Wednesday, January 13, 2010

Good deals?

I get quite a few emails asking "are we at the bottom", "is it a good time to buy" and so forth. Those are impossible questions to answer with any certainty. We can make educated guesses but my estimation may be no better than the NAR's forecasts (although I think it is). Heck anything could happen in this market. Nothing surprises me anymore. But overall I think we are close to the bottom in the nicer areas and probably there at most of the other areas in the IE. The OC and LA have miles to go.

Personally I feel there are some pretty good deals out there. I'm even seeing great deals in some of the better areas. There have been some closed sales that I look at and kick myself for not making an offer on them. I'm seeing some houses close for $50k under listing price. So the deals are there. Not everyone is getting them. I also still see houses close for prices that make me go HUH??? what the hell were those idiots thinking.

It looks to me like most of Riverside is now very close to the bottom. There are a few tracts that are holding up but for the most part I think Riverside is a buy. Corona on the other hand still seems a little high with the exception of a few areas like Sycamore Creek which is probably close to as low as it will go. But there are still some good deals in Corona as you will see bleow.

The problem for most buyers right now is lack of inventory. The prices are decent but there's not much to buy.

Here's a few of examples of homes that I would probably have bought at the closing prices.

How about this house in Norco Hills. 1456 Morab Way. This monster closed for $97 s/f. Let me tell you that is a SMOKIN" deal. Yes it needed some appliances but for a 4600+ s/f house on a 1/2 acre lot on a hill with a drop dead gorgeous view, $450k is a steal.

290 Wild Horse Ln, also in Norco Hills. I actually almost put an offer in on this one. The only reason I didn't is it's a littls smaller than I'm looking for. But this 2800 s/f one story with nice landscaping on a 1/2 acre and a great looking pool closed for $428k. The price per sq/ft is a little high at $149 but that's primarily because it's a smaller home.

How about this monster up in Woodcrest. 17564 Seven Springs. This 4000+ s/f house on over an acre and a half has a back yard like a resort. It has a totally bitchin pool and some pretty nice landscaping and hardscaping. This thing sold as a short sale for $450k. I would have bought this house in a heart beat. There is no Mello Roos in this tract either!

People are getting some good deals out there.


Tyrone said...

$450K? Lets put this into perspective.

Household income to reasonably support the mortgage loan, using 36% of the loan compared to household gross income.

10% down: $145K household gross income
20% down: $130K

The big wildcard is having a secure future income.

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golfer_X said...

Good point Tyrone but these homes are not starter homes. They are not even move up homes. These are where the higher income IE folks live. I think your income estimates are right on and the people living in these tracts are probably easily making that.

I don't want anyone thinking that the median income IE family can afford these bombers. They can't!

The point of the post is that there are decent deals out there. These homes sold for 2000-2002 prices. That seven springs house sold for the same as it went for when it was new in 2002. And it easily has $150K in that back yard.

Kevin said...

How's chino hills or rancho cucamonga? Are the 3000sf plus homes close to bottom or do they still have a while to go?

OSA said...

X. How did you miss out on these? You always seem to be on top of your game

Mitesh Damania said...

What is the best area for the best deals? On a 400k home what's the rent that's expected?

Martin Burtin said...

Seems to me there is substantial networking going on, pocket listings, referring to friends and relatives the better deals, etc. Then there are cash buyers competing heavily in the market too. There are good deals to be had out there, but the truly excellent deals you would be very lucky indeed if you could snag one, without connections or cash or both.

Don't let that bog you down though, just because your situation may require using FHA and low down, there is still reason to hope to do very well on a purchase price, if you can fortify yourself to endure making a series of offers on different homes until you are successful.

This stressful activity is harder than most realize, until they try it. We all tend to fall in love with a property to some extent, or we would not make an offer on it. If you can be determined not to overpay if asked for a counter offer or best and final, and prepared to walk away to the next opportunity, you can do very well, eventually.

golfer_X said...

There is definately a lot of inside shenanigans going on. Ive seen several houses that sold and as far as I can tell never hit the market or were listed for a few hours.

I actually wanted to put anb offer on the seven springs house but they wanted a cash buyer.

Jack said...

i know of a few such shenanigans in my personal circle.. nothing illegal but just not your regular - put on mls, show house, agent handling type sales... just like in all walks of life, you know someone who knows someone and you get yourself a sweet deal... but when both buyer and seller are in a win-win* situation it doesn't matter who's watching from the sidelines...

*win used very loosely

golfer_X said...

Actually in many cases it is illegal. They are conveniently "losing" higher offers in order to keep the sale inside the office and double up on the commission. That is fraud since the bank is being screwed out of money.