Realtard of the week

This weeks winner is,

HILARY AYERS

FIRST TEAM SNS - DIAMOND BAR

She wins for this new listing in Norco ( I should cut her some slack as it is a new listing, but I'm having a bad night, so poor hilary gets it).

1536 Valley DR Norco, CA 92860, This is up in Bretton Gait and it is a 4488 sq/ft home on a 3049 sq/ft lot according to Hilary. This is obviously a mistake since these homes sit on 1/2 acre lots. This is her entire description, " BEATUIFUL HOME ON LARGE LOT. .. . TONS OF UPGRADES. A MUST SEE!" That's it, one sentence (or is it two?) and a fragment. One misspelling, all caps and an exclamation point. Large lot? well we know it is but it's listed as 3049 sq/ft. Must see huh, well how about a picture then. No pictures yet. This is one of the weekest listings I've seen for a $700k home.

Now on to the Price. This home was last purchased in Sept 05 for 1.2 million. Now it's listed for $699k. That's half a million dollars down the drain. rejunkie reports this is an REO that went back to the bank for $965k. So the bank is listing it $265k off what they are owed right off the bat.

Since there is no picture I screen grabbed the listing since you "MUST SEE!"

The under 300s in Mission Grove

I decided to see what I could find in the Missio Grove/Orange Grove area under $300k that was a decent home. There are some wrecks but I'll ignore those.

Home 1

7370 Ayers Rock RD Riverside, CA 92508. This is a nice looking home with 4 bedrooms and 2.5 baths. It's a good size at 1563 sq/ft although some might find that smallish if you are used to seeing those 3000 s/f homes they've been making lately. This home was built in 96 and sold last in 99 for $150k. It's listed for $289k and it is NOT a short sale nor a REO. Even at this relatively low price the owners are looking at doubling there money in 9 years. Not too shabby.



Just down the street is 7285 Ayers Rock RD, this one is a short sale. This home is a small 3 bedroom, 2 bath home just over 1000 s/f. The current bag holder bought it in 2005 for $325k. It's listed as a short sale for $260k. It's cheap but compared to home one it's no deal.



Home 3 is 11250 Mathilda LN, its a 4 bedroom, 3.5 bath home. It has 1728 sq/ft and sits on a teeny weeny wee lot of 3500 sq/ft. it was purchased in 98 for $122k, the original owner paid $138k in 94. It's currently listed for $285k. (started at $375k in Sept 07)



The price per sq/ft is still very high on these homes even though they are under $300k. The good news is there are now some decent homes under 300 in this area. 2 months ago that was not the case, there was nothing decent listed under 300.

Let's look at those charts again

I took a couple of charts from a NAR report for Riverside. Using their median price chart and drawing a line from the start (1980) through the top of the last peak and out to today we come up with a median price of approx $225k. Since this line is through the top of the last peak it's probably on the optimistic side (After all that was the peak of the last bubble). Taking another line and going through the low in 1995 (after the bubble popped) the median drops to about $150k. We can see, had there been no super-bubble the median price of a home would probably have been between $150k and $225k today.

Looking at another NAR chart on Price to Income ratio's we can see that this ratio stays between 2 and 3 from 1980 all the way through late 2002. After 2003 the ratio goes parabolic, jumping to nearly 6x by late 2005. I believe it's closer to 7 or 8 now! If we go back and use this traditional measure of what a home should cost we once again come up with a number close to $150k. Riverside currently has a median price of about $360k putting it about 240% above the $150k number I keep coming up with. Even if I use the higher $225k number, prices are still 160% overpriced. In other words, to fall back to traditional values homes would need to decline 60% to hit the $150k number or 40% to get to the higher $225k number

And if it's not clear enough yet that home prices are WAY out of whack, take a look at the last graph.

Don't think the prices will fall that far? I'm not convinced myself that we will ever see the median under $200k again. However, some of the Northern California counties have already fallen into the mid $200s The difference between us and them? The price declines started in Late 2005 in Northern California. They have over a year head start, but we are catching up fast! Riverside's median has fallen nearly 20% in only 6 months (housingtracker.com)

More foreclosure news

I combined a couple of articles from two different newspapers on local foreclosures.

RIVERSIDE –Riverside County foreclosures increased more than 50 percent last month – and more than 300 percent compared to a year ago .

6,821 filings of mortgage default notices (NODs), auction sale notice (NOTs) and bank repossessions were recorded in the county in December, according to RealtyTrac. That’s a 55 percent increase over the 4,399 foreclosure filings reported in Riverside County during November.California recorded a total of 53,292 filings in December, a 33 percent increase over November.

Realtytrac reported a total of 481,392 properties, or approx 1.9 percent of households, had gone through a foreclosure action of some kind, RealtyTrac said. That was a 238 percent increase over 2006.

In Riverside County, approx 1 in 100 households received some form of foreclosure notice in December, the third highest number in the state. A big jump from November when 1 in 159 households got one. The county's foreclosure rate was up 302 percent from last year’s level of 1,698 filings, per RealtyTrac.

SAN BERNARDINO- Lenders filed close to 24,000 notices of default in 2007, up nearly 150% from 2006. 7,727 homeowners lost their homes through up nearly 720% from the previous year, according to DataQuick Information Systems.

During the real estate bubble prices of resale homes soared more than 167% from 2000 to 2005, according to DataQuick. But the mortgage meltdown alond with affordability problems and overbuilding have forced the housing market into a full correction.

Checking in on Beaumont.

Last month I took a peak at the SCPGA golf community in Beaumont. This master planned community was tanking BAD. If you remember I listed homes under $300k, $300-350k and 350-400k.

Last month there were 7 under $300k, the price leader was $259k.
This month there are 20 at $300k or below. The price leader is ,

11014 Picard PL Beaumont, CA 92223, a 3 bed, 2.5 bath home 1958 sq ft. Purchased 9/2005 for $361. Currently listed for$233k. Not a short sale, this one is a bank owned. 36% loss on this one.

In the 300k to 350 there were 13 last month
This month we have 10, I suspect a few of them dropped into the under 300 category.

In the 350-400 range we had 17 last month
This month that number is down to 12.

So, we can see the total number of homes under $400k is close. There are 5 more homes total this month that are priced under $400k. But the obvious change is that the homes are falling into lower price ranges. The ranges above 300k both lost homes but the under 300k range increased by 275% in a month.

Intersting article

While cruising I found this article. It's a good read and makes some good points. Here's some of the full article.

What Median Home Prices Would Look Like If the Bubble Never Happened

Jan 28, 2008

How much should you be paying for a home? The answer is easy to calculate if you understand the connection between median home prices and median incomes.

Historically, median home prices and median incomes have always shared a close relationship. From the mid-1970s to 2001, the historical ratio of median housing value vs. median household income was consistently between 2.6 and 3.0.

What this essentially means is that median home prices were (on average) 2.8x the median household income for the last 30 years. Using this 2.8 formula, it is very easy to estimate what median home prices would be if the most recent bubble never happened.

Median Home Prices by Region

Region	Current Median*	What the Median Should Be	% Difference
Northeast	$258,600	$145,760	44%
Midwest	$159,800	$133,941	16%
South	$173,400	$122,875	29%
West	$309,800	$146,297	53%

Using the 2.8 formula, it is clear that local bubbles aren't the problem. Median home prices are inflated in every U.S. region. In the West, where the median household income is $52,249, median home prices are more than double what they should be. The situation is similar in the Northeast, where the median household income is $52,057.

Median home prices are not quite as high in the South and the Midwest, where median household incomes are $43,884 and $47,836 respectively. Even so, prices are still 30 percent higher than what they should be in the South and 16 percent higher than what they should be in the Midwest.

California Median Home Prices

Current Median*	What the Median Should Be	% Difference
$402,000	$158,606	61%

The result is that home prices are 61 percent higher than they should be given California's media household income of $56,645. In some areas of the state, such as San Francisco and Oakland, median home prices are so inflated that they are more than 11 times the median household income.

The first sub-$300k listing in Eastvale

here it is, the first sub-$300K listing I have seen in one of the newer tracts in Eastvale.

6695 JASPER DR, Corona, CA 92880, This is a smaller two story home with 4 bedrooms and 2 baths. It's still a good sized home with 2452 sq/ft and is sits on a 6500 sq/ft lot. This home was built in 2003 and sold new for just over $300K. It sold again in March 2005 to the current owner for $470k. It's just listed for $299K. The listing does not say this is a Short Sale, nor does it say if it is a Bank Owned property. I would guess that this is a short sale. So the bank might not take a sale at this price (that, of course would be stupid). Just the fact that there is a $299k listing will have an effect on the other listings. I said six months ago that I expected this area to be selling in the $250s at the bottom. This is a big step in that direction. If more homes in this area start appearing under $300k this early in the "correction", then I'll be thinking that I may have been a little too optimistic in my prediction.

WTF award of the decade!

Remember this post from a couple of weeks ago, Delusional seller of the week.

In that post our delusional seller listed a home for a million when an identical floor plan 2 homes away was listed for $589k. That was obviously an insane thing to do but this new listing is astounding in it's stupidity. It's black hole stupid, stupid so massive that not even light can escape.

8763 Gentle Wind DR, Corona, CA 92883, This home is in between the ones in the other post but across the street. It's slightly smaller and is only a 3 bedroom, where as the others are 5 bedrooms. This home was purchased in May of 07 for $720k. Today it lists for 1.25 million. That's $250K more than the first delusional seller and a incredible $661k more than the REO across the street. For a smaller home with less bedrooms! WTF?? He is asking MORE than double the price of the larger home right across the street, and this one is on a much smaller lot.



The Realtart is SHAHID JALAL, GOLD TEAM REAL ESTATE. I think Shahid needs to check what he is putting into his hooka. I might have to email this tool and ask him if I can get some of his weed. It's obviously some prime stuff.

Your very own ranch in the hills

21790 The Trails CRK Murrieta, CA 92562, This is up "kinda -sorta" in the La Cresta/Santa Rosa area of Murrieta. This area is uppity, big custom homes on big lots. This home is no different although it is a smidge small for this area. Our feature presentation is a 4 bed/3.5 bath home, 3943 sq/ft in size. The best part of this property is the FIVE car garage. It has an attached 3 car and a stand alone 2 car. I think I'm in love! The other cool thing about this home is it's on 7.45 acres! The only bad thing I can see from the pics is the kitchen looks kinda lame for a home in this area. It might be just the pic but it sure looks small and plain.

The home was built in 2002 and it looks like it sold for $645k. One year later it sells for $849k. In march of last year it sells for 1.325 million. This must be a first payment default because the bank got it back only 9 months later. The primary lender was into it for $809K, I will assume the 2nd lost everything (over $500k). It is currently listed by the bank for....drumroll...... $749K!. That is a loss of $576k in less than a year. I think they will sell this, heck they might even get over asking. If I had the money and the wife would live down there I might fire off an offer on this one.

Auction action

17622 Laurel Grove RD

Riverside, CA 92504

I found a sale of one of the properties I had been watching on Realtybid.com. This home is up in the Bridle Creek development in Riverside. It was a bank owned home that they took back last Sept. They have been trying to unload it ever since. They started out at $899 and dropped the price again and again. It is currently listed for $609k. The bank is into it for $720k.

It was auctioned off on Realtybid.com last week. The winning bid appears to be $539k. To me that still seems a bit much for this particular property. It has ZERO landscaping and there are several other similar properties in the development for sale around $600k. I would think that he could have worked a better deal by getting the other properties to fight for the sale. No matter, $539k if it closes will be a step in the right direction. That home sold new in June 05 for $779k. So that is a $240k haircut or a 31% drop from the 05 price. Compared to the prices of the other homes this looks like a good buy. Looking at foreclosure.com shows me that there are a lot more of these homes going to be REOs later this year. I think that home has another $100K to go down. I'm thinking these will bottom out in the mid $400s.

Another spin through Eastvale

Eastvale, love it or hate it you have to put it near the top in the IE as far as the Kaboom goes. Bringing up that area on redfin nearly causes my pc to seize up due to all the homes that are for sale. The toxic kool-aid is still being chugged. I'd estimate at least 75% of the listing have no hope of selling. The other 25% range from the fringes of "no hope" all the way to "they might have a chance".

I did a search by price to see what was available for under $400k. Surprisingly enough I found over 60 homes priced under $400k. I then searched under $375k and found that 7 of those were under $375k. I tried $350, but I struck out at that price. It seems our price leaders are in the high 300's.

The lowest price per sq/ft that I was able to find was $116 sq/ft. I found another 3 under $120 sq/ft. Most of the lower priced units were in the $130s to $140s sq/ft.

Here's a couple of the sq/ft leaders in Eastvale.

7441 Spindlewood DR, Corona, CA 92880
3782 sq/ft
4 bed/3bath
Purchase Price $560k in 2/05
Asking price $449k m($116 sq/ft)
Total loss $110k plus fees and holding costs for 2 years.

14485 English Setter ST Corona, CA 92880
3813 sq/ft
5 bed/5 bath
Purchase price Approx $620k (mid 06)
Asking price $450K ($118 sq/ft)
Total loss $170k plus fees and holding costs
You get two to choose from as 14335 is also for sale. Same home, same price.

December Sales #s and Foreclosure #s (4th QTR)

The latest reports from DataQuick,

December Sales

A total of 25,585 new and resale houses and condos were sold statewide last month. That's virtually unchanged from 25,578 for November, and down 41.1 percent from 43,431 for November 2006. Last month's sales made for the slowest December in DataQuick's records, which go back to 1988. On a year-over-year basis, sales have declined the last 27 months.

The median price paid for a home last month was $402,000, down 2.9 percent from $414,000 for the month before, and down 14.8 percent from $472,000 for December a year ago. The median peaked last March/April/May at $484,000. In December 2007 a total of 17,500 California homes were purchased with a "conforming" loan up to $417,000. That was down 29.8 percent from 24,913 for the same month a year earlier. Last month a total of 4,600 California homes were purchased with a "jumbo" loan of more than $417,000. That was down 69.8 percent from 15,227 for December 2006.

The typical mortgage payment that home buyers committed themselves to paying last month was $1,878. That was down from $1,951 in November, and down from $2,160 for December a year ago. They are 23.5 percent below the current cycle's peak in June last year.

Foreclosures on the rise

The number of mortgage default notices filed against California homeowners jumped last quarter to its highest level in more than fifteen years, a real estate information service reported.

Lending institutions sent homeowners 81,550 default notices during the October-to-December period. That was up by 12.4 percent from 72,571 the previous quarter, and up 114.6 percent from 37,994 for fourth-quarter 2006, according to DataQuick Information Systems.

Last quarter's number of defaults was the highest in DataQuick's statistics, which go back to 1992.

The median price paid for a California home peaked at $484,000 last March and declined to $402,000 by the end of 2007. Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 22 months, up from 15 a year earlier, indicating that the pool of at-risk home loans is getting larger.

Last quarter's default numbers were a record in 42 of the state's 58 counties. In Los Angeles County it was 63.5 percent of the first-quarter 1996 peak.
On a loan-by-loan basis, mortgages were least likely to go into default in San Francisco, Marin, and San Mateo counties. The likelihood was highest in Merced, San Joaquin and Stanislaus counties.

Of the homeowners in default, an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes 'work-outs' difficult.

Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 31,676 during the fourth quarter. That's the highest since DataQuick began tracking Trustees Deeds in 1988. Last quarter's total rose 30.8 percent from 24,209 in the previous quarter, and jumped 421.2 percent from 6,078 in fourth quarter 2006. In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The all-time low was 637 in the second quarter of 2005.

County/Region...2006Q4… 2007Q4… %Chg
Los Angeles.....7,445....13,613...82.8%
Orange..........1,983....4,276...115.6%
San Diego.......3,150....6,151....95.3%
Riverside.......4,528....9,913....118.9%
San Bernardino...3,538...7,288....106.0%
Ventura............794...1,504.....89.4%