Brown lawn, nothing photoshop can't fix

Added, Just for Martin!

I am pretty sure there are rules against realtors using Photoshop on listing pictures. But it didn't stop this guy from adding some photoshop grass to this listing.

This boy needs to work on his PhotoShop skilz.

Why didn't he fix the back yard???



Here, let me help

Hmm, let's kick it up a notch

Left the appliances, took the garage door

Now I've seen a lot of things taken from foreclosures but this is a first for me.

These people left the usual stuff like the stove and microwave, but they took the garage door? Who takes a garage door and leaves a stove?

Well, it's in Perris so I guess nothing should surprise me. If you're interested in a house with a ...a...a Carport, yea that's it we'll call it a carport, you can have it for $189k.

The weekly tumble

Here's this weeks median listing data from Housingtracker.net. The numbers are continuing to decline. In the core areas this week, the middle did not move much but both the high end and the low end saw average declines of $5k and $4k. On the County wide numbers the low end and high end did not move much but the middle saw about a $3k decline.

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

Trend	07/28/2008	1 month	3 month	6 month	12 month
Median Price	$259,000	-4.1%	-13.6%	-27.0%	-39.8%
Inventory	13,430	-1.7%	-9.2%	-2.0%	-10.3%

Historical Data

Date	Inventory	25th Percentile	50th Percentile (Median)	75th Percentile
07/28/2008	13,430	$190,000	$259,000	$354,900
07/21/2008	13,470	$194,900	$259,900	$359,000
07/14/2008	14,390	$195,000	$260,000	$359,900
07/07/2008	13,511	$199,000	$266,000	$365,000
07/01/2008	13,897	$199,900	$269,900	$369,900
06/28/2008	13,666	$199,900	$270,000	$370,000

Weekly Data for Riverside and San Berdu County

Weekly inventory and median asking prices for Single Family and Condo homes (together) are displayed in the trend box below. 25th and 75th percentile prices for the last ten weeks are shown in the table. For a longer history of trends see the averages data further down.

Trend	07/28/2008	1 month	3 month	6 month	12 month
Median Price	$254,900	-5.6%	-14.7%	-25.0%	-36.1%
Inventory	45,999	+0.1%	-4.7%	-9.0%	-12.2%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
07/28/2008	45,999	$184,500	$254,900	$369,900
07/21/2008	47,243	$185,000	$257,600	$371,175
07/14/2008	45,778	$189,900	$259,999	$379,000
07/07/2008	46,531	$189,905	$264,900	$379,900
06/30/2008	45,947	$194,900	$269,900	$387,500
06/23/2008	47,519	$195,225	$270,000	$389,000

Bridle Creek under $400k

Bridle Creek is a horsey development in Southern Riverside near Lake Mathews. The homes are being built by Lyon and are decent sized houses on one acre lots. I like a couple of the floor plans in this tract so I keep an eye on it. Last year the builder was trying to get $700k to over a million for these units. Being a relatively new development it's now peppered with REO's and homes in various stages of foreclosure. Lately there have been some big price reductions on some of the REO's. A few were down in the mid $400s. Those reductions must have gotten some interest as I see a few have gone pending. We will have to wait and see what the selling price was on those. This weekend I see a new listing hit the market and it's an attention getter if you are interested in this area.



17741 Canyonwood Dr. is a 3266 sq/ft 4 bedroom, 3.5 bath home. It's plan number 2 if I remember correctly. It's not one of my favorites but it is a nice floor plan. This home was purchased in Oct 2004 for $638k. It went back to the bank in April for $539K and it hit the market this weekend for $377K. From the pics the home does not look to have much in the way of upgrades. On the bright side it does not look like the last owners thrashed it on the way out either. If you can pick this up for asking price it's probably a decent deal. The asking price is very close to what homes of this size on lots this size were selling for in 2000/2001. I think this will probably sell for quite a bit over asking. My guess is it will go for around $420k~$430k.

One of the better video's I've seen lately.

This is a bit long but it's a good video. Unfortunately the message is a little late.

The Biggest Loser

There are a lot of homes in the IE that have lost 50% or more in the last couple of years. Most of those though are "only" losing $300K to $400K. It's not every day you find a 50% loss that is nearly a million dollars.

Well, here's one in Corona. 1015 Lowry Ranch Rd is a large estate home up in Crown Ranch. According the the description this was a model home. It is 5400 sq/ft and has 5 bedrooms and 5.5 bathrooms. The home was purchased new in May 2006 for 1.83 million. It does not say that this is a REO on the listing but I will assume it is as it shows a sale in June for 1.49 million. It is currently listed for $875K. That is a loss of 53% or $955K! If it sells at that price the total losses after all the fees are paid should be well over a million.



If you are thinking this home is going to be "snapped up" you might want to take note that there are quite a few REO properties in this tract and some are priced very close to this one. In fact there is a model match at 960 Randall Ranch Rd. This home is identical except for the "model home" upgrades. It cost quite a bit less so the loss is not nearly as impressive but even so the loss is considerable. It was bought new in June 2006 for $1.475M. The lender took it back in Nov 2007. Since then they have been chasing the market down. After 6 price reductions they are down to $878K. The loss on this one is "only" 41%, assuming they can get it sold at that price the loss is going to be around $600k plus fees..

A trip to MoVal

Moreno Valley is one of the few cities where you can currently buy and be reasonably certain your house won't be worth $100k less next year. MoVal gets a bad rap some of it is deserved and some is just hype. The crime rate in the city is about average for a city of it's size. It's no Beverly Hills but it's also no Compton. It has a few ghetto areas like Edgemont and it has several very nice areas like Moreno Valley Ranch, Rancho Bellago and Sunnymead Ranch. Home prices in MoVal shot up about 300% between 2002 and 2007. By early 2007 many of the newer tracts were selling homes between $500k and $700k (before upgrades). That's absolutely insane for a working class town like MoVal.

In the last 6 months of 2007 the market in MoVal seized up. Nothing was selling. At one point in late 2007 there was a 4 year supply at the rate homes were selling. By spring the prices were falling faster than IndyMac's stock price. Homes now, at least the ones that are selling are going for 50% to 60% off peak prices. They are all the way back to 2001/2002 prices. And guess what, they are selling!Last month they go rid of 322. That's not epic by any means but it sure beats the 50 a month they were selling last fall.

I don't want this to be a "yea, but who wants to live in MoVal thread". Let's just take a look at what you can get in MoVal.



First up is 13531 Somergate. This is one of the Model Homes for the tract. I visited these homes, my grandfather lives very close to them and they were great floorplans on large 1/4 acre lots. But back then they wanted about $500k for them and I just laughed. This home is 3570 sq/ft and has 6 bedrooms and 3.5 baths. It was purchased for $735k back in 2006. That was long before the models closed. They only closed the models about 6 months ago. It's now an REO and it's listed for $315K or $88 s/f. Thats a loss of 58%! This is a beautiful home and if you work in the IE this is probably a solid buy.



Around the corner in anothr new tract is 13388 Triple Crown. This is an equestrian tract so the lots are huge and the area is zoned for horses. The tract was build by Richmond America. I never like these floorplans or any other Richmond floorplans for that matter. I think they just finished the tract and they still might have one or two new homes left. These were also in the High $400s to Low $600s (without upgrades). And trust me these needed upgrades the stock builder grade stuff they came with was junk. This home is 3574 sq/ft and has 5 bedrooms and 3.5 baths. This home was purchased new in Jan 2007 for $510k. At that price I doubt there were many upgrades. It's now bank owned and also listed for $320k. Not as good a deal as the last home but for $320k it's a nice big home on a nice big lot and probably a decent buy at $92 s/f.



If those 2 are still too rich for your blood then how about 16513 Colt Way. This one is down the south end in Moreno Valley Ranch. It's very close to the MoVal RCC Campus. This home is 2605 sq/ft and has 5 bedrooms and 3 bathrooms. It says it has granite counters and from the one pic it looks very nice. The home was purchased new in 2003 for $292k. It sold again in 2006 for $495K. Now it's owned by the bank and the listing price is $205K or $76 s/f. If it sells at that price the loss will be 59%! I think this will go for more than that but I doubt it will fetch over $240k. Even at that price this is probably a reasonable buy and should make a nice starter home for a young family.

These were 3 of the REO's that hit the market today. The city is full of them! It's no surprise that the sales for Riverside County were up last month. With prices hitting 50% to 60% off in MoVal, Perris, Hemet, San Jacinto, Wildomar, Meniffee, Murrieta, and surrounding areas it's easy to see why sales are up. Don't fret, soon enough 50% to 60% off will be coming to a city near you!

Foreclosures still going through the roof

Trustees Deeds Recorded

DataQuick has released the Foreclosure report for the second quarter of this year. As you can see the numbers are still sky high. Riverside is up 250% in Notice of Trustee sale and San Berdu is up a whopping 315% over last year.

Another Increase in California Foreclosure Activity
La Jolla, CA.--Lenders started foreclosure proceedings on a record number of California homeowners last quarter, the result of declining home values and the rampant spoilage of a batch of especially risky home loans made in late 2005 and 2006, a real estate information service reported.

Mortgage servicers recorded 121,341 "notices of default" during the April-through-June period. That was up 6.6 percent from a revised 113,809 for this year's first quarter, and up 124.9 percent from 53,943 in second-quarter 2007, according to DataQuick Information Systems. Last quarter's number of defaults was the highest in DataQuick's statistics, which go back to 1992.

"It's still very clear that most of the problems are in certain areas and in certain categories. Basically, areas that absorbed spillover activity during the end of the boom cycle in 2006 seem to be the hardest hit. Prices went too high, fueled by the availability of easy-to-get dicey home loans. An added element was speculative buying," said John Walsh, DataQuick president.

Most of the loans that went into default last quarter were originated between September 2005 and November 2006. The median age was 26 months, up from 16 months a year earlier.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $11,583 on a median $346,400 mortgage.

Last quarter's default numbers were a record in almost all of the state's 58 counties. That included Los Angeles County, where last quarter's 21,632 residential defaults surpassed the prior record of 21,444 recorded during first-quarter 1996.

Of the homeowners in default, an estimated 22 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 52 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes 'work- outs' difficult.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 63,061 during the second quarter. That's the highest since DataQuick began tracking Trustees Deeds in 1988. Last quarter's total rose 33.5 percent from 47,221 in the previous quarter, and jumped 261.0 percent from 17,458 in second quarter 2007. In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The all- time low was 637 in the second quarter of 2005.

The weekly Tumble

Not much movement this week in the county wide median listing price numbers except at the low end and the high end (The high end took a beating). The core areas were basically unchanged this week. That's almost expected given the large decline the previous week. The monthly averages remain basically unchanged with about a 5% decline per month currently.

County wide numbers (Rivy and San Berdu)

Trend	07/21/2008	1 month	3 month	6 month	12 month
Median Price	$257,600	-4.6%	-14.1%	-25.1%	-35.4%
Inventory	47,243	-0.6%	-1.4%	-1.6%	-9.0%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
07/21/2008	47,243	$185,000	$257,600	$371,175
07/14/2008	45,778	$189,900	$259,999	$379,000
07/07/2008	46,531	$189,905	$264,900	$379,900
06/30/2008	45,947	$194,900	$269,900	$387,500
06/23/2008	47,519	$195,225	$270,000	$389,000

Here's the Core areas

Trend	07/21/2008	1 month	3 month	6 month	12 month
Median Price	$259,900	-5.5%	-13.4%	-27.8%	-40.1%
Inventory	13,470	-7.3%	-3.0%	-4.5%	-7.3%

Historical Data

Date	Inventory	25th Percentile	50th Percentile (Median)	75th Percentile
07/21/2008	13,470	$194,900	$259,900	$359,000
07/14/2008	14,390	$195,000	$260,000	$359,900
07/07/2008	13,511	$199,000	$266,000	$365,000
07/01/2008	13,897	$199,900	$269,900	$369,900
06/28/2008	13,666	$199,900	$270,000	$370,000
06/21/2008	14,533	$199,900	$274,900	$375,000

June sales by city

Here are the numbers from DataQuick for sales by city.

City, .......Sales......2008 median....2007 Median...% chg

Riverside County	3,471	$275,000	$405,000	-32.10%
BANNING	38	$198,750	$262,000	-24.14%
BEAUMONT	73	$272,500	$380,000	-28.29%
BLYTHE	7	$215,000	$190,136	13.08%
CABAZON	5	$150,000	$252,000	-40.48%
CALIMESA	4	$269,500	$370,000	-27.16%
CATHEDRAL CITY	51	$217,000	$330,000	-34.24%
COACHELLA	38	$212,000	$325,000	-34.77%
CORONA	431	$369,705	$550,000	-32.78%
DESERT HOT SPRINGS	61	$157,500	$273,500	-42.41%
HEMET	161	$177,000	$288,750	-38.70%
HOMELAND	2	$167,750	$435,000	-61.44%
IDYLLWILD	4	$338,000	$310,750	8.77%
INDIAN WELLS	34	$739,250	$860,000	-14.04%
INDIO	167	$256,000	$365,000	-29.86%
LA QUINTA	113	$466,000	$556,250	-16.22%
LAKE ELSINORE	119	$245,000	$385,000	-36.36%
MENIFEE	109	$268,000	$392,000	-31.63%
MIRA LOMA	25	$360,000	$439,000	-18.00%
MORENO VALLEY	322	$212,090	$379,500	-44.11%
MURRIETA	296	$289,000	$440,000	-34.32%
NORCO	20	$476,000	$540,000	-11.85%
NUEVO	9	$238,500	$547,000	-56.40%
PALM DESERT	126	$354,000	$402,250	-12.00%
PALM SPRINGS	102	$300,000	$371,250	-19.19%
PERRIS	134	$215,000	$370,000	-41.89%
RANCHO MIRAGE	67	$520,000	$569,000	-8.61%
RIVERSIDE	383	$272,000	$413,750	-34.26%
SAN JACINTO	99	$205,000	$334,000	-38.62%
SUN CITY	88	$252,500	$328,250	-23.08%
TEMECULA	239	$319,000	$450,000	-29.11%
THOUSAND PALMS	7	$222,500	$290,000	-23.28%
WHITE WATER	3	$127,500	$270,000	-52.78%
WILDOMAR	45	$294,000	$440,000	-33.18%
WINCHESTER	84	$305,000	$423,250	-27.94%

San Bernardino County	2,043	$239,500	$365,000	-34.38%
ADELANTO	75	$165,000	$300,000	-45.00%
ANGELUS OAKS	3	$200,000	n/a	n/a
APPLE VALLEY	109	$190,000	$295,000	-35.59%
BARSTOW	25	$121,500	$185,000	-34.32%
BIG BEAR CITY	31	$204,000	$300,000	-32.00%
BIG BEAR LAKE	26	$292,500	$410,000	-28.66%
BLOOMINGTON	13	$200,000	$360,000	-44.44%
CEDARPINES PARK	5	$76,000	$175,000	-56.57%
CHINO	78	$360,409	$500,000	-27.92%
CHINO HILLS	64	$446,500	$630,000	-29.13%
COLTON	34	$200,500	$345,000	-41.88%
CREST PARK	3	$196,000	$375,500	-47.80%
CRESTLINE	24	$180,000	$234,500	-23.24%
FAWNSKIN	2	$417,500	$664,500	-37.17%
FONTANA	252	$289,000	$435,000	-33.56%
GRAND TERRACE	11	$305,000	$367,500	-17.01%
GREEN VALLEY LAKE	3	$165,000	$345,750	-52.28%
HELENDALE	10	$175,000	$274,750	-36.31%
HESPERIA	129	$200,000	$328,750	-39.16%
HIGHLAND	38	$240,000	$360,000	-33.33%
JOSHUA TREE	6	$170,000	$163,750	3.82%
LAKE ARROWHEAD	41	$349,000	$515,000	-32.23%
LANDERS	8	$56,750	$102,500	-44.63%
LOMA LINDA	12	$266,000	$414,000	-35.75%
MENTONE	4	$267,500	$321,500	-16.80%
MONTCLAIR	21	$300,000	$409,000	-26.65%
MORONGO VALLEY	3	$113,000	$189,000	-40.21%
NEEDLES	3	$183,000	$86,000	112.79%
ONTARIO	96	$290,000	$411,000	-29.44%
PHELAN	10	$216,500	$338,750	-36.09%
PINON HILLS	5	$273,000	n/a	n/a
RANCHO CUCAMONGA	163	$385,000	$523,500	-26.46%
REDLANDS	45	$297,500	$429,000	-30.65%
RIALTO	76	$225,000	$354,500	-36.53%
RUNNING SPRINGS	13	$224,500	$255,000	-11.96%
SAN BERNARDINO	170	$168,500	$287,000	-41.29%
SUGARLOAF	11	$100,000	$196,000	-48.98%
TWENTYNINE PALMS	22	$137,000	$135,000	1.48%
TWIN PEAKS	6	$192,500	$265,000	-27.36%
UPLAND	55	$375,000	$555,000	-32.43%
VICTORVILLE	245	$180,000	$317,000	-43.22%
WRIGHTWOOD	4	$245,000	$332,500	-26.32%
YUCAIPA	51	$292,500	$350,500	-16.55%
YUCCA VALLEY	32	$147,500	$201,000	-26.62%

Yet another look at The Retreat

After spending a weekend watching the British Open I though I would take a peak at my favorite golf course community. WOW, the prices there are coming apart like Greg Normans game did today. Back in late April I wrote a post about the first home to list under $500k in The Retreat. Here we are, only 3 months later and there are 17 homes listed under $500k and of those 5 are under $450k. There are 32 homes listed under $600k. Some of those are short sales but enough of them are REOs and those will set the comps so the when the shorts do become REOs they will be priced in the same range or probably even lower. On a square foot price basis many of those sub $500k homes are in the $130s s/f with the lowest priced home being a short sale listed for $122 s/f. As the selling season winds down I'm starting to wonder if the lenders will start dumping these homes soon. I've been seeing quite a few new listings in this tract every week. The inventory could start to balloon if they don't start selling some of these.

The price leader on a square foot basis is this home at 22586 Secret Way. This home is 3676 sq/ft and has 4 bedrooms and 3 baths. These were built by KB homes and this one sold new for $841,500 in 2005. Today it's listed as a short sale for $122 s/f or $449,999. That works out to a loss if $391,501 (less costs) if they can get is sold.



My personal pick would be 8024 Sanctuary. This is another KB home. It's 3760 sq/ft and has 4 bedrooms and 4 baths. I like this floor plan with the exception of the fact that it only has a 2 car garage. That actually is a deal killer for me, I need at least 3 and preferably 4. Other than that, this is a very nice floorplan. The home was purchased for an even $1 million February of last year. Today it's listed as a short sale for $499k. If the bank will go for that price (and they would be smart to take it) that would be a loss of 50% or $501k in 16 months. KB is still building this tract (well they were as of a month ago) and they were still asking over $600k for this floorplan the last time I stopped at the models.

It's the stupid Economy

I saw this clip over at Calculated Risk and though it was worth sharing.

How low can it go?

About a year ago many here in the blogosphere talked about housing prices returning to sane levels. Most folks back then thought that $100 s/f for homes was probably the lowest we would see in the IE. After all a year ago most homes were still priced over $200 s/f in the nicer areas and even in the outer edges of the civilized world, places like Hemet and San Jacinto prices were well over $100 s/f. I remember how exciting it was when the first homes started to show up under $100 s/f. Heck that was less than a year ago!

So how low can prices go? Well theoretically they can go to zero but as long as we have a reasonably stable economy and people want to live in SoCal that's not likely to happen. But the question remains, how low will prices go?

If anyone a year ago would have suggested that you could buy a nearly new home in the IE for $50-$60 s/f they would have been ridiculed. But today there are actually homes listed for very close to that amount. Most of them are short sales but there are a few REO properties listed that low too. Granted these are out in San Jacinto, Hemet, Perris or other far flung locations. Even so that's quite a price. That's far less than it would cost to build a similar home.

Here's the cheapest one I could find. 3072 Coffeeberry Way, San Jacinto. This home is 3693 s/f and has 5 bedrooms and 4.5 baths. It was build in 2006. I don't know what is sold for but the appraised tax value was $425K, so I assume it sold for close to that. It's currently an REO property and it's listed for $189,900 or $51 s/ft!

Not a bad looking house, especially for $51 s/f. You can live in your very own McMansion for about $1200 mo. Hell, you can almost afford that working as a greeter at WalMart. Which is handy since that's about the only kind of job in San Jacinto.

SFR Median sales price by Zip Code

Here is the Median Sales price data for Single family resale homes by Zip Code. Check out the zip codes where the median has fallen below $200k. One Hemet zip is $130K and there are a few other really low ones too but they are even farther out.

RIVERSIDE COUNTY		SFR	Price	% chg
Countywide		2,842	$263	-33.4%
Aguanga	92536	1	$220	-40.5%
Anza	92539	1	$200	-1.5%
Banning	92220	34	$194	-28.4%
Beaumont	92223	45	$247	-19.4%
Blythe	92225	5	$167	-6.7%
Blythe	92226	n/a	n/a	n/a
Cabazon	92230	5	$150	-36.4%
Calimesa	92320	4	$270	-27.2%
Canyon Lake	92587	20	$285	-49.1%
Cathedral City	92234	49	$217	-36.4%
Coachella	92236	29	$200	-26.1%
Corona	92879	44	$320	-24.3%
Corona	92880	102	$378	-34.7%
Corona	92881	46	$390	-25.0%
Corona	92882	84	$360	-28.7%
Corona	92883	77	$348	-33.6%
Desert Center	92239	n/a	n/a	n/a
Dsrt Hot Springs	92240	37	$128	-53.4%
Dsrt Hot Springs	92241	2	$199	-7.4%
Hemet	92543	31	$130	-44.7%
Hemet	92544	57	$175	-44.4%
Hemet	92545	57	$190	-36.8%
Homeland	92548	n/a	n/a	n/a
Idyllwild	92549	5	$338	8.8%
Indian Wells	92210	14	$870	-22.7%
Indio	92201	65	$205	-39.3%
Indio	92203	50	$260	-32.5%
La Quinta	92253	81	$415	-25.6%
Lake Elsinore	92530	64	$220	-36.2%
Lake Elsinore	92532	43	$271	-37.0%
Mecca	92254	n/a	n/a	n/a
Menifee	92584	86	$242	-34.5%
Mira Loma	91752	25	$365	-25.4%
Moreno Valley	92551	54	$195	-44.4%
Moreno Valley	92552	n/a	n/a	n/a
Moreno Valley	92553	95	$165	-51.4%
Moreno Valley	92555	76	$258	-36.3%
Moreno Valley	92557	63	$219	-39.2%
Mountain Center	92561	1	$660	-3.9%
Murrieta	92562	130	$294	-38.8%
Murrieta	92563	141	$289	-31.8%
Norco	92860	22	$463	-14.3%
N Palm Springs	92258	n/a	n/a	n/a
Nuevo	92567	10	$239	n/a
Palm Desert	92211	42	$354	-5.7%
Palm Desert	92260	24	$445	-7.0%
Palm Springs	92262	38	$329	-35.5%
Palm Springs	92264	23	$580	-11.8%
Perris	92570	31	$255	-46.9%
Perris	92571	96	$205	-39.4%
Rancho Mirage	92270	34	$683	-0.7%
Riverside	92501	7	$121	-67.7%
Riverside	92503	82	$273	-34.6%
Riverside	92504	44	$197	-47.5%
Riverside	92505	41	$249	-40.1%
Riverside	92506	40	$300	-36.6%
Riverside	92507	35	$234	-32.2%
Riverside	92508	54	$360	-28.0%
Riverside	92509	54	$265	-32.1%
San Jacinto	92582	35	$214	-40.9%
San Jacinto	92583	49	$182	-36.0%
Sun City	92585	30	$230	-29.9%
Sun City	92586	22	$165	-25.8%
Temecula	92590	n/a	n/a	n/a
Temecula	92591	61	$314	-27.8%
Temecula	92592	139	$319	-28.8%
Thermal	92274	n/a	n/a	n/a
Thousand Palms	92276	7	$223	-12.7%
White Water	92282	3	$128	-52.8%
Wildomar	92595	35	$280	-32.9%
Winchester	92596	55	$279	-28.5%

Let's get back to some houses....

More Delusional sellers in Corona!


Here's another story of a poor fella that waited just a little to long to sell his pleasure palace. Even though the market has clearly fallen from it's drug induced highs there are still plenty of late sellers that either didn't get the memo or don't believe it.

The owner at 3944 Bennet Ave in Corona is one such person. His disbelief of the current market conditions is evident by his asking price. No doubt about it, this is a first class pad. The inside looks awesome as does the outside. But it's still a tract home in Corona. The home is 3615 sq/ft and has 4 bedrooms and 3 baths. It also has a bitchin back yard with a cool rock pool, fireplace and built in BBQ. I'm sure they spent some serious cash on that back yard. However as most of us know, A pool is a terrible investment. You get very little of that money back as it scares away 3 out of 4 buyers. I'm sure the other upgrades add some value to the home but nothing close to what the owner obviously thinks.



It looks like the owners picked this home up new in 2002 for $378k. Judging by the backyard they have HELOC'd or refi'd the hell out of this thing and probably owe a fortune. The asking price is $850K. 2 years ago they would have gotten it but today they have some serious competition.

The first and most similar is a model match at 4020 Old Waverly. Same home also with a pool and spa. No pics though except for the front view. It looks nice from the front but it's hard to compare without pictures. None the less this home is listed for $620k. It also has no hope of selling at that price. (107 days on Market so far).



There is also a REO property of the same model at 1929 Crystal Downs. This one doesn't compare to the first one in upgrades (it has none) but the home is identical in floor plan. It is currently listed for $445K. Not quite HALF the price of the first home and it hasn't sold at that price either. It's been listed for 60 days. This home was last purchased in May 2005 for $740K (amazing no?). It went back to the bank for $422k in May. That means nobody bid on this home in May when it was auctioned for $422k! Total loss, assuming it sells at $445K would be $295K (from the 2005 sales price).



How much extra are those upgrades worth on home one? I know they aren't worth $400k. The Crystal Downs house hasn't sold in 2 months at the $445k asking price. I think if they get that one down under $400k they will get some action on it and get it sold. What does a $400k comp do when it comes time for an appraisal on the first home? Even if they were to find a willing buyer is there any way they could get financing. I doubt it. It's just more waisted listing cluttering up the MLS.

Data quick June sales report

DataQuick has released the June report. The only bright spot is that sales are up in the IE over last year. That wouldn't be hard since last year was the worst on record. Take note that the median price has fallen $15K (5%) in one month in Riverside and over $10k (4%) in San Berdu. That's pretty darn large drop in one month. If that rate of decline keeps up the median in Dec will be $202k for Riverside! Some people will see the sales increase and get all worried but it's a small increase, only 400 more homes than last year and many of those are new homes. Last year NOTHING new was selling because the prices were still sky high. There's a lot more new stuff selling this year due to the builders whacking the prices. Also note that 62% of the sales in the IE are foreclosures.

Now here's the report.

La Jolla, CA---Home sales in Southern California continued at their slowest pace in more than two decades last month as many potential buyers and sellers held off if they could, or struggled with mortgage financing if they couldn't, a real estate information service reported.

A total of 17,424 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 3.0 percent from 16,917 the previous month and down 13.6 percent from 20,166 for June a year ago, according to DataQuick Information Systems.

While last month's sales were the highest in ten months, it was still the slowest June in DataQuick's statistics, which go back to 1988. The June average is 28,488 sales, the peak was reached in 2005 when 40,156 homes sold.

"The mortgage market turbulence is putting quite a bit of activity on hold. Policy decisions about underwriting don't really mean much if there's little or no money to lend. Even some very well-qualified households aren't getting mortgages these days, although this could all change fast if liquidity comes back," said John Walsh, DataQuick president.

The median price paid for a Southland home was $355,000 last month, down 4.1 percent from $370,000 in May and down 29.3 percent from $502,000 for June 2007. The peak of $505,000 was reached in March, April, May and July of last year.

The median has fallen because of depreciation, especially in inland markets, and because of the steep dropoff in home financing in the so-called jumbo category, which until recently was defined as loans above $417,000.

Foreclosure resales continue to be a dominant factor in today's Southern California market accounting for 41.1 percent of all resales. That was up from 39.2 percent in May, and up from 7.3 percent in June a year ago. Foreclosure resales ranged from 18.9 percent in Orange County last month to 62.3 percent in Riverside County.

	Sales Volume			Median Price
All homes	Jun-07	Jun-08	%Chng	Jun-07	Jun-08	%Chng
Los Angeles	7,580	5,678	-25.1%	$545,000	$415,000	-23.90%
Orange	2,641	1,930	-26.9%	$645,000	$495,000	-23.30%
Riverside	3,359	3,757	11.8%	$400,000	$275,000	-31.30%
San Berdu	2,190	2,215	1.1%	$365,000	$240,000	-34.20%
San Diego	3,510	3,077	-12.3%	$495,500	$370,000	-25.30%
Ventura	886	767	-13.4%	$582,000	$420,000	-27.80%
SoCal	20,166	17,424	-13.6%	$502,000	$355,000	-29.30%

Getting closer but more declines needed

This was the 3rd post I wrote on this blog nearly a year ago. Back then the median price was still in the stratosphere. A lot has changed since then but these charts and graphs still show there is a way to go if we are to return to traditional values.


(Post from Sept 2007)
Just for kicks I took a chart from a NAR report for Riverside. Using their chart and drawing a line from the start (1980) through the top of the last peak and out to today we come up with a median price of approx $225k. Since this line is through the top of the last peak it's probably on the optimistic side. If you took that line and went through 1995 the median drops to about $150k. I personally think that the $225k number is closer to where is should be (because most newer homes are larger now and interest rates are much lower). However looking at another NAR chart on Price to Income ratio's we can see that this ratio stays between 2 and 3 from 1980 all the way through late 2002. After 2003 the ratio goes parabolic, jumping to nearly 6x by late 2005. I believe it's closer to 7 or 8 now! If we go back and use this traditional measure of what a home should cost we once again come up with a number close to $150k. Riverside currently has a median price of about $420k putting it about 170% above the $150k number I keep coming up with. Even if I use the higher $225k number, prices are still 85% overpriced. In other words, to fall back to traditional values homes would need to decline 65% to hit the $150k number or 45% to get to the higher $225k number

And if it's not clear enough yet that home prices are WAY out of whack, take a look at the last graph.

The weekely tumble

Here's this weeks median listing data from housingtracker.net. The core areas took another beating this week falling about $6000 across the board. That's a healthy drop for a single week. The inventory crept up but is still within a few hundred of where it was at the start of the year. I've heard from a few agents that the traffic is starting to slow. Maybe the summer rush it petering out or all the knife catchers have already bought. I haven't seen any data to back up there observations. It also might have something to do with the news in the last few weeks. Lets face it, when the stock market is tanking, banks are failing and the government backed lenders are on the verge of total meltdown it doesn't give one a warm fuzzy feeling. So here's the data!

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

Trend	07/14/2008	1 month	3 month	6 month	12 month
Median Price	$260,000	-5.5%	-16.1%	-27.8%	-40.2%
Inventory	14,390	-2.9%	+3.8%	+5.6%	-0.8%

Data

Date	Inventory	25th Percentile	50th Percentile (Median)	75th Percentile
07/14/2008	14,390	$195,000	$260,000	$359,900
07/07/2008	13,511	$199,000	$266,000	$365,000
07/01/2008	13,897	$199,900	$269,900	$369,900
06/28/2008	13,666	$199,900	$270,000	$370,000
06/21/2008	14,533	$199,900	$274,900	$375,000
06/14/2008	14,827	$200,000	$275,000	$375,900

How much house can you afford

In the last half dozen years all of the tradition methods and ratios that were commonly used by lenders (and buyers) to calculate affordability were thrown out the window. A few years of this has everyone thinking a $500k house is a cheap house. It's NOT!

Lets take a look using traditional ratios how much home you can afford. The old quick and dirty method was 2.5 times your yearly income. If you make $100k per year, you can afford a $250k home. Easy, peasy. Now this does not take into consideration interest rates, other debts you might have etc. So the lenders used the 28/36 ratio. Basically 28% of your income for payment, taxes, PMI and insurance. The 36% adds in your other debts like credit cards, student loans and car payments. In the good ole days if you could not make those ratios you rented or found a cheaper house.

Using the quick and easy method of 2.5 times your income you need to make the following to afford the median priced home.

In Corona last month the median priced home was $385k. You need to make $154k per year

In Riverside the median priced home was $284k. You need to make $113k per year.

In Moreno Valley the median priced home was $218k. You need to make $87K per year.

Now taking that Corona home and figuring a 10% down payment and using the 28% ratio lets see what your monthly and yearly needs to be.

Corona at $385k. 10% down ($38.5K plus your closing costs) leaves you $346k to finance. Assuming perfect credit you can get a loan at 6.5% giving a payment of about $2187/mo add in $200 PMI (you put down less than 20%), add in taxes of $450/mo (most newer homes are 1.6% to 1.8%) and another $100/mo for insurance gets you to a grand total of $2937/mo. Using the 28% ratio that means you need to be making $10,489 per month (or $125,871 per year).

Now you can clearly see that using traditional ratios home prices are still FAR too high in most areas for the average or even above average family. Maybe I'm out of touch with how much people make these days. I just don't think there are that many families out there making $125k per year. And who are they planning on selling all those $700k homes to? How many families are making $250k per year. Not many I think.

That's the beauty of numbers. Maybe it's the engineer in me but laying out the numbers sure makes it crystal clear. The prices still have some distance to fall.

For sale by delusional owner

I don't usually look at the "for sale by owner" listing because most of them are upside down sellers listing at ridiculous peak prices. In the past you could often get a better deal on a FSBO property because you could eliminate the realtor commission and split that savings with the seller. Today however all the FSBO properties seem to be offered by sellers wishing upon a star, hoping to somehow find a buyer that will swoop down and save them from the foreclosure monster. It's not likely to happen because most of those homes are worth about 1/2 what the people are trying to get.

Like I said, I don't usually look at them, but today I was bored and looked at some. Most were just your average Joe trying to unload his overpriced home. But then I ran across this one.



312o Curly Horse Way in Norco, Ca. This home is in the Norco Ridge estates development. Another one I feature here quite a bit. According to the listing this home is owned by a BROKER! A broker apparently too embarrassed to list this thing on the MLS. This one caught my eye not because of the ridiculous price. It's priced similar to most of the other FSBOs, at about peak pricing. It caught my eye because of the description in the listing. I highlighted the comedic portions of the listing.

Come see this gorgeous home in the elite community of Norco Ridge Estates built by Standard Pacific Homes. It is surrounded by upgraded homes valued at $1,200,000 and up! All of the interior upgrades available were done including but not limited to Maple Mantle and cabinets with upgraded hardware, full security with cameras, Platinum Theater Sound System in Family Room, intercoms/radios throughout house and garage, internet and cable tv wired to every room, spa-jet tub and separate shower in huge master with 2 walk-in closets. Zoned for 6 horses. Landscape is planted with bareroots, bulbs and seed sprouts of drought resistant, beautiful flowering trees and plants. New patio and gorgeous 12'W X 14'L X 10'H custom wood arbor. Small dog/pet black vinyl mesh fence enclosure creates yard area about 40' X 30' behind home. Wrought Iron fence and gates around entire property. Custom wooden latching 48"H gates built to enclose huge front porch. Corner lot on hill with a bird's eye view from master balcony of entire neighborhood and city lights below. Unobstructed view of undeveloped mountain directly in back of property makes it look like back yard goes on and on and up the mountain. Sprinklers and timers on all slopes around property and unique non-wasteful spot irrigation system in use for plantings. Purified drinking water, all upgraded stainless kitchen and laundry with sink. Granite counters and back splashes, glass doors in cabinets, butlers pantry, big kitchen pantry w/ glass door, Kitchen Aid appliances, formal dining and living rooms. Full insulation in floors and walls throughout. Upgraded staircase with wrought iron spindles and Maple railings. Curtains throughout custom made. Split slate in autumn colors on all bathroom, family room and high traffic floor areas with upgraded carpet everywhere else. French-style elevation with concrete tile roof and rock accent in front. Windowed garage door w/ keyless entry. Gardener and pest control in place. Horse trails everywhere and equestrian center down the road. Owner is a broker but not listing on MLS and would prefer direct buyers only, no agents or other brokers. Let's keep the costs down! All offers considered, willing to be creative.

Surrounded by homes valued at 1.2 million and up?? Where pray tell are those? Surrounded by homes $400k and up would be more accurate this month. The highest price sale up there lately is around $600k. He goes into great detail about all the upgrades yet there is not a single picture of the inside of the house. 4 pictures of the front of the house is all you get. This guy is a broker, he has a big house that his is trying to get $987k for and the best he can do is post 4 pictures of the outside. Now lets talk about the beautiful landscaping. From the 4 piss poor pictures all I see is splotchy grass and a few plants. Like every other FSBO listing this one has no hope of selling. And as a broker this guy knows that.

Another 20% according to Bank of America

Another 20% according to Bank of America!

Bank of America Chief Executive Ken “ As for the housing market, Lewis said Bank of America's latest forecast called for a further 15% decline in home prices nationwide, with the decline going into at least the first quarter of next year.

In the case of California, Florida and other markets that had the biggest booms, a further 20% decline is more realistic”.

Personally, I think we will see more than another 20%, especially in the areas that have only fallen 20% to 25%. But assuming he is correct that will bring the median in Riverside down to $230k and in San Bernardino the median would fall to $200k.

There you have it Ladies and Gents, The chief exectutive of Bank of America thinks the median in Riveside will be $230k next winter! Yup, there's never been a better time to buy....... (sarcasm off)

Fraud and its effect on prices

Today I read another article about mortgage fraud in the SD Union Tribune. Last week there were loads of articles floating around because of the big FBI "crackdown". Many of these cases involve groups buying homes at inflated prices, pocketing the excess and letting the homes go to foreclosure. This scheme, it seems was quite common and very profitable. The thing that really pisses me off about all these articles is they fail to make the connection between the high prices and this fraud. Not one article has asked the question "would prices have shot up that high without these fraudulent sales?"

The answer is obvious, NO! It only took one of these inflated fraudulent sales in an area and "poof" every home was now worth what that one sold for. Do that 2 or 3 times and prices double in a year or two for no apparent reason. You can clearly see the pattern when looking at many of the new tracts build in 2005 and 2006. The homes would sell new for $600k then a few months later sell for a million. After that everyone in the tract is asking 1.2 million. 9 months later that initial million home is in foreclosure but everyone still thinks their home is worth bazillions.

The reporters seem unable or unwilling to make this connection, the banks have their fingers in their ears humming lalalalalalala and the government is trying to pass legislation to keep these artificially high, fraud driven prices in the stratosphere.

I wish just one investigative reporter had the ballz to make the connection and put it in print. Of course no one would believe it. It's easier and more palatable to believe the equity fairy dumped a gallon of pixy dust on their stucco Mcmansion and it's value doubled in 12 months.

Pending sales drop 4.9%

Drop in Pending Home Sales Dashes Hopes of Near-Term Housing Recovery

The number of contracts entered into for existing U.S. homes fell 4.7 percent in May, dashing any hopes of a short-term housing recovery that had been created by a jump in pending home sales during April. On Tuesday, the National Association of Realtors said its pending home sales index, a forward-looking indicator based on contracts signed in May, fell 4.7 percent to 84.7 from an upwardly revised reading of 88.9 in April, and remains 14.0 percent below the level recorded one year earlier.

The drop in May’s contract totals outpaced economists’ expectations, which had pegged the index to fall 3 percent; the large drop — even after a strong upward revision to April’s contract totals — clearly added to Wall Street’s already-dour mood in the financial sector.

One month after touting that “bargain hunters have entered the market en masse,” NAR economist Lawrence Yun was forced to reverse course Tuesday morning.

“The overall decline in contract signings suggests we are not out of the woods by any means,” he said in a press statement.

Revised assumptions, new housing in a freefall
Most noteworthy in the NAR report, however, was a wholesale change in expectations for new housing sales transactions going forward. The realtor-led group now expects new housing sales to decline both this year and the next; just one month ago, the NAR had predicted a 12.5 percent rebound in new housing during 2009.

On Tuesday, the NAR revised that projection and said that new home sales are likely to fall 32.3 percent to 525,000 in 2008, and decline another 3.4 percent next year to 507,000. The group had earlier predicted new homes sales of 595,000 for 2009 in June’s forecast.

Poor Lawrence Yun, it must be hard to be an optimist when you ship is going down like the Titanic.

The weekely Tumble

The median listing prices are showing no signs of slowing. I know it seems like prices are not falling if you are chomping at the bit to buy. But they are still falling. The inventory is continuing to bounce around within about 1000. Ever since Feb it has fluctuated between 13,500 and 14,500. So although we keep hearing about lots of sales they are not making a dent in the inventory levels. I suppose it's not much of a stretch to imagine the inventory really starting to climb as the selling season is starting to wind down.

Another data point that shows the increasing speed of the crash is the one month change numbers. If you look you will see the decline in the last 30 days is 5% and for the last month it's been between 5% and 6.5%. The one month change had been running about 3.5% for most of the year.

As I posted earlier this month the foreclosure rate is still climbing and most of those May and June foreclosures are not on the market yet. So the amount of REO properties hitting the market will increase as the sales rate decreases. That should make for an interesting winter!

Here's the data for the core areas of the IE from housingtracker.net

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

Trend	07/07/2008	1 month	3 month	6 month	12 month
Median Price	$266,000	-5.0%	-15.6%	-28.1%	-39.3%
Inventory	13,511	-1.1%	-3.5%	-6.8%	-7.1%

Historical Data

Date	Inventory	25th Percentile	50th Percentile (Median)	75th Percentile
07/07/2008	13,511	$199,000	$266,000	$365,000
07/01/2008	13,897	$199,900	$269,900	$369,900
06/28/2008	13,666	$199,900	$270,000	$370,000
06/21/2008	14,533	$199,900	$274,900	$375,000
06/14/2008	14,827	$200,000	$275,000	$375,900
06/07/2008	13,660	$205,000	$279,900	$379,900
06/01/2008	13,907	$209,900	$285,000	$389,000
05/28/2008	14,053	$210,000	$287,900	$389,000

And here's the county wide numbers,
As you can see the county numbers are dropping a little faster now than the core areas, especially at the high end. The inventory is also holding much more than the core areas.

Trend	07/07/2008	1 month	3 month	6 month	12 month
Median Price	$264,900	-5.1%	-13.1%	-24.1%	-33.8%
Inventory	46,531	-1.6%	-5.5%	-6.0%	-12.6%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
07/07/2008	46,531	$189,905	$264,900	$379,900
06/30/2008	45,947	$194,900	$269,900	$387,500
06/23/2008	47,519	$195,225	$270,000	$389,000
06/16/2008	46,962	$199,000	$275,000	$395,000
06/09/2008	47,297	$199,900	$279,000	$399,000
06/02/2008	46,949	$200,000	$280,000	$399,000
05/26/2008	47,187	$200,000	$285,000	$399,000

The Mac attack

Pasadena lender IndyMac bank imploded today. You may have already read about it but this was one of the largest lenders specializing in Alt-A loans, those were they type that were very popular in California. Something like 70% of the loans from 2005 to 2007 were of the Alt-A variety. Indymac was apparently visited by "the suits" from the FED this weekend and it looks like they didn't like what they found. Indymac announced they have stopped all retail and wholesale lending and will lay off more than 50% of their employees. I wonder how many of the 4000 work here in Southern Ca? I hope you didn't have any stock in this train wreck. It has lost over 98% of it's value over the last year and a half.

And if that were not enough Lehman Bros, small business finance unit also imploded today. Two lenders in one day!

And if you missed it Fannie Mae and Freddie Mac got pummeled today. They lost 18% and 16% of their value IN ONE DAY! Too bad the housing market cannot move that fast....

The worst time to buy a house EVER

If you ask people when was the worst time in history to buy a house most would probably say 2006 or 2007. Those were terrible years to buy a house but I think today might actually be worse. In 2006 you still had prices going up in some areas and even if prices were not going up they were not cratering like today. In 2007 sales were at a standstill but prices were not falling much at least until late in the year (mostly because of the lack of sales). Today however you can buy a house one month and next month it can be worth 20% less. Today is the worst time in history to buy a house looking at month to month values. Sure prices have dropped on average 30% since last year but the rate that the prices are falling is increasing. It has slowed slightly for the "spring bounce" but come fall they will probably take off like jet.

Here's an example of what I'm talking about.
In May of 2008 a bargain shopper "snapped up" 4467 Cabot Drive in South Corona (Dos Lagos), the home is a 3 bed, 3 bath and it is 3413 s/f. He was probably all giddy at his apparent steal. You see this house was previously purchased in Dec 2005 for $1.045 million. He stole it for $560k after the bank took it back in Dec 07 for $753k. Sounds like a great deal, right? He bought it for 47% less than the previous owner. How can you go wrong?

Here's how. Fast forward 6 weeks since he closed and his neighbor (a bank) with the same floor plan has listed for $499k. 4455 Cabot Dr was last purchased in Sept 2006 for $975k, lost to the bank in early June for $621k and has just hit the market for 11% less than 4467 Cabot only 6 weeks after he closed. Sure I suppose it could go for more than asking but that is highly unlikey



Anyone thinking that this is just one case cherry picked might also take note that just up the street at 4365 Cabot Drive there is a 350 s/f larger home (REO) with 2 more bedrooms listed for $519k. All three of these homes back to the golf course so there is little difference in regards to lot premiums. The best lot is actually this last home. It sits near the tee box so getting peppered with golf balls is not the issue it is likely to be with the first two homes. (There is another one of these 3800 s/f 5 bedroom homes for sale for $529k just around the corner from the first 3 homes)



Knife catchers beware, currently the knives are razor sharp! With rising foreclosure numbers and home values still higher than traditional ratios the pressure is going to keep dragging the prices down. You can lose a lot of money in a very short time these days.

$280k inEastvale

In one of the early posts on the blog I stated the I thought thought the smaller homes in Eastvale would end up selling around $250k. Of course there were some doubters. I was confident in my prediction at the time and I'm still confident, although I'm begining to think I should have been less generous with my numbers. The speed of the price drops are taking me a little by surprise (still too slow for some folks though). I've seen a few listings in Eastvale under $300k but most were auctions, homes that were stripped or short sales.

This week there are a couple more. 7547 Walnut Grove is one of them. It does not indicate that this is a short sale or a REO. It looks like this is the original owner from 2001 that is selling. So there is actually a chance this guy will still make money on this house (or at least not lose his ass). It's a 3 bedroom, 3 bath home, 2462 sq/ft on a quaint 6000 s/f lot. The home is listed for $280K or $114 s/f. Currently this is the best priced home in the area so it should fetch a few offers and it will be interesting to see what it sells for. Let's hope this one sets a new trend and we see lot's more listed under $300k.

Are we going to be a Ghost Town?

This was on the LA Times blog today

A financial analyst fresh from a tour of construction sites in the Inland Empire is warning Wall Street of a "ghost town" where finished homes sit vacant and additional homes are still under construction.

"At several properties, there were a significant number of fully built homes sitting vacant along with a large number of additional homes still under construction," Sandler O'Neill & Partners analyst Aaron Deer wrote today after touring developments in Corona and Ontario. "At one master plan community, the entire development appeared to be vacant -- with the exception of crews working on new construction, it was a ghost town."

Median home prices in both communities have dropped sharply over the last year, declining 33.6% in Corona and 30.3% in Ontario, according to DataQuick Information Systems. In Corona, the median sales price fell nearly $200,000 from May 2007 to May 2008, dropping from $565,000 to $375,000.

More from Deer's note: "The homes all appeared to be empty, and there were no prospective buyers anywhere to be found. Surprisingly, the sales office was open ... but the woman working there had questionable English fluency. When asked how many homes had been sold in the past month she simply responded, 'Uh huh. Thank you. Yes!' and handed us some additional literature on the property."

More: "Perhaps the most interesting aspect to the development was what it revealed about the nature of the housing boom: that at the peak even the most undesirable and remote locations were worthy of expensive, high-end homes."

My comments;

While I don't agree the IE will become a ghost town I do expect some of the new unfinished devlopments to end with a ghost town feel. The Preserve in Chino, Riverwalk Vista in Riverside and to a lesser extent Lake Hills, Sycamore Creek and parts of Eastvale. If the tracts are built out or mostly built out then they should have less of a ghost town feel. I would be very, very worried about buying in new tracts especially that Riverwalk Vista.

I've noticed quite a few builders are now selling the models on tracts that are no where near built out. They have not said that they are going to stop building, but when they sell the models it's a pretty good indication ( And by selling the models I mean selling them, pulling down the fancy fences, tearing out the sales offices etc.).

There is a simple solution to finished homes sitting vacant and I'm sure they builders or the banks know what it is and will use it. There are prospective buyers, just not at the silly prices most builders are still asking. Most builders are still trying to get at least $100k more than comparable REOs are listed for. Lake hills has dozens of REOs in the mid $400s yet the builders are trying to get $500k to $700k for new homes. Victoria Grove is busting at the seams with REOs, most in the mid $300s, yet the last builder is asking high $400s to $500s for the last few homes. The thing I find amazing is that they actually still manage to sell one or two. Where are they finding these people??

They won't sit vacant for long once they cut the price enough. Many builders/banks in NorCal, Florida and other place are already auctioning new homes are steep discounts. Poor wall street will lose a ton of money for sure but there aren't going to be tracts of finished vacant homes, at least not for very long anyway. (This may not hold true for far flung places like Adelanto, Barstow or some hell hole east of Pheonix. There is a possibility of entire tracts of homes remaining vacant.)