Just drop the damn price....

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.

Norco Hills, 61% off peak

Here's a decent looking deal for anyone interested in Norco Hills. 1493 Harness Ln, Norco, is a 4 bedroom, 3 bath single story home. It's just under 3000 sq/ft and it sits on just over a half acre (unfortunately much of that is a hillside). The home sold new in 2001 for $372,500. It sold near the peak in July 2006 for $883k. It recently went back to the bank and they listed it for $349K. That's the lowest price I've seen in this area by about $50k. There was a listing a few weeks ago on a similar house at $399k. That one went quick and I expect this one will too. I'm sure this will sell over list but we will have to wait and see what the final number comes in at. The loss from peak is $533k or 61% if it sells at list.

This house would actually fit my target profile perfectly but unfortunately I don't like the floorplan. It's in my target area, in my target price and is about the size I want. Now if I can just find a floorplan I like in this price range....





A few streets away in the same tract there is another new listing. This one however, illustrates that some people (especially realtors) still have "hope". 1042 Canyon View is a larger (3900 s/f) 2 story home with all the bells and whistles. It's got the rock pool, the fancy resort style back yard and lots of great upgrades. The lot is much better with an expansive view. But in this market what are those extras worth? The first home is listed for $111 sq/ft and that's probably a fair price. This second home is listed at crack smoking price of $256 sq/ft or a few happy meals shy of 1 million dollars.

The house itself is nice but it doesn't look super upgraded. The flooring is not super high end, I see carpet and 12 x 12 tile. The apliances in the kitchen are ordinary and the cabinets don't look all that spectacular either. It looks like most of the extra would be on the outside. I don't really see anything inside that screams "high end". So what is the view worth? How about the fancy backyard? If we use the same dollar per sq/ft as the base the home's base value is $432k. Now a pool and a view (of the 15 fwy) ait worth $568k. I think the lot is worth an extra $30k and maybe another $100k for the hardscape putting the total value at about $570k.

The asking price is nearly 1 million which is only $50k less that this guy paid in 2005. I don't know if he added all the fancy stuff or it was there. But either way I don't see anyone paying anything close to his asking price.

Flipping, alive and well

Here's a flip attempt in Corona.

3231 Huntfield St was taken back by the bank for $401K. The previous owner had paid $930K in Dec 2006 for it. It sold in early Sept for $370K. That is a loss of 60.3% from the Dec 09 price or if you prefer your loss in dollars, that's a loss of $560K. This one was picked up by an investor hoping for a quick profit. It's already back on the market priced at $499K. Not bad if he can get it that's a quick profit of $130K less sales costs. The flipper looks to be an agent or broker.

Listings like this have to make you wonder if these agents aren't taking advantage of their positions to snag deals before the public gets a chance. This house at $370k was a steal (unless it was trashed). There's no way that it would have sold that low had it been on the open market. Homes in this area, this size are still selling for well over $400k and some are still getting over $500k. The listing says it is completely rehabed. But the house was only 3 years old and it's only been 3 weeks since it sold so they could not have done much more than paint and carpet. Now this house could have been trashed and everything could be legit, but it does make you wonder....

Some new members of the "clubs"

Things have been kinda slow this week so lets induct a couple of new members into the big loser club

The first inductee is 8113 Sanctuary Dr in The Retreat in south Corona. This home is one of the KB models and is a favorite of mine. I really do like the layout of this home but the price they were previously asking was just loony. This home was sold in May of 2006 for $1,191,500. I don't know if that was the price from the builder or not, I'm guessing it was. Fast forward 2 years and it's now owned by the bank. They have just listed it for $519K. If it sells for asking price that is a loss of $672K (That's a loss of $6,460 a month since the last sale). This home is so close to making it into the $700k club. Even if it sells for over asking this home will easily stay in the $600k club.



A new club! This guy is obviously taking on water fast and more than likely he is going down with the ship. 975 Randall Ranch Rd in Corona is a large estate home up in the Amberhill/Crowne area. This home was purchased in Aug 2006 for $1.9 million. After 194 days on the market the asking price has dropped to $1.0 million. Yup, that is a loss of $900k! If it sells... (His neighbor across the street with a larger home is asking $975k).

$500k, $600K, $700K, $800k club, where will it end?

I was all impressed with myself when I found a member for the $600k club last week. But now we have a $760k loss and even an $830k loss. Both in The Retreat. This development is the poster child for bubbles gone mad. These latest two homes are perfect examples of greed (and very likely fraud).



22262 Jessamine Way is a 4 bedroom, 4.5 bath home, 3760 sq/ft. It sits on a 1/4 acre lot but has no golf course frontage. It looks as though it was purchased new in Feb 2006 for $901k. Only 8 months later it was flipped for $1.4 Million. It does not look like they even planted a fern or a blade of grass for the $500k profit they made. Of course this deal went south in a hurry. The bank got the home back and has been trying to unload it now since Jan. It's currently listed for $639k making this a loss of $760K from the year ago sale. They might have a problem getting the price since the new KB homes are about the same price as this REO.




8309 Sanctuary Dr. is the "Biggest Loser" so far, as far as I can tell. This home is a 4 bedroom, 4.5 bath home that is 4743 sq/ft. It also sits on 9143 s/ft lot so there is not much of a yard. This home looks to have sold new for $1.4 million in May 2006. This one was also quickly flipped for 1.5 million in Feb 2007 (what kind of idiot paid 1.5 million dollars for a tract home in Corona in 2007???). And another thing, $1.5 freakin million dollars and you get 4" square white tiles on the kitchen counters, WTF. Once again, this quickly went back to the bank. It's now listed for $670k. Making this a $830k loss in one year (less actually).

Last year I did a post (dec 8th) about the first two homes listed in The Retreat under $700k. There are 22 as of today priced under $700k and 9 of those are under $600k. Several of them are under $550k in fact 4 of them are with the lowest sitting at $500k (although it's a short sale attempt). In addition to all the resales, KB Homes has dropped the price of the new homes down under $700k, they now start around $640k. Hell they might even be lower now as the last time I checked was about 6 weeks ago.

In a way I feel sorry for anyone that bought in The Retreat thinking they were actually going to live there (sorry, but in the same way I feel sorry for the kids that ride the short bus). It's very obvious at this point that they whole tract is a big ponzi scheme on a grand scale. Flippers, speculators and greedy builders drove the prices up far higher than they should ever have been. Now it's just a matter of how far will this area fall. many of them are already past 50% and to me they still seem way too high. I think these will settle in the mid to high $400's at the low end and maybe somewhere in the $600s for the bigger better homes.

Missing the Boat

Missing the boat is a bad feeling and I'm sure there are thousands of local home owners that will have a knot in their stomach when they realize the SS Cashcow has long ago left port. The easy money flips have turned to flops and the "guaranteed appreciation" turned out to be an empty promise, like a ticket on Aloha Airways.



The seller at 1950 Lucy Ln in Corona is one such person. he missed the boat but it looks like he is still standing on the pier, expecting it to return and pick him up. This home was purchased mid bubble in May 2004 for $679k. The house is in a decent area but this was a small tract of large homes stuck in the middle of a bunch of smaller homes that were built in the late 80's and early 90's (or earlier). These homes are a little out of scale for the area in my opinion. This home is just over 4000 s/f and has 5 bedrooms and 4 baths. It sits on a 1/2 acre lot but only about 1/2 of that is usable land, the rest is a steep hillside. The house is currently listed as a short sale for $775k. A short sale for $100k over the purchase price 4 years ago! This intrepid sailor obviously drank heartily from the home ATM fountain! He listed his McPalace in October of 2007 for $900k. Hoping to catch that last wave of buyers I guess. He had reason to feel a little optimistic as his neighbor around the corner at 661 John Drive has sold a slightly smaller home only 10 months earlier for $900k. I'm sure he thought that his house being 400 s/f larger and sitting on a bigger lot would be a slam dunk at his $900k asking price. But alas, he really had missed the boat. By October the market was in full seizure and he has been reluctantly reducing the price ever since.



Unfortunately for this poor fella that neighbor that sold in January and gave him so much hope looks to be a first payment default. The bank has taken that home back already and it's on the market with and asking price of $416k. That would be a loss of $484k or 54%. I'm going to give this home honorary membership into the 500K club. It's soooo close and the 54% loss is very impressive considering it was done in just over 1 year.

All this talk of boats is getting me excited about my upcoming cruise, 22 days and counting......

The $500K club

In my favorite tract we have another member of the $500k club. What does one have to do to be a member of this club. Well in past years entry into the club was almost impossible, like LA country Club or Augusta National. But now days the membership is skyrocketing. To join this exclusive club all you need to do is lose more than $500k on a home.

Today's new member is in Bretton Gait in Norco Hills. 209 Oldenburg is a large 6 bedroom/7 bath home that is 4160 sq/ft sitting on nearly a 1/2 acre lot. It appears this home was built in early 2004 and it sold new for $750k. In May 2007 some numbscull bought this place for $1,150,000. I guess they did not read the paper or possibly this is another case of fraud. Either way this must be a first payment default since this place has already gone back to the lender. The bank got her back in mid Jan for $890k. I will assume there was a second for the remaining $260k which was wiped out entirely. The home listed today for $650K. That is a 1/2 Million dollar loss in SEVEN MONTHS! Maybe the agent is hoping to set off a bidding war with his low price. I doubt that will work, there are 3 other foreclosures within 100 yards of this house.

179 Oldenburg is listed for $684k and has been on the market for 120 days. I've looked at this house and it's nothing special. It has no upgrades that I could see. The cabinets are basic, the carpet is cheap so is the tile in the kitchen and bathrooms. The tile counters in the bathrooms are falling apart. For what these sold for initially this house looks poorly put together.

229 Oldenburg is listed for $627k. Nice house but smaller. It has been listed for 80 days at that price. I did look at one of these but I don't remember if it was this house or another one of the same floorplan. It's was a nice one story home that I'de be happy to give them $400k for.

220 Oldenburg is listed for $620k. It has been on the market for 60 days at that price. It is a little smaller but has a better, bigger lot with a great view. This house is all skrewed up inside. The last owners tried to get all artsy fartsy with tile and stone. There are a lot of half finished projects inside this house. It's not wrecked but unless you are into weird decor this one aint for you.