Centex getting a clue in Riverside

[golfproz]

A few months back me and the wife stopped at a Centex development in Riverside. The prices were high like all the other places. They started in the mid $500s and went into the high $700s. I picked up a price sheet and put it into my notebook. So far prices up in Riverside have been holding up. A few builders have made some small cuts and one KB development slashed them pretty good, but over all builders have been clinging to their prices. Well today I went to the Centex website to see how the prices were holding up. Wow was I shocked. These things have taken a dive in price.

For instance the 4303 model Hawksbury is listed in the brochure I have (from May) at $769,990…..
New price on the website…..ready for this…. $599,990. That’s a 22% drop and puts this model at $140 sq/ft.

Plan 4, 3931 of the Ardenwood homes was $645,990 and is now $499,990. Again that’s about a 22% drop. That puts this one at $127 sq/ft! Not too bad.

There are about 15 models in this development and all of them have similar price drops. Looks like Centex is getting the message. These are in a pretty decent area of Riverside (Woodcrest). I still think they need to drop some more (another 15-20%) but this is a nice start.

[luchabee]

My wife and I recently walked through a neighborhood in Riverwalk (Pierce street), near La Sierra University in Riverside. It’s a fairly new community (five years old?) and we couldn’t believe the number of homes for sale.

Here’s a map from refin (not sure if it will show up):
http://www.redfin.com/stingray/do/listings-search#residential=true&condo=true&min_price=&max_price=&num_beds=&num_baths=&time_on_market_range=-&min_listing_approx_size=&max_listing_approx_size=&sold_within_months=0&min_parcel_size=&max_parcel_size=&min_year_built=&max_year_built=&status=1&lat=33.909700373974346&long=-117.48926281929017&zoomLevel=16&disp_mode=B&market=socal

It seemed like every other house was for sale, including a bank owned home. After this, I drove my brother through the neighborhood and he commented about all the homes for sale and he doesn’t even follow real estate. Looks like the I.E. will likely be ground zero for most of this.

[JWM in SD]

Lots of disparity in those prices per sq/ft. Are these sellers idiots or are they ignorant to the fact that people can look these prices up online now???

[bsrsharma]

$127 sq/ft! Not too bad.

Are these really nice homes or bare bones shacks needing a lot of "upgrades" before you can live there?

If you see these in SD area, that should be time to jump in.

[golfproz]

These were actually decent homes. Most of the floorplans were well layed out. They were not “high end” but they were not stripped either. They came with granite counters in the kitchen and decent appliances. The cabinets were not too bad looking. I’m sure you could option them up quite a bit but the basic homes were fairly nice. I’m not saying run out and buy one but this clearly shows that the builders are getting the message.

[SD Realtor]

Golfproz that is good to see. Inland Empire is not my domain by any means but I believe in a years time another 22% drop is not out of the question. As areas that are closer proximity to L.A. start to fall off, the outlying regions will experience even more price pressure. Also correct me if I am wrong but the foreclosure rate in the IE is way up there as well isn’t it?

SD Realtor

[golfproz]

The foreclosure rate is off the chart. It seems to be primarily concentrated in pockets of the newer developments. If you drive through tracts that were built in 2002-2006 there are for sale signs everywhere (Who ever makes those signs has got to be making a killing!). Now with the newer homes dropping the prices those sellers are done.

Another tract that had a big price drop was the Bridgeport by KB. Those dropped nearly 20% a few months ago. The tract that I like (Stellan Ridge) has also dropped over $200K in the last few months (started at 1.2M). It’s still way too high though, but then again it’s in the “beverly hills” of Riverside so I’m not holding out much hope of those falling to $500K

[vizcaya]

Very good price drop for those homes. I am very familiar with those areas in Riverside. The only downside on those homes is the property Taxes(approx 2 percent). But with most new developments this is to be expected.

In Riverside the best areas are Orangecrest, Woodcrest, Canyon Crest, and areas around Victoria. I have found that only a small number of listings are bank repos in these areas as of right now. If you can find a Bank owned home in this area, banks are accepting bids a lot lower than what the asking price is.
My situation has led me to purchase one of the few but better bank owned homes in Orangecrest. 2460sqft, 4 bed 3 bath, 9000sqft lot, pool, spa, 3 car garage, low tax rate (1.15). Comparable comp same house with pool, down the street just sold for $515k in May 2007. At the peak of the market(2005) this comparable home with a pool sold for $560k. Using these numbers, I am purchasing this home at $140k off peak, or a 33% drop.
Everyones situation is different, and if you can afford to wait it out then do it. I wouldn’t suggest purchasing until 2009. Do as I say, not as I do.

[bsrsharma]

Do as I say, not as I do.

Golden words in your case! That $127 right away puts your $420K purchase at around $312K ballpark. That is a $100K decrease in first (or second) innings.

[golfproz]

The tax rate does blow at most of the newer developments. 1.8% seems to be about average. Stellan Ridge is the lowest I’ve found at 1.05% but the prices of that development start at $870k (down from 1.1M). I like the Bridle Creek homes too but they have not budged on their prices yet (and 1.7% tax on these). I’ve given the sales rep a hard time on a couple of occasions but he insists they are not going top lower the prices. He’s freakin delusional, they have 3 homes from the last phase they’ve been trying to unload since January at $100k off. There’s also one bank repo the I know of in that tract. Those homes sit on min 1-acre lots so I expect them to fetch a premium over homes like the Centex ones. I’ll see how those homes are prices next winter after they’ve been sitting on them for 6 months.

[luchabee]

I’m able to work from home and am new to the Inland Empire, having moved from San Francisco. (Wow. What a change!)

My wife and I have total flexibility in our locations. Anyone know about home prices in Yucaipa, Redlands, Beaumont, etc.? I see lots of new homes sitting out there. Ultimately, we would like to buy in a few years. However, I’m afraid if timed the market too well (and purchased at the bottom) these neighborhoods will be crime-ridden with a lot of the “middle-class” evaporating. Anyone have any experience out there in the sticks? Redlands is very nice near downtown, but the other communities seem to have some sketchy areas.

Any information on taxes, too, would be great.

[golfproz]

Beaumont and Yucaipa have never been considered very nice towns. Redlands however is one of the best in the IE. Beaumont is gonna tank hard and Yucaipa probably will too. Redlands will probably do better but it’s gonna see drops. Most of the newer homes in Redlands are 2x to 3x the price of a Beaumont or Yucaipa home. If you can afford Redlands move there, I’de avoid the other two. They have a lot of new homes that are nice but those are also the areas that will get pummled with foreclosures. Once that happens those areas will probably start to deteriorate.

[jabrwoki]

Not only is SoCal/IE region affected by these Centex price cuts they are the following the same formula to push sales here in NorCal (Contra Costa county) as well. Recently they are offering upto 15% price cuts on a single day sale. That figure amounts to ~ $200k on their million ($1.2 mil) plus homes here in San Ramon ! Its about time !! Wonder what the folks who bought last month think about this. Centex may have offer apologies a la Steve Jobs and credits for future home purchases.

[former SoCal]

Former Socal

I grew up in Redlands and my mom finally sold our family home 2 years ago. It’s a great community. I took my kids for a neighborhood walk on a visit before my mom sold. No one knew me after all I moved out when I went to college. The neighbors invited us into their backyard for a tour, gave us some fruit because their son went to high school the same time as 1 of my siblings.

Since then I’ve lived in Yorba Linda, Irvine and now the bay area. I never had that same sense of community and friendliness in any other place. But it’s HOT there and the smog in the 70’s when I was growing up was awful. It’s much better now but still smoggy. I plan to retire back to Southern California (someday) but not Redlands because of the heat.

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