Saturday, January 22, 2011

check the comps, PLEASE

With the large rush of homes hitting the market lately I'm seeing a lot of sellers smoking the dream pipe again. Here's one in Norco Hills. 209 Friesian is a big 5 bed/3.5 bath home overlooking the golf course. It's a funky flooorplan but I kinda like it and actually did put an offer in on a home like this in late 2009. The bad thing about this plan is the layout of the garages. They are on the side of the house and while it's nice that they are hidden from view it's VERY difficult to get cars in and out of them as you have to turn 90 degrees to get into the main garage. There are two other small single garages too. This fella bought this home early on in the crash. He jumped off the fence WAY too soon and paid $625k for this as an REO in Mid 08. He thought he was getting a deal. It originally sold for $1.2M in late 06, got foreclosed on in late 07 (buyer probably never made a payment). They listed in at $780k in late 07. So the buyer pays $625 and thinks he's getting a steal. Fast forward 2 years and these are selling from the mid $400s to the mid $500's. The one I offered on sold for $465k and it had a pretty nice pool.

This guys house sit's WAY up above the 17th fairway. I don't think you could consider it "on the course" There's at least 100 yards of scrub brush hillside between the house and the course. The landscaping looks ok but the freeking realtard only has 2 pis of the outside. The listing price is $699k! That's at least $150k more than this house has any hope of selling for. Personally I think it's at least $200k more than it will sell for. And I'm not basing this on my magic 8-ball. All the seller needs do is look at a recent comp. And it happens to be across the street and 4 houses up. 190 Friesian is the same floorplan but with a spectacular back yard and a horse corral. This home just closed for $525k! I'd take this home over Mr. Delusional's any day of the week.

Thursday, January 20, 2011

The bubble must be back

The bubble days are back. This seller thinks so anyway. 8024 Sanctuary in the Retreat just listed for $748k. That's $223k more than the owner paid less than 2 years ago. Other than some landscaping and paint I don't see that he's done much to the house. I looked at this home in 2009 when it was for sale and although it was nice it was actually priced about $50k higher than some of the identical floorplan homes were selling for. This one does back up to the course but the yard is small and it's right next to the clubhouse. I'm not sure what makes a person think in this economy that they can get $223K profit on this house. The realtor should have smacked the seller for even suggesting such a price. On the plus side, the pictures are great. I'll give Tiffanie some brownie points for the listing. Well written and good pics, that's nice to see once in a while. But the price.......

Monday, January 17, 2011

The tide's coming in.

If you are looking for a property you might have noticed a LOT of new listings hitting the market. It seems like the banks are getting serious about turing over their non-performing assets. There was a lot of talk about this late last year and for the most part it was expected. But after a few years of never knowing what's going to happen next it's hard to beleive anything you read these days. But looking at the latest numbers from housing tracker it's pretty obvious that the wave is coming in. The only thing that is in question is how big this wave will be and is there enough demand to absorb this additional inventory. You might also notice that the average listing price has tanked this week. The high end has fallen nearly $100k since it's post crash high of $435k in August 2009. The median has fallen $30k from it's post crash high of $240k in Sept 2009. You can see the high end is VERY weak and I have been saying that for years now. There's just not that many people that can afford $500K plus homes in the IE.

Tuesday, January 11, 2011

Time to break out the Ass-Clown award

There's a new bread of Ass-Clowns popping up. These are the delusional flippers or the people that recently purchased a home and for whatever reason want to sell it now. Today's home is the latter. The buyer picked up 4507 Birdie Dr in June of 09 for $570k. The house is a 4 bed, 3.5 bath home and nearly 3900 sq/ft. He paid top dollar for it but it is a pretty nice house. However the kitchen cabinets and appliances are low end as is the bathroom. The primary upgrades are outside where it has a nice pool. This home has no view to speak of either. Now, a little over a year later in a market that has dropped off considerably from mid 09 he thinks he can make $100k on this house! Good luck with that fella. If he's lucky he can get out for what he paid.

Just to drive the point home there is 4545 Edgewater Cir. just around the corner from his place. This one is an REO but it's in great shape and has a great view of the Eagle Glen golf course. Even if that view starts with the parking lot. This home is quite a bit larger than ass-clowns place. It's a 5 bedroom, 4.5 bath home of 4136 sq/ft. The kitchen looks nicer, the bathrooms look comparable but this house has a much better view. The listing agent for this one had high hopes for it too. Initially it listed for $580k but it's down to a more reasonable $499k. At this price there's a good chance this home will sell fairly quickly.

Sunday, January 9, 2011

Golf foreclosure

A few years ago I posted that anyone purchasing in a new golf community should think twice because you never know what's going to happen to a golf course, especially in an economic crash. The first victim was Mountain View golf course in Corona. All those homes that previously had a beautiful golf course view are now looking at acres of weeds. We all know what that did to the property values.

The latest course to fall was Dos Lagos in South Corona. I figured that this place would go belly up because of the fact they could not afford to even build a club house. B of A finally foreclosed on the golf course. So far they are keeping it a golf course. They have brought in a management team to run it for them. I suspect they will try to sell it, after all Banks are not in the biz of running golf courses. Especially once they find out how much money they will lose on this thing. The big question for the homeowners around it has to be what's going to happen to it. Golf courses cost a fortune to maintain. With a lot of competition for players, courses have been lowering their green fees for several years now. Making it harder and harder to stay in the "green". If the course cannot make any money, no one will buy it as a golf course. They might if they can bulldoze it and throw homes on it though.

So I will repeat my warning about golf course communities. Be careful, just because it's a golf course today, does not mean it will be a golf course next year!

Thursday, January 6, 2011

Wanking bankers!

Ran across this and found it rather amusing. (you might want to skip this if you are easily offended)

Wednesday, January 5, 2011

Any predictions for 2011

The crystal ball has been a little foggy lately. I was pretty much bang on the money for 2007 and 2008 but my predictions for 2009 were a little off. Primarily due to the massive government intervention in the market. I did not anticipate that level of interference in a free market. I really didn't know what to think about 2010 because of the uncertainty about what the government would do next. It seems like every time one program failed they would start another in 2009. In 2010 they pretty well just let everything expire and crossed their fingers and hoped for the best. Unfortunately without the government programs the market is slowing. The last quarters numbers are pretty convincing evidence that it is going to continue it's downward march. A slow and orderly decline would probably be tolerated but if things start to worsen we will probably see the government step in again. Heck, they already have stepped in again with the announcement that the fed is gonna buy more toxic crap. Other than another tax credit I'm not sure what they could do. Government sponsored low interest loans would probably be the best bet rather than another tax credit we can't afford.

My feeling for the IE is that our market will stay fairly stable. Currently prices have fallen to the point of affordability for most buyers. In many areas it's now cheaper to buy than it is to rent. Investors are busy purchasing rentals and the flippers are hard at work trying to pick them up cheap at the trustee sales. Unless the employment situation gets worse I think the market in the IE will be stable. One possible exception is the market over $500k. Tightening of the mortgage market makes getting loans over $417k harder and there's just not a lot of people that can qualify for homes in that price range out here. So I suspect the high end may fall a little bit. But I think the low to mid priced homes (up to $400k) will be stable.

There are some other factors that might effect out market. The new governor will undoubtedly raise our taxes one way or another. More taxes means less available income to purchase or pay for a home. The foreclosure crisis is not over. Many of the pick a pay loans are set to recast in the next year. The recasts will add another wave to the foreclosure crisis. The resets should not be affected since rates are still very low. And there is still a lot of uncertainty about how fast the banks are going to throw these homes onto the market. So far they have controlled the inventory levels of REO's very tightly. But it's anyone's guess what they will do if the market continues to decline. Personally I think the will continue to trickle them out.

I guess to summarize, I just see more of the same. We may see a slight dip in the median but if it happens it will be because of the high end of the market. I don't thin the low end or the middle of the price ranges will change. So lets here what you guys think.

Sunday, January 2, 2011

The big drop and some MLS hanky panky

Here's a perfect bubble poster child and possibly some MLS hanky panky. It's nothing criminal but it looks like this guy as no intention of selling this house.

17939 Timberview up in Bridle Creek was purchased right at the peak and actually closed just as the crash was starting. The home was built in 2006 but didn't close until Jan 2007. This poor fella dropped a cool $1,000,000 on this house. That's right a million dollars. Alright technically he probably dropped nothing other than his signature on some loan docs. Some idiot lender dropped $1M on this thing. He must have upgraded everything as this floorplan was "only" selling for around $800k. There's no landscaping to speak of but he poured enough concrete to build a runway.

Fast forward 3 years and he lists it in May as a short sale for $392k. So a 60% drop in value in 3 years. The price might seem like a good deal for a home in this tract, but for this floor plan with no landscaping that's actually pretty close. If it's highly upgraded inside he probably has it listed a little on the low side. The comps for that floor plan range from $375k to $450k. I actually put an offer in on the $45ok house. That one was spectacular though. All upgraded inside and out with a pool and Viking appliances.

But here's were this listing is questionable. It lists for a day and then goes on hold for a month. I'm not sure what's going on here but it seems like someone is playing games with a bank.

Jan 02, 2011 Relisted (Active) -- -- CARETS #P738448
Dec 20, 2010 Delisted (Hold) -- -- CARETS #P738448
Dec 20, 2010 Relisted (Active) -- -- CARETS #P738448
Dec 07, 2010 Delisted (Hold) -- -- CARETS #P738448
Dec 06, 2010 Relisted (Active) -- -- CARETS #P738448
Nov 11, 2010 Delisted (Hold) -- -- CARETS #P738448
Nov 10, 2010 Relisted (Active) -- -- CARETS #P738448
Oct 05, 2010 Delisted (Hold) -- -- CARETS #P738448
Oct 05, 2010 Relisted (Active) -- -- CARETS #P738448
Sep 25, 2010 Delisted (Hold) -- -- CARETS #P738448
Sep 25, 2010 Relisted (Active) -- -- CARETS #P738448
Sep 01, 2010 Delisted (Hold) -- -- CARETS #P738448
Sep 01, 2010 Relisted (Active) -- -- CARETS #P738448
Aug 17, 2010 Delisted (Hold) -- -- CARETS #P738448
Aug 15, 2010 Relisted (Active) -- -- CARETS #P738448
Jul 26, 2010 Delisted (Hold) -- -- CARETS #P738448
Jul 21, 2010 Relisted (Active) -- -- CARETS #P738448
Jun 09, 2010 Delisted (Hold) -- -- CARETS #P738448
Jun 08, 2010 Listed (Active) $392,000 -- CARETS #P738448

And one more to start off the new year.

Here's a tale of two foreclosures. Unfortunately it's on the same house. As the crow flies this house is probably about a mile from the Bridle Creek house. That mile and a different zip code makes this house worth about $100k less though. 19159 Eldorado is over in "the boulders" off Cajalco and Wood streets. This is technically Perris although it's actually no where near Perris. It's Perris in zip code only. Like most of the homes in this area this tract has large homes on large lots. Horsey properties or folks with lotsa toys buy these. This house was built in 2005 and sold for $523k. In July of 2008 the bank too the home back and it was sold a few months later for $310k. These people probably didn't put much money into this deal as it was foreclosed on again in May 2010. They could not have made very many payments to end up foreclosed on only 20 months after purchasing. The amount the lender was seeking at the trustee sale was actually $25k more than the purchase price. I guess they were actually trying to recoup those late fees and back payments. Now it's for sale again. You can pick this baby up for the bargain price of $280k. That's not too shabby for a newer 3000 s/f, 5 bedroom home on a 1/2 acre lot.

Happy New Year