Sunday, October 26, 2008
X and the wife are off for the Halloween cruise to Ensenada. Try and behave while we are away!
Feel free to use this as an open thread to discuss whatever "floats your boat".
I start by mentioning that I went out again today to look at some opens in Norco Hills. The traffic was fairly busy but I suspect much of it was due to the Auction open houses. The REDC has an upcoming auction and there were 3 auction homes open in the area. I think this drew a lot of people that then stopped at the other opens. One or two homes looked nice and the prices are getting a bit more reasonable. 2 of the homes in Bretton Gait were under $500k and one just slightly over that. I like one of the houses on Morab and another over the hill on Crestview. One home on Oldenburg was thrashed by the previous home debtor. They took the freaking base boards, Who does that? The rest of the house was a mess too. Another looked like a pack of wolves went through it and pee'd on every sq foot of carpet. Note to realtors: Get the damn carpets cleaned!
I overheard on lady talking to a realtor, she wanted and an 80/20, 100% financing. He was doing his best to tell her those are not available any more. Don't these people read the freakin paper or watch the news?
Saturday, October 25, 2008
How much do you think the stock market dive will affect the real estate market. I mean other than the banks and lending. How many people do you thing have lost a portion of their down payments. How many people are scared as their 401ks melt away? I've heard different opinions from realtors but most of them are trying to blow smoke up my arse, so their opinions don't carry much weight with me. I think the market troubles will take at least 10% of the potential buyers out of the picture. I think those buyers will be primarily the older buyers and the high end buyers though. I think the economy and job losses, or fear of job losses will take more buyers out of the picture in the near future.
This home is 50% off and still hasn't sold. 5917 Pine Valley Dr, Fontana. This home is in the Sierra Lakes development. It is a 4 bed, 3 bath home that is 2581 sq/ft in size. The last sale price for this home (before the bank bought it) was $580k in June 06. It has been listed for 63 days at $294K and still has not sold. That is nearly 50% off the bubble price. The listing is amusing. It says "reduced". Big woop, it went from $295k to $294k! A one freeking thousand dollar reduction, 0.3%. What a tool....
The part of Fontana south of the 10 fwy is doing even worse. Sub $100 sq/ft listing here are easy to find, like this one listed for $89 sq/ft. 17026 Via De Anza. This home is a 4 bed, 2.5 bath of 3099 sq/ft. It was last purchased in April 05 (At least a year before the peak) for $469k. It's currently listed as an REO for $275k. This one has been listed for 75 days. If the picture looks cropped a bit too tightly there's a good reason for it. There is a giant high power transmission line right behind this house. I bet that sounds cool on those foggy mornings.
Friday, October 24, 2008
golfer_x. Why do you always show the low side of San Jacinto? Why not take a look at Trulia. 605 Wamblee (3127 sq feet) - $110 sq/ft 496 Peregrine (3127 sq feet) - $103 sq/ft. Why don't you show what is really happening
Ok, I'll take the challenge. Let's look at what is really happening in San Jacinto and these two properties in particular.
605 Wamblee Ln, San Jacinto. A 3 bedroom, 3 bath home of 3127 sq/ft. reader Osa indicates it recently sold for $110 sq/ft. Well it did, kinda. That sale was the bank foreclosing on the property. They took it back for what I will assume was the loan balance of $345,095 from poor Hector Escamilla and his wife Rebeca. It's not currently listed but the bank purchase was fairly recent so they may not have it out to a broker yet. This home sold new in 2006 for $411K. Any guesses on what it will list for? This house had been for sale by owner for quite a while. He even tried an auction without any success.
The second home is;
496 Peregrine Ln, San Jacinto. This is a 3127 sq/ft home, also with 3 beds and 3 baths. It was purchased in Sept 06 for $375K. The owner had some trouble paying for it and the bank took the home back for $324,068 in August. It listed as an REO in Sept for $205k. The price has dropped to $189,900 as of Oct 20th. The asking price is 49% less than the selling price only 2 years ago. It's currently listed for $61 sq/ft.
Wednesday, October 22, 2008
This house hit the market today. It's in one of my favorite areas. It has a pool (the kids want a pool, dad, not so much!) and it has a synthetic putting green (oh yea, dad likes that). The price is very good for the area (currently). It is a two story and we really would prefer a single. My wife didn't like the finish on the kitchen cabinets. But when she saw the pool she gave it the thumbs up anyway. I'm quite sure this will go quick and probably for way more than the $482k it's listed for. This one is by far the best deal in the area currently. The only drawback I see is the location. It's on the corner of two busy streets. This home sold new in 2004 for $704k. It sold again in 2005 for $815k. I assume that there folks put the pool in and the rest of the lanscaping. They had it on the market for quite a while at 1.13 Million. The banks took it back for $462k. That woulda been a great deal to pick up on the court house steps! Unfortunately my checking account is about $461K short.....
So far this week I have seen at least 6 homes hit the market at prices that make me want to get off my butt and go see them. Although they are still more than I want to pay, they are getting closer. Of course who knows what they will end up selling for.
I've noticed more homes hitting the market each day too. Maybe the banks are getting caught up with that new foreclosure law. Lets hope so. It's been quite slow for the last few weeks.
I think I will take a week off, go on a cruise and ponder when to break out the low-ball cannon.
I know, I know, it seems like it's taking forever for the prices in the desirable areas to fall. But, they are desirable for reasons and those reasons will slow the price declines in those areas. It won't stop them, it wont make the fall any less it will just make it take longer.
Check out what you can get it you don't mind living in the sticks. Can these go lower?? I keep looking for one under $50 sq/ft but no luck so far.
3030 Cat Tail Ct, Hemet is a 3335 sq/ft home with 5 bedrooms and 3 baths. Built in 2005 this home sold new for nearly $450K! IN HEMET...nope no bubble here..... The bank is trying to unload this house for $190K. That's about 57% off the new price. And this is a nice looking house. Even the inside looks good (in the two pics). It has nice hardwood floors and the kitchen looks very nice. At that price this house works out at $57 a sq/ft! This house is down in the newer end of town near Diamond Valley lake.
Think that listing is a fluke? Nope, here's another one even cheaper. 1819 Overland court is in the same area as the first house. This one is a 5 bedroom 4.5 bath home with 3511 sq/ft. This one also built new in 2005 sold for $485k. It's a bank owned and it's listed for $189,900. That's $54 a sq/ft for a newish home with tile floor in the kitchen and granite counters. It even has a landscaped back yard and a small patio. FIFTY FOUR bucks a square!
Here's another, 204 Kirby St, San Jacinto $55 sq/ft
378 Overleaf, San Jacinto (REO) $51 sq/ft
1242 Enchanted, San Jacinto, (REO) $53 sq/ft
Tuesday, October 21, 2008
|RIVERSIDE COUNTY||SFR||Price||% chg||$/Sq Ft|
|Dsrt Hot Springs||92240||93||$120||-35.10%||$76|
|Dsrt Hot Springs||92241||8||$173||n/a||$138|
|SAN BERNARDINO COUNTY|
|Big Bear City||92314||43||$190||-24.00%||$178|
|Big Bear Lake||92315||35||$270||-26.50%||$225|
Monday, October 20, 2008
The Sept numbers are out and they are fabulous. Well, compared to the worst year in history they are fabulous. If you remember, last August is when the subprime market really went into full crash dive mode. The sales numbers crashed down to the lowest recorded levels. Even the difference from August to Sept was shocking in 2007. The sales went down something like 22% in just that one month period. Consequently the sales numbers for the next 6 months or so are going to look absolutely stellar.
Looking at the numbers and doing some math here's what you need to remember from this report. Disregard the fluff, Remember these key points.
1) Sales numbers are the 2nd worst since they started keeping records.
2) 70% of the sales in Riverside are foreclosures.
3) Prices are STILL dropping. The median drop from August 2008 to Sept 2008 is -4.1% in Riverside and -4.7% in San Bernardino!
So here we go with DataQuicks Sept report.
Southern California home sales shot up by an unprecedented 65 percent last month from the dismal, record lows of a year ago, when a credit crunch slammed the brakes on home financing. September sales also posted a rare gain over August as price cuts lured more buyers. Foreclosure resales rose to half of all transactions.
A total of 20,497 new and resale houses and condos closed escrow in the six-county Southland in September, up 5.8 percent from 19,366 in August and up 64.6 percent from 12,455 in September 2007, according to San Diego-based MDA DataQuick, a real estate information service.
Last month's sales were the highest for any month since December 2006 and the year-over-year gain was the highest for any month in DataQuick's statistics, which go back to 1988. However, last month's sales were still the second-lowest for any September since 1996 and were 17 percent below the 20-year sales average for that month.
This September's huge annual sales increase stems from the extraordinarily weak activity in September 2007, when sales were at a record low for that month. The year-ago sales plunged after the credit crunch that struck in August 2007 made "jumbo" mortgages for higher-end homes more expensive and harder to obtain. Sales were already hurting from the subprime mortgage industry meltdown earlier in 2007, which undermined demand for entry-level homes.
"The pitifully low September 2007 sales numbers weren't tough to beat. More impressive was that this September's sales volume bucked the seasonal norm and rose above August. Steep price declines, especially inland, have improved housing affordability quite a bit and may keep sales levels well above the record lows we saw late last year and early this year. It will depend on the severity of this economic downturn," said John Walsh, MDA DataQuick president.
"You have to view last month's sales in the proper context," he cautioned. "They represent escrow closings, which reflect purchase decisions made in mid-to-late summer. That was before the dramatic worsening of the nation's economic crisis in recent weeks. Over the next few weeks our sales data will begin to show how the meltdown in financial markets this fall has impacted housing demand."
I am impressed that they even mentioned the reason for the great "looking" numbers and I'm even more impressed by the candor in that last paragraph.
Bargain shopping continued to fuel the Southland market last month, with sales typically rising the most in areas where prices have dived and foreclosures have soared.
Fifty percent of all existing homes that closed escrow in September had been foreclosed on at some point in the prior year. That's up from 45.5 percent in August and 12.6 percent in September last year.
At the county level, such foreclosure resales ranged from 36.8 percent of September resales in Orange County to 68.9 percent in Riverside County. In Los Angeles County foreclosure resales were 39.1 percent of all resales; in San Diego 47.3 percent; San Bernardino 63.1 percent and in Ventura County 44.0 percent.
The high level of foreclosure resales helped push the Southland's median sale price down to $308,500 in September, the lowest since it was $305,000 in May 2003. Last month's median was 6.5 percent lower than $330,000 in August and 33.2 percent lower than $462,000 in September 2007. The September median stood 38.9 percent below the peak $505,000 median reached in spring and summer of last year.
Sunday, October 19, 2008
It was nice to hear that some thing's haven't changed though. Here's a few of the gems I heard, "it's a great time to buy", "these deals won't last forever", "investors are snapping them up", "sales are way up, we bottomed out late last year" and the very best comment I heard all day was "The stock market is just killing the real estate market". It seems like some things nver change.
Friday, October 17, 2008
Take a listen to economist Chris Thornberg as he is interviewed on the housing market. Here's a few gems,
Prices in California have basically come down halfway to where they're going to end up.
In general, we would have to see about a 40-45% decline in home prices in CA just to get us back to normal levels relative to income.
If you want to sell and you need to sell, you're going to have to price it realistically.
We hear this all the time - people can't get loans, that's not actually the circumstance. If you do qualify, that is, you have the cash to put down, and your income is in line with what you're trying to borrow, and guess what, you can verify the income, you can still get a loan.
The problem is here in CA even with the drop we've seen in home prices, prices are still high relative to incomes. If you can't qualify today, it's probably good for you.
Housing markets don't bounce, they splat. They hit bottom and they stay there. You'll have a long opportunity to capitalize on those low prices once we find that bottom."
Whe asked what will it take to unfreeze this market.
It's not frozen. Quite the contrary, it's moving very rapidly, just not in the direction we like to think about. Prices will fall to the point that will eventually draw buyers back in. And then things get moving.
It's not the news people want to hear. It's certainly not the news real estate agents want to hear, because you can make a lot more money on a 500k house than a 200k house. But if the house is only worth 200k, all the wishing in the world doesn't make home prices go up again. But guess what - the value was never there in the first place.
Thursday, October 16, 2008
How did they do last year at estimating this years numbers. Well, you could have asked you cat and probably have gotten a better estimate. Last year they estimated that prices would fall 4% and sales would fall 9%. At the current rate it looks like the median sales price will drop about 32% and sales will actually increase about 12%. Thats WAY off. So, why would we think this years estimate is any better?
I doubt we will see another 32% decrease but I also doubt it will be only 6%. 6% in January might be about right, but for the year I would be willing to wager a nice bottle of single malt that the number will be closer to 20%. I'm also skeptical that the sales numbers will increase. I think with the faltering economy and tightening lending standards that the sales numbers will be flat or down slightly. I just cannot see an increase with the economy coming apart like it is. I guess we will have to wait and see who gets closer, me or the CAR.
Tuesday, October 14, 2008
There's a lot of talk on the blogosphere about "phantom Inventory". That's the new name for homes banks have taken back but are sitting on. For some unknown reason they are holding homes and not listing them as soon as they foreclose. There's much speculation as to why they are doing this. The most logical to me is that they don't want to flood the market with REO properties. This would drive the prices down even faster than the 5% per month they are currently dropping. But on the flip side if a bank holds a home for 6 months they probably have lost 15% to 20% of what they could have got by selling right away.
Case in point,
514 Wrightwood Rd, Corona. This is a former model home. It was built in 1997. It sold new for $220K when the development built out in late 97. It sold again right at the peak in Sept 2006 for $580k. The bank took the home back in Jan 2008 for $496k. Even back in Jan there is little chance they could have sold this for the balance of $496k. But they probably could have gotten close. A house just a few doors up the street sold in March for $395k. Another sold in June for $350K. And yet the banks still did not put this home on the market. I've been driving past this house for nearly a year wondering when they would list it. Well, wonder no more. It hit the market this week. Listing price, $262,500. At that price this should attract some attention. Especially from the guys that just paid $350k 4 months ago..... I'm sure this will get bid up unless it's thrashed inside. But I'm also quite certain it will not get bid up $88k to make the June buyer feel better.
The question remains though. Why did the bank wait? If they had put this home on the market back in Jan, when they took it back they probably could have gotten close to $400k for it. Now they will be lucky to get over $300k.
Monday, October 13, 2008
In the heady days of the real estate boom the fastest way to maximize your profit was to upgrade. High end appliances, travertine, granite, and fancy landscaping were all used to maximize profits. But how much is too much? Well here's your answer:
Marble tile on the garage floor is TOO MUCH!
And layed at a 45 too! with a fancy beveled edge to boot. What the hell was this guy thinking. How many people want a marble floor in the garage?
This home is near Lake Mathews up near woodcrest/Orangecrest but unfortunately the address is in Perris. This takes the value of this home down about $150K or more. Homes over in the 90504 zip of Riverside sell for a lot more than this home will even though it's only a mile away.
This home was bought in 2005 for $631k. It's a 5 bedroom, 3 bath home, 3725 sq/ft sitting on just over an acre of well manicured land. Gawd knows how much this guys spend on upgrades. Some of the stuff is awesome. The kitchen counters are beautiful the cabinets look low end, in the pics but I'm sure there not though). The bathroom looks like a suite at the Ballagio. They even put marble tile on the stairs. It's over the top gawdy in some respects. Actually in most respects. It makes me want to speculate that a realtor owns it!
Anyway if you want this marble palace it's offered as a short sale for $450K. The price is not that bad considering the home. Some of it would need to be toned down a bit for those of us not used to living in a marble palace. Unfortunately I think the zip code is gonna hurt him. That and the fact its a short sale.....
Tuesday, October 7, 2008
The Core area data is as follows;
Including Arlington, Bloomington, Box Springs, Canyon Crest, Casa Blanca, Colton, Corona, Crestmore, Fontana, Grand Terrace, Jurupa, La Sierra, Mira Loma, Moreno Valley, Norco, Perris, Rubidoux, Woodcrest
|Trend||10/07/2008||1 month||3 month||6 month||12 month|
|Date||Inventory||25th Percentile||50th Percentile|
And here's the county data for the Riv/San Berdu metropolitan areas.
|Trend||10/06/2008||1 month||3 month||6 month||12 month|
(SFH + Condo)
|25th Percentile||50th Percentile|
Sunday, October 5, 2008
Now that this has spread to the rest of the economy will there be a 2nd wave to this housing bust. The first wave is the deflation of the bubble prices currently hitting us. Once the prices return normal levels, will a 2nd wave drive them even lower? This second wave, driven by a severe US recession could take prices far lower than those normal levels. A severe US recession would put millions out of work. Many of those people are in homes they can easily afford right now, but they might lose them if they lost their jobs.
At this point a recession is all but a certainty. In California were in it, and have been for a while. The argument amongst the so called experts is now, how bad will it be. Goldman Sachs has just announced that they are now forecasting a much deeper recession that they expected earlier.
If you read the news all you know about the job losses. They are not just in housing and banking anymore. They have spread to manufacturing, service, government and just about every other sector of the job market. Auto makers, airlines and even Starbucks are laying off.
The talk now is about the coming wave of Prime and ALT A defaults. Will the talk next year be about the coming wave of defaults due to job losses. If you lose your job now, finding another will be difficult. The competition, even for menial jobs is fierce. They are getting thousands of applicants for jobs at Walmart.
Corona just announced it is eliminating 112 jobs due to budget shortfalls. The shortfalls are a result of lower property and sales tax revenues. Lake Elsinore also just had a round of layoffs. Remenber the good old days when a government job was a safe job? I'm not sure there are any safe jobs any more.
Sorry if this post is a little too "tin foil hat" for your taste. But the news these days does not fill me with optimism about the future. I think the government is far too optimistic about this crash. I don't know if they are just putting forth a brave happy face to calm people. Or if they really actually think this will be over in a year or two.
I think the US will be changed forever after this. Hopefully for the better. We have become the nation of the quick buck. A nation trying to keep up with the Jones's. And a nation of perpetual debtors. Maybe this is what we need to snap us back to reality.
Thursday, October 2, 2008
As it struggles through the housing crisis, home builder D.R. Horton Inc. is unloading land across California at big discounts.
Horton two weeks ago sold about 2,000 house lots in Desert Hot Springs ... for $7.8 million, according to county records. William Shopoff, a land investor ... estimates Horton paid about $110 million for the land before spending on improvements.
Who knows how much they spent on improvements. But even if they spent nothing that sale would be 7 cents on the dollar. YIKES!!
Wednesday, October 1, 2008
Then something unheard of happened. The banks actually expected people to pay for it. The nerve! Well paying for it was out of the question for most average folks. And that brings us to the "after" picture.
The home looks so sad now. No Vette, no Hummer, no occupants. This house, 6347Peach Ave in Corona was purchased new in 2002 for $291K. In 2004 it sold for $560K and now it's owned by the bank. REO price is $355K. Still about $80K too much in my book. I wonder if the home paid for those fancy cars via HELOC or refis??
Murrieta may not be your idea of the perfect town but it's much better than most of the other cities that have gone sub-$80. It is a little far off the beaten path and I would not recommend anyone move there if they cannot find work locally or within a reasonable commute (20 miles). There are a few to choose from in the Sub-$80 range or close to it. Most of them curretnly are short sales but there are REO's to choose from as well. Most of them are huge and most are fairly new. Lets take a look at a few.
26193 Palm Tree Ln is a big 4008 sq/ft, 5 bedroom/5 bath home. This puppy sold at the peak for $680K. It looks like bank took it back WAY back in Jan for $573k. It's just now hitting the market (why did they wait 9 months??). It's listed at $295K or $74 sq/ft. That is a loss of $385k or 57% from the bubble price. This is a nice looking house. The yard leaves a bit to be desired but the house looks clean and ready to move into.
39166 Shree Rd is another nice looking house in Murrieta. This one is 3586 sq/ft and has 4 bedrooms and 3.5 baths. The home was purchased new in 2006 for $632K. The bank took it back in Sept. It looks like the offered it on the court house step for $375K and not surprisingly there were no bidders. It just hit the market listed for $280K or $78 sq/ft making the loss (if it sells at asking) about $352K or 56%. I think this one will go quick, maybe even over list, it looks very nice. Notice the last occupants took the oven!
37705 Summer Wind is a 3160 sq/ft 5 bed/3 bath REO that has been on the market for a month and a half. After a $30k price drop this home is currently listed for $260K or $82 sq/ft. Since it's been on the market a while you might be able to get it under $80.
How about a little Sweet Magnolia? This home is another REO home. It's 3066 Sq/ft and has 4 beds and 4 baths. This one looks to be a sad case. Purchased new in 2000 for $246K it was lost to the bank in August. There's no telling if this was HELOC abuse, familiy tradgedy or simple job loss. My guess is HELOC abuse since the bank took it back for more than the original loan. This is now listed $1k BELOW it's original selling price in 2000! Now that's a rolback! BTW is it just me or is that one BUTT-UGLY house.