61% off peak, is this the bottom?

South county (Riverside) is taking a beating, I think we all know that by now. Temecula, Murrieta, Lake Elsinore, and Wildomar have all seen whopping price drops. So much in fact that these areas are probably very close to being back to "normal" price levels.

Here's a property that's probably priced about right. 27069 Pumpkin St, Murrieta. This home is in Greer Ranch, which is one of the better tracts in the city. It's a 4 bed, 3 bath home, 3681 sq/ft on a decent size lot (although some of it is a slope). The inside looks in nice shape, but average as far as upgrades go. It does have granite countertops and some tile. New from the builder in 2004 it sold for $584k. At the peak this home sold for a silly $770k. It's bank owned now and listed 61% under that last sale at $295K ($80 sq/ft). That 61% loss, is in only 20 months!



You may think the first home is "cherry picking" or that it will sell for far more. It may be cherry picking but I doubt it will sell for more. To illustrate this point lets look at 27498 Fern Pine Way, in the same tract. This home is also a 4 bedroom, 3 bath. It's slightly smaller at 3362 sq/ft but it does sit on a larger lot. Much of that extra land is also a slope though. There are no homes behind this house, which is a bonus in my mind. This home is also an REO. It is listed for $307K or $91 sq/ft. It's been on the market for 62 days and has already seen one price drop.

The plunge is spreading

I've posted about sub $100 sq/ft listing and then sub $80 sq/ft listings. But those sub $80 sq/ft listings were for the most part in areas that most of us would rather not put down roots. They have been primarily in far flung areas like Hemet, Perris, San Jacinto and Moreno Valley. They are moving though. Like ripples on a pond sub $80 sq/ft listings are creeping out. There are loads of them popping up now in Murrieta, and it probably won't be long before they start creeping into Temecula, Riverside and Corona.

Murrieta may not be your idea of the perfect town but it's much better than most of the other cities that have gone sub-$80. It is a little far off the beaten path and I would not recommend anyone move there if they cannot find work locally or within a reasonable commute (20 miles). There are a few to choose from in the Sub-$80 range or close to it. Most of them curretnly are short sales but there are REO's to choose from as well. Most of them are huge and most are fairly new. Lets take a look at a few.

26193 Palm Tree Ln is a big 4008 sq/ft, 5 bedroom/5 bath home. This puppy sold at the peak for $680K. It looks like bank took it back WAY back in Jan for $573k. It's just now hitting the market (why did they wait 9 months??). It's listed at $295K or $74 sq/ft. That is a loss of $385k or 57% from the bubble price. This is a nice looking house. The yard leaves a bit to be desired but the house looks clean and ready to move into.



39166 Shree Rd is another nice looking house in Murrieta. This one is 3586 sq/ft and has 4 bedrooms and 3.5 baths. The home was purchased new in 2006 for $632K. The bank took it back in Sept. It looks like the offered it on the court house step for $375K and not surprisingly there were no bidders. It just hit the market listed for $280K or $78 sq/ft making the loss (if it sells at asking) about $352K or 56%. I think this one will go quick, maybe even over list, it looks very nice. Notice the last occupants took the oven!



37705 Summer Wind is a 3160 sq/ft 5 bed/3 bath REO that has been on the market for a month and a half. After a $30k price drop this home is currently listed for $260K or $82 sq/ft. Since it's been on the market a while you might be able to get it under $80.



How about a little Sweet Magnolia? This home is another REO home. It's 3066 Sq/ft and has 4 beds and 4 baths. This one looks to be a sad case. Purchased new in 2000 for $246K it was lost to the bank in August. There's no telling if this was HELOC abuse, familiy tradgedy or simple job loss. My guess is HELOC abuse since the bank took it back for more than the original loan. This is now listed $1k BELOW it's original selling price in 2000! Now that's a rolback! BTW is it just me or is that one BUTT-UGLY house.

Some banks STILL don't get it, most sellers still don't get it...

Most of the banks have accepted the fact that the value of those REPO's ain't what they were hoping it would be. Most of the REO's hitting the market are priced to reflect this fact. But there are still some banks (or brokers) that are in serious denial. While checking the new listings today I ran across these two REO properties in Greer Ranch in Murrieta.

Home number one is 27146 Red Maple St. This home is a 4 Bedroom, 3 bath home that is 3532 sq/ft is size. Judging from the poor pictures the house is nothing special, just an average tract home. The home was purchased new in Nov 2004 for $588K and it looks like it went back to the lender in March for $659K. Obviously the last owner used the home to finance his high rolling life style. Our "poor" lender thinks they are dumping this place at $610K ($173 sq/ft), Hey that's $50K less than they are into it! It must be a deal, right?



Unfortunately for them a $50K loss is wishful thinking. They are looking at a $250K loss (or more) in all likelihood. As an example of what the should have priced this house at lets look at another new listing just a block or two away. 26727 Chamomile St is a much bigger house with 5 bedrooms and 4.5 baths tucked into 4295 sq/ft. This home sold new in 2005 for $634K, then again in June 2006 for $778k. This one has also gone back to the lender but this lender is more in touch with the market. This home is listed for $410K ($95 sq/ft)



Does bank number one really think anyone is going to buy that house at $173 sq/ft when the can go down the street and get a newer, larger home for $95 sq/ft? Most of the homes in this tract are listed between $100 sq/ft and $120 sq/ft. How a broker and/or a lender can put a home on the market at $173 sq/ft is beyond me.


Now let's look at a couple of F'd home owners. Most home sellers are still in major denial, especially if they bought in the last few years. It's hard to admit you F'd up and it's even harder to throw in the towel and destroy your credit. But the facts are the facts and no amount of rubbing you lucky rabbits foot will get a home sold for 2006 prices. Many sellers are still listing the homes at wishing prices and a few like the one below (on Nuthatch) are just complete morons listing homes at the price they do.

Remember the days when prices made sense and similar homes in similar areas would all be priced within a few percent of one another. Even if one house was totally decked out with pool and fancy landscaping the premium for that home would only be 10% or 15% more than the average homes. Today's market is so screwed up that similar homes can have wildly different asking prices, especially if one is a REO or short sale.

19285 Nuthatch St in Perris and 18774 Malkoha St are examples of this. These are identical homes in the same tract. One home is all tricked out with landscaping and a pool and the other is still looking a little bare in that department. The nice house was originally listed for an unbelievable 1.1 million (in Perris, WTF dude??), Now it's down to $999k ( oh yea, that's better). Someone should call this guy and tell him his house is in PERRIS!.

The other home (Malkoha) is a short sale listing and it is priced at $380k (and it's not the cheapest house in the tract!). Granted it needs some landscaping and it does not have a pool but it's 62% less than the other house and for that extra $619K you could put in a pool, landscaping and a couple of Ferrari's.

We could sure make the inventory numbers look a lot better if all the wishing listings were removed. I have noticed lot's of them have been dropping off over the last few months but there's just so many of them to weed through when you are looking. I just wish the agents would drop those stupid listing and remove all the useless clutter from the MLS.

Why, oh why, are some REO's priced so high?

Can anyone explain why in todays market, so many REO properties are listed at wishing prices. I realize the outstanding loans might be very high but that has no bearing on the current market value of these properties. I know the banks are getting BPO's (broker price opinions) before setting the listing price. Is it the brokers that are out of touch with reality or is it the banks not wanting to believe "it's that bad". There are more and more REO's hitting the market with pricing close to 2002 prices yet there are still loads of them listing at crazy wishing prices.

For example, 26727 Chamomile St Murrieta. This is in Greer Ranch, a newer high end development in between the 15 and 215 fwys. Like most new developments there are loads of homes for sale in this development. Many of these are REO's. The price leaders just listed (probably re-listed as it's been REO'd for almost 6 months) has and asking price of $149 s/ft. That's a lot of extra money over the price leaders since this home is 4300 s/f. It's listed for $639k when it should be under $500k to be in line with the current crop of REO's. Those are not selling so if they actually want to sell this beast it should probably be in the mid 400s or lower. There are way too many homes listed around $100 s/f in this area for anyone to bother with this thing.

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.

For prices it's a new year, and that's 2001

2003 price roll backs are getting too easy to find. I thought I'd be a little more ambitious and look for 2002 rollbacks. I decided I would take a look to the south since I don't go down there much. I looked in Lake Elsinore, Wildomar, Murrieta and the surrounding areas. Surprisingly I found some and even more surprisingly I found some 2001 price rollbacks.

31669 Canyon Ridge DR, Lake Elsinore, CA 92532, this 4 bed/2.5 bath home was sold in mid 2001 for $260k, again in 2003 for $325, again in 2004 for $425 and it's for sale again in 2008 for....back.... back....back in time we go to 2001. It's for sale for $275k! Right back to 2001 prices.

23065 Empire Penguin RD, Wildomar, CA 92595, this 4 bedroom home with a nice pool was built in 2002 and sold for $310k. In addition to the pool it has a "Gormet, built-in barbeque", gawd I love illiterate realtors. But I digress, today you can buy it for $290k. $20k less than it sold for in 2002.

35381 Perla PL Wildomar, CA 92595, is a nice looking 3/3 home that's just over 3000 s/f. This one sold new for $249k in 2001. Today it appears to be bank owned and you can get it for $295 ($97 s/f). That would probably put it back to early 2002 prices.

40139 WHITE LEAF LN, Murrieta, CA 92562. I listed this one just for fun. This home was built in 1989 and sold new for $238k (Murrieta and Temecula were actually on the spendy side back in the late 80's compared to Corona and Riverside). Today you can buy this home for $61k more than is sold for 18 years ago. That equates to an annual rate of appreciation of 1.25%. Now do you believe the NAR when they say "Real Estate is you best investment". ONE POINT TWO FIVE PERCENT over the last 18 years. AND, that is assuming they sell it for the $299k it's listed for. It would not take much of a discount to wipe out that paltry 1.25% gain. Looking at the pics this home looks old and dirty inside so I would not put any money on them fetching the asking price.

I found about a dozen of these 2001/2002 rollbacks without looking too hard. Makes you wonder just how far back the prices will go.

Realtard of the week

This week's Realtard of te week goes to Gail Copley of Evergreen Realty for the listing at

22997 Banbury CTMurrieta, CA 92562. This home is a nice 3700/sf 3 bedroom, 3.5 bath sitting on the 11th tee of Bear Creek Country club. Sales Price $1,029,000

Here's the listing description,

"Price reduced $100,000. This is the best deal in Bear Creek! Beautiful S. Story on 11th tee. Great lake , fairway and mnt. views. 3 fireplaces, sitting rm. in master, casita, custom cabinets, covered patio w/ viking bbq, refr. . Beautiful landscaping with many trees, fountains, firepit and more. Complete sprinkler and outdoor lighting systems. Over 30 trees, block walls, and a lot of grassy areas. Rear yard faces west."

Now most of this is not that bad by Realtor standards. But there are a few obvious realtardisms in there. Who else would abbreviate room (rm) or single (S). Commas, periods, slash marks and exclamation points galore. Caps in odd places. A lot of grassy areas..wtf, it's on a golf course, duh. But none of those are enough to qualify as realtard of the week. The line that clinches her the title is the second one "the best deal in Bear Creek!"

The "Best deal in Bear Creek"? really. So how far do we have to look to find a better deal?
Well, how about RIGHT NEXT DOOR!

22991 Banbury CT, Murrieta, CA 92562 This home is 3667/sf, 4 bedroom and 3.5 bath. From the pictures it looks to have a much nicer kitchen than home 1. It also sits on the 11th tee box of the golf course and the lot size is about the same. Listing Price, $699,000

I might have cut her some slack if this home had just come on the market but it's been listed for 3 months. It's been $300k less the whole time. Interestingly this home is actually priced quite well. Yes, it's expensive but it's a big house on a big lot on a private country club. It sold new in 2001 for $500k. At $700k that only works out to an annual increase of just under 6%. Slightly more than the typical rate of 4% but still within reason. This one's probably a steal if you can get it for $600k.

back to Oh-3

When the crash started I though prices would drop back to 2003 levels. I may have been too optimistic. We are not even a year into the IE's crash and already it's not too difficult to find homes priced at 03 levels. These homes are primarily in the less desireable areas but they are moving closer to the core areas of the IE. Here's a few I plucked from redfin today.

15260 WASHINGTON, Lake Elsinore, CA 92530 this is a newer home on the north end of Elsinore. It's listed as a short sale so the bank may not go for the price. They bought it new in 2003 for $350k. They have obviously spent some money on this home, putting in a pool, patio, bbq and landscaping it. All that does not seem to matter and they have put the old ranch on the market as a short sale for $319k. $35k less than they paid 4 years ago and that does not factor in the cost of the pool and other upgrades. That's gotta sting a little, eh?

10481 Whitecrown Corona, CA 92883. This south Corona home was purchased in 2003 for $407k, sold in 2006 for $660 (for a very healthy profit, lucky seller). Unfortunately this buyer did not see the returns of the last one. Another sale was posted in June for $558k, I think this was probably the bank taking it back. If so it would have to be a 1st payment default. It's now listed for $399,900. $7k Less than the 03 price and $260k less than the 06 sales price. That's a 40% loss in ONE year!




Here's another 40% yearly loss. this one is not an 03 rollback since it was only built in 2005. Originally it sold new for $371k in 2005. This guys flips in in 06 for $485k making a quick $100k!, No bubble here folks, nothing to see, move along.... Unfortunately for the buyer history did not repeat itself. It does not indicate this is a REO or a short sale. If it isn't the poor owner is heading for the exits $186k poorer. $186k is a lot to spend to live in MoVal for a year and 4 months.

38265 Placer Creek, Murrieta, CA 92562, this one sold new in 2001 for $239k, again in Dec 2003 for $405k and the last record is in July for $517k. My guess is that would be the bank taking it back. It's now listed for $369k.

2003 rollbacks are easy to find, how long before 2002 rollbacks?