Finally some evidence the banks are slashing repo prices

[temeculaguy]

I have just started to see some of the repos take drastic actions on pricing. I know they are in Temecula and you may not have seen evidence of this in your areas but it does represent bank owned properties taking some serious cuts and since these banks often own properties all over So Cal, they may introduce similar actions in other areas soon. Recently the repos were priced almost in line with the other resales.

I found a bunch of them recently, this is a prime example. Same Street, Same model, Same color. Both sold in March of 2005, esentially the same lot, one is larger but the excess is slope.

Property A sold for 563k 03/06 and is bank owned (although they call it corporate owned, the latest euphamism) and is was reduced last week to 512k.

Property B sold for 485k 03/06 and is listed by the owner at 640k, good luck with that.

Nice little 125k undercut, the bank should have sent flowers and condolences to Prop B’s owner. I found some other examples that have just started to pop up but chose these two because they are almost identical houses on the same side of the street and about six lots from each other.

Prop A http://www.redfin.com/stingray/do/printable-listing?listing-id=581763

Prop B http://www.redfin.com/stingray/do/printable-listing?listing-id=665693

[temeculaguy]

Typo above, both properties were last sold 03/05 not 03/06, sorry.

[temeculaguy]

Typo above, both properties were last sold 03/05 not 03/06, sorry.

[Bugs]

It was never a question of “IF”, but of “WHEN”.

[Bugs]

It was never a question of “IF”, but of “WHEN”.

[PD]

I think the banks have held their breath as long as they could.

[PD]

I think the banks have held their breath as long as they could.

[bobby]

funny. all the specs are the same except one says 5BR and the other 4BR.
different neighborhoods may account for price difference.

[bobby]

funny. all the specs are the same except one says 5BR and the other 4BR.
different neighborhoods may account for price difference.

[El Jefe]

I think that we are still some time away from seeing reel price reductions on bank owned properties. At the moment all the banks are still flushed with cash and the forclosures are just starting to come in mass. The last thing that the banks want to do is destroy their own pricing power, and will do everything possible to avoid price reductions and flooding the market. Eevntually, the banks will run out of free cash and will be forced to move property off their books quickly, but I don’t see that happening until the banks have to start cancelling yearly bonuses for the C*O’s to bolster their capital reserves. Likely FY08 at the earliest.

[El Jefe]

I think that we are still some time away from seeing reel price reductions on bank owned properties. At the moment all the banks are still flushed with cash and the forclosures are just starting to come in mass. The last thing that the banks want to do is destroy their own pricing power, and will do everything possible to avoid price reductions and flooding the market. Eevntually, the banks will run out of free cash and will be forced to move property off their books quickly, but I don’t see that happening until the banks have to start cancelling yearly bonuses for the C*O’s to bolster their capital reserves. Likely FY08 at the earliest.

[NotCranky]

HOORAY, HOORAY,HOORAY, Please let it be true(insert deity name here)http://lowchensaustralia.com/names/gods.htm

Temecula Guy: No offense to you with that little joke.I am really impressed with your posts of the last two weeks. you area very versatile individual it appears.

The most extreme REO slash I have seen so far was a 16 acre property in Boulevard that sold with a brand new maufactured home in 2005 for 440k. It just closed for 312K(29%). I think areas like City Heights and Encanto will be the first in the city to get hit like that.Numerous detached SFR’s will get into the 200’s at that point. Not a great place to live IMO but that’s a start. Any of those inner city areas that didn’t gentrify will add mass to the snowball, and it will spread like that perhaps? I really expect to see a big discounts in those areas any day now. I did a random search of one of them and the first three properties were REO.I should have done it until I got one that wasn’t. It would have been a desperation flip I bet.
Best wishes.

[NotCranky]

HOORAY, HOORAY,HOORAY, Please let it be true(insert deity name here)http://lowchensaustralia.com/names/gods.htm

Temecula Guy: No offense to you with that little joke.I am really impressed with your posts of the last two weeks. you area very versatile individual it appears.

The most extreme REO slash I have seen so far was a 16 acre property in Boulevard that sold with a brand new maufactured home in 2005 for 440k. It just closed for 312K(29%). I think areas like City Heights and Encanto will be the first in the city to get hit like that.Numerous detached SFR’s will get into the 200’s at that point. Not a great place to live IMO but that’s a start. Any of those inner city areas that didn’t gentrify will add mass to the snowball, and it will spread like that perhaps? I really expect to see a big discounts in those areas any day now. I did a random search of one of them and the first three properties were REO.I should have done it until I got one that wasn’t. It would have been a desperation flip I bet.
Best wishes.

[temeculaguy]

Bobby, they are on the same street, only about five or six houses from each other, so it’s the same neighborhood. It is the same model and sq ft, often times you can have rooms made into offices or two into one large room, I’m sure that’s the reason one is a 5 and the other a 4.

Bugs and PD, I think you are both right. They can’t hold on forever and they can’t expect the prices to rise as the lawns get browner.

Rustico, Thanks, I try.

Two more, same street, sq ft and model. The repo is priced 175k below the non repo. Granted the non reo has a cool pool but they have the same view, are about eight houses apart and of course the repo will need some sod. There were three repos on the street for about 550K each and a few owner occupied listed at about 700k each. I think this is evidence that the must sells are being forced to move prices, it’s almost July and if you aren’t getting any offers you are about to miss the summer selling season.

http://www.redfin.com/stingray/do/printable-listing?listing-id=672188

http://www.redfin.com/stingray/do/printable-listing?listing-id=665761

[temeculaguy]

Bobby, they are on the same street, only about five or six houses from each other, so it’s the same neighborhood. It is the same model and sq ft, often times you can have rooms made into offices or two into one large room, I’m sure that’s the reason one is a 5 and the other a 4.

Bugs and PD, I think you are both right. They can’t hold on forever and they can’t expect the prices to rise as the lawns get browner.

Rustico, Thanks, I try.

Two more, same street, sq ft and model. The repo is priced 175k below the non repo. Granted the non reo has a cool pool but they have the same view, are about eight houses apart and of course the repo will need some sod. There were three repos on the street for about 550K each and a few owner occupied listed at about 700k each. I think this is evidence that the must sells are being forced to move prices, it’s almost July and if you aren’t getting any offers you are about to miss the summer selling season.

http://www.redfin.com/stingray/do/printable-listing?listing-id=672188

http://www.redfin.com/stingray/do/printable-listing?listing-id=665761

[Author]

Posts