Sunday, August 24, 2008

Chasing Down the market!

It is a known fact in team sport games like soccer or basketball that passing is much faster way to move the ball than dribbling.
The analogy to RE, is that if you chase down the market, you will never catch it. The fact is that you will get buried under the house or literally get foreclosed in today's market.
Here is a nice example of this:

5716 WILBUR AVENUE, Tarzana, CA 91356

Sales History:
Oct 17, 2000 $230,000
Sep 02, 2005 $699,000

Asking price history:
Feb 20, 2007 $749,950
Apr 22, 2007 $650,000
Jun 05, 2007 $595,000
Jul 21, 2007 $555,000
Aug 12, 2007 $545,000
Aug 21, 2007 $490,000
Nov 30, 2007 $489,000
Mar 26, 2008 $475,000
Mar 27, 2008 $465,000
Jun 10, 2008 $435,000
Aug 19, 2008 $405,000
off market
Relisted as new listing:
Sep 23, 2008 $395,000

This seller is trying to sell for the last year and a half...
He slashed his asking price from $750,000 down to $400,000. Almost 50% and still can sell.
Had he been not so greedy but more reasonable....Had he just wanted to sell and not chase down the market...
He could have sold it long ago...It is safe to assume he could have sold it for $600,000 in Feb-march 2007. (when loans were still given to anybody that can sign x and say his name...)

Saturday, August 23, 2008


Some have question me about finding half priced homes. I refer to those that sold recently for HALF the amount of the last sale price. is one to start with

5022 Don Pio Dr, Woodland Hills CA 91364

Here is the Sales history:

SOLD May 17, 1990 $311,000
SOLD Jun 10, 1993 $250,000
SOLD Mar 24, 1994 $190,000
SOLD Sep 30, 2003 $425,000
SOLD Dec 22, 2005 $615,000
SOLD Feb 23, 2006 $800,000
FORECLOSED May 11, 2007 $701,771
SOLD Jul 07, 2008 $410,000

So from 2006 to 2008 about two years, the house went from $800,000 to $410,000. To me that is 50% decline! or HALF PRICE.

Funny that i found that the bank once wanted
$549,000 but we all see they settled at $410,000

Here is another one that is about to join the list.

5327 Don Pio Dr. Woodland Hills, CA 91364

This is a common example of how far the loan owner was able to milk his lenders.
To our congress people like Senator Dodd and Frank, it looks like the poor homeowner just lost his house to foreclosure...
However, let me show you how this "poor" home owner just scored $200,000 cash tax free and is smiling everyday when he goes to his bank....

sales history:
Sold May 02, 1989 $290,000
Sold Apr 14, 1995 $185,000
Sold Jun 02, 2005 $655,500
Sold Oct 18, 2005 $746,000
Foreclosed Jun 03, 2008 $573,750

For Sale asking $459,900

SOLD !!!
Oct 14, 2008 Sold $450,000

What you don't see here is that in April 2007, the loan owner was able to get a $200,000 HELOC from City national bank.

The foreclosure occurred on his 1st mortgage was for
$596,500 and Bear Stearns foreclosed for $573750.
There was also a second mortgage for about $112,000 that got wiped out completely.
Add to that National city that was wiped out of $200,000.
If this house is for sale asking $459,900 and assuming it will sell for $400,000 (like many next door comps)
Bear sterns (JP Morgan chase) will lose $196,000 (probably more after sales commission something like $210,000)
Didn't the FED agreed to guarantee $30 Billion of Bear's assets...So I guess thie $210,000 is our (tax payers money...)
2nd mortgage $112,000 loss
National city HELOC $200,000 loss.

Foreclosed loan owner gain about $200,000 from his cash out HELOC, and only god knows how many months of free rent...