Dellusional seller of the month award

I can give out the dellusional seller of the month award already because I know there is no way I can top this one. This guy needs smacked in the head and asked "WTF are you thinking".



16340 Highgate DR in Riverside is a 5 bedroom, 4.4 bath home that is 3904 sq/ft. I've actually featured this house before but it went off the market late last year. I actually figured it had gone back to the bank. It listed again today and beleive it or not it's $100K MORE than it was listed for last year! This MORON is asking 1.4 Million dollars for a tract home off La Sierra in Riverside. I'm sure he thinks it's worth every penny. After all it has custom dyed carpets (so does my living room thanks to cherry kool-aid) and tons of decorator upgrades. Now it may have some very nice decorator touches but not everyone is going to like those mauve walls or the titty pink kids room. None of that matchy-matchy furniture comes with the deal so all those decorator touches won't mean squat when I plop my old worn sofa down in that fancy family room. I don't care if Martha Stewart herself is going to help arrange the buyers furniture, no one is going to pay anywhere near asking, not even 50% of asking in fact you will be lucky to get 1/3 of the asking price.
It does have a nice pool and it is a very nice house but come on people ONE Point FOUR million?? The seller should be bitch slapped and the realtor should have a CAT-scan, she obviously has brain damage.

There is a model match comp in the same tract at 16398 Hidden Peak, in fact it was also in the Nov post. It's been on the market now for a whopping 175 days. After 7 price reductions this home is now asking $525K. That's a staggering $875k less than the doofus above.



And heck if that's not enough of a clue about the price then maybe they should look at 17066 Noble View. It's also the same model home and it's REO and also listed for $525k. This one has also been on the market for a couple of months.

How do you price a model match home in a newer tract at nearly 3 times the price of other homes for sale. What kind of idiot does that??

Are we there yet?

It seems every week I read some Realtor’s report of the market turning around. It’s usually full of colorful realtor-speak like “there’s never been a better time to buy”, “if they wait they’ll be sorry”, “long term, real estate is your best investment” and my current favorite, “Scraping along the bottom”. The funny thing about bottoms though, they’re not all flat. One second you are cruising along the abyssal plain and the next second you fall into the Marianas Trench and get crushed like an old chevy at a monster truck rally.

Has SoCal hit the bottom? Is it really a great time to buy? I seriously doubt it, and here are just a few reasons why.

The first reason is a simple one. This bubble like nearly all bubbles will probably fully implode (When most bubbles implode they tend to overcorrect a bit). Prices in SoCal have tripled in the last 10 years. Even if they were to fall 50% they would still be well above pre bubble levels. They need to fall about 66% to drop back to pre bubble levels. Can they fall that far? Sure they can. Will they? I doubt it in most cases, because there would have been some normal appreciation on those 10 years. Given a normal 3% appreciation they would need to fall about 55% to get back into the normal range. According to most charts, the decline in the IE is currently averaging about 30%. That would indicate we have about another 25% to go.

Reason number two is probably the biggest factor keeping me from believing there is a bottom anywhere close. There is still a gargantuan amount of distressed properties hitting the market (foreclosures people!). The foreclosure numbers are through the roof and still accelerating. There is no hope of this trend reversing any time soon. The peak of the subprime rate resets runs right through the end of this year. The foreclosures are another 6 to 9 months behind that. Then there is the Alt-A wave, which runs through late 2011. Many of those properties will already have sold or walked away from long before then so I’m not expecting that wave of foreclosures to rival the current one, but there will certainly be some.

The shear number of distressed properties on the market make any hope of recovery about as likely as Ron Paul being elected President. In Feb nearly 50% of the homes sold in the IE were foreclosures, last month it was almost 60%. That number is probably only going to go higher. Until those are worked out of the system there is little hope of prices going anywhere but down.

Reason number 3 is related to reason number two. The prices are still in a nose-dive. People know this and will continue bidding low. Currently median in the IE has dropped 27.2% in the last year according to the California Association of Realtors. If the prices are still falling how can we have hit bottom?? When the prices start to rise again (for at least 3 months in a row) we can start talking about the possibility that we hit some sort of bottom.

Reason number 4 is the inventory levels are still way too high. The current IE inventory is somewhere close to 50,000 units. Last month we sold just over 3000 units. That equates to a 16.6 month supply. Most realtors will tell you that a normal balanced market has about a 6 month supply of inventory. We are currently running 2 to3 times that amount. The inventory might fall as the summer hits but come fall it is likely to skyrocket again (like it did last year).

Reason number 5 is the overall economy is not looking very healthy. It’s all but certain we are in a recession. Jobs are being shed and buyers are being lost. As more and more “regular” buyers are lost that will leave a larger percentage of investors. Today’s investors are looking for deals. They are only going to buy properties if the prices are low enough so as to pencil out as an income property. Currently very few properties fall into this category. Most smart investors will look for small, inexpensive homes. These are cheaper to maintain and easier to rent. Those big 3000 s/f (and bigger) homes will sit and sit until the prices fall because investors don’t want them and the regular buyers can’t afford them at the current prices.

Reason number 6. I just asked my Magic Eight Ball and it said “outlook not so good”. Who can argue with that!

And finally, lucky #7. AFFORDABILITY. Even though homes have fallen substantially in the last year, affordability is still very, very low. In California it’s something like 24% that can afford the median home (up from 14%). Median income is still under $60k in most areas. The new median of $309k in Riverside is still over 5 times the median income. Riverside County median price was traditionally under 3 times the median income, until this bubble hit. At 3 times the median income the median home would be roughly $180k. Even I’m skeptical it will fall that low. But if it follows its usual pattern it will fall back into that price range eventually (3X the median income).

The spring bounce that didn't

Dataquick released the March report today. It's surprisingly bad considering all the talk we've been hearing about increased activity and the spring bounce. These numbers are terrible and taken together with the foreclosure numbers will add up to a continued slide in prices. The NAR and the CAR will undoubtedly spin the numbers by putting out a report saying something like "Sales up 18% in March". Of course, they will leave out the fact that they are normally up about 40% or that they are 40% to 50% below last years sales (which were already way down from 05 and 06).

Take note of the Median home price for San Berdu, it's down to $265k. Riverside is very close now to breaking through the $300k barrier. It could happen next month if the current rate of decline continues.

La Jolla, CA--- The onset of spring did little to thaw Southern California's semi-frozen housing market: The seasonal boost in sales between February and March was less than half its normal level and a record low. The weak start to the home buying season also saw another record dive in the median sales price, the result of depreciation, slow sales for higher-priced abodes and growing sales for discounted homes fresh out of foreclosure.

A total of 12,808 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in March. That was up 18.8 percent from 10,777 the previous month but down 41.4 percent from 21,856 in March 2007, according to DataQuick Information Systems.

Over the past 20 years Southland sales have risen by an average of 38 percent between February and March. Last month's 18.1 percent increase from February was the lowest in DataQuick's statistics, which go back to 1988.

March was the seventh consecutive month in which sales have fallen to the lowest level on record for that particular month. On average, March sales have been about twice as high - 25,407 - as last month.

Foreclosure resales - houses sold after being foreclosed on continue to dominate many inland neighborhoods. More than one out of three Southland homes that resold last month, nearly 38 percent, had been foreclosed on at some point in the prior year. This time last year such sales were only 8 percent of the market. At the county level, foreclosure resales ranged from 28.8 percent in Los Angeles County to 56.4 percent in Riverside County.

The median price paid for a Southland home was $385,000 last month, the lowest since $380,000 in April 2004. Last month's median was down 5.6 percent from February's $408,000, and down a record 23.8 percent from $505,000 in February 2007. That peak median of $505,000 was reached several times last spring and summer.

All homes	Mar-07	Mar-08	%Chng	Mar-07	Mar-08	%Chng
Los Angeles	8,353	4,263	-49.0%	$540,000	$440,000	-18.50%
Orange	3,130	1,663	-46.9%	$629,000	$506,000	-19.60%
Riverside	3,680	2,691	-26.9%	$420,000	$306,250	-27.10%
San Bernardino	2,476	1,534	-38.0%	$369,000	$265,000	-28.20%
San Diego	3,218	2,108	-34.5%	$490,000	$395,000	-19.40%
Ventura	999	549	-45.0%	$566,750	$430,000	-24.10%
SoCal	21,856	12,808	-41.4%	$505,000	$385,000	-23.80%

Foreclosure filings up 21% from last month in Ca.

U.S. Foreclosures Jump 57% as Homeowners Walk Away

April 15 (Bloomberg) -- U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as adjustable mortgages increased and more owners gave up their homes to lenders.

More than 234,000 properties were in some stage of foreclosure, or one in every 538 U.S. households, Irvine, California-based RealtyTrac Inc., a seller of default data, said today in a statement. Nevada, California and Florida had the highest foreclosure rates. Filings rose 5 percent from February.

``We're not near the bottom of this at all,'' said Kenneth Rosen, chairman of Rosen Real Estate Securities LLC, a hedge fund in Berkeley, California and chairman of the Fisher Center for Real Estate at the University of California at Berkeley. ``The foreclosure process will accelerate throughout the year.

Bank seizures climbed 129 percent from a year earlier, according to RealtyTrac, which has a database of more than 1 million properties and monitors foreclosure filings including defaults notices, auction sale notices and bank repossessions. March was the 27th consecutive month of year-on-year monthly foreclosure increases. In February, foreclosure filings rose 60 percent

California had the second-highest rate at one filing for every 204 households, and the most filings for the 15th consecutive month at 64,711. Foreclosure filings more than doubled from a year earlier and were up about 21 percent from February.

``The continued increase in new foreclosures implies an even larger drag on prices in 2008,'' Goldman Sachs Chief U.S. Economist Jan Hatzius wrote April 8. Home prices fell 8.9 percent in the fourth quarter, the biggest decline in 20 years as measured by the S&P/Case-Shiller home price index.

median asking falls below $300k!

For the first time in a very long time the median asking price of a home in the IE has fallen below $300k. This weeks median fell another $5k from the previous week (At this rate homes will be free in just over a year...... (60 weeks)). The median asking is down 27.7% in the last 12 months. As you can see the price declines are still accelerating, with the last 30 days seeing a 6.1% decline, the last 3 months a 14% decline and a 20% decline over the last 6 months.

Trend	04/14/2008	1 month	3 month	6 month	12 month
Median Price	$299,999	-6.1%	-14.0%	-20.0%	-27.7%
Inventory	48,625	-1.0%	-4.9%	-8.2%	+4.5%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
04/14/2008	48,625	$225,000	$299,999	$423,990
04/07/2008	49,226	$229,000	$304,900	$425,000
03/31/2008	48,449	$230,000	$309,900	$429,900
03/24/2008	48,721	$235,000	$315,000	$435,000
03/17/2008	49,120	$239,000	$319,500	$439,000
03/10/2008	49,206	$240,000	$320,000	$439,900
03/03/2008	49,907	$244,950	$325,000	$440,000

$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.

So Cal foreclosures up 18% in March

S. California Foreclosures Increase 18 Percent in March 2008

Default Research, the premier provider of foreclosure real estate data in Southern California, is reporting that Notice ofDefaults and Notices of Trustee Sales were up approximately 32,800 last month.
According to Default Research (www.defaultresearch.com), the Inland Empire was the hardest hit region in SouthernCalifornia in March 2008. In Riverside County, 7.9 percent of homes faced foreclosure and in San Bernardino 6 percent of homes entered the foreclosure process.

Housing inventories continue to increase while median home prices are still declining, said Serdar Bankaci, founder of Default Research. However, for the savvy investor armed with the Default Research foreclosure lists, there are deals to be made. Those with the cash or credit can snatch up a nice portfolio of homes and turn them into rental properties. Residential vacancy rates are low and rents appear to be going up.

Below is a unique and accurate local look at how the Default Research foreclosure statistics affect your area:
Los Angeles Foreclosures – Hardest hit cities Los Angeles (2060), Lancaster (869), Palmdale (852), Long Beach (499) and Santa Clarita (264)

**Note: Although Los Angeles County did not have the highest percentage of households in foreclosure, the number of
Notice of Defaults and Notice of Trustees Sales in Los Angeles Counties increased to more than 10,000 for the first time according to Default Research.**
Orange County Foreclosures -
Hardest hit cities Santa Ana (629), Anaheim (413), Garden Grove (211), Orange (150), Fullerton (136)

Riverside Foreclosures -
Hardest hit cities Riverside (1028), Moreno Valley (945), Corona (742), Murrieta (494), and Perris (478)

San Diego Foreclosures -
Hardest hit cities San Diego (1620), Chula Vista (582), Escondido (373), Oceanside (370) and El Cajon (260)

San Bernardino Foreclosures –
Hardest hit cities Fontana (770), San Bernardino (668), Victorville (609), Hesperia (384), and Rialto (341)

Default Research is California's leader in foreclosure research, reporting Notices of Default and Trustee Sales Notices days after being recorded. More information about Default Research can be found at its Web site: http://www.defaultresearch.com. For more detailed California foreclosure statistics listed by county, please visit http://www.market.defaultresearch.com.

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......

March worst month yet for housing market,

That is a headline from the North County Times in Sand Diego. While we are hearing about an uptick in sales and more buyers in the market the numbers for March don't reflect this (at least in San Diego). As you can see in the article, March sales are normally about 40% better than Feb. This year they were just 9% better.

Here's some highlights from the article,

Despite relatively high February home sales and real estate agent reports about a swarm of buyer activity, North County's housing market hit a new low in March.

Weakness in the housing market cut across all indicators, according to a report issued Tuesday by the North San Diego County Association of Realtors. Here are other key points in the report, which is known as HomeDex:

-- North County home sales posted the biggest year-over-year drop since the start of the housing recession.

-- The area's median sales price, where half the homes sell for more and half for less, continued to take a beating and also showed the largest annual decline yet. In March, it dropped below $500,000 for the first time since 2003.

Sales tumbled 37 percent from a year ago to 484 sales, a stark contrast from February, which posted a 12 percent year-over-year drop in sales.

The median sales price in North County for last month fell 23.4 percent from a year ago to $490,000, the biggest year-over-year decline in price recorded during this recession. Adjusted for size, though, the median price has fallen 16.1 percent to $255 per square foot.

And prices are likely to fall further because many analysts consider the 11 months it would take to sell of all active listings in the region a deep buyer's market.

While slightly down from February's inventory of 12 months, last month's inventory is still almost double that of a year ago, when March inventory stood at 6 months. And last year, March inventory was 35 percent lower than February's while the inventory fell just 6 percent this year from February.

(end)

I wonder how the IE did?

Actually I think I know how some of the IE did (closed sales). Some areas saw decent increases, these were the low end areas where the prices have already plummeted. Moreno Valley for instance saw 152 sales this March vs only 101 last year. Many other cities though look to be well below last year. Riverside was 171 vs 225 last year, Fontana 86 vs 130 last year, San Berdu 79 vs 121 last year. These are closed sales though and reflect homes that sold in Dec, Jan and Feb.

Most of the sales these days are in the low end. This is the main reason the median price is plummeting. The number of high end sales (over $600k) has fallen to a trickle. The primary reason for this is that the high end market is driven my move up buyers. These days most of the low end homes are sold by banks. Banks are not move up buyers! No move up buyers means the high end is dying on the vine. The higher lending standard are also taking a larger hit on the high end market than they are at the lower end.

A look at the Villages of Avalon

The Villages of Avalon is the development below the Dam at Lake Perris. I've posted several blurbs on homes in this development selling at "rental" prices. Just for giggles I searched for homes under $200k. In this one development I got 50 hits with many of them being well under $200k. In fact 21 of them were under $175k, and 2 of them were under $150k.

1240 Lilac Rd is one of the 2 houses priced at $149k. This is a perfect small starter home or rental property. It is 1200 s/f and has 3 bedrooms and 2 baths. The last sale on this house was $310k in Sept 05 (at least a year before the peak). Now you can pick it up for $149k or there abouts, depending on the offers. The loss is over 50% on this house from the last sale and if it had sold during the summer of 06 the loss would probably be closer to 60%.

$100 s/f in So Corona

25073 Pacific Crest St in South Corona is the first legit $100 s/f listing I've seen in So. Corona. There have been a few short sales listed for $100 s/f but this is the first REO listing at this price I've run across.

The house is 3200 s/f and it is a 3 bedroom, 2.5 bath home. It's sitting on a smallish lot of just under 5700 s/f. It looks like the home was purchased new in March 2006 for $605k. It's listed as and REO property for $320k. That's a loss of $285k or 47% in 2 years (less fees).

Most people look at the price and home and are less concerned about price per sq/ft. Us blogheads use the number because it's another way to gauge the decline other than the overused median price. Because most people/buyers are less concerned about the $ s/f they may not think this home is such a good deal. There are currently 14 homes priced under $350k in that tract so this home actually does have competition in it's price range.



Ok, now for some comic relief! Just up the road from the $100 s/f house there is a MOBILE HOME for sale (well technically it's a manufactured home...same thing). 10304 Dusty Lane is a 1440 s/ft 3 bedroom 20 year old "trailer". Yours for $285k! Yup only $35K less than a 2 year old 3200 s/f house. That's a seller with a sense of humor! Actually there are a few of them in that trailer park.

Median asking price down another $5k this week

Like clockwork the median asking price has dropped another $5k. at the beginning of the year the average was $3k per week, now it's running $5k per week. The inventory has increased by 777 homes in the last week (that's a big jump for one week).

Trend	04/07/2008	1 month	3 month	6 month	12 month
Median Price	$304,900	-4.7%	-12.6%	-19.6%	-26.7%
Inventory	49,226	+0.0%	-0.5%	-7.0%	+7.4%

Date	Inventory (SFH + Condo)	25th Percentile	50th Percentile (Median)	75th Percentile
04/07/2008	49,226	$229,000	$304,900	$425,000
03/31/2008	48,449	$230,000	$309,900	$429,900
03/24/2008	48,721	$235,000	$315,000	$435,000
03/17/2008	49,120	$239,000	$319,500	$439,000
03/10/2008	49,206	$240,000	$320,000	$439,900

data from housingtracker.net