So lets look at a few of these. I believe these are all REO properties. Some short sales are listed even lower. I found one listed at $27 s/f. The listing price on these homes is so low that your electric bill is likely to be higher than your house payment in the summer.
At some point even San Jacinto must start to look good. I mean at these prices you can have a nice big house and not even have to worry about your job. Does it make more sense to buy one of these, pay it off in 10 years and then just kick back for the rest of your life. Or does in make more sense to spend double that to live in Corona and work for the next 20 or 30 years to pay it off. If you have a 20% down saved for a decent house in Corona you could nearly pay for one of these homes. Put $100k down and pay off the other $50k in 5 years. Then kick back with the rest of the rednecks and work on your monster truck. Yea haw....
295 Northwood ave. 3042 s/f, 4 bedroom, 3 bath home. Sold new for $366,500. Now listed for $149k, or $49 s/f.
2989 Crooked Branch. 3322 s/f, 5 bedroom 3 bath. Sold new for $390k. Now listed for $162k or $49 s/f
640 Drake St, 3148 s/f, 5 bedroom, 4 bath. Sold new for $423k. This one is now listed for $153K or $49 s/f. And this one has a pool!
Still too expensive for you, how about $41 s/f?
1374 Willowstone Ct is 3802 s/f and has 5 bedrooms and 3 baths. This one sold new for $410k. Its now listed for $155k or $41 s/f. And it's a nice looking house!
Just around the corner at 1429 Lynden Trails there is a model match listed for $170k or $45 s/ft
18 comments:
The problem with these places is: who will live there? There's not much employment out there, so it would be difficult to live and work there. It's a good place to retire to, for a Californian - but such huge houses aren't too well suited for a retired couple. They are nice, very large houses, and a lot of people want places like that, but it's hard to integrate living there with everything else you do in life. Not many people have no concerns or interests other than living in a nice, very large house.
These places would be good for group living - homeless shelters, rehab, halfway houses - but you can't have a neighborhood of *just* such places. Some constructive possibilities would be live-work space for craftsmen or extended-family housing where most of the family is dependents.
Anybody who can think of a good way to use these McMansion farms can get rich. Is it possible? We'll see.
At these prices the infrastructure fiscally implodes. They would have to put in toll booths everywhere to pay for police fire sewer water etc etc....
If you don't pay for it with inflated property tax revenues they will be forced to take it from the ones with money and the only ones with money will be the ones driving.
The city will have to BK ala Visalia,fire the civil servants and rehire at cheaper labor rates.
What can you get in services for $2700 a year in property taxes?
Buy two next to each other. Fill one with food and supplies and never leave for a year. Otherwise expect to cough up $5 to get in the city.
Most cities out here did just fine 6 or 7 years ago with the property taxes they were collecting. The cities got spoiled the last few years but they managed just fine in the 90's and even early this decade. It will take some belt tightening but I don't see any reason they cannot provide reasonable services at 1997 tax levels.
FairEcon, Plenty of people are willing to live out there. It's not like those folks are commuting to LA (if they are they need a CAT Scan). Those folks are warehouse workers, truck drivers, auto mechanincs, nurses, etc that are probably working within 20 or 30 miles from home. That puts Downtown Riverside well within commuting distance. I don't see retiree's buying a 3000 s/f home. But take a young, non-college educated couple that work service or mfg jobs, those homes are easily affordable.
The problem is the chances of those tracts turning into gang infested ghettos is far too high for most folks. I don't think it's the drive or the lack of nearby jobs. I think it's the fear of ghetto-fication that's keeping buyers away. Since these homes are too large for most investors to consider as rentals they need to find real buyers. And I'm not sure that real buyers are that willing to roll the dice on San Jacinto.
For what it's worth, a neighborhood with a lot of group homes wouldn't be bad for the local economy at all. Those homes get steady state paychecks for the services they provide to their "consumers". They pay taxes just like everyone, buy food and other consumables in large quantities, and hire local folks to help out with cleaning and supervision.
People get scared that these homes bring down property values (ahem, Norco)and cause crime to soar, but the reality is these homes are almost always great neighbors. They are highly regulated by the government entities they are vendored by, and chance that a neighborhood would be impacted negatively are very remote.
Although the monetary influx generated by a group home might be slight for a rich beach community; I'm sure the money that a group home brings to a community such as Hemet, San Jacintio, Menifee, etc. is noticeable and greatly appreciated.
The trade-offs of a big house in the country versus a smaller house/apartment in the city have been around forever. Plan on paying a lot more per sf for the smaller house in the city.
Well planned suburbs are a good alternative to smaller houses/apartments in the city - good value, decent schools, etc. But San Jacinto is a suburb to suburbs, and I wouldn't call it well-planned. Riverside and Corona are already cheap alternatives to Orange and LA County.
I think they just built way too many big houses in the hinterlands for the number of families that are employed exclusively in the IE.
X, I know there are jobs out there (although even Riverside is perhaps 45 minutes away; more with traffic). The problem is that there's not many more jobs than there were 8 years ago but there are a LOT more houses. To fill up the house, a lot of people will have to move to San Jacinto but there won't be extra jobs for those extra people.
I agree ghettofication is a very real possibility - likely IMO with the economics of inadequate jobs. I wonder how much it influences people's current housing decisions, though. Most Americans aren't sociologist or economists or urban historians, and they just idolize these large suburban homes. Do most buyers really recognize the ghettofication risk?
Martin - an occasional group home can be an asset to a local economy. But people in group homes tend to be people with problems, and too many will bring a neighborhood down. Well, at least I think so - I haven't looked for actual research.
In 1997 The state budget was just under half of what we piss away today. Education has eaten up half the budget for decades.
In '97 CalPers did not plan to charge cities a 30-40% payroll tax for every dollar of payroll they cut.
The traffic at the ports of LA & LB will not even get back to '87 levels much less '97 volumes.
If we have any water to spare San Jacinto will be leveled and turned back into farm fields.
I just need to convince my wife to live there....How about its better than Barstow!
i live in San Jacinto. i moved there in 2005. why? i wanted a house i could afford on a 30 year fixed mortgage. back then and today, 380K was and is as much as i could afford. i was looking for a house that was big enough so i would not have to move if i had children. other areas were victorville etc. i was not looking for a big house but that is what was out there. so i bought. with hindsight been 20/20 was it a mistake, yes. can I do anything about it, yes. i was brought up on the premise of "you make your bed, you sleep in it". it's hard to lose 200K plus. i am not judging anyone that bails on their house or gets out. each person needs to do what they must. as for who will live here. houses are selling at a brisk pace. just in my neighborhood, 2 houses have sold in the last week. i work in orange county. i am a white collar professional making 90K a year. as for apying for police etc. we pay a fixed mello roos irrespective of house prices. it averages just over 3K a year. so even with the drop in revenue from the purchase price, they are still ok. i am concerned about it getting gang infested but i put down a ton of money as a deposit and it is hard to walk away. even if i did, where would i go? as i mentioned earlier, i pay my debts. that is just me. am i angry at myself. absolutely. even though i make good money, this decision has probably cost me the chance of having financial security. i wish i had known about this website back in 2005. x could have saved me but that is how things go. peace to all
OSA, my question for you is: what is your total annual household income, and what is your total loan? Because for my point of view, 90K annual income should only support up to 270K loan. When you get more than 1/3 of your gross income supporting your housing cost that is when we all start having problem. This is not even including all the Mello Roos crap...
I understand your situation and personally experience the same in smaller scale (I bought in 92 and was underwater for 6 years afterward).
Snail, a 3:1 ratio is a good rule but it's not the norm in California even during saner times. CA normally goes back and forth between a 4:1 and a 6:1 ratio. And of course, in 2005, the ratio went up to 10:1 and if you were going to buy a house, 3:1 was just out of the question. It was a mistake to buy in 2005, but an understandable one in view of the massive mania going on. Given that OSU did make that mistake, he did about as well as anybody buying in 2005 did in terms of staying within his budget.
Now if we could teach everybody about 3:1 and other affordability measures, yeah, we'd all be much better off.
OSA,
the melloroos were calculated on the assumption that 96% of the homes are paying it on time. If they don't hit that number the time it takes to pay off goes longer. Melloroes are basically bonds and bonds have covenants that might include provisions if the recovery rate falls, up until now they have never failed so I have no clue what recourse they have to keep funding the bonds.
OSA you sound like a fine upstanding Citizen who prides himself on being responsible. I'm sorry to say that there is no place in this country for people like you. I wish you the best of luck.
FairEcon, 3:1 ratio is the norm for the IE and if you look at the long term trend it's closer to 2.6. It's only been the last few years that saw it diverge. It's only gone over 3 twice since 1980. Once in the early 90's when it peaked at about 3.2:1 (in 92) and then again in after 2002. It went over 3:1 in early 2002.
3:1 or higher is more normal for LA and OC or the bay area but even those areas rarely get over 4:1 in normal times. The rest of California does usually stay under 3:1.
and i thought making 90K was a good salary. i guess i did overbuy and i had no idea. so i guess now i can afford san jacinto.
$90k is a good salary. But it normally only allows you to buy a $250k house. The last 7 years were not "normal". Which is why we are in this mess. Lenders lost sight of the fundamental laws of economic physics. They some how thought buyers with ratios of 7:1 would be able to fabricate house payments from thin air.
With the interest rates as low as they are you can comfortably go higher than 3:1. But under 3:1 is still the number to shoot for. I'm trying for closer to 2:1 in case of a job loss or pay cut.
3 to 1 was the standard lending rule of thumb back in the middle 1980s when inflation expectations and interest rates were nearly twice their current levels. With current rates, it runs a bit higher.
Keep in mind this figure on a regional basis gets skewed by the percentage of renters. In LA County, for example, less than half the households own their homes, so the median income will never afford the median home. I've seen the affordability rate get as high as the 40-50% rate, but not higher.
Check out 560 overleaf. 2800 sq feet for 100K. $35 a square foot
housing kaboom -- i'm doing a series on Surviving the Mortgage Crisis for local NPR affiliate KVCR. would love to talk to you in person, maybe get you on the air. can you contact me at anthea.raymond@sbcglobal.net. thanks.
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