Thursday, February 01, 2007

California flipping sees a slight downturn

The New York Times
House flipping in California last year declined to its lowest level since 2003 as speculators retreated from a market in which sales plunged and prices flattened, a market tracker said recently.

Properties owned for six months or less accounted for just 3.2 percent of resales last year, down from 4.2 percent in 2005 and 3.6 percent in 2004, according to the San Juan Capistrano-based

Overall, flippers sold the properties for a median $45,000 more than they paid, somewhat lower than $52,000 in 2005. If there were improvement costs, profit would be correspondingly lower.
In 2003, when began tracking flipping, the practice of buying and then quickly selling a property, it accounted for 2.4 percent of resales.

The company tracked public records and considered a property flipped if it was owned for six months or less.

In Los Angeles County, flipping accounted for 3.6 percent of sales last year, versus 4.4 percent in 2005.

This level of activity is not surprising because sales last year were well under the 2005 level. Prices, though, have not plunged because the economy is still growing, albeit at a modest pace.
“What’s happened now is the flipping activity is just reflective of today’s real estate climate,” said Steve Morgan, the company’s senior vice president.

“Investors, if they can, have adopted a buy-and-hold strategy until prices come back up.”
And if prices don’t start rising some owners will be forced to sell and cut their losses, he said.
Flipping was highest in Kern (4.7 percent) and Riverside (4.3 percent) counties last year, and lowest in Napa County (1.9 percent) and in rural Sierra foothill counties (2 percent).

Chula Vista owner facing over $130K loss

Listing Information (click to enlarge):

Previous Sale Info:

I don't understand how a person purchasing a home in 1) August 2005 2) in Chula Vista 3) for $900K and 4) ~$350 per month in fees, thought a profit could be made.
Thats not exactly a recipe that calls out to me. I don't even think he would have made a profit if the home was in La Jolla.
The builders were making a killing, I remember a house like this in 2000 would cost about $300K. Amazing.........

Tuesday, January 30, 2007

Rancho Bernardo home under 2005 price

Listing Details: (click to enlarge)

Previous Sale Details:

Owner is looking at a minimum $90K loss here. Purchased almost 2 years ago for $589K this home has depreciated at least 10% in 2 years and in my opinion still has a way to go. The current assessments and mello-roos totals $330 a month. If purchased at $539K with 20% down and a 30 year conventional loan (@6%) the monthly mortgage comes out to about $2,600. If you add property taxes @ 1.1% thats another $500 per month.
The bottomline is that you will purchase a 1600 sq ft home in congested Rancho Bernardo for a monthly payment of about $3,500 a month. If you add utilities, insurance and other expenses you are looking at $4,000 a month.
I'm sure people are waiting in line for this opportunity.
Don't forget to feed the kids.....

Monday, January 29, 2007

Scripps Ranch home under 2005 price

Listing Details (click to enlarge):

Previous Sale:

Originally listed for $751K this owner, like other owners now-a-days, has come to reality that his home is not worth what he paid for it, thus the new listing price. On the market now for a 113 days, and with a flood of new listings after the holidays, his situation is grim. Already looking at a $80K loss, he needs to cut the price at least another $50-100K or in a blink of an eye the $80K loss can potentially be over $200K.
With todays market, I personally would have a very difficult time offering more than $500K. But that is only my opinion, what do I know anyway.

California Foreclosure Activity Jumps Again

Click on link above or on picture to enlarge

We are looking a triple-digit increases in almost every county in California. This is going to be a very ugly ride down this slope, I am buying canned food and water already!

Carlsbad Owner suffers $120K loss from 2005 purchase

Listing Information (click to enlarge):

Sales History:

Carlsbad home was purchased in feb 2005, at the current listing price it represents a 11% decline. 2004 and 2005 purchasers will suffer the most in this market.

Sunday, January 28, 2007

Adjustable rates climbing...death to corrupt lenders

Copyright © 2007
Reprinted with permission


As Adjustable Rates keep moving up, the window for sleezy lenders to loan absurd loans to unquailfied individuals will close rendering the colapse of the San Diego real estate market. Currently the popular ARMs range from 4.5% to 5.4%, once we reach 6.5-7.5% we will see a saturated market, no quailfied buyers and desperate sellers. Hold on folks this should be quite a ride.

$150K loss in months for Spring Valley flipper

Listing Information: (click to enlarge)

Sales Infromation: (click to enlarge)

Purchased for about $800K in 5/2006 this flipper faces a minimum of a $150K loss. We warned you not to buy, and you did not listen.