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...)

HALF PRICE

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.

So....here 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...

50% reductions in prime areas?

Wanted to see 50% reductions, check this out:

4388 Pampas Rd Woodland Hills, CA 91364

Sold new Dec 16, 2003 $699,000
Sold Jun 13, 2006 $1,500,000

Now offered for $750,000
Basic algebra skill say 1,500,000/750,000 = 2

==================================================================
Another interesting one:
19440 Shirley Ct Tarzana, CA 91356


Sold Sep 11, 1997 $590,000
Sold Apr 11, 2000 $700,000
Sold Sep 01, 2005 $1,350,000
Sold Sep 29, 2006 $1,700,000

Was offered couple weeks ago for $900,000.
That is 48% discount...almost half.

Updated Case Shiller index for LA to April 2008

So far my prediction is within +-3%. I did however corrected the housing bull prediction as i moved the yellow line down from their previous guesstimates. RE Bulls have been claiming every single month that we have reached bottom...
Yet we still falling down the slippery slope.
Enjoy the free ride!

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?

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!

REO Blow out! REDUCED!!! MULTIPLE OFFERS,

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

UPDATE:
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)
UPDATE:
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....