I happened to be in Twentynine Palms recently and checked out the real estate situation. There is a massive amount of empty 3/2 spec homes with the obligatory granite countertops. Land for sale signs are everywhere. I talked to a local realtor and asked her about the market. The following is part of our conversation:
“Have prices come down?” I asked.
“Yes, it is a buyer’s market.”
I lifted up a flyer for house with her picture on it. It was a brand new 3/2 home on an infill lot with a shack a few doors down. “This house is listed at $229,000. How much would you have asked for it during the peak?”
“Oh, about $295,000,” the realtor said. “There are some great bargains out there now.”
“So how much could you rent this house for?” I casually asked.
“Well, I don’t really handle rentals but I think you could get about $1,000 a month and maybe up to as much as $1,200,” she said, trying to impress me.
I nodded thoughtfully, hiding just how impressed I actually was. “How many homes are on the market right now?”
“About 300,” she said after a hesitation.
I accepted this silently but decided to follow up on ziprealty (actual number was close to 500). “How many months inventory is that?” I asked.
A frown had appeared on her forehead and her lips were starting to purse. It was beginning to dawn on her that I was not an easy mark.
“I really don’t know.”
I didn’t press her on it and just moved on to my next casual question. “So how big is Twentynine Palms? What is the population?”
“About 5,000, I think.” Out of all of her answers, I gave the most weight to this one as she claimed to have been a resident for 20 years.
I nodded, thinking of the very large number of military housing on the base and the fact that all of those people were not in the market for a house and could not really be counted as a substantial force in the demand.
Trying to reel me back in, she told me about how she had spent the entire morning showing developers land and giving them a tour of the town, pointing out the highlights.
Just before I had met her, I had observed her saying goodbye to these same developer moguls. I had been struck by how bad their teeth were, coupled by the absolute lack of sophistication in their dress and manner. Now I know that I sound a little snobby here, but they just did not strike me as savvy businessmen.
Sighing regretfully, I said, “I don’t know, it just doesn’t seem like it is a good time to buy here. I think prices are going to go down quite a bit more.”
This elicited an instant and fervent response from her. “Oh no! Prices are not going to go down any more! There is so much building going on here. All of these new houses are going to make prices go up!”
After my enlightening conversation with the local realtor, I drove around. While going down the street of one of the nicer neighborhoods with a lot of infill spec homes, I saw two police cars park behind another police car. About 9 officers with bullet proof vests piled out of the cars and headed, en masse, toward one of the houses. Most of them turned aggressively and looked at me as I drove by. It was quite the capper for my day!
Post your observations of other markets here. Does anybody have any recent info on Yuma?
Nice!!
I don't have much on yuma but we have very good friends in Havasu and it has just been a graveyard out there.
SD Realtor
“Oh no! Prices are not going to go down any more! There is so much building going on here. All of these new houses are going to make prices go up!”
What can an intelligent person say to something like that?
I had someone just this week telling me that "The Decider" is a pretty good president ...
As Jeff Foxworthy would say, "Here's your sign"
We lived in 29 Palms and Yucca Valley. We moved right before the "big boom" in real estate. The market was pretty dismal when we were there, but we heard about the run-up in prices and massive new construction from our military friends and saw a lot of new construction when we visited. The mantra was so many people wanted to live there and commute to jobs in Palm Springs. Yeah right. Seemed like speculation and easy money drove it like it did other boom markets. I don't have any hard details, but we hear Yuma is in the same situation.
Now we live between Barstow and Victorville. Pray for us - ha!The market here is close to dead. There has been a large amount of speculation, huge price increases since 2003, easy credit, incompetent or fraudulent appraisals, etc. All the things that have been talked about on Pigginton. There have been some substantial price decreases (20% range)with a few sales. In addition, we now have an influx of crime and I think it will only get worse as the housing situation fails to improve.
Aw, PD, say it isn't so; your husband not getting transferred to 29P, is he?
If you go, with JES and bgates gone, we'll be down to a just a few balanced conservative voices around here.
No, jg, we're not moving. My husband was working up there for the day and I went along. While he was busy, I checked out the town.
Article on Florida market. Apparently, 1.2 million Brits have homes in Florida. That's quite a few.
http://www.dailymail.co.uk/pages/live/ar...
Whew! Good to hear, PD. Get that Coronado home of your dreams in a few (okay, maybe five-to-seven) years!
Hey maybe the government could step in and buy those 69Palms homes and let the service people have / rent them. I'm against staying in Iraq and despise the current administration - but I think that the military gets the short end of the stick and it's a way to have some synergy going.
(I'm not saying pay the developers full price or bail them out - just get some of the inventory off the market and help out the troops.)
Yes - my understanding is that there are about 4 thousand Brit's who have gone completely upside-down on Florida condos. Even at the crazy prices when translated into Pounds they are a cheap bargain compared to London. Unfortunately they way over paid, pre-bought and are now in financial trouble (the vast majority).
I live in Corona and we have hundreds of bank owned homes for sale. It has been painful to watch the market here. Some of the banks are finally getting a reality check and have started lowering their prices. I have even seen some bank owned homes now with $150,000-200,000 drop in prices since they went on the market.
I have been in the market since January to purchase a home. While driving by looking at bank owned homes I happen to come across a KB development in South Corona. We stopped just to look at the models and my husband and I ended up purchasing a 3700 sq ft. home with $94,000 of upgrades for $582,000. KB is paying $10,000 closing cost and a 3% commission to our realtor. (We came back the next day with our realtor and bought)
There are only 30 homes in this development and KB (for some insane reason) is not advertising this development. Apparently, the homes were previously sold but KB had major problems with permits and some other problem that most people couldn't wait and ended up cancelling. Now they have these homes that are almost built with all upgrades that were chosen by the previous owners. We were not able to change anything. But I am not complaining. I love the upgrades.
We bought mainly for investment purposes. We were looking to upgrade from a 1700 sq ft. house to something a little larger around 2500-3000 but nothing that we looked at including the bank-owned homes came close to what we bought with the KB home.
For those in the market do your due diligence, be patient, drive around the deals are out there.
jan777, I'm a little confused here. You're seeing all the foreclosures in Corona and you bought a new KB house for investment purposes? How much do you think your new house will appreciate and when?
Our new house was less expensive than the bank owned homes we were looking at. Plus the builder is paying all of our closing costs. With that said, we sold our 1724 square foot house bought a 3700 square ft house and our monthly payment went up by $50.00. Originally our new house was selling for mid 700,000 about a year ago but kb ran into major permit issues and so the buyers cancelled. Not sure when or how much our new home will appreciate but we are getting a really nice house at a price we can afford.
I have to agree with PC, jan. Your logic seems a bit hypocritical. Chances are great that your new home will drop to below what you paid for it, and so will the Corona resales and foreclosures. Hopefully the increased taxes and energy costs don't kill you. Just one year into the decline, we have a long ways to go to hit bottom, let alone appreciate into anything resembling a decent investment.
The same thing is going on here in Temecula. I had a chance last week to buy a brand new 2800sqft single story, fully upgraded granite, stainless built-ins, home theater speakers installed, for $360k. Two weeks earlier they were trying to sell for $450k. 6 months ago, they were $550k. The sales women kept calling me, and then offered 10k towards closing costs. After talking it over, we decided to pass, they (and everyone else) still have a ton of homes to sell. This is just the beginning, I can only imagine the deals that they will be offering next summer.
matt, where was the 360k house, I haven't found any of the builders cutting below 400 for an sfr especially that size range in the city of Temecula, just Murrieta and French valley so far.
Not sure what you mean by hypocritical but the development we bought in only had 30 homes for sale and they have only 5-6 left to sell. They have sold about 20+ homes since January. These homes were originally preselling at the end of 2005 and they were starting in the high 600's with no upgrades. Since we bought in April some of the homes have actually gone up in price. When I said our monthly payment was only increasing by $50.00 a month that was including taxes and homeowners insurance. The house we sold had mello roos taxes and the new house doesn't have any. That offset the increase in taxes based on sales price.