Here's a guy that bought a foreclosure a year too soon.
2822 Vandermolen in Norco hills. This house is 3738 sq/ft with 5 bedrooms and 4 baths was foreclosed on back in March of 08 for $674k. The previous sale was in Feb 07 for $1.2M, and that sale just reaks of fraud. It was purchased as and REO last August for $600k. The guy surely thought he got a steal. After all it was 50% off! But then homes around him start listing for closer to $400k than $600k and he probably starts thinking, "oh crap, I pulled the trigger too soon". What ever the reason he's already bailing out and hoping to get $550k for it. After fees this guys gonna lose close to $100k in 8 months if he gets his price (doubtful). We have to assume this guy put at least 20% down. A non-conforming loan was just about impossible to get without a hefty DP late last year. Does he have any hope of getting $550k? I doubt it. With a dirt yard and minimal landscaping in the front this house is a hard sell. The inside looks nice but there is a model match around the corner for $490k that hasn't sold in ages and there was another one down the street that must have gone pending, it was listed and $449k (for quite a while too).
A perfect example illustrating the dangers of jumping off the fence too early!
5 comments:
I think maybe he can start a support group with the guy at 2902 Vandermolen Dr, a few houses over who still is holding out for $1 mil.
This is the kind of thing that will sour people on real estate investing for a generation. Anybody rah-rah on real estate investing who has any money has probably already gotten into one of these "great deals" and is now in the process of losing fingers. Everybody else is going to see and hear of the carnage and want to stay away (I know of one guy, a grad student, who made a mint on real estate - and is now wiped out, deep underwater in his last condo.) Ugly.
FairEcon, I think the IE housing market had way too much participation from "investors" in recent years, so discouraging a bunch of the speculators is not a bad thing. This owner may be facing one of those tougher life issues (job moving, job loss, divorce, etc.), so I don't want to be too judgmental, but if you have a one year investment horizon in a declining market, you should expect to get nicked. Probably more often than not.
Wow....$15K/year just for property tax+MelloRoos. That's very steep cost just to live in Norco!
There are many houses in the newer areas of northern Rancho Cucamonga and northern Fontana that have taxes in the $10k-$15k range. Several are on or have been on the market at prices well below the peak but the property taxes and Mello Roos fees are just way too high.
Have any of you seen the "Home Prices: Low, But Still No Bargain" article on the WSJ site today? It makes for some intresting reading.
http://online.wsj.com/article/SB123853857749575441.html
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