOD’s make it all the way through the foreclosure auction stage and end up on banks balance sheets. About 25% of NOD’s are cured by various means by the time auction hits. If you combine last months NOD’s of 44,100 and this month’s you get a total of 87,111 meaning banks will take back 65k homes 4-5 monnth out, because that’s how long it takes to get through the auction phase. This means October and November will have record REO coming back to the banks. 65k homes going back to banks is more than the total homes sold in CA in the past two months and will likely be much more than sold in Oct and Nov, which are historically poor sales months.

2. Notice of Trustee Sale (NTS ) were at a record 34, 564 new filings. This is a 15.6% increase over last month’s 28,992. This is huge. This means much fewer people are curing their NOD’s than in the past. These are from Notice of Default’s 3-4 months prior, as by law the NTS can be filed 90-days after the NOD. However, the average time it took a lender last month to file the NTS was 105-days due to the volume. Lenders can take a home to auction 21-days following the NTS. Jan NOD’s were 38,500 so the percentage that made it from NOD to NTS was 89.77%. This is a new record.

3. Total homes that went to auction increased 11.8% to a total of 25,523 properties. This was also a record. Of those, 24,831 or 97% received no bid higher than the lenders opening bid and became lender owned.

One thing to note, 3% of the 25,523 properties were bought by 3rd parties vs. 2.3% last month.

4. Discounts at auction were at a record.86% of all homes were discounted at an average of 28%. The largest subprime areas such as Sacramento, San Joaquin, Stanislaus and Merced saw larger discounts from 31-37%.

Tuesday, June 10, 2008

The danger of buying a new home



I've commented on many occasions about the dangers of buying a new home in today's market. Today the LA Times blog has a couple of posts about these dangers. Some local developments have put the brakes on a few developments around town. Not problem if the development is still in the planning stage. But what about projects like Rosedale in Azusa.

AZUSA - Frustrated over problems at what will be a new 1,250-home community, some residents want a home builder to buy back their homes.

Two of four home builders at Rosedale, Fieldstone Homes and William Lyon Homes, stopped construction this year at the city's first master-planned community in the foothills.

Neighbors living in Fieldstone's Arborview neighborhood said they feel cheated, others said being surrounded by vacant homes and unkempt grounds causes safety concerns.

Even though Fieldstone representatives deny the allegations, residents feel the developer has walked away from the project.

"The bottom line from my perspective is that we were presented and purchased what was supposed to be a house in a master-planned community," said resident Neil Giles. "It's supposed to have all these amenities and what really happened is (Fieldstone) walked away from everything."

"Right now, our property looks like trash," said resident Joy Rodpai-Parham. "They haven't mowed the lawns in I don't know how many months."

But officials said many of the problems residents complain of are products of a housing market that took a turn for the worst.

"Due to the continuing downturn in the homebuilding industry, Starfield Azusa Partners LLC has put new home construction on hold at the Rosedale master-planned community in Azusa, California,"

"The streets aren't being swept, the landscaping's not being maintained, there's no pool," he said. "So what are the homeowners getting?"

There are several developments around the IE that I would be very hesitant to buy into. The preserve in Chino is a perfect example of this. There were BIG plans for this development but they are turning into a steaming pile of empty promises for the few residents that bought homes there. One perfect example is there are too few students to open the new schools. Children will have to be bused for miles now. You have to wonder if the builders will keep building or just pack it up, leaving residents living next to barren fields.

There are plenty of others too, Sycamore Creek in So. Corona, Riverwalk Vista in Riverside, The Retreat, and lots of others. I don't care how good the deals are the chances of the builders bailing out are just way too high (especially at Riverwalk Vista).



Monday, June 9, 2008

Worse than we think?


Daniel Gross has an epiphany and it's covered in newswek. Now this guys is another economist that has made some shockingly poor predictions over the last year or two. I generally don't pay much attention to most of these quacks but this article is probably closer to reality than most.

Why It’s Worse Than You Think

For months, economic Pollyannas have looked beyond the dismal headlines and promised a quick recovery in the second half. They're dead wrong.

The forgettable first half of 2008 is stumbling to a close. On Friday, the Labor Department reported that American employers axed 49,000 jobs in May, the fifth straight month of job losses—an event that signals a recession sure as the glittery ball dropping on Times Square augurs a New Year. The report, which inspired a 394-point decline in the Dow Jones Industrial Average Friday, was the latest in a run of bad news. Auto sales, the largest retailing sector in the U.S., were off 10.7 percent in May from the year before. And housing? Ugh. Nationwide, according to the Case-Shiller Index, home prices in the first quarter fell 14 percent.

Yet hope springs eternal that the second half will be better than the first. Economists polled by the Federal Reserve Bank of Philadelphia in May believe the economy will grow at an annual rate of 1.7 percent and 1.8 percent in the third and fourth quarters, respectively. Lawrence Yun, chief economist at the National Association of Realtors, tells NEWSWEEK that "home sales and prices in most of the country will improve during the second half of 2008." (Yun is the Little Orphan Annie of forecasters. He's always sure the sun will come out tomorrow.) Last month, Treasury Secretary Henry Paulson said, "We expect to see a faster pace of economic growth before the end of the year."

But this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm— a housing and credit crisis, and rising energy and food prices—have strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial news—a credit crunch and the global commodity boom—are blunting the stimulus efforts. As a result, the consumer-driven economy may not bounce back as rapidly as it did in the fraught months after 9/11.

The difficulties today start—as they began last year—with housing and housing-related credit. Last Thursday, the Mortgage Bankers Association quarterly report showed that the percentage of mortgage borrowers behind on their payments—6.35 percent—was the highest since the MBA began tracking the number in 1979. It's not just subprime. In the first quarter of 2008, 36 percent of all foreclosures initiated were on prime adjustable-rate mortgages in California. Mark Zandi, chief economist of Moody's Economy.com, says the decline in home prices has slashed $2.5 trillion from household wealth, or about $25,000 per homeowner. The fall has also removed an important source of support for consumer spending, as Americans who grew accustomed to borrowing against rising home equity to finance car purchases or vacations now find themselves bereft. Banks are extricating themselves from the home-equity-line-of-credit business in the same way college students get themselves out of relationships gone bad: abruptly. Judi Froning, a second-grade teacher in San Diego, was surprised last week when she received a letter from Chase informing her that it was terminating her untapped HELOC. "In the light of declining home values, they said they are stopping, effective May 31, any draw on my line of credit," she says.

Unemployment up, Check!
Household wealth down, Check!
Retail sales tanking, Check!
Prices skyrocketing, Check!

The weekly median listing numbers

Here's this weeks numbers from housing tracker. The county numbers don't look too bad but the core area numbers made a healthy dive. The price trend is still clear and showing little change. It's still dropping about 3K per week.


Here's the county numbers,

Trend06/09/20081 month3 month6 month12 month
Median Price$279,000-4.6%-12.8%-21.6%-30.9%
Inventory47,297-0.2%-3.9%-9.9%-6.4%


DateInventory
(SFH + Condo)
25th Percentile50th Percentile
(Median)
75th Percentile
06/09/200847,297$199,900$279,000$399,000
06/02/200846,949$200,000$280,000$399,000
05/26/200847,187$200,000$285,000$399,000
05/19/200846,779$208,900$289,000$399,900
05/12/200847,403$210,000$292,500$402,500
05/05/200847,960$215,000$299,000$410,000



And here's the core area numbers (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)

Trend06/07/20081 month3 month6 month12 month
Median Price$279,900-6.4%-16.4%-26.3%-37.1%
Inventory13,660-3.3%-4.5%-8.8%-1.6%
DateInventory25th Percentile50th Percentile
(Median)
75th Percentile
06/07/200813,660$205,000$279,900$379,900
06/01/200813,907$209,900$285,000$389,000
05/28/200814,053$210,000$287,900$389,000
05/21/200814,068$212,500$289,000$389,000
05/14/200813,895$218,856$294,900$395,000
05/07/200814,131$220,000$299,000$399,000
05/01/200814,355$225,000$299,900$399,500