super crappy listings

I'm not a perfectionist but I do expect a level of competence from people in their chosen profession. I don't think it's too much to ask of a CPA to have math skills or a doctor to have medical skills or even a realtor to have basic sales skills. So when I run across listings that I swear my 11 year old could do better with it really torques my nutz. Like this one for instance;

8037 Armagosa Dr, Riverside. This listing is PATHETIC! The pictures are ridiculous and my guess is that they were taken with a cell phone. It's the only way I can think of that would produce such crappy pics. But even a good camera would have had a hard time with the angles and locations of the pics. Then there is the fact that they didn't even clean up the place. It's not horrid dirty or anything but is it too much work to move the dirty towel from the bath, or the roll of toilet paper from the tank or the laptop and water bottle from the kitchen island. The pics are so bad I'm not even going to post them here.

The written description is bad, English is obviously not his native tongue. Get it proof read! The broker should be bitch slapped for letting this listing post.

Now, the price of this thing isn't bad at all. This is one of the nicer tracts in the area. If you could pick it up for $300k you would really piss off the nieghbors that have been paying closer to $400k in this tract.

Home buyer tax credit

As of a few days ago the home buyer tax credit seemed doomed. It would appear that the NAR and the home builders have done some serious lobbying because now it looks like it is going to be extended AND expanded.

Snagged from Calculated Risk

From Bloomberg: Senate Close to Deal Replacing Homebuyer Tax Credit

The details:

Income eligibility for first-time home buyers stays at $75,000 for individuals and $150,000 for couples.

For move-up buyers, income eligibility is $125,000 for individuals and $250,000 for couples.

There is a minimum 5 year residency requirement in their current home for move-up home buyers.

The tax credit is the lesser of $7,290 or 10% of the purchase price.

The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow)

Expect bill to be signed by Friday.

I guess I should be happy (since I will qualify for a credit under these terms), but I don't. It makes me feel all dirty like I just had sex with a cheap hooker..... (not that I've ever had sex with a cheap hooker btw).

Insanely high taxes

I pretty much took the summer off from seriously looking for a house. Now that the summer rush is over I have started looking again. I have not gotten too serious yet but lately I've been checking Redfin more and crunching some numbers on homes I might like. The payments are not too bad. Even though prices will probably fall a little more, with the low interest rates the payments are reasonable at the homes I'm looking at. The taxes however are insane on most of them. And on top of that many of them have HOA fees of $200 to $300 a month. I looked at a house in Norco Hills listed for $380k. It was a nice house with a pool although smaller than I want the price was good. But when I looked up the taxes it had nearly $5k per year in CFDs. That's over $400/mo! I could buy a pretty nice car for $400/mo. Another house I looked at had even higher taxes and had a $260 HOA. That one was the equivilent of a payment on a BMW 5 series or an E-class. I'm not talking total property tax, this is just the CFD (Mello Roos). And that Norco Hills CFD went to 2033, another 24 years.

This isn't news to me, I crunched the numbers last year too. But for some reason it didn't bother me nearly as much last year. Probably because I was more excited then about the prices finally falling. Now that I have snapped out of my state of euphoria, I am a little more unwilling to throw $500+ a month away. The problem is, there's not many tracts without mello roos or CFD's. And the few that don't have the taxes just don't excite me much (with the exception of Stellan Ridge, but those are still priced crazy high). So it's bite the bullet, settle for another area or find an older house or one without mello roos. The more I think about it the less I want to bite the bullet and pay those taxes. Over 20 or 30 years that is a shit load of money (or vacations or cars or nice whisky etc....)

The differnce in the price of the house you can buy is phenominal when you back out a $500/mo cost. That means you can buy a $500k home vs a $400k home and have the same monthly nut after taxes. Even using a less extreme home where the tax differnce is only say $300/mo, you could buy a $460k house vs a $400k one.

Taxes suck!

Uncle Sam propping up prices

This isn't news to anyone that has been following the bust closely. The government has been doing everything it can to keep the prices from collapsing too fast. Now Goldman Sachs has quantified the results of the governments meddling in the housing market....

Uncle Sam’s interventions in the housing market have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.

The government over the past year has slowed the pace of foreclosures through moratoria and the drive to modify mortgage terms to keep more borrowers in their homes. It also has pumped up demand for housing by giving tax credits to many first-time home buyers and by driving down mortgage interest rates. As a result, home prices in some areas have risen in recent months, particularly for homes that appeal to investors and first-time buyers. Bidding wars for the more attractive bank-owned homes have become common.

But these artificial props won’t last forever and may have created a false bottom in the market. “The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.”

Federal government policies encouraging loan mods have reduced the supply of homes on the market temporarily because it takes months for loan servicers (the firms that collect mortgage payments) to figure out which borrowers qualify. Some states have added their own restrictions on foreclosures that drag out the process further. In many cases, borrowers who get loan mods will default again within a year or so, meaning the problem has been delayed rather than solved. That means there is a large but impossible-to-measure “shadow” inventory of homes that eventually will hit the market.

Goldman estimates the tax credit has boosted sales by 200,000 units. Congress is debating whether to extend that credit beyond Nov. 30. Goldman says it “appears likely to be extended for at least a few months but probably no longer than through the first half of 2010.”

Mammoth purchases of mortgage securities by the Federal Reserve appear to have held home mortgage rates about 0.30 percentage point lower than they would have been, Goldman says. Those purchases are due to be phased out in next year’s first quarter.

The outlook for further government policy is “cloudy,” Goldman notes. But it is safe to assume that many politicians will remain loath to let the market run free and wild. Goldman points to legislation introduced by Sen. Jack Reed (D, R.I.) that would require mediation between borrowers and lenders before any foreclosures and mandate loan mods in some cases.

“At a minimum, the Reed proposal would slow the foreclosure process considerably,” helping to prevent price declines in the near term, Goldman says. It adds: “The tradeoff would come later, when many of the properties eventually make their way back onto the market through foreclosure.”

How to make millions in real estate

First you need to start will millions so you can pick up homes at the trustee sale like this guy.

11892 Silverloop in Mira Loma was purchased new in 2004 for $479k. a year and a half later it was sold for $619k. That didn't work out for the buyer for whatever reason and they lost it to the bank. The bank took $270k for it at the trustee sale. I have no idea what the house looked like so it's hard to say what the investor/flipper spent. It says new carpet, paint and appliances. It obviously had a new lawn too. If that's all they did I doubt they have much more than $10k to $15k into the house. Now it's listed for $345k. That's a pretty healthy profit. Even after fees they are looking at a profit of $40k to $50k. Not too shabby for a couple of months.

Does this piss you off? I know Sara doesnt like it judging by her responses in a previous post. But is there anything wrong with it. The current asking price is in line with what the other homes in the tract are listed for. This one is turn key. Had the bank took it back they probably would have listed it for a similar price without fixing it. Sure I would prefer the banks eliminate this extra level of middle men that are making a killing. But that's the system we have. And like with most things those with money are the ones making money. Man it sucks to be po'

Another forecast for next year

One says prices up (NAR, what a surprise) this one says prices down.

If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower. Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%. In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years -- though it underestimated the scope.

Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said.

In fact, those areas with high concentrations of foreclosure sales will experience the steepest drops, according to Fiserv. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years.

If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011. In Orlando, Fla., the second-worst performing market, Fiserv anticipates a 27% price collapse by June 2010, followed by a less severe drop the following year. In Hanford, Calif., prices are estimated to drop 26.9% and continue falling 9.5% in 2011; in Naples, Fla., they're expected to fall 26.8% and then flatten out.

Other notable losers include Las Vegas, where prices have already fallen 54.6% and are expected to lose another 23.9% by June 2010. In Phoenix values have already collapsed by 54% and could fall another 23.4%. In both cities, Fiserv anticipates the losses to continue into 2011, but they will be less than 5%.

The latest forecast is at odds with the past few months of the S&P/Case-Shiller Home Price index. That report has given hope that most housing markets may have already stabilized because the composite index of 20 cities rose in May, June and July. Nationally, it found that home prices have gained 3.6%.

Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, however, expects a change in fortunes, however. "I'm afraid Case-Shiller may be just a temporary reprieve," he said.

Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.

Home values in the nation's second largest city, Los Angeles, have fallen 43.3% since June 2006 to a median of $313,000. They are expected to dive another 20.2% over by June 2010, and then start to climb in 2011. (I'm not sure I agree with them about prices going up in 2011)...............................................

I would not put too much faith in any of these forecasts. But I'm inclined to agree with this one. With the economy in shambles, the banking industry on government life support and 1/6th of the IE out of work it's hard to beleive things are going to get much better soon.

$8k tax credit fraud.....really

I read some interesting developments with the $8k home buyers credit over on Calculated Risk. I'll summarize and add some sarcasm of my own.

The internal watchdog for the U.S. Internal Revenue Service is expected to warn the agency for the fourth time about fraud in the multibillion dollar homebuyer tax credit program ... The inspector general found at least 70,000 tax credit claims, totaling $489 million, were granted to individuals who do not appear to qualify for it. ... The agency has opened 107,000 civil cases related to the credit and identified 167 criminal schemes

The government is giving away $8k and it seems some people are shocked to find there may be a lot of fraudulent applications for this money. Did they learn nothing from the Katrina relief? Every lowlife in America applied for that money. Who knew there were 60 million people living in New Orleans! The IRS is starting to audit the $8k tax credit, they are examining 100,000 suspicious credits. Heck that's only 800 million, why worry about chump change. How many crack heads from Detroit (or Hemet for that matter) will apply for this money? Probably more than a few. Heck in Detroit you can buy a house for less than the credit. Lets see, we have Welfare Fraud, FIMA Fraud, Tax Fraud, Medicare Fraud, etc, etc, etc. Get the government involved and you can pretty much guarantee a fraud free for all.

On of the caveats of the credit is that you must live in the house for 36 months. How many of those low end first time buyers will find themselves having to repay ALL of that $8k credit should they lose the house. I wonder if they all know about that little stipulation.

It looks like the $8k credit is losing it's shine fast. A couple of months ago it looked like a slam dunk for extending the tax credit. But lately there is growing opposition to extending the credit. It's looking like it really might actually expire come Dec 1st. The real estate propaganda machine must be working day and night on this latest development.

Where the F is the tsunami?

Ok it's been a few weeks since the supposed tsunami of foreclosures was supposed to start rolling ashore. Where the hell is it. I saw a minor uptick in the amount of listings hitting the market early in the month (But last week was dismal). Record foreclosures is all I see in the headlines. Yet the inventory level is squat and what is out there is either trash or priced so ridiculous it's not worth looking at. I was planning on starting up my hunt again come the end of the month. So lets go banks, foreclose already and lets get those homes on the market.

'Worst three months of all time'

Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

"They were the worst three months of all time," said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter -- whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state -- the best record in the country.

The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders.

That deluge contributed significantly to the quarter's record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes.

"REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties," James Saccacio, RealtyTrac's CEO, said in a statement.

Most disturbing is that all foreclosures -- not just repossessions -- are rampant despite efforts to corral them. Not only has the Obama administration's Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

And in some low-price markets, lenders simply aren't following through on foreclosures, according to Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland.

"They'll even set the date for the sheriff's sale, but they don't file the final papers," he said. "They hold it in abeyance and let the residents stay in the house."

In ever more frequent cases, delinquent borrowers want out of the mortgage worse than the lenders. There are no firm statistics for it, but many industry watchers claim the percentage of REOs caused by borrowers voluntarily walking away from their homes is skyrocketing.

A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When "negative equity" approaches 50%, 17% of households default, even when they can still afford their mortgage payments.
No end in sight

The foreclosure crisis may not diminish anytime soon. "The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers," Sharga said. "It's going to be a lingering problem."

Plus, the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly.

And because there are so many delinquent borrowers, Sharga predicts the banks will be slow to take back their properties and put the repossessed homes back on the market.

"It's hard to envision [the banks] putting millions on properties up for sale and cratering prices," he said. "Recovery will be slow and gradual. I don't see home prices getting much better until 2013."

Sept sales report

DataQuick got this one out a little early. Riverside's median fell back down to $185k giving back the $5k it gained last month and San Berdu managed a gain of $5k. Sales numbers followed sales price with Riverside seeing a decline from 08 and San Berdu seeing an increase.

Here's the report.

Southland home sales edged higher last month, bolstered by late-closing summer transactions, low mortgage rates and buyers hoping to take advantage of a soon-to-expire tax credit. The region’s median sale price remained lower than in September 2008 but, for the first time in years, several counties logged year-over-year gains in the median price paid for resale houses, a real estate information service reported.

Last month 21,539 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 0.2 percent from 21,502 in August and up 5.1 percent from 20,497 a year earlier, according to MDA DataQuick of San Diego.

September marked the 15th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. Sales for the month of September have averaged 24,873, ranging from a low of 12,455 in September 2007 to a high of 37,771 in 2003, based on DataQuick’s statistics, which go back to 1988. Last month’s sales were the highest for a September since 2006, when 24,195 sold.

The small uptick in September sales from August was atypical. On average, sales have fallen 9.5 percent between those two months.(of course it went down last month which isn't normal either).

“There were more than just normal, seasonal forces at work in these September sales numbers. More attempts at short sales, which typically take longer, and new appraisal rules no doubt delayed some deals this summer, causing them to close in September rather than August. September probably also got a boost from people opting to buy sooner rather than later to take advantage of the federal tax credit for first-time buyers, which is set to expire next month,” said John Walsh, MDA DataQuick president.

The median price paid for a Southland home was $275,000 last month, the same as in August but down 10.9 percent from $308,500 in September 2008. It was the median’s smallest year-over-year decline for any month since November 2007, when it dipped 10.3 percent from a year earlier.

	Sales Volume			Median Price
All homes	Sep-08	Sep-09	%Chng	Sep-08	Sep-09	%Chng
Los Angeles	6,274	7,138	13.8%	$360k	$330k	-8.3%
Orange	2,667	2,828	6.0%	$425k	$429k	0.9%
Riverside	4,551	4,312	-5.3%	$237k	$185k	-22.1%
San Bernardino	2,831	3,023	6.8%	$205k	$150k	-26.8%
San Diego	3,366	3,454	2.6%	$328k	$325k	-0.9%
Ventura	808	784	-3.0%	$385k	$371k	-3.4%
SoCal	20,497	21,539	5.1%	$308k	$275k	-10.9%

I noticed a glimmer of hope for the buyers out there. In the last vew weeks the inventory has been creeping up. It's still 10K below where it was a few months ago but in the last 3 weeks it's gone up 2500. Median asking price is falling again. It had been bouncing up and down all summer but in the last couple of weeks its really dropped especially at the high end. I wouldn't make too much of that thought as it has fluctuated quite a bit in the last few months. But for the last 3 or 4 weeks the price is trending down and the inventory is trending up!

Another foreclosure avoidance plan

Another foreclosure avoidance plan is in the works by the Dept of the Treasury. Details are expected to be released next week. From the rumors I've read so far this one actually might help.

This is the report from Housingwire.

The United States Department of the Treasury is launching, with an official announcement expected next week, a new program to help ailing borrowers escape foreclosure.

The Chief of the Homeowner Preservation Office at the Treasury, Laurie Maggiano, released information on the Home Affordable Foreclosure Alternatives (HAFA) while speaking at the MBA’s 96th Annual Convention going on in San Diego. The official launch is expected in the next week or so.

HAFA already holds the support of Fannie, according to a VP at the agency, Eric Schuppenhauer, who believes the new program allows borrowers in imminent default to “make a graceful exit” from their home. HAFA will keep the stigma associated with foreclosure away from the borrowers, he added, and help keep communities intact.

Maggiano adds that HAFA will offer financial incentives to both servicers and borrowers, and associated secondary investors, in order to facilitate a short sale or deed in lieu of the property.

Borrowers will need to be Home Affordable Modification Program (HAMP) eligible and Maggiano released some stats for the crowd’s consumption. 2,484,783 homeowners have requested information on HAMP. 757,955 HAMP plans were offered. 487,081 trials are underway.

Other additional incentives to the short sale industry are nearly developed. The IRS will soon offer a 4506EZ form that will enable servicers to pre-fill out the information so that it only requires a borrower’s signature. It also will include softer language so as not put potential participants off.

................

This is technically a foreclosure avoidance plan but this one is not meant to keep people in homes that they cannot afford (makes sense so far). This one actually addresses the losses the banks are taking when they foreclose. By streamlining the short sale process the homeowners will escape the credit hit and the bank losses should be tempered some what. If the plan actually does work like this it should be a win/win for everyone.

Shadow inventory

Here's a long and boring read about shadow inventory. This is a report put together by the Amherst Securities Group for their investors. There report starts off with...

With the apparent stabilization of home prices and the increase in new and existing home sales, many investors believe the housing market has bottomed, and is beginning to recover. We believe this optimism is premature. We acknowledge that there are a lot of positives in the market—prices have fallen significantly and housing is more affordable than at any point over the past 2 decades. The tax credit for first time home buyers has helped spur purchase activity. However, investors are overlooking one critical factor—the size of the “housing overhang”; i.e., the # of loans in delinquent status or in foreclosure. We estimate the housing overhang at 7 million units – these loans are destined to liquidate, and are creating a huge shadow inventory.

Interestingly, they used the city of Riverside as an one example.

The break out is as follows:
For Sale = 1,372 Units
Banked Owned (but not yet listed) = 1,362 Units
Auction Date Announced = 1,916 Units
Notice of Default Issued = 2,360 Units
Total Probable Inventory = 7,010 (1,372 + 1,362 +1,916 + 2,360)

As of 2007, City-Data.com reports that the city of Riverside, CA had 34,854 mortgaged residential units. It is one of the cities in the San Bernadino/Riverside County areas that experienced rapid home price appreciation during the bubble, with median home prices escalating from $136,000 in 2000 to a 2007 median price of $423,400 (for a 17+%/year price appreciation). Using Loan Performance data, we estimate that almost 50% of the mortgaged properties in the city were financed with Alt-A, Pay Option, or subprime loan product. Recent median sales data indicate that home prices have fallen nearly 60% from the peak.

Thus, the Trulia numbers imply a staggering 7,010 potential properties for sale in Riverside, out of only 34,800 units (thus 20% of all properties!). Stated differently, total inventory (actual listings + REO + Auction Date Announced + Notice of Default issued) are actually more than 5X the number of units listed “for sale.” And this doesn’t take account of homes backed by loans where a Notice of Default has not yet been filed.

Inflation and Interest rates

I hear a lot of talk (especially from agents) about the interest rates shooting up soon. Personally I think this is just BS. Obviously the agents are trying to sell a house and creating a sense of urgency is a great way to do it by put a little fear into the heads of potential buyers. But is there any chance of the rates rising significantly?

Personally I don't see any chance of rates going up soon. The entire economy is on life support. The government is doing everything it can to prop up prices and keep people from defaulting. They are tying to save as many banks as they can and saving the banks means keeping people paying the mortgage. Raising the rates goes against this strategy. It means less people can afford to buy and more people will default on the mortgages they have. Not to mention the havoc it will cause to the auto industry and credit card default rates.

But there's an even more "fundamental" reason the Fed won't raise the rates. Inflation is at near zero. Sure bread and milk costs more today, but the rate the gov uses is hovering around 1.5%. Another factor is the very high unemployment rate. The Fed usually drops the rate as unemployment rises so that businesses have access to cheap money to expand and hire people. So we have a double whammy to the Fed rate. There's no reason to think they will raise the rates judging by their past behavior. Wew can also take a look at what Japan did in the 90's and early 2000's. They kept rates at near zero for a decade. Why do we think the US will be any different? Our current crash is just as bad as theirs was. Ok, our values haven't plunged 80% ....yet, but our crash and our governments handling of it mirrors Japan's.

Will the rates go down? Probably not much farther than they are now unless the 10 yr treasury rate tanks. Obviously with the Fed rate is at zero, nothing they do can lower the mortgage rates. I think they will fluctuate between 4.5 and 5.5 for the next few years. Until the economy comes off life support we will not see the rates rise significantly. And I don't think that will happen for 2 or 3 years at least.

F the bank!

It's been a while since I've seen a really bad REO. One where the previous pissed off home-debtor just trashed the place. But today a great one popped up. Now I looked at this house when the guy was trying to sell it (for $800k) It was gorgeous and had an amazing back yard. Not any more. Looks like they thrashed the pool, killed the palm trees, tore out the wrought iron fencing, poured paint all over the kitchen (cabinets and appliances), looks like concrete in the toilet. They pretty much did everything they could to thrash the place.

16661 Edge Gate Dr. Riverside. Tell ya what mr Realtor, I'll give ya $200k for it! They really didn't pay that much for the place. They bought it new for $607k. But they probably borrowed heavily to put that landscaping and hardscape in. There looks to be about $200k in outdoor work done to the place. Oh the bubble years, how people spent with reckless abandon... Now the bank owns this wreck. They actually tried to get $575k for this thing at the trustee sale. Now it's listed for $400k. NO WAY this thing will get $400k or anything near that. There was a nice home listed just up the street last weekend for $450k. It may have been the same model. It also had a nice backyard with a pool ( It sold in couple of days).

Big...I'll show you BIG

After the last post about big I thought I would see just how big we grew them out here in the IE. Well, there were some folks that really "went big". I'm talking stupid big. Check out this palace I'm sure you didn't know about in Corona.





1111 Casper Cir in Corona is the biggest thing I could find. This fella has gone completely off the deep end with this house. I dunno if he thought the King of Denmark was moving to the IE or what, but he built a palace for him. How does 14,873 s/f grab ya?? That's not the lot size, that's the house! The lot is nearly 4 acres.

So how many buyers are there for 11 million dollar homes in Corona?

Big Homes, they're so last year.....

During the boom builder and buyers started gravitating to larger and larger homes. Builders did it because it maximized the profit. A 5000 s/f home generated a lot more profit than a 3000 s/f home on the same lot. Buyers looking to make the most profit or suffering from MTV Cribs envy were snapping up these monsters. After all, with homes doubling in value every 3 or 4 years why not go for the big payday. At the peak these large tract homes were selling for up to $1.5M! Think about that, a tract home in the IE selling for $1.5M. It's mind boggling.

Now take away the prospect of making $100% on your home in 3 years (or 5 or 10), and there's not many people looking to buy these monsters. The only hope for a sale these days comes from multi-generational families. These really large tract homes are dinosaurs. A product of a housing market run amok. As a result the prices of the big ones are really tanking in most areas. They are very hard to sell. People are not seeing a big payday, they're seeing a big electric bill, a maintenance nightmare, and a whole lot of house to keep clean.

Here's an example of the big isn't better anymore theory.
16622 Catalonia Dr in Riverside. This home sold for nearly $1.4m right at the peak of the market in late 2006 (by late 2006 anyone with 1/2 a brain should have seen what was coming). This house is typical of the Mcmansions they were throwing up all over the IE. It has 5426 s/f, there are 5 bedrooms and 5.5 baths. Lot's of wasted space in these homes. Large foyer, spiral staircases, grand entryways to the master, master bathrooms the size of a bedroom etc. Lot's of fluff! This particular tract was built by KB homes and is basically the same homes they put into their tract at The Retreat in So Corona. The small single story in this tract is quite nice but the other two models are just too big. There are currently 4 of these big ones for sale in this tract. All are priced between $500k and $575k. One of those 4 is the final home the builder put up on the site of the old sales office. They've been trying to sell it for about 6 months or more, it's currently listed for $569k. The current asking price of 16622 Calalonia is $499k. That is a loss of just under $900k, or 64% (assuming they can get $499k for it).