Tuesday, May 27, 2008

Case Shiller Updated to March 2008

I am plotting here the graph for LA based on Case shiller updated to March 2008 with additional two projections. I want to know which one makes more sense to you.

The Blue line is the current S&P Case shiller for LA updated to March 2008
The Pink line is my prediction of house prices behavior from now to about 2012
The yellow line is the housing Bulls prediction of house prices behavior from now to about 2012

The pink line assumes that the unavailability of stated income loans, Option ARMS and stated second mortgages will simply decrease the number of qualified buyers to such a point where over correction would occur, then after getting to some support level by wages, market will flatten and start increasing at the rate of inflation.

The yellow line assumes we have hit bottom, and are going to be flat or start appreciating again....

Now, you tell me, who do you think is right?

Sunday, May 25, 2008

Fraud in Day Light

This is an update to my post back from Saturday, March 29, 2008.
Well, the house was put on the MLS for sale asking $725,000. I called on the second day to the listing agent and was told that the house is in escrow....
The seller (flipper) slapped a coat of paint to the house and was thinking to flip it. So I was thinking that there is now way to sell this painted leaking roof shack for more than what he bought it from the bank just in January for $500,000.
Surprise! I just checked public records and found that indeed a sale was done and a buyer got it for $700,000.
From my good knowledge of the area, there is absolutely no way that a legit appraiser will give $700,000 to this place. There is no chance that any crazy bank will give a loan for this amount unless of course there is some serious down payment. Similar houses in the area are selling for $500,000 range.
Check out websites such as propertyshark.com to find the owner's name.
So far, i haven't seen anyone moving in...the house is still vacant.
My bet, is that this is a straw buyer that does not exist and that the poor bank got jacked. The flipper managed to bailout of the shack with some nice cash...Amazing, only in the US of A.
Give it 4-6 months, and we are going to see a fresh NOD on this one.
And if the bank's people are reading this...look no other place, the robber is the seller, go after him!


5316 Mecca Ave Tarzana, CA 91356

This one is a tail about a bank, "US Bank", that is in denial, acting very slow and basically losing money as we speak. The listing description is simply a killer. The bank/agent claims that there are multiple offers for this amazing property and that last best offer need be submitted by...
3-11-08 AT 9:00 A.M.
Well, we are more than two months after...and what happened to those multiple offers???? NOT EVEN ONE!
Here is the full description from the listing:
*** THIS PROPERTY IS IN MULTIPLE OFFERS, IF YOU CHOOSE TO WRITE AN OFFER, PLEASE CALL FOR FORMS, DEADLINE FOR ALL 'HIGHEST & BEST' OFFERS IS TUESDAY, 03-11-08 AT 9:00 A.M. - THANK YOU! *** REO Blow out! REDUCED!!! S of Ventura, 3+2+Fam rm, Hardwd, Fp's; great master, sliding glass to pool! Some copper, newer electric, Seller crediting $10,000 for Buyer Closing Costs,Direct entry 2 car garage; gated parking; 2 car att gar; cent air/ht; Breakfat rm, open kitchen; Great newer home with old style craftsman - work. A fantastic Value. Covered patio, Just Reduced and incentives added; This is your chande!!! Step-down dining area. Paver tile flooring, wet bar. Some dual Pane windows. Vaulted ceilings. Pool, spa, Rear bedroom with own separate bath with dressing area and separate tub and shower. 2 car attached garage with direct access to house. Separate laundry room. ***Reduced with Bonus and Seller incentives to buyer and buyer's agents!!! Go Quickly, now's the time!!!
The bank took this house back for $852,129 back in May 2007, it is already a year and they still hold it...
Here is the History of asking prices:
Aug 18, 2007 $985,000
Sep 12, 2007 $965,000
Nov 10, 2007 $920,000
Nov 22, 2007 $895,000
Dec 08, 2007 $870,000
Jan 15, 2008 $820,000
Jan 29, 2008 $799,000
Jan 30, 2008 $790,000
May 23, 2008 $744,900
As of August 1, 2008 Asking price is $690,000

Zillow zestimates it at: $937,000. My only advice to the bank is to sell the house to zillow...and my advice to zillow is to correct their wishing price to actual market price. (somewhere in the $600,000 for that area)
zillow zestimate is now at $832,000 I guess they corrected by $100,000 in about 90 days....
They have another $200,000 to go....

Smoking Crack Seller

5511 FALLBROOK Ave Woodland Hills, CA 91367
3 Bedrooms, 2 Bath 1700 sf on a 7800 sf lot.

Asking Price: $799,000 that is $467 per sf
Now asking $610,000
Value is around $400,000 and dropping...

This seller is smoking crack, the house description is hilarious.
As always, the asking price is a result of a flipper getting stuck by buying at the peak and getting the worst timing doing that...
Sales History:
Sep 10, 1997 $157,500
Sep 30, 1998 $205,000
Sep 22, 2005 $620,000

similar houses are at that area are selling for 2003-2004 prices, that means that this house value today is about $420,000-470,000, while the owner is asking for almost double....
Zillow zestimate it at $549,500. Pay attention to they latest ranges, for this one it is $467,075 as low and $604,450 as high.

For reference here is a similar house practically next door.
5611 FALLBROOK AVENUE, Woodland Hills, CA 91367
3 Bedroom, 3 bath, 1700 sf, on a 7800 sf lot.

Asking price: $455,000 that is $271 per sf
$432,000 (08/05/2008)