Saturday, January 31, 2009
In 2006, the bottom was going to be in 2007....
In 2007, the bottom was sighted in late 2008....
In 2008, the 3rd or 4th quarter of 09 was the most popular guestimate.
In 2009, many of the more realistic prognosticators are now forecasting late 2011!
It appears the bottom is much deeper than they originally thought!
Recently Beacon Economics predicted that the SoCal housing market won’t hit bottom until the summer of 2011. Many other forecasters are predicting a similar time frame. The thing is, in the real world, the bottom will be hit at different times in different places. If you go out to Perris or San Jacinto, those areas are already so close to the bottom the are kicking up sediment. Corona and the areas around it are still a long way from hitting mud. Go out to Laguna or Palos Verdes and they are years behind us. I really don't like the idea of using a date as a bottom indicator. The only accurate indicator will be when the prices stop falling. That will happen when fundamental values are once again reached AND the economy is stable.
Historically the Price to Income Ratio in the IE is 2.7. at the Peak it was 7.1! even though there have been massive price drops, it's still around 4 in most areas. Go out to Moval, Hemet, San Jacinto or Perris and you'll find it's a lot closer now to those historical levels.
Let's take a look at what the current price to income ratios are in a few areas;
The median family income in Corona is around $75k. That means the median house needs to be around $200k. Currently the median home is $325k. That's still a large difference from where it is to where is should be. Current ratio 4.33
The median family income for Perris is $48k. The median priced home should be $129K. Currently the Median home is $150k. That's not too far off. Current ratio 3.125
Riverside's median income is $54k. Median home price is $215k. Current ratio 3.98
Temecula's median income is $72k. Median home price, $267K. Current ratio, 3.7
Fontana's median income is $50K. Median home price, $220k. Current ratio, 4.4
Moreno Valley's median income $55k. Median home price, $146k. Current ratio, 2.65 (we have a winner!!) MoVal is currently at tradition levels.
It's looks like we have at least one city where fundamental values have been reached. That does not mean prices will stop falling and begin to rise in MoVal. Prices may stabilize, but more than likely they continue to decline, but at a much slower pace. Prices will not begin to rise until employment and the economy is back on a solid footing. I don't think that will happen for another 5 years at least.
Thursday, January 29, 2009
That chart only looks good if you work at NASA.......
From the LA Times
More than 236,000 homes were lost to foreclosure in California last year, topping the previous nine years combined, data released Tuesday show. And the number of borrowers who defaulted on their payments hit a record high of more than 404,000. (and that number would have been quite a bit higher had AB1137 not slowed the foreclosures in the 4th quarter!)
The wave of foreclosures, which began in early 2007, was initially triggered by falling home values and resets on adjustable-rate loans. But lenders and industry analysts say the trend is now being exacerbated by rising unemployment, which has shot up to 9.3% in California.
California was last hit by massive foreclosures in the early 1990s, when the state was also struggling with an economic downturn and rising unemployment. At that time, there were about 10 foreclosures for every 100 layoffs, said John Burns, an Irvine real estate consultant.
In this cycle, he said, there will be about 15 for every 100.
"The price declines have been more severe this time, and the job losses are looking worse," Burns said. "Consumers are more likely to give the keys back to the bank because they don't have anywhere to turn."
In California, the number of homes lost to foreclosure rose 180% last year compared with 2007, according to MDA DataQuick, a real estate data firm. It was the largest number of foreclosures since DataQuick began tracking them in 1988.
The number of foreclosures actually dropped this fall, to about 14,000 in November from about 25,000 in September. But that decline was probably a temporary blip due to a new state law that forced lenders to make more efforts to contact borrowers before foreclosing, and doesn't signal a reversal of the trend, said DataQuick analyst Andrew LePage.
Indeed, foreclosures rose 14% in December from November. And notices of default, the first step in the foreclosure process, also dropped this fall but had rebounded sharply by December.
The word on the streets is that there's a BIG foreclosure wave-a-coming. I've read it in the nation media, I've heard it from friends in the banking industry and the real estate industry and Mr. Mortgage has just put a good post on the subject. AB1137 backed up the system, in addition many banks held off over the holidays, and they were already backed up before AB1137. I know from personal observations that there are truck-loads of empty homes that are not listed.
In addition to the current crop of foreclosures resulting from the bubble popping, the foreclosure crisis is now sprouting in a new area. Mounting job losses are causing another wave of lost homes. People that bought well before the bubble and were previously in good shape are losing homes from job losses ( A friend of mine in San Diego may lose his house of 10 years after getting laid off in Nov). Unemployment in Ca is getting very close to the levels of the early 90s. The national numbers, while better than Ca are the worst they've been in decades.
I'm really hoping this wave of REO's hit's soon. X and the family are ready to move on. Plus if I don't buy a house I will probably destroy my liver taking cruises........
Wednesday, January 28, 2009
Here's the meat of the Dec DataQuick report.
A total of 19,926 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 19.2 percent from 16,720 for November, and up 50.5 percent from 13,240 for December 2007, according to MDA DataQuick.
Regionwide, foreclosure resales accounted for 55.7 percent of December's resales activity, up from 54.7 percent in November, and up from 24.3 percent in December 2007.
A total of 1,813 newly-built homes were sold in December, easily the lowest number for that month in DataQuick's statistics. The December average since 1988 is 4,926. In December 2005 a total of 8,723 new homes were sold.
"The builders are in a holding pattern, staying alive until the market recovers. Mortgage interest rates last month were near record lows. Of course, that doesn't mean much if the money isn't actually being lent. It does look like the spigot is being opened a little bit, at least for low-cost home purchases," said John Walsh, MDA DataQuick president.
The most active lenders to Southland home buyers right now are Countrywide, Bank of America and Wells Fargo. MDA DataQuick will report more extensively on the home financing market next month.
The median price paid for a Southland home was $278,000 last month. That was down 2.5 percent from $285,000 for November, and down 34.6 percent from $425,000 for December a year ago. The median reached $505,000 in mid 2007.
Indicators of market distress continue to move in different directions. Foreclosure activity waned in early fall but is edging higher again and remains near record levels, while financing with adjustable-rate mortgages is at an all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat overall but is above-average in some markets, MDA DataQuick reported.
Riverside's median fell from $220k in Nov to $209k in Dec. That is a whopping 5% in one month!
SanBerdu's median fell from $185K to $180k, and that's a healthy 3% in one month.
Some of that fall is surely due to the high percentage of low end properties that are selling but none the less that's a pretty stunning monthly drop.
Friday, January 16, 2009
It's time for X and the wife to hit the high seas again. This is our long overdue 20th anniversary cruise that was supposed to happen last summer. Well, better late than never!
As the real estate market and the economy teeter on the edge of oblivion I will be sucking down fruity foo-foo drinks and eating myself into a diabetic coma on the Norwegian Pearl.
Feel free to use this as an open thread and talk about whatever "floats your boat" (oh that was bad).
Be back the 26th!
Thursday, January 15, 2009
How long do you think it would take a "super motivated seller" to sell?? A week? Maybe a month? Nope keep guessing, because you're never going get this one.
433 DAYS AND COUNTING!
here's the first line of the listing:
"NOT a repo and NOT a short sale. .. .. .. just a super motivated seller! This Crystal Ridge single story is model-like in every way!"
14305 Crystal View is a nice single story home over in Crystal Ridge Estates in Riverside. The home is 3215 sq/ft and has 3 bedrooms and 3.5 baths. It sits on a hill, on a large lot, although much of that lot is not usable. The house looks nice and the price is getting close to where they may have a chance of snagging a buyer. But this is a perfect example of how NOT to sell a house. It's been on the market for well over a year. In fact I'm sure this was on the market even before that. I'm sure I looked at this house 2 years ago or more. In any case the listing price has always been "just a little too high". It's a classic example of chasing the market down. Actually they didn't have a hope until Sept, when they got the price below $600k. Before that the price was probably $150k to $200k too high. I looked at 2 REO properties listing in the around $500k back when this guy was listed at $800k.
You have to give the realtor some points on the listing. There are great pictures and listing is even well written. She did everything right except the most important. She priced it too high in a declining market. Of course the price is probably the result of a delusional seller much more so than a delusional realtor.
Check out the price movement. At $550k this has a chance of selling now. Not a great chance, especially as stale as this listing is but at least it's not miles higher than the nearby listings any more.
|Jan 06, 2009||Price Changed||$550,000||--||MRMLS #I07163035|
|Nov 04, 2008||Price Changed||$599,900||--||MRMLS #I07163035|
|Sep 09, 2008||Price Changed||$650,000||--||MRMLS #I07163035|
|Jun 06, 2008||Off Redfin||*||--||Inactive SoCalMLS #1|
|Jun 03, 2008||Price Changed||$740,000||--||MRMLS #I07163035|
|May 30, 2008||Price Changed||$699,900||--||MRMLS #I07163035|
|Apr 12, 2008||Price Changed||$789,000||--||MRMLS #I07163035|
|Mar 07, 2008||Listed||*||--||Inactive SoCalMLS #1|
|Feb 09, 2008||Price Changed||$849,900||--||MRMLS #I07163035|
|Nov 26, 2007||Price Changed||$899,000||--||MRMLS #I07163035|
|Nov 09, 2007||Listed||$920,000||--||MRMLS #I07163035|
|Mar 31, 2004||Sold||$621,000||376.3%/yr||Public Records|
|Feb 13, 2004||Sold||$508,000||--||Public Records|
Also check out this chart from Piggington's site in San Diego. It's a graph of defaults and foreclosures. You can clearly see the effect of California foreclosure bill AB1137 in Sept. And you can clearly see that the banks are catching up!Rate %Housing from
Rank State Metro Name Total Units 2007
1 CA STOCKTON 21,127 9.46 99.16
2 NV LAS VEGAS/PARADISE 67,223 8.89 121.31
3 CA RIVERSIDE/SAN BERNARDINO 112,284 8.02 117.02
4 CA BAKERSFIELD 16,208 6.17 115.42
5 AZ PHOENIX/MESA 97,684 6.02 220.77
6 FL FORT LAUDERDALE 47,387 5.95 127.81
7 FL ORLANDO 46,843 5.48 195.84
8 FL MIAMI 49,697 5.21 96.46
9 CA SACRAMENTO 39,876 5.20 67.74
Then there is this chart from Mr Mortgage's site also showing the defaults going through the roof even though Countrywide and Freddie/Fannie had stopped for the holidays. Default notices were up 100% from Nov to Dec! (21k in Nov and 41k in Dec)
Wednesday, January 14, 2009
Nearly a quarter-million California properties were foreclosed upon in 2008, breaking a record set the year before, according to a report Tuesday from ForeclosureRadar, a Discovery Bay company.
And in December, following a short lull induced by new state legislation, the number of "notices of default" shot back up to levels reached last summer, indicating that more foreclosures are on the way, the company said.
Last year's statewide total of 249,940 foreclosures was up 158 percent from just under 97,000 in 2007, when total foreclosures barreled ahead of the former record-high year of 1996. That year, just over 58,000 California owners lost their properties to foreclosure, according to MDA DataQuick, another company that tracks such information.
The year-end foreclosure numbers are sobering, and so was the month of December, by at least one measure. After three months in which "notices of default" were far fewer than earlier in 2008, in December lenders filed 42,421 such notices statewide, nearly doubling the total number sent to California property owners in November. Default notices are the documents lenders send to late-paying homeowners to notify them that foreclosure proceedings are beginning.
Notices of default had dropped off steeply in September following the enactment of a new state law requiring mortgage companies to give delinquent homeowners 30 days' notice before beginning the foreclosure process with a notice of default. But the rebound of default notices showed that the California Legislature's effort to reduce foreclosures by passing the law, known as SB 1137, has not been successful, said Sean O'Toole, founder of ForeclosureRadar. Part of the problem, he said, is that most homeowners who default on their loans are badly "underwater," or owe much more on their homes than the homes are now worth. "Lenders simply don't have sufficient reserves to lower principal balances enough to help homeowners in foreclosure escape the prison of debt their home now represents," O'Toole said in statement released with the data. He said the average foreclosed property has a market value $180,000 less than the owner's mortgage balance. So, it looks like foreclosures are still on the way up even though Fannie and Freddie have extended their freeze. I wonder how much worse it will be once those two fire up the foreclosure engines again....
But the rebound of default notices showed that the California Legislature's effort to reduce foreclosures by passing the law, known as SB 1137, has not been successful, said Sean O'Toole, founder of ForeclosureRadar.
Part of the problem, he said, is that most homeowners who default on their loans are badly "underwater," or owe much more on their homes than the homes are now worth. "Lenders simply don't have sufficient reserves to lower principal balances enough to help homeowners in foreclosure escape the prison of debt their home now represents," O'Toole said in statement released with the data.
He said the average foreclosed property has a market value $180,000 less than the owner's mortgage balance.
So, it looks like foreclosures are still on the way up even though Fannie and Freddie have extended their freeze. I wonder how much worse it will be once those two fire up the foreclosure engines again....
Tuesday, January 13, 2009
On the housing front Beazer announced that sales were down 53.2%.
Home closings for the quarter ended December 31, 2008 totaled 938, a 53.2% decline from 2,006 homes closed during the same period in the prior fiscal year. Net new home orders totaled 551 for the quarter, a decrease of 56.0% from 1,252 net orders in the first quarter of the prior fiscal year. Net orders declined 48.9% in markets where the Company maintains a presence and 93.9% in markets the Company had previously announced it was exiting. The cancellation rate for the first quarter was 45.6%, compared to 46.6% for the same period in the prior year.
Ouch, that's gotta sting......
Sunday, January 11, 2009
If you measure the value of a home using the $ sq/ft yardstick then this one should rate high on your meter.
25095 Cliffrose St is a big home in Sycamore Creek, South Corona. It's 4519 sq/ft with 5 bedrooms and 3 baths. Built in 2004, it sold new for $555k. Listed now for $295k or $65 sq/ft. It's not quite $50% off but then again it was bought 2 years before the peak. Peak price for this thing would probably have been around $800k. (using 25122 Cliffrose as a comp).
Think it's a one of a kind deal? How about $55 sq/ft? 11135 Larkspur shows up on Redfin as a bank-listed foreclosure. This home is 4158 sq/ft. It's also a 5 bedroom and 3 bath home. It's listed though for $227,500 or $55 sq/ft! This one sold new for a few latte's under $700K in 2006.
This tract has many listings under $100 sq/ft and quite a few under $90 sq/ft. Then there's the two above under $70 sq/ft. Listing prices like these have been creeping inward towards the better areas for over a year now. How much longer before they hit central Corona and the better areas of Riverside? Do you think they will stop short? Once upon a time I did. I'm not sure that they will anymore. I still don't think "normal" sized homes will see $65 sq/ft in central Corona but they big obnoxious monsters might get close.
Saturday, January 10, 2009
Mortgage giants Fannie Mae and Freddie Mac said Thursday they will extend the suspension of foreclosure sales and evictions from single-family homes through the end of January. The companies had suspended foreclosures through the holidays, but were expected to resume proceedings after Jan. 9. The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as it works with mortgage servicers to find options for troubled mortgage holders under the Streamlined Modification Program.
What's a "Streamlined Modification Program". That's FM and FMs plan to make people debt slaves. Borrowers would get reduced interest rates or longer loan terms to make their payments more affordable. Great, give em 50 year loan at 4.5% so they keep paying on something worth 1/2 of what they paid...... That will end well!
I'm sure this will help a few people, mostly in non bubble states where the negative equity amount is lower. But in SoCal I doubt many people will qualify. In addition with the mounting job losses fewer and fewer borrowers will have enough income to qualify.
None of these ridiculous mortgage workout plans put forth so far will help. The only thing that will help is mortgage cram downs. Generally speaking I am against cram downs. But if it will stop the job losses and get the economy back on it's feet then it's hard to oppose such a plan. However, I would only support cram-downs if they screen out those that lied on the mortgage apps. I would not want investors or speculators bailed out. And I would want the cram-downs posted as sales so the comps accurately reflect the current home values. But the bigger question is, "who's going to pay for losses". A cram-down means a loss for the lender. In Freddie and Fannies case we know who's paying for the loss, you and me. But what about the other lenders? In some cases if not most cases, mass cram-downs would leave the lenders insolvent (of course they already are anyway).
But I digress....it looks like the new years foreclosure wave has been delayed a month.
Friday, January 9, 2009
What happens when a whole tract of homes is under water by $400 or $500k per home? There are quite a few of these in the IE. These tracts were built right at the peak in late 2006 thru 2007. You have to figure that nearly every home will default. I'm sure there are a few homes that were purchased out right and there might even be a few buyers with high moral standards and high enough incomes that they stick it out and keep paying. But most buyers will probably just throw in the towel.
One such tract is "The Highlands". It's a small tract right at the western edge of Riverside. It's located in a funky area at the north end of Buchanon St. The homes are all large 2 story and came equipped with high end fixtures and appliances. The kitchens are outfitted with Viking appliances and granite counters. The homes were nice but you were paying for it. These babies started around $700k and went up close to $900k (without lot premiums or upgrades). Now the market corrects and these things are worth $400k. How many will be going back to the lenders?
Here's the first of the failures. 4273 Carnegie Ct. This is the plan 3, the largest of the homes in the Highlands. It sold new in August 2007 for $850k. It's now listed for $429k which must be a short sale as there is a NOD filed against the property. That's just about a 50% decline in slightly over a year. $429k is not a bad price in today's market for this house. These homes really were outfitted nicely. An additional bonus is there is no Mello Roos in this tract and the tax rate was only 1.09% when I looked at them.
The builder is actually still trying to get rid of the last few built homes. I don't beleive the tract is fully built out though. But there are signs saying builder closeout so they might have just given up for now.
Thursday, January 8, 2009
While the purchases are trimming the inventory of unsold properties, most of those bought by speculators will likely return to the market when prices rise again, hampering any recovery, said Nobel laureate economist Joseph Stiglitz and Yale University Professor Robert Shiller in interviews.
“We’re creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve,” said Stiglitz, a Columbia University professor of economics. “We could see a double-dip in the housing recession if that happens.”
“You don’t have it in strong hands, you have flippers,” said Shiller, who helped create the S&P/Case Shiller real estate price indexes. “These speculators are preventing the market from crashing now, and when they get out it could fall again.”
Dario Moscoso of San Diego tracks notices of default and negotiates directly with banks if a home doesn’t sell at auction. He bought a three-bedroom foreclosed house in San Diego three weeks ago for $490,000, half of what it would have fetched a year ago. He’s renting it for $2,500 a month and plans to sell when prices rebound.
“We hope to put it back on the market in about a year,” Moscoso, 52, said in an interview. “We’ll gauge the market and see how it goes.”
This is an interesting concept that I have not considered. In the IE, a large percentage of recent sales are investors, especially in the lower priced areas. Investor purchases will not help the economy as much as regular owner/buyers will. Investors will not spend money on furnishings, nor will they spend money on upgrades or pools. And what happens to the inventory levels when prices finally do start to rise and those investors want to cash in and take their profits? If the inventory spikes it could very well cause another dip in prices. Why do they bring up these scenarios. It makes my head hurt....... or maybe that's the scotch.
I'm not sure who this outfit is but the LA times real estate blog used them as a source. Housing predictor.com ranks Riverside as the 2nd worst market for 2009 and expects a 23.9% decline in value. Now I don't agree with their findings. While we may see a 25% decline, I think LA will be higher than the IE this year and I think several other markets will be too. I'm sure we will be in the top ten. But my guess is we will be closer to the bottom of the top ten.
Now, riddle me this Batman, Why do these forecasts bother to go all the way to tenths of a percent with their estimates?? Just round it off, for Pete's sake. It's a freaking guess. It's like having someone ask "when will the real estate market bottom out" and answering with " June 19th 2011 at 4:11 PM".
Tuesday, January 6, 2009
What's with the freakin gimmicks these days. I thought we were past that. That's usually stuff they try at the beginning of a slowdown. You know, the we'll throw in a free pool, or buy a new house get a new car. etc.
Today I run across this 1488 Andalusian in Norco, This 4000 sq ft home has been an REO and on the market forever. Redfin say's 182 days but I know this home has been on the market for well over a year, Hell, I looked at it a year ago. It's in the area I am looking to buy. It's about the size I want and it's basically a one story. So far, so good. The only problem I have with this floorplan is the funky way the garages are laid out. You must drive up the side of the house then perform a piece of stunt driving to get the car in. My wife has a hard enough time getting her monster SUV into our garage and it's a straight shot from the road. I can't imagine her trying this exercise. The inside is also in poor shape but nothing some new carpet, tile and a little paint wouldn't fix.
Back to the point of the post. This house sells for 1.1 million at the peak. It's goes back to the lender WAY back in Oct 2007. They've been chasing the market ever since. Now it drops to an almost reasonable price WITH a $25K landscaping credit..... WTF. Just lower the freaking price another $25k and you might sell it. I guess it doesn't matter because this baby is going to the REDC auction in 2 weeks. Now if it sells at the $470K asking that would be a staggering drop of 57% from peak. A loss of $630k plus over a year of holding costs plus realtor fees. OUCH!!
Tell ya what mr Realtard, I'll give you $400k for it today! You keep the landscaping credit.
Jan. 6 (Bloomberg) -- Fewer Americans signed contracts to buy previously owned homes in November as credit markets seized up and a deteriorating labor market signaled the housing slump will extend into a fourth year.
The index of pending home resales fell 4 percent to 82.3, the lowest level since the series began in 2001, from a revised 85.7 in October, the National Association of Realtors said in a report today in Washington. Pending sales fell in all four regions.
A financial crisis that worsened in the final months of 2008 deepened the economic recession, extending the slump in home sales and prices. President-elect Barack Obama has pledged to enact measures to ease foreclosures and save or create 3 million jobs to boost the economy.
“The housing stress just doesn’t end,” said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York.
Economists expected November pending sales to fall 1 percent after an originally reported drop of 0.7 percent in the prior month, according to the median forecast of 34 economists in a Bloomberg News survey. Estimates ranged from a drop of 5 percent to a gain of 1.5 percent.
Today’s home-sales report showed declines of 7.2 percent in the Northeast, 6.7 percent in the Midwest and 2.4 percent in the West. Pending sales fell 2.2 percent in the South.
Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in the Realtors’ monthly existing-home sales report. That report for December is scheduled to be released Jan. 26.
In a separate survey released today, the Realtors group said housing starts in 2009 are likely to fall 28.6 percent to 646,000 from 904,000 last year. Median existing-home prices are likely to be $198,100 this year, little changed from 2008, and the median price of new homes will be $231,700, compared with $228,800 last year, the group said.
Purchases of previously owned homes, which account for about 90 percent of the market, fell 8.6 percent in November from the prior month and median prices fell 13 percent from a year earlier, the biggest decline on record. November sales of new homes, which account for the remainder, dropped to the lowest level in 17 years.
One in 10 Americans fell behind on mortgage payments or were in foreclosure in the third quarter, the Mortgage Bankers Association reported last month. The share of mortgages 30 days or more overdue and the share of loans already in foreclosure both jumped to all-time highs in a survey that goes back 29 years, the association said.
Monday, January 5, 2009
And now for something entirely different......
Chrysler's December sales fell 53% to 89,813 vehicles from 191,423 a year ago.
Ford Motor Co. posted a 32% drop in U.S. light-vehicle sales for December.
Toyota Motor Co. reported a 37% fall.
Honda Motor Co. had a 35% decline.
GM reported a 31% drop in December U.S. light vehicle sales to 220,030 cars and trucks from 319,837 in December 2007.
That makes for the auto industry's worst year in more than 15 years.
So what's up with Chrysler. No one buying those pimpin' 300's anymore? The shine's all worn off the PT Cruiser phenomenon? I'd still love to have one of those new Challengers! Yes, it's a guy thing. So it gets 12mpg it also does 0-60 in 4.somthing (SRT8). Maybe in few years I can pick one up for a song.....
Jesse Toprak, executive director of industry analysis for Santa Monica-based Edmunds, said declines were especially pronounced in places such as the Inland region, where high rates of home foreclosures suppressed consumer spending and led to higher numbers of car dealership closures.
At least 10 Inland auto dealerships shut their doors or announced planned shutdowns in 2008. While 2008 auto sales fell 25 to 30 percent for all of California, Toprak estimated the Inland region's drop was 35 to 40 percent.
"We've seen the biggest percentage drop (within California) in the Inland Empire," Toprak said in a media conference call. "The areas most affected by the housing crisis have seen the biggest declines in sales."
Sunday, January 4, 2009
How long does it take a bank to realize the "price is WRONG B'tch". I give you an REO, that's been on the market Two Hundred and Fourteen fa-reeking days. And the listing still says "hurry before it's too late". hahahahaha
16418 Village Meadow Dr. in the Lake Hills development in Riverside. This big ole Mcmansion sits on a hill and overlooks the elementary school below ( I hope you like the sound of screaming kids). It's a 5 bedroom, 4.5 bath home. It's very nice inside but the yard is just rocks (and I do mean rocks). The lot is big at .8 acres but .6 of that is hillside, on all 4 sides. It has a good size yard but at least 1/2 of that .8 acre is not useable. The home sold new from the builder in Dec 2006 for a peakish price of $855k. Those peak prices are really starting to look stupid now, aren't they? It went back to the lenders in May. This home has actually been listed since April 07! After the lenders got it they listed it for $540K. They did have one whopping $7k price reduction (1.5% come on people). It's been listed for $533k since Sept. As the market crumbles around them they just sit and wait for a miricle. The price is obviously wrong b'tch! Yes, I said "the price is WRONG". Price it at $429K and you might have a chance. But do it quick before the next wave of REO's hit.
Saturday, January 3, 2009
Yes, the high end is getting crushed, and here's why.
I started looking today at how many homes over $500k were selling. Answer, not many and if you go over $600k it's almost ZERO in the IE. I checked Riverside using Redfin. I know Redfin is not the best. It shows foreclosures as sales making it a little difficult to determine legit sales vs properties going back to the lender. But it's easy to use and the numbers while not perfect are good enough for this excersise.
Riverside, I found 57 over $500k. Lets figure (conservatively) that 10% are foreclosures ( my gut feeling is that closer to 30% of those sales are ones back to the lenders). That leaves 51 sales over the last 3 months that were over $500k. So that's 17 per month! If you change the number to sales over $600k it drops to 13. But looking at those 13, I'de say a good 50% of those are foreclosure postings.
There are well over 200 listings in Riverside over $500k. So, if we are selling 17 per month, that's about a year's worth of inventory
Corona (not including Eastvale) shows 59 sales over $500k in the last 3 months. Again lets say 10% are lenders so it leaves us about the same as Riverside. Just over 17 homes per month. If you jump up to $600k there are 14 sales that show up. Again it does look like a high percentage of those are lenders getting the properties back.
Friday, January 2, 2009
In general my thoughts on short sales are "stay away from them". I'm not a patient person, nor do I handle cluster#u@&s well. So to keep my blood pressure nice and low I stay away from shorts. I usually don't even write about them. I know some are actually getting sold. A co-worker of mine just did one up in The Retreat. So they can happen. Now what got me thinking is this listing.
2534 Tara Ln in Riverside. It's a relatively new custom built over near Hawarden Estates. It's a nice sized single story home with 4 bedrooms and 3 baths. From the pics it looks pretty nice. And the price for the area is great. But will the bank go for the listing price of $349K? (last sold for $744k) The listing says "the lender indicated they will take fair market". I don't know how they would figure out what fair market is over there. There has been nothing sold in that area for months near as I can tell. Redfin show's one similar sized REO selling back in Oct. But that home is on the other side of Victoria St. Not nearly as nice an area as this home. So how would they estimate fair market when there are no sales? There were two nearby sales of similar sized homes about 6 months ago. Both of those were close to $500k. This looks like a great price to the area but is it worth the hassle? For me it's not. This house is smaller than I am looking for anyway but maybe someone wants to give it a shot.
Here's a property that's probably priced about right. 27069 Pumpkin St, Murrieta. This home is in Greer Ranch, which is one of the better tracts in the city. It's a 4 bed, 3 bath home, 3681 sq/ft on a decent size lot (although some of it is a slope). The inside looks in nice shape, but average as far as upgrades go. It does have granite countertops and some tile. New from the builder in 2004 it sold for $584k. At the peak this home sold for a silly $770k. It's bank owned now and listed 61% under that last sale at $295K ($80 sq/ft). That 61% loss, is in only 20 months!
You may think the first home is "cherry picking" or that it will sell for far more. It may be cherry picking but I doubt it will sell for more. To illustrate this point lets look at 27498 Fern Pine Way, in the same tract. This home is also a 4 bedroom, 3 bath. It's slightly smaller at 3362 sq/ft but it does sit on a larger lot. Much of that extra land is also a slope though. There are no homes behind this house, which is a bonus in my mind. This home is also an REO. It is listed for $307K or $91 sq/ft. It's been on the market for 62 days and has already seen one price drop.
Thursday, January 1, 2009
Let's start out the new year with a new low. Just when you thought the prices couldn't go any lower. 9555 Tanzanite Ave in Hesperia hits the market. This "gem" is a 4 bedroom, 2.5 bath home and its just a smidge under 3000 s/f. It was built in 2005 and sold for $415,500 new from the builder. It went back to the bank in Nov and they now have it listed for $99,990 or $33 a sq/ft. Now, the listing does say it's a fixer so we can assume the previous owners either stripped it or just thrashed it on the way out. How much work and $$ it will take to get it habitable is hard to establish from the rather lame-ass listing. A few pics or some description of the things that need-a fixin' would be nice. Oh, then there is the bigger problem of it being in Hesperia......
How 'bout somthing closer to civilization. 25347 Court St, San Berdu. This is an older place just spittin' distance from the airport. It's a 4 bedroom, 3 bath home and it's 2880 sq/ft in size. This one looks like a victim of equity extraction. The last owner bought the place in 2001 for a modest $92k. He lost it for just under $200k and now it's listed for $99,990 or $35 a sq/ft.
Heading back to BF-Egypt we find 8733 Buckthorn Ave, Hesperia. This spacious 3851 sq/ft home sits on the golf course. It was built in 1959 and judging by the price it's probably all original. This last sold in 2000 for $138k (I think, there are some goofy sales posted for this one). It's now a lender owned and listed for $99,990 or $26 a sq/ft!!