Sycamore creek post a new low

Here's the first decent listing I've seen under $80 sq/ft in Corona. 25285 Noble Canyon, this 5 bedroom, 3.5 bath home is 4158 sq/ft in size. From the pics it looks nicely upgraded and in very good shape. This one sold new, Feb 2006 for $716k. The bank now owns it and thinks that a listing price of $327,500 aught to git-r-done. That is about 54% off the new price, or a loss of about $388k. All in all this one looks like a reasonable deal. I'll give this one a green light if you can get it at that price.


If 4000 sq/ft is a bit much for you, you might want to look at 25215 Coral Canyon. It's just around the corner and at 3268 it a little more "cozy". Actually its still quite large but this one is listed as an REO for $285k. That puts it at $87 sq/ft.

Easy come, easy go

Well after a few days of bickering, it looks like that $15,000 home buyer credit is TOAST!

From what I've read the have modified the old first time home buyer $7,500 tax loan to a tax credit. So it does not have to be repaid. That looks like main change.

Everything but the location

Here's exactly what I'm looking for. It has everything but the location. 15881 Rawhide Ln is a custom home up near Lake Mathews. This was on the market as a spec home for very long time. They started off asking around a million and slowly came down to about $800k. Looks like the bank took this one off their hands. The bank's asking price is quite fair at $359k. In fact I might even go so far as to say this one is a great deal (assuming it's finished and not thrashed inside).

The home is a custom build. It sits on just over 2 acres of dirt. It has 4 beds and 4 baths spread out over 3615 sq/ft. Best of all it has a 4 car garage. It's hard to tell from the pictures if there is flooring installed. Some might consider this a positive since you can pick your own. But if there is no flooring you need to factor in at least 20k for decent flooring. Even so the price is still very good, if only the location was.

The only drawback to this house is the location. It's off the beaten path on a dirt road and it looks like it's surrounded by commercial lots (a nursery and who knows what else). I guess that's why the price is so low. I will be checking this one out though!

So close.......

Is it really "a great time to buy"?

According to every realtor out there it is. But what's the deal, is it a good time to buy?

My short answer is....NO, here's 5 reasons why

1. Prices are still falling. Unless you can find a deal where you are picking up the property for significantly less than the comps you will probably find yourself underwater. That's not a good place to be. It limits your options if something comes up and you need to sell.

2. There's no rush. Even if prices were to stop falling there is nothing to indicate that they will start to rise again. The economy sucks, employment sucks and there is a glut of homes in distress. So there is no reason to rush into the market. You are not "going to be priced out" anymore.

3. In most better areas it's still cheaper to rent. Granted this may no longer be the case in Perris or San Jacinto but in Corona or nearby areas it's still cheaper to rent.

4. The foreclosure wave is still coming. Unless Obama and crew can pull some miracle from their hats, the ALT-A wave is due to hit over the next year and a half. Then there is the prime wave, also still to come.

5. Low interest rates seem like a great thing but they can also trap you. If the rates suddenly rise back to the normal 8% range, it will put tremendous pressure on prices. A person that could afford a $250k at 6% can only afford a $180k home at 8%.

So, if it's a crappy time to buy why are sales up? First sales are up because last year they were practically non-existent. It would be nearly impossible not to be up. If you look at the majority of what's selling though you will find it's low end stuff. Much of it is being sold to investors for use as rentals. There are even still flippers around, believe it or not.

There are still reasons to buy though. If you can get a deal that limits your downside risk then it might be worthwhile. Lets face it, renting sucks. It may be worth a 10% equity loss just not having to deal with a landlord. And if you stay in the house long enough you will eventually surface from being underwater. If you can easily afford the payments you tend not to dwell on what the house is worth. That only becomes a factor if you want to refi or get a home equity loan. Buying now will definitely limit your options in that respect. You're not going to be able to "pull out" $40k to put a pool in a few years from now.

Currently the median is falling at about 5% per month. Don't kid yourself though, that does not mean prices are falling at 5% per month. Prices are falling at probably 1/2 that. The rest of that decline is due to the shift in sales to the low end of the market. There is practically nothing over $500k selling these days in the IE and there's not much over $350 selling. Most of the sales these days are between $100k and $300k.

In the end, whether to buy or not is a personal decision we all must make on our own. We should gather as much info as we can and decide whats best for our families. As with most financial decisions there is a certain amout of risk in buying a home. But sometimes you have to roll the dice.

Ghost towns

Has anyone else seen the empty new homes seemingly abandoned littered across Riverside. I was up in Orangecrest last weekend looking at a house when I saw a whole street of empty houses. This was a small tract of 24 homes called Nandina. It looks like they only built about 12 homes. The sales office is now gone and all but one of the homes are sitting empty. These were built early last year and the asking prices started close to a million. The last time I stopped at the sales office they were down to the high 700s. Now they appear to have given up.

Another tract in the same area is the Gallery homes tract. This tract also has a bunch of empty homes. The sales trailer is also gone.

Riverwalk Vista looks to have given up. The last couple of times I drove past the gate was closed. It's hard to sell houses if the gates are closed.

Bridle Creek has packed it in. They have sold everything as near as I can tell but they are far from built out. The last time I was in the sales guy told me they had another 40 lots. I doubt they built more than 10 homes since that conversation.

I see Pulte is still putting up homes at Stellan Ridge. And still asking sky high prices for them. I whole bunch just hit the MLS this week. There's a few that have been built for some months now that haven't sold and they have another half dozen under construction. They are super nice houses but they are still priced a good $200k too high in my opinion. $800k is loopy for a tract house in Riverside.

What will become of these tracts. I suppose they may go to auction. Would you want to live in a half built tract? If anyone has info on these please post a comment.

Computer problems no more!

You may have read that I was having some PC issues. Right after I got back from my cruise my PC had a MI during a windows update. After that it would not boot up. I ended up re-installing windows and did manage to get it operational. But the poor old box was on it's last legs after 4 or 5 years of hard abuse the drives were full and it was running like a slug. So today I broke down and replaced the old girl with a new, young sexy machine. What a difference. Lemme tell ya, a 24" HD monitor is the bomb-diddly! A smoking fast, 64 bit box with 4G of RAM ain't too shabby either. However, vista is gonna take some getting used too.

More on the $15k tax credit

First of all, lets not get to excited as this is not a done deal yet. I don't like much of anything about these bailouts. But if they are going to give away $15k, I'll be happy to take it my serving.

Here's the whole thing if you want to read it.

It looks like this modifies the old $7500 tax loan program. This one is a tax credit though and NOT a loan. The qualifying max income caps have been changed from $75k as a single to $125K and the joint max income went from $150k to $250k (yippee). This makes just about every "normal" family eligible for this credit. You have to be WAY up there in the income brackets before you lose out on this one.

Any purchase made after Dec 31, 2008 will qualify. It looks like this is a $15k credit that can be used as part of your down payment if I read the thing right.

(g) Transfer of Credit-

`(1) IN GENERAL- A taxpayer may transfer all or a portion of the credit allowable under subsection (a) to 1 or more persons as payment of any liability of the taxpayer arising out of--

`(A) the downpayment of any portion of the purchase price of the principal residence,

`(B) mortgage, flood, and hazard insurance premiums in connection with the purchase and paid at or before closing,

`(C) interest on any debt incurred to purchase the residence,

`(D) State and local real property taxes paid in connection with the purchase, and

`(E) funding fees paid to the Department of Veterans Affairs in connection with the purchase.

Dellusional seller of the month

I can't believe there are still people out there that try for peak prices in today's market. Then there are sellers like this tool that try for even more than that. You can tell by the incredibly bad listing that even the agent doesn't want to waste time on this pointless exercise. What kind of thought process must you have to list a home for triple the price of the nearby homes. I just don't get it.

5963 Pingrove Pl, Corona, it's over in Eastvale aka foreclosure central. This dreamer buys his place in late 2006 for $683k. Yup, that's about as peak as it gets! His 2 years are up, and now he wants his $200k paycheck. That's the same plan most of the other buyers in 2006 had. Damn the foreclosures, his house is different and the dreamer has listed it for $899k!. That's only about triple what the other places in the area are going for....

I will ask again, "why do agents take these listings?"

Affordability index

We are getting there but we still have some air left in the bubble.

HOUSING AFFORDABILITY RATINGS UNITED STATES METROPOLITAN MARKETS OVER 1,000,000
Rank	Metropolitan Area	Median Multiple
AFFORDABLE
1	Indianapolis	2.2
2	Cleveland	2.3
2	Detroit	2.3
4	Rochester	2.4
5	Buffalo	2.5
5	Cincinnati	2.5
7	Atlanta	2.6
7	Pittsburgh	2.6
7	St. Louis	2.6
10	Columbus	2.7
10	Dallas-Fort Worth	2.7
10	Kansas City	2.7
10	Mem[hios	2.7
14	Oklahoma City	2.8
15	Houston	2.9
15	Louisville	2.9
15	Nashville	2.9
MODERATELY UNAFFORDABLE
18	Minneapolis-St. Paul	3.1
18	New Orleans	3.1
20	Birmingham	3.2
20	San Antonio	3.2
22	Austin	3.3
22	Jacksonville	3.3
24	Phoenix	3.4
25	Sacramento	3.5
26	Tampa-St. Petersburg	3.6
27	Denver	3.7
27	Hartford	3.7
27	Las Vegas	3.7
27	Raleigh	3.7
27	Richmond	3.7
32	Salt Lake City	3.8
33	Charlotte	3.9
33	Riverside-San Bernardino	3.9
33	Washington (DC)	3.9
36	Milwaukee	4.0
36	Philadelphia	4.0
SERIOUSLY UNAFFORDABLE
38	Chicago	4.1
38	Orlando	4.1
40	Baltimore	4.2
41	Virginia Beach-Norfolk	4.3
42	Providence	4.4
43	Portland (OR)	4.9
SEVERELY UNAFFORDABLE
44	Seattle	5.2
45	Boston	5.3
46	Miami-West Palm Beach	5.6
47	San Diego	5.9
48	New York	7.0
49	Los Angeles	7.2
50	San Jose	7.4
51	San Francisco	8.0

Are you stimulated

Congress just passed a $15k tax break (or 10% of the value) on a purchase of a new or existing home as part of the new "stimulation package". This will cost the government about 19 billion in lost tax revenue. I'm not sure how much it will stimulate the economy. Buying a new home will help by creating or at least helping maintain employment. Buying existing homes will not. It will help with home sales though.

The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000. I have not seen the details of this provision yet. I don't know if there are income caps attached to it or not. This brings Obama's stimulation package over the 900 Billion mark.

They've also added a tax break for the purchase of new cars. You now can write off the tax and interest for purchases made this year.

It seems our new government is using this crisis as an excuse to go on a spending spree. Keeping the masses appeased by throwing a few bones our way such as these temporary tax breaks. Obama's been in office 3 weeks and he's already spending over 900 Billion AND cutting revenue.

Hmmmm isn't that the exact same behavior as the consumers that created this mess?

BTW, is it just me or does anyone else want to scratch there eyes out when watching Nancy Pelosi on TV.

Can I interest you in a castle at 63% off

Ok, so it's not really a castle but this is still a cool looking house.

2881 Rumsey Dr in Riverside is in the Victoria Woods area just south of Victoria Ave. This house was built in 1926 and from the few pictures it's a very cool property. I really wish they had included more than 7 pictures. The estate is covers nearly an acre and the home is just under 5000 sq/ft. It last sold in 2006 for $1,475M. It's currently listed as an REO for $550K. If my math is right that's about 63% off the bubble price. It's currently listed for less than it sold for in 1998!

Nice stained glass and check out that ceiling!

More details, check out the doors. And look at the detail in that ceiling.

What went wrong?

After 6 months 50% of modified loans are once again in default..... Wow, who here is surprised?

More than half of loans modified in the first quarter of 2008 fell delinquent within six months, according to recent data from a top bank regulator. Redefault figures reached 58 percent after eight months, according to U.S. Comptroller John Dugan.

The trend has left officials investigating: Are the modified mortgages badly written? Or have cash-strapped, unemployed homeowners accumulated too much increased credit card debt to afford even reduced payments?

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

I feel sorry for you "officials so X will give you a hint! The mortgage amounts are STILL too high relative to incomes. You can modify all you want, but when the principal amount is 5x the persons income they will likely default. There is just no margin for any unexpected cost when you are working with those ratios. Don't mod a loan unless the person can really afford it using the old tried and proven 28/36 ratios.

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More good news from the Press Enterprise...

It was only a few years ago that economists were talking about how the housing bubble was costing Inland Southern California its advantage as the affordable place for buyers.

The area was at close to full employment, but home prices were going up too fast. It meant that even though there were abundant jobs in San Bernardino and Riverside counties, the typical worker could not afford the typical mortgage.

Now more than 186,000 Inland workers are unemployed, many more are underemployed, and almost everyone is nervous about the state of the economy. It means that, despite a huge decline in home prices, there won't be enough buyers in 2009, Chapman University economists said in their annual forecast.

The Inland Empire stands to lose 14,000 jobs in 2009, a drop of 1.1 percent, Chapman's economists predict, but the decline will ease by the fourth quarter. The two-county area lost about 38,000 jobs in 2008, according to a recent state report, and federal statistics indicate the job loss could have actually been much steeper. (no duh!)

Unemployment, currently at a 13-year high of 10.1 percent, could go more than a full point higher. Most job sectors, except for health care and education, will see diminished payrolls. The job losses will likely hinder any housing recovery.

By the end of the year we should see better housing numbers, or at least numbers that are less bad, Adibi said in an interview.

In early 2005, when the median home price in Inland Southern California was about $340,000, only one in five people made enough to qualify for a typical 30-year fixed mortgage with 20 percent down. (what about 2006 and 2007 when only 1 in 10 could afford it?)

The median single-family home price has dropped to about $209,000 in Riverside County, and $180,000 in San Bernardino County, according to a recent report by DataQuick Information Systems.

Adibi, who presented his forecast Wednesday in Riverside in front of an audience of mostly builders and developers, said there won't be enough demand for housing to bring the bulldozers back to the Inland area. He is forecasting a decline in Inland construction jobs for the third straight year. (wow, that's a stretch...not)

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

Meanwhile back at the ranch, foreclosures are ready to soar as Fannie and Freddie's foreclosure freeze expires.

Home foreclosures, bottled up for the last few months, could soon explode.

A moratorium that Fannie Mae and Freddie Mac put on foreclosure sales and evictions by their servicers in late November is scheduled to expire next week. Freddie had 5,000 to 6,000 loans headed for foreclosure before the freeze, though some might receive streamlined modifications. Fannie said it had contacted more than 10,000 borrowers and renters before the freeze about the possibility of a property heading for foreclosure.

"There probably will be two more waves of foreclosures coming," said Mark Carrington, the director of analytical sales and support at the unit of First American Corp. of Santa Ana, Calif.

"When the foreclosure moratoriums end, we'll see one wave of foreclosures," he said, and "2009 is going to be the start of the ramp-up of the option ARM loans facing foreclosure."

"Virtually everywhere we've seen moratoriums, there is a run-up in foreclosure activity, then a huge drop-off, and a spike back up when the moratorium is over," said Rick Sharga, a senior vice president at RealtyTrac Inc. in Irvine, Calif.

As of June 30, Fannie and Freddie owned or guaranteed 373,000 delinquent loans. Freddie had 151,515 "seriously delinquent" mortgages — meaning they were 90 days or more past due — as of Sept. 30.

"Right now, between moratoriums that were enacted last year and the pure volume of foreclosures, time lines could be double the standard of a year ago," said John Anderson, an executive vice president at Clayton Services Inc. in Shelton, Conn., which owns Quantum, a servicer of delinquent loans.
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So. let me get this straight. Unemployment is high and getting worse by the day. Values are falling. Defaults are rising. Re-defaults are running 50%+. Holy smokes, there's never been a better time to buy! (sarcasm off)