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Summary: Based on this data between the same time periods in 2009 vs. 2010 sales are down 31%.  In 2009 67% of the sales were REOs, in 2010 only 39% are REOs. Generally the short sales take the most days on the market to sell, and the Standard sales pull the highest prices per square foot.  Most of the listings now are short sales (including homes in foreclosure) and the REOs tend to sell the best. Read the rest of this entry »

Sketchers USA distribution center – south of the 60 freeway: between Theodore Street and Redlands Blvd – under construction

Read the rest of this entry »

10 Moreno Valley Homes Sold 3 Years Ago and What Happened to Them Since

23802 Parkland Avenue

1474sq’        built 1986    .11 acre lot

Sale History: 5/30/2006 $355,500 $241 per Sq’ 100% financing 7.35% ADJ
4/14/2009 $55,000 $37 per Sq’ as an REO
-$300,500 -$8586 per month

16605 Vista Conejo Drive Read the rest of this entry »

Affordability, Foreclosures, Inventory and Unemployment 5/20/2009

First Chart is showing what percentage of a population can afford the median priced home, in its area – for Riverside / San Bernardino Counties the lowest percent of families that could afford the median priced home was in the third quarter of 2006 at 18% – now in the first quarter of 2009 it is 65% of families that can afford the median priced home, which is superior to the National affordability rate of 64% for the first quarter of 2009.

affordability Read the rest of this entry »

March 2009 Moreno Valley Real Estate Prices down to January 2001 levels. Read the rest of this entry »

Moreno Valley Market Conditions: 10-10-2008

First chart is the median sales price for each August – from 1988 to 2008 from dqnews.com

Next chart is the median sales prices per square foot since January 2008

Read the rest of this entry »

Bayer Facts:  8/26/2008

First chart is the median sales prices for the 4 Moreno Valley zip codes for each July (between 1989 and 2008).  I think Magic Mountain is considering this new coaster design.

This is really painful to property owners in Moreno Valley!

The Murrieta (CA) Real Estate Scam

The accused: James B. Duncan, Hendrix Montecastro (a real estate broker), Maurice E. McLeod

Offense: violated Federal Securities Laws – seeking restitution for “ill-gotten gains”

Also Named: Pacific Wealth Management, Stonewood Consulting Inc and Total Return Fund LLC

The opportunity: Investors in Southern California, Arizona and elsewhere were invited to participate (invest) in the California Real Estate Boom.

The recruits: Military Personal, Filipino families and church members

The Scheme: The investors (recruits) were directed to purchase more than $118 million worth of homes (many in Murrieta).

The Fraud: Falsified loan applications allowed the investors to purchase multiple properties; inflated appraisals allowed excess mortgage proceeds to go to Duncan, Montecastro and / or McLeod.  Those excess fees was more then $100,000 on some transactions.  Investors were told the excess fees would be invested – and those investments would cover the mortgage payments on the properties the investors purchased in their own names, not covered by the rental income.

“Stonewood typically paid $50,000 to $100,000 more than the listed sales price for a house.  Sellers received their asking price and the remaining money went to Stonewood agents in the form of commissions.  The prices investors paid for the houses were justified by appraisals that Stonewood ordered.”

The Harm Done: Because the investors (recruits) often borrowed money from lines of credit, credit cards and retirement funds – in the end the money was gone the properties foreclosed and their credit ruined.  Lenders who made the loans based on false income and appraisals ended up with loans exceeding value and eventual foreclosures (any deception to a Federal Lending Institution is a Federal Offence).  And the perpetrators pocketed tons of cash (Montecastro was estimated to have pocketed millions).

Appraiser Advice to Investors

Line Up Financing First

Find out how much money you can borrow and what the payment will be.

Decide on the location where you will look for properties

Pick an area where you are familiar, or plan to spend significant time learning what is going on in that particular location and property types you are considering.

Bring Together Your Team

Lender – pick one who has been around awhile and is familiar with the area where you are considering purchasing properties.

Real Estate agent – only use local real estate agents and seek out ones that you can work with – who will always tell you the TRUTH.

Property Manager – again find a local property manager, who will help to determine a reasonable rent for a property you are considering.  Will pre-qualify a tenant, collect rent or evict a bad tenant; set up regular rent increases and take care of property problems – so you don’t have to.

Appraiser – get your own appraiser, the appraiser the lender will hire has the lender as his / her client – not you.  Use a local appraiser with over 10 years of experience (20 years would be even better), I recommend using an Appraisal Institute SRA designated appraiser (appraisalinstitute.org), if you can; and insist on an appraiser who will tell you the TRUTH.  In fact you might consult with an appraiser, before starting to look for a property.

Settle on Your Game Plan

Are you going to buy and hold for the cash flow?
Or
Buy and flip for profit

Questions to be Answered Before you buy

Are home prices going up or going down in the area or for the property type you are considering – and is the rate of increase or decrease speeding up or slowing down.

What is the inventory of homes for sale (has it been going up or going down) and what is the rate of sales.  If there are 100 homes listed for sale and they are (now) selling at a rate of 10 per month – you would have an inventory of 10 months.  If last year (in the same time frame) there were 50 homes listed for sale and selling at a rate of 25 per month (= 2 months of inventory) you can see market conditions are getting worse.  If the reverse (fewer homes for sale and selling faster) conditions are improving – especially if prices are moving up.

Is there a problem with foreclosure in your market area or many homes selling Vacant?

Are there problems with the local job market?

What is the affordability ratio: the percentage of residents who can afford the median priced home, if below 20% there could be a problem, especially if the ratio is dropping?

What is the potential rent for a property under consideration and does that rent justify the purchase price (down payment, rehab costs and mortgage payments) especially in a market where home prices are not currently going up.

Beverly A. Bayer, SRA
Moreno Valley Appraiser: 951 247-3674
www.AppraisingMorenoValley.com
MVappraiser@yahoo.com

Bayer Facts: April 30, 2008

First chart is Moreno Valley median sales prices from DataQuick for March, June, September and December from the year 2000 to 2008 (March) – showing the rapid increase in median prices and the current decline. Prices have gone down in 1-year by zip code: 92551: 35.5% 92553: 49.3% 92555:  37.4% 92557:  36.8%

Next chart is the total number of home sales for March 2000 to March 2008 – showing the rise and decline in the number of sales.

DataQuick reports for all of California March 2008 reported the lowest number of home sales for a March since they started keeping records in 1988.  And 38.4% of the homes sold in the State in March were foreclosed homes.

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Next chart is the number of foreclosures for each of the Moreno Valley zip codes for the first quarter of 2007 and the first quarter of 2008 – showing the huge jump up.

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For the first quarter of 2008 – Stockton, California had the highest rate of homes in the foreclosure process at 1 house out of 30 – in second place is Riverside / San Bernardino Counties – with 1 house out of 38 affected.  For the 4 zip codes in Moreno Valley here is the following:

Zip code 92551 1 house out of 43 is in foreclosure – ranking 11 in the Southern California area

Zip code 92553 1 house out of 69 is in foreclosure – ranking 25 in the Southern California area

Zip code 92555 1 house out of 36 is in foreclosure – ranking 7 in the Southern California area

Zip code 92557 1 house out of 75 is in foreclosure – ranking 30 in the Southern California area

And there are 498 zip codes in the sample

This chart is for a 3 week period of single family homes in Moreno Valley by Notices of Default (the first step in the foreclosure process); number of new listings and the number of those new listings that are vacant; the number of pending sales and the number of those pending sales that were vacant; and the number of closed sales and the number of those that sold vacant.  43% of the new listings are priced under: $200,000.  The average list price of the pending sales was: $215,163 and the average price of the sold homes was: $233,896.  With the average home sold over 1900 square feet in size.

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Final chart is the median price per square foot for the closed sales / closed sales (vacant) / list prices of the pending sales and list prices of the pending sales the sold vacant.  Noting the pending are going out for less and there is a slight discount between prices of occupied homes and vacant homes.

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Until we see more sales then new listings and new notices of default – and more pending sales actually closing escrow – prices will not be able to start moving upward.  And the bigger the desperation of the sellers will probably result in a continued decline in home prices.  Prices now are down to the levels from the summer of 2003, and a decline of about 47% from the top of the market from the Summer of 2006.

From Beverly A. Bayer, SRA