Another member of the $600k club

They are getting so easy to find I sort of lost interest in posting about big losers. $600k, $700K and more in losses are so easy to find in Corona that it's just not news any more. However $600k losses in Riverside are not nearly as common. They didn't built that many million dollar tract homes in Riverside. So the big losses are a little harder to find. Well they were....

This one is setting precedent that the neighbors are not going to be happy with. 7904 Horizon View is a 3444 s/f home with 3 bedrooms and 3.5 baths. It sits on 1.28 acres of dirt over in the high end area near Overlook and Crystal Ridge Estates. This is one of the best areas of Riverside if not thee best area in Riverside. But that does not mean the houses were ever really worth what they were selling for. This home has an interesting sales history. Built in early 05 it sold new for $732K, 8 months later is sells for $200k more, a month later for $10k more(dunno about that sale?) and then again 9 months later for another $250k more. All this appreciation without the owners pouring a patio slab or even planting a blade of grass! The house probably looks the same as it did the day the builder put the done stamp on it. Well except now the front lawn is dead.

Apr 29, 2005	$732,500	--
Jan 26, 2006	$939,000	39.6%/yr
Feb 02, 2006	$945,000	39.4%/yr
Oct 02, 2006	$1,200,000	43.4%/yr
Jul 22, 2008	$563,941	-34.2%/yr

Obviously that last sale is the house going back to the lender. The lender now has it listed for $550k. Will it sell at that price? Probably considering the price of most of the other listings in the area. There are still quite a few clueless buyers floating around. It it does sell at asking price that is a loss of $650K from the last sale.

It's actually a nice looking house and if it were closer to $400k and had 4 bedrooms I might go look at it. (Although I'm not sure I like those stupid arches on the front. I would probably knock those out.)

Even at this huge price drop this home might not be that easy to sell. I said it would probably sell but there are a couple of homes that will make people think twice about the price. 7964 Kimberly Jean is the same floorplan and it's just around the corner. This one though is nice. It has beautiful landscaping and lots of poured stained concrete. It has a covered patio and the inside looks better than the other house. The listing price is better too. Alas this one is a short sale, so most buyers will not bother with it. Although they will take notice of the price and factor that into any negotiations on the other house.

The end of the world as we know it

Unless you live in a snow cave near the south pole, you probably heard about the stock market meltdown today. The Dow was down about 5%, not a record by any means. It dropped over 20% on Oct 19th 1987 (black monday). But 5% is still a bunch in one day, especially since much of that was in the financials. AIG dropped 50%, Wamu was down another 40% to about $2. Did anyone think Wamu would be a 2 buck chuck stock a couple of years ago. Some respected experts and financial gurus are now predicting armagedon. By the looks of the Asian markets tonight they might be right. They are following the US market...right off a cliff.

What does this mean to the real estate market. Who knows for sure but I expect it will serve to further tighten the credit markets. Making financing harder and harder to get. It may also further confuse and delay foreclosures. As banks fail and the paperwork gets shuffled around who knows how long people may slip through the cracks.

Will the gubment step in and take over the financials? Will they offer mortages? I'd bet they will do something. But our gubment being what it is, it will probably be a disaster. The last week has been a scary one. This could easily go sideways if even a little bit of panic sets in. Let's hope they can keep this meltdown undercontrol.

Happy Birthday to Kaboom

I freakin' missed my blogs 1st birthday a couple of weeks ago. I started this insane blog Sept 2, 2007. It sure doesn't seem like a year already.

In that short year the median price in riverside has gone from about $400k down to about $250k. Even in my wildest dreams I would not have thought it would fall that fast. I figured it would fall a long way but the speed has surprised me. I wonder what the next 12 months will bring?

Ass-Clown of the month award

I thought maybe, possibly, hopefully, I had seen the last of the delusional seller listings. But no, that was wishful thinking. This months assclown lives in Sycamore Creek. The biggest financial black hole in Corona. Most homes in this tract are currently listed for about 1/2 what they sold for new. That puts the average asking price in the low to mid 300's. Then there is this guy!

11439 Tesota Loop. The house is 3603 s/f with 5 bedrooms and 3 baths. The house looks nice but it's not high end. The kitchen counters appear to be tile, I don't see any hardwood flooring and the appliances are low end. The house was purchased new in April 2005 for $556k. It listed this week for a gut busting, soda spitting price of $830K!!



Is this another "fake" listing in order to get the bank to agree to a loan modification? "Sure, Mr Bank, I had it listed for 6 months and couldn't sell it...." I hope it is. Because to think that this far into the biggest real estate meldown in recent history, there are sellers and agents that think people will pay more than peak prices is disturbing. The agent should be strung up by the gonads just for taking this listing.

Checking Redfin to see what homes are selling for shows that about a dozen near him have sold in the last 3 months. The price range was $275k to $380k for those homes. In addition the three houses to his right are all for sale (4 in a row) , 2 are slightly smaller and one is the same floorplan. They are all listed under $400k and 2 of those 3 have been listed for over 4 months now. So, obviously they are asking too much.

$830K for an average tract home Sycamore Creek......What is this guy thinking. I bet we don't see those prices again until 2050.

They're duking it out in Eastvale

The banks are getting pretty aggressive this week with their REO's in Eastvale. 3 have listed in the last couple of days under $300k. I haven't seen very many under $300k so seeing 3 hit the market in the last few days is unusual.

The first and from the pics, the nicest is 6727 Black Hawk. This house is 3086 s/f with 5 bedrooms and 3 baths. It looks to have a nice kitchen and has some decent landscaping in the front. Purchased in late 06 for $590k it is now owned by the bank and listed for $299,900. Once all the fees are factored in this will easily be a 50% loss, even if it sells slightly above list.


Home 2 is 12849 Pattison St. This house is 2371 s/f and has 4 bedrooms and 2.5 baths. It was purchased in Oct 04 for $444k. The bank is the owner now and they want $292K.


The third house is 13936 Clearwater. This house is 2568 s/f and has 3 beds and 3 baths. It was purchased in july 05 for $500k. The current owner is a bank and they feel $298K will get the buyers off the fence (probably right too).


In addition to these 3 sub $300k homes there were a whole bunch hit the market in the very low $300s. So, is it a good time to buy? I'd still say no, it still appears that the prices are falling. All the data, whether from HousingTracker, Dataquick or even the NAR shows prices are still falling. Lehman came out last week and said they think California is only 1/2 way to the bottom. And we are still not down to the normal ratios of price to rent or price to income. We are getting close though. The IE has fallen farther and faster than much of the rest of California. I still think we have another 20% or so to go in the IE.

Foreclosure hurricane, It just won't go away

Just in case you were one of the few that believed the Real Estate Industry hype about foreclosures leveling off, here's the August report.

From the Press Enterprise

Mortgage defaults, which mark the start of the foreclosure process, spiked in Riverside and San Bernardino counties in August after a two-month decline, smashing hopes that the flood of home foreclosures might be about to ebb.

RealtyTrac, which today released last month's foreclosure trend data, also said the combination of all foreclosure activity in both counties, as measured by notices of default, trustee sales and repossessions, reached the highest level in August since the Irvine-based company began following foreclosures in January 2005.

With 11,485 foreclosure-related filings last month, Riverside County ranked fourth nationally in foreclosure activity, with one filing for every 64 households. San Bernardino County ranked sixth with 9,651 filings, or one for every 69 households.

In Riverside County, total foreclosure-related filings were up 58 percent from a year ago and 39 percent from July, while in San Bernardino County, total filings increased 98 percent from August 2007 and 34 percent from the month before.

Most of the growth was in bank repossessions. There were 4,165 in Riverside County, up 248 percent from a year earlier, and 3,172 in San Bernardino County, up 348 percent.

In July, some industry analysts took heart that the worst of the foreclosure crisis might be ending because the two Inland counties had experienced two consecutive months of declines in default notices. That trend ended in August, when 5,002 notices of default were posted in Riverside County, 80 fewer than in August 2007 but almost 27 percent more than the 3,946 notices posted in July.

Also, 4,329 notices of default were filed last month in San Bernardino County, up 18 percent from the 3,667 filed a year ago and up 22 percent from 3,542 default notices in July.

Chapman economist Esmael Adibi said he was disappointed by the uptick in defaults.

"We are not out of the woods," Adibi said. "We are going to deal with this issue of foreclosure much longer than people anticipated or anticipate even now."

RealtyTrac said although foreclosure activity also reached record levels nationally last month, the annual increase of 27 percent was lower than earlier in the year.

RealtyTrac spokesman Daren Blomquest said the change could be attributed to greater efforts being made by lenders to negotiate loan modifications to prevent foreclosures or by new legislation that gives homeowners more time to work out their financial problems before homes go into default. It is possible that foreclosures are simply being delayed, he said.

Adibi said he does not expect a decline in foreclosures because of mortgage failures anticipated from a large wave of adjustable-rate mortgages scheduled to reset late this year and in 2009. Many of the mortgages at risk were made to people with good credit who had the option of making ultra-low monthly payments that would have caused their loan amounts to grow.

Built his castle in the wrong neighborhood

Everyone wants to own their dream home. A castle of our own, with everything we've always dreamed of. If you are planning on building your castle, be sure to choose your location carefully. Nothing sucks more than building your castle and then the peasants revolt. Here's an example of how not to built your dream home.

35280 Stockton ave is a 2 year old tract home on the SCPGA golf course in Beaumont. This home was built in 2006 and sold new for $704K. The home is 3490 s/f and has 5 bedrooms and 3 baths. It does back onto the golf course and has a nice view of the fairway. The owner has done some crazy stuff in the backyard. It looks a little bit like Castle Park in Riverside. All it needs is a windmill. For whatever reason our homeowner has decided to sell his dream home. He figures his toontown home is worth a whopping $829K.

First of all, $704k for a tract home in Beaumont?? Come on people, did anyone really think tract homes in Beaumont were worth 3/4 of a million bucks? Obviously some people did because they sold them. I just cannot wrap my feable mind around those numbers.

Fast forward two years we are in the middle of the biggest financial meltdown since the depression. Real estate is down 50% plus in much of the IE. But King Louie XVII here still thinks someone is going to go gaga over his plastic back yard. For a reality check he needs to drive down the street. There are at least 5 homes for sale within a 200 yards of his house and 4 of those are priced under $320K.

There's this model match, also on the golf course listed for $320K

Or this ever so slightly smaller home listed for $299k

Or this one, listed for $289k.

In case your math skills are not up to snuff, these 3 are listed for about 500K less than Toontown. In fact you could buy all three for just a little bit more than he is asking for his plastic fantastic. $829K puuuleaze.

The moral of the story is.................. ( Please fill in the blank )

This might be a record

This might be a record for the number of price reductions. 25 price reductions in just under 4 months on the market!

8079 Golden Star, Riverside. It's in a good area of Riverside and it sits on 1.4 acres. The home was purchased in 2006 for $945k. Now they are asking $529k. Of course it's a short sale. You gotta give this guy credit for trying. At least he is not like most people that stubbornly hang onto the dream of "not giving it away". This guy has made the right moves. If it doesn't sell reduce the price. The problem is the high end of the market is at a standstill. And the homes that are selling are the pearls and even those have to be priced right.

Check out the price reductions, some are only a day apart and two are on the same day.

May 20, 2008	$899,000
May 23, 2008	$889,000
May 29, 2008	$879,000
Jun 02, 2008	$869,000
Jun 04, 2008	$859,000
Jun 10, 2008	$849,000
Jun 10, 2008	$839,000
Jun 13, 2008	$829,000
Jun 16, 2008	$819,000
Jun 19, 2008	$809,000
Jun 24, 2008	$799,000
Jun 27, 2008	$789,000
Jul 03, 2008	$779,000
Jul 07, 2008	$769,000
Jul 09, 2008	$749,000
Jul 14, 2008	$739,000
Jul 17, 2008	$699,000
Jul 23, 2008	$649,000
Aug 01, 2008	$629,000
Aug 05, 2008	$619,000
Aug 13, 2008	$599,000
Aug 21, 2008	$579,000
Aug 25, 2008	$569,000
Aug 26, 2008	$559,000
Sep 03, 2008	$539,000
Sep 10, 2008	$529,000

Way OT, got me a new toy

I'm doing my part to spur on the economy. I received my new toy tonight.

Yea baby!

Never been a better time to buy?

A phrase I here every day whenever I stop at an open house. Really? Well, not really and I can disprove that little sales pitch all day, every day. Lets take a look at one small street in Corona. These homes were built in 97 and sold in the high 100's. Some of these were fetching over $600k at the peak. There were a few REO's sitting on the market for months at the beginning of the year. They all started out asking around $500k with no takers. Once the first one dropped to $399k they started selling.

The first sale was 530 Wrightwood. It had been listed for about a year before going REO. If finally sold the very end of March for $395k. The guy probably thought he got a deal. I'm sure his Realtor told his so.

Well, not so fast. Only a couple of months later 1328 Woodvale sells for $350K, the asking price was $399. It's a slightly smaller home but the lot is better and the home was in better shape. (These homes are only about 6 houses apart.) Hmm, I wonder how much that stung $40k down the tubes!

Just to rub it in, a model match just around the corner at 1353 Hermosa also just sold for $350k. This one had also been on the market forever. They also tried to get $500k, then $400k, finally selling in July for $350k.

Now, for more bad news, especially for buyer number one. But numbers 2 and 3 are not going to like this listing much either. 1408 Hermosa just listed as and REO a couple of weeks ago. It's definitely the nicest house out of the bunch, by far. It's a model match to homes 1 and 3 and it's listed for $319k. Sure it might fetch more, we will have to wait and see. It's got to make home buyer number one dizzy though. That's about a 20% loss in 5 months! Yes, never been a better time to buy indeed.

By the way check out the description from the listing of 1408 Hermosa. This guy obviously bought The Dummies Guide to Adjectives" book. At least I don't see any spelling errors!

"Welcome to paradise! This enchanting beauty boasts a captivating private back yard featuring a phenomenal view of the golf course and city lights. This is an entertainers back yard. The luminous kitchen easily flows into the family room which highlights a cozy fireplace all emphasizing the the inviting living room and entry. 4 glorious bedrooms and extraordinary tile flooring are just some of the gifts that this beauty has to offer."

That reminds me of something Stewie from the Family Guy would say. Just imagine it read in his voice!

And there is one more also a model match to homes 1, 3 and 4. It's been listed for a couple of months at $350k. This one is a short sale so I don't count it yet. Once it goes to the lender I'm sure it will be even lower than 1408.

This is not some new tract that is imploding. This is a well established tract in a nice area of Corona with only a few REO's. Even with only a few REO's you can see that the prices are still falling at a hefty clip. I wonder how many of those buyers though they were buying at the bottom? I would bet all of them did!

The weekly tumble

After a few week of stagnation the downward trek has started again. There wasn't much movement in the median asking price for Riverside/San Berdu through much of August. Only 2 percent down in the core areas but the county saw a monthly drop of 4%. It seememd like less but the data shows we are still dropping at a decent pace.
This week is once again seeing noticeable downward movement in the prices. It might be a fluke, I would have expected the prices to remain more stable for another month, especially since the sales numbers have been a little better lately. I have been seeing the prices dropping again lately in the areas that I am looking at. It was getting a little frustrating watching the prices level off for a couple of months there. Even though I know it's normal for that to happen in the summer, I still found it irritating.


From housingtracker.net

Here are the county wide numbers,

Trend	09/08/2008	1 month	3 month	6 month	12 month
Median Price	$239,900	-4.0%	-14.0%	-25.0%	-37.7%
Inventory	46,403	+2.8%	-1.9%	-5.7%	-18.0%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
09/08/2008	46,403	$170,000	$239,900	$350,000
09/01/2008	44,714	$174,900	$244,900	$354,000
08/25/2008	44,833	$175,000	$249,000	$359,000
08/18/2008	45,096	$179,000	$249,900	$359,999
08/11/2008	45,138	$179,900	$249,999	$365,000

Here are the numbers for the core areas,

Trend	09/07/2008	1 month	3 month	6 month	12 month
Median Price	$244,900	-2.0%	-12.5%	-26.9%	-41.7%
Inventory	14,569	+3.9%	+6.7%	+1.9%	-11.8%

Historical Data

Date	Inventory	25th Percentile	50th Percentile (Median)	75th Percentile
09/07/2008	14,569	$179,900	$244,900	$340,000
09/01/2008	13,852	$180,000	$248,000	$345,000
08/29/2008	13,590	$180,000	$249,000	$349,000
08/21/2008	13,661	$184,900	$249,900	$349,900
08/14/2008	14,047	$185,000	$250,000	$349,900
08/07/2008	14,017	$186,900	$250,000	$350,000

The worst states are continuing to get much worse

"The worst states are continuing to get much worse" Yes, that's what the head of the MBA had to say about the foreclosure situation in the US.

From the LA Times

A sharp drop in prices along with the resetting of ARM loans in California and Florida are cited. The two states accounted for 39% of all foreclosures started in the country, an analyst says.

The percentage of home loans entering foreclosure nationwide rose to a record level in the second quarter of this year, driven by the one-two punch of sharp home price declines and resetting adjustable-rate loans in California and Florida, the Mortgage Bankers Assn. said today.

With a combined 18% of the population, "California and Florida accounted for 39% of all the foreclosures started in the country," Brinkmann said.

The national average for foreclosure starts -- the time a lender turns a delinquent loan over to lawyers -- was 1.09% during the quarter, up from 0.99% in the first quarter and 0.65% in the second quarter of 2007, the association said.

The latest figure was 1.82% in California, which has 12% of the nation's population, and 2.21% in Florida, which has another 6% of the population.

Another way to look at the problem: Only eight states were above the national average in foreclosure starts. The others were Arizona, Nevada, Michigan, Rhode Island, Indiana and Ohio

One key driver for the trend is an unusually high number of mortgages that move from early delinquencies into foreclosure. The percentage of California borrowers with at least one payment past due was 5.78%, less than the national average of 6.41%.

Brinkmann said Californians who fall behind on payments are more likely to have their homes go into foreclosure in part because falling home prices, which have lopped 30% off peak prices in many areas of the state, have reduced the value of their homes to far less than what they owe.

Combined with that is the prevalence in California and Florida of pay-option adjustable rate mortgages. These tricky loans, made to borrowers with decent credit scores, allowed the borrowers to pay less than the interest due each month, adding the difference to their loan balance.

When those loans "recast" to require full payments, typically three to five years after they are made, many borrowers find themselves owing 10%, 15% or even 25% more than they started with at a time when their home value is much lower.