Dellusion sellers.... they still exist

Here's one of those listings that just makes you scratch your head and wonder of you read it right.

688 Sun Cup Circle is a 3400 s/f home on a 7000 s/f lot in McSweeney Farms, Hemet. It's way out on the South Eastern side of the city, behind Diamond Valley Lake. It was built as an Equestrian community with many of the lots being 1 acre (this home is on a small 7000 s/f lot). The community is fairly nice with a big clubhouse and horse trails. It was built right as the market started to tank. I haven't been out there in over a year so I don't even know if they built it out or not. If I had to guess I'de guess they didn't.

This particular house was bought new in Feb 07 for $383k. It went on the market in Dec 08 for $350k. Of course by then there was no hope of getting that in Hemet. Months went by and the price went down...down....down, finally getting to $205,777 (777 must be lucky). It stayed there for a while. Then I guess the owner started reading about the "green shoots" and the price started going up. First to $285,777 in March and now to $350, 777. It's now listed higher than it was in Dec 08.

How do you like those dining room chairs!

So what's it really worth? Well it's hard to say since there's been so few sales in this tract. There was one on the same street that sold back in Feb for $179k. It was a little smaller though. There are 3 nearby homes listed, one REO model match listed at $174k. It has been on the market since Aug 08! The other 2 are short sales listed for $150k and $179k. So going by the model match comp you have to assume the value is $180k tops. Since that home hasn't sold at that price it's probably less.

Now if you did want to spend $300k to live in this area you might rather look at 650 Newport. It's a large single story on a 1 acre lot. This home is beautiful inside. The kitchen is awesome. It sold new for $630k and is now listed as an REO for $304K. That's probably still a little high. It's been listed since May with no takers. More than 50% off and they still can't sell it. $250K ought to get it done for this house. I don't think they'll get over $300k for it with no landscaping.

Now that's a nice kitchen!

More foreclosure graphix

This came from the OC register from a post about "there's no second wave" because the first wave hasn't washed through yet.

You can see the NOD's (blue) are increasing with little change. They've been going up like homesick angel since 07. And this year the trajectory is only getting steeper despite the best (or worst) efforts of the government. NODs will probably continue to skyrocket. I suppose they will level off at some point once most of the upside down homeowners have received one. Most of the increase is due to job losses and those upside down homedebtors giving up. I wonder how much of it is due to people that can afford the payment but want to get a loan mod? So they stop making a few payments. If your credit is already bad and there's a chance of lowering your house payment its probably worth a shot.

The burgandy line is the NOTs, homes that are scheduled for foreclosure. You can see that it's been rising for the last few months after the lull we had around the holidays when the government put all those foreclosure freezes into effect. Most of those have expired now but there are still some games being played like the latest one in California that went into effect in June.

The yellow is the REO's, or the stuff the banks already own. You can see it is decreasing even though the NOTs are increasing. This isn't how it's supposed to work. It's like flooring your car and seeing the gas milage go up. Part of that widening gap is surely due to the fact that the banks are actually selling the REOs now that the prices have come down. But I'm sure an equally large part of the difference is due to the intervention of the govenrment. All the moritoriums, freezes and workout plans are having an effect. It's not going to change the eventual outcome in most of the cases where the NOT has been filed.

A whole year!

19126 Hawkhill Ave, in Perris was foreclosed on lat year, August 2008 to be exact. It's just now hitting the market! It took the lender a whole year to get this property on the market.

Now I don't know the particulars of this property. It could be that they were tied up evicting a renter or the previous debtor or some other problem. But regardless of what the problem was, a year seems like a awfully long time between when a foreclosure happens and the property hitting the market.

Now the price on the home isn't too bad. At $96 s/f you get a large single story on a half acre. Yes the address says Perris but it's not "really" Perris. This home is up near Lake Mathews. The problem is that this particular tract is a little too close to Mead Valley. And Mead Valley is the meth capitol of the IE. The home is nearly 3000 s/f it has 4 bedrooms and 2.5 baths. It was purchased new in early 2005 for $414k. Then flipped 4 months later for $555k. That's not a bad deal eh? $140k profit in 4 months.... The bank took it back in Aug 2008, tried to get $290k at the auction but there were no takers. Now they have it listed for $258k.

A bottom for prices??

There's been a few articles in the median lately about the bottom being here. The leveling off of prices and even a few increases are seen as an indication the bottom is in. It's nice marketing but I'm not sure anyone really believes it. Over at Piggingtons they put up a nice chart of the last real estate bust we suffered here in Cali. The chart shows the price declines from the early 90's bust. You can clearly see that there was a "spring bounce" pretty much every year. Even in 1993 which was the worst year of that bust there was a tiny increase in the spring. Those bumps did not stop the fall or indicate a bottom or a turnaround. All the articles spouting off about a bottom or a turn around are optimistic at best. Could it be the bottom? Sure it could, just as easily as it could be the half way point. We won't know when the bottom hits until years after it happens, and it's not going to hit every market at the same time.


The indicated points are the spring/summer increases in median for San Diego.