Has Santa Ana or Riverside seen the worst yet?

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financeguy_IHB

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The consensus on this blog is that housing prices will go down in the next year or two due to the mounting wave of foreclosures. I was wondering if this applies to the already hard hit areas such as Santa Ana or Riverside. I am toying with the idea of buying an investment property (SFR) in a really cheap area and renting it out. Any advice?
 
Riverside & Santa Ana are at the bottom or 5% from it. A lot of the properties are already at the cost of construction. Although they are at the bottom, you will not see price appreciation for long long years.
 
Somebody in the mass media is floating "seven million homes" as phantom or phantom-in-waiting inventory. If even half that number comes to pass, prices will fall far below the cost of construction.



BTW, you can build in the IE or Bakersfield for $80 a foot - $110 for a super premium builder and fancy materials. Why is it so expensive in OC to build? Makes no sense...
 
It is hard for me to believe Santa Ana doesn't have a good amount left to fall when seeing these:



<img src="http://i34.tinypic.com/rtn90o.jpg" alt="" />



<img src="http://i36.tinypic.com/fnhgk3.jpg" alt="" />



<img src="http://i35.tinypic.com/orv24w.jpg" alt="" />



Keep in mind the 1st and 2nd photos are only showing 500 when there are over 1,000 in each stage.



I could post Riverside if needed but from a quick eyeball test it looks like it has over 2x in each stage as Santa Ana
 
I would have thought Riverside was within 10% of bottom until I saw those foreclosure Radar maps.

Viva Lo Rojo!
 
Riverside county has areas that are probably at or near bottom, but Riverside proper has an unsustainable premium compared to those areas. See this <a href="http://housing-kaboom.blogspot.com/2009/09/sales-by-zip-code.html">Housing Kaboom</a> thread on Riverside vs. Moreno Valley.
 
Riverside is at the bottom, probably past it. Low end inventory is insanely low; less than one quarter as much as it was when I was looking in April. I started making notes on the inventory of houses within city limits priced below $175k, excluding short sales and under contract, on Redfin, starting at the beginning of April. The number has been dropping since I started doing this. On April 3rd, it was 337. That was the highest number I recorded. Today, there's only 78 houses that meet those parameters. Redfin also shows that prices bottomed in mid-May and stayed there until mid-August, at prices between $111 and $113 a square foot. Prices are now at $122/sq ft and climbing.
 
[quote author="FairEconomist" date=1254245319]Riverside county has areas that are probably at or near bottom, but Riverside proper has an unsustainable premium compared to those areas. See this <a href="http://housing-kaboom.blogspot.com/2009/09/sales-by-zip-code.html">Housing Kaboom</a> thread on Riverside vs. Moreno Valley.</blockquote>


No, Riverside deserves a significant premium over Moreno Valley-always has had such, always will. For one, it's a nicer city, IMHO. But the bigger deal is distance to jobs. It is possible to commute from Riverside to Orange County. Rather unpleasant, but it can be done. One would commit suicide if you tried to do the same from Moreno Valley; there's at least an extra half hour each way, possibly an extra hour. Plus, there are a fair number of jobs, plus several major universities (most notably UCR) in Riverside itself; there's basically nothing in Moreno Valley, other than the downsized March Air Reserve base.



Likewise, Corona gets, and deserves, a significant premium over Riverside, due to it being even closer to Orange County. Also, Moreno Valley has a premium over places like Banning or Hemet. The further out in the desert, the lower the prices.
 
According to Foreclosure Radar, there are 932 REO in the city of Riverside.

There are 2398 properties with a Notice of Trustee Sale.

There are 2183 properties with a Notice of Default.
 
[quote author="Geotpf" date=1254261842]Riverside is at the <strong>bottom</strong>, probably <strong>past it</strong>.

</blockquote>


bot-tom

?noun 1. the lowest or deepest part of anything, as distinguished from the top: the bottom of a hill; the bottom of a page.



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>



Sorry, I couldn't help myself.
 
[quote author="caycifish" date=1254265617][quote author="Geotpf" date=1254261842]Riverside is at the <strong>bottom</strong>, probably <strong>past it</strong>.

</blockquote>


bot-tom

?noun 1. the lowest or deepest part of anything, as distinguished from the top: the bottom of a hill; the bottom of a page.



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>



Sorry, I couldn't help myself.</blockquote>


If you climb down to the bottom of a valley, and then keep going, climbing back up, you have gone past the bottom...
 
If you drop a dead cat off the top of a 50 story building and it hits a window ledge on the 30th floor, the dead cat will bounce up for a second, but after that second it will continue on its drop.
 
[quote author="awgee" date=1254265220]According to Foreclosure Radar, there are 932 REO in the city of Riverside.

There are 2398 properties with a Notice of Trustee Sale.

There are 2183 properties with a Notice of Default.</blockquote>


According to Redfin, there are only 461 properties of all sorts currently listed for sale in the city (not including commercial properties that Redfin doesn't track, or vacant land which Redfin does track (140 for sale)).



If I understand how Foreclosure Radar works correctly, the "bank owned" category just lists all properties that the bank has taken back in the last 120 days, but doesn't try and check to see if those properties have been sold by the bank, or at least listed for sale, in the mean time. So, 932 divided by 4, that's 233 a month. Housing Kaboom says 527 houses sold in August overall. So, if one assumes that REO sales are about half of all sales in Riverside (that's just a guess), that would mean REOs are being sold at about the same pace as the banks are foreclosing on them.



<a href="http://www.foreclosureradar.com/faq/why-does-your-site-indicate-there-are-less-opportunities-other-sites">FAQ at Foreclosure Radar</a>



<i>Similarly, we only include Bank Owned opportunities for 120 days after the auction, as the bank will have likely listed the property in the MLS by that point. If you want to lookup properties over 120 days, you can still search our historical data.</i>



Is there a source that shows how many REOs are actually sold during a given time period?
 
[quote author="Geotpf" date=1254270127]



Is there a source that shows how many REOs are actually sold during a given time period?</blockquote>


If I look up the REO sales on the MLS trending for the past months within the city of Riverside, will you two please stop with the dropping of cats?
 
[quote author="IrvineRealtor" date=1254270402][quote author="Geotpf" date=1254270127]



Is there a source that shows how many REOs are actually sold during a given time period?</blockquote>


If I look up the REO sales on the MLS trending for the past months within the city of Riverside, will you two please stop with the dropping of cats?</blockquote>


That would be very nice of you. :)
 
[quote author="IrvineRealtor" date=1254270402][quote author="Geotpf" date=1254270127]



Is there a source that shows how many REOs are actually sold during a given time period?</blockquote>


If I look up the REO sales on the MLS trending for the past months within the city of Riverside, will you two please stop with the dropping of cats?</blockquote>


No, every time he takes reality out of context to fit his fantasy, I will be happy to expose the fallacy of his thinking.
 
[quote author="awgee" date=1254273545][quote author="IrvineRealtor" date=1254270402][quote author="Geotpf" date=1254270127]



Is there a source that shows how many REOs are actually sold during a given time period?</blockquote>


If I look up the REO sales on the MLS trending for the past months within the city of Riverside, will you two please stop with the dropping of cats?</blockquote>


No, every time he takes reality out of context to fit his fantasy, I will be happy to expose the fallacy of his thinking.</blockquote>


And I will come in to back you up with another dose of reality.
 
[quote author="Geotpf" date=1254273314][quote author="IrvineRealtor" date=1254270402][quote author="Geotpf" date=1254270127]



Is there a source that shows how many REOs are actually sold during a given time period?</blockquote>


If I look up the REO sales on the MLS trending for the past months within the city of Riverside, will you two please stop with the dropping of cats?</blockquote>


That would be very nice of you. :)</blockquote>


Riverside OREOs

Month - # - total sales - % of total sales

Jan08 - 25 - 172 - 14.5%

Feb08 - 23 - 107 - 21.5%

Mar08 - 55 - 219 - 25.1%

Apr08 - 82 - 230 - 35.7%

May08 - 134 - 318 - 42.1%

Jun08 - 188 - 398 - 47.2%

Jul08 - 225 - 417 - 54.0%

Aug08 - 235 - 464 - 50.6%

Sept08 - 269 - 484 - 55.6%

Oct08 - 279 - 495 - 56.4%

Nov08 - 262 - 420 - 62.4%

Dec08 - 298 - 494 - 60.3%

Jan09 - 284 - 425 - 66.8%

Feb09 - 259 - 367 - 70.6%

Mar09 - 471 - 594 - 79.3%

Apr09 - 380 - 499 - 76.2%

May09 - 360 - 497 - 72.4%

Jun09 - 421 - 584 - 72.1%

Jul09 - 343 - 535 - 64.1%

Aug09 - 285 - 487 - 58.5%

Sept09 - tba



<em>source - SoCalMLS</em>



-IR2
 
Geo - I have made you this offer a couple of times before and you have yet to take me up on it, but I will make it again.



Give me a zip code in Riverside, preferably yours but not necessarily, and pm me your email address and I will email you the FR list of REOs in that zip code. You can then use Redfin to see which are listed and I am fairly sure one of our professional realtors on this site will be kind enough to send you the list of properties in escrow. Using those two lists, you can see exactly how many REOs are not already sold without having to use any assumptions or estimations. Whaddaya say?
 
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