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We touched on a(nother) foreclosure in Bressi Ranch, revisiting briefly the scene of the crime that Jenae and her cronies had left behind.  Once a neighborhood (and houses and agents in particular), have been tainted with scandal, home buyers don't want to touch them with a ten-foot pole.

A reader wanted an explanation as to why the 4,608 sf foreclosure on Arundel might list for only $995,000, as I suggested.  It's an aggressive price, admittedly, but if you are a lender and/or listing agent and you see the current work of Jenae, what would you do?  Here is her active listing of one of her victims - that's right, the buyers of this home listed with her to sell it!

6239 Lismore

4 br/3.5 ba, 3,464 sf

$1,350,000  SP  5/07

$1,300,000 financed

$875,000 Today's list price

120 days on market

This house was originally owned by a broker who had it listed for $1,199,000 to $1,225,000 in early 2007.  But when Jenae came along and suggested inflating the sales price to include a generous "property management fee" to be kicked back by the seller - they couldn't resist.  The sellers had already been on the market for 160 days at the lower price, in their mind they had to do something.

We checked out the buyers - they live in a 1,448 sf house in Escondido that cost them $205,000 in 2000.  They had no business buying a house like this to live in, let alone try to flip or lease-option with $50,000 down.

But they bought it, believing they could get rich on a lease-option program that had no risk - the property management fee was their fall-back money.  Until it went away.

So you can guess the rest - they tried to rent it out on the lease-option plan, but no one wanted to pay the exorbitant $10,000 per month rent, and I don't think anyone has lived there for the past year.  The extra money disappeared, so the payments aren't being made, and the notice of default got filed on April 7th.

So they are scrambling now - but Jenae told me that she is confident that the market will be picking up this summer.  She is down the the current list price of $875,000, but no takers, even though she has this in her MLS remarks:

"Bank APPROVED at $875K or above, submit offer ASAP and close by end of June. No waiting, already approved price. Approved offer was canceled. Submit offers TODAY."

How are the foreclosure agents doing?

Buyers prefer "bank deals", and apparently the lenders are getting the price right! 

We've been following the same four realtors who specialize in REO sales - here's an update on their sales of houses and condos:

Jun 11 - 328 Actives/98 Pendings = 3.35

Aug 21 - 382 Actives/111 Pendings = 3.44

Sep 20 - 425 Actives/97 Pendings = 4.38

Nov 9 -  486 Actives/128 Pendings = 3.80

Nov 25 - 484 Actives/138 Pendings = 3.51

Dec 14 - 446 Actives/147 Pendings = 3.03

Jan 15 - 474 Actives/149 Pendings = 3.18

Feb 7 -   482 Actives/187 Pendings = 2.57

Mar 13 - 477 Actives/205 Pendings = 2.33

Apr 18 - 467 Actives/247 Pendings = 1.89

May 13 - 418 Actives/298 Pendings = 1.40

The same four agents have closed 487 transactions year-to-date. 

(They closed 763 in 2007)

The averages, based on year-to-date/since April 1st:

1,532 sf/1,541 sf

$337,913/$323,973 average sale price

$220.57 per sf/$210.24 per sf

94 days/80 days on market

Every notch downward, the market picks up a little more steam.

We see a number of properties in the process of changing hands - how did they turn out?

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1453 Heritage, Encinitas Ranch

5 br/4.5 ba  3,911 sf

$1,120,000  SP 9/03

$1,019,000  LP  2/08

$1,040,000  SP  3/08

YB: 2003  HOA = $135  MR = $325

The original owner got foreclosed on, and the bank put a very attractive price on this one - it sold for $21,000 over list to a cash buyer, but we know that there were at least a handful of offers on it.  This came on the market on February 8th, just a week after the house below had opened escrow, listed for $1,050,000.

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1467 Heritage, Encinitas Ranch

5 br/4.5 ba,  3,416 sf

$926,990  SP 12/03

$925,000  SP 3/08

$1,151,300  SP 5/08

YB: 2003  HOA = $127, MR = $270

Yes, you are seeing that correctly, the buyer in March flipped this house and made $226,300 gross profit.  Downey Savings, the foreclosing lender, only had a loan amount of $880,000, and their opening bid at the trustee sale was $825,000 - if you would have picked it up there you would have made another $100,000!  Once they had foreclosed, they got greedy and listed it for $1,100,000, but after 30 days went by with no action, they dumped it for $925,000 and probably figured, "heck, at least we didn't lose money on it".  The latest buyer paid $3,540 over the flipper's list price, and the agent told me there was a back up offer that might have paid more.

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7071 Cordgrass, Carlsbad

4 br/4.5 ba,  3,199 sf

$1,519,000  SP 12/05

$1,506,000  NOTS amt

$880,000 Opening Bid

YB: 2005,  HOA = $137, MR = $76

Another eye-popper.  Even though WaMu was owed over $1.5 million, their opening bid at the trustee sale was $880,000 - and there were still NO BIDDERS!  They are crazy not to better publicize how little they are willing to take, and I guess once it hits the open market (the trustee sale was May 1st) it should be listed pretty aggressively.  My previous guess at the list price was $1.3-something, but it could be six figures.

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3601 Seaview, Carlsbad

5 br/5.5 ba, 4,369sf

$1,585,000  SP  8/06

$1,095,000  SP  4/08

YB: 1990 HOA & MR = 0

A broker had bought this with 10% down, but it didn't take long for those payments to get old.  He did procure a short sale, and it was in escrow for six months, which wasn't too surprising considering the bank had to eat almost $400,000 with costs.  The seller noted on the MLS that is sold for $1.2 million cash, but the tax rolls showed a different story.  The new owners have it for rent at $3,200 per month.

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3371 Calle Tres Vistas, Olivenhain

6 br/6.5 ba, 6,412 sf

$2,200,000  SP 5/01

$2,650,000  loan

$1,857,854  SP 2/08 (at Trustee Sale)

YB: 2001  HOA = $216 MR = 0

This is the one where the owner was involved in a securities 'misunderstanding' and ended up in jail, and wife divorced him.  The attorney had told me that there was no way they'd cheap-sell this one, he'd just have some of his cronies buy it if it came to that.  He was certain that if it made it to the courthouse steps, it would get bid up into the mid-$2 millions.  Whoops.  New owner hasn't done anything with it yet.

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17265 Camino de Montecillo, Fairbanks

6 br/6.5 ba, 6,981 sf

$1,432,000  SP 11/92

$4,799,000  LP 5/07

$1,600,000 Highest bid at auction

YB: 1991  HOA = $473, MR = 0

This is the Fairbanks Ranch house that the realtors tried to auction off on a Sunday at the property.  They had lowered the minimum bid to $2,699,000 after having it listed in the low-$3 millions.  But when the auctioneer began, he couldn't get a bid until he lowered it to $1,600,000, and then no one else would go higher.

The owners rented it out instead, for $10,500 per month.

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3542 Jasmine Crest, Olivenhain

6 br/6.5 ba, 7,943 sf

$4,000,000 in loans

$3,270,631  SP at trustee sale

YB: 2007  HOA = $371 MR = 0

Not sure if this estate was finished yet, in the pictures from when it was for sale in 2006 and 2007 it looked incomplete.  But nice view over the Bridges Golf Club, nice enough that someone plunked down $3.2 million cash at the courthouse steps.

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1062 Straightaway, Oceanside

5 br/4.5 ba  4,461 sf

$1,002,500  SP 3/06

$750,000 loan amt

$599,000 - $669,000 LP

YB: 2006  HOA = $105, MR = $400

These out by the back gate in north Oceanside are getting hammered.  This seller lost not only his entire $252,000 down payment (plus costs), he is having to work a short sale too.  But it is in escrow, so hopefully the end is near.

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We know there are thousands of foreclosures in the tougher parts of town - how are the better areas doing?  The action is subtle and slow-moving, but it sure seems like there are more homes having trouble in better areas.

Here are some examples of homes at or near their Trustee Sale date:

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7771 Pendon

3 br/2 ba,  2,195 sf

$21,000  SP  3/76

$692,243  Min Bid

$479,000  LP guess

YB: 1976  HOA = 0  MR = 0

Trustee Sale date:  5/1/08

This is probably one of the houses that CA renter has mentioned to be an eye sore in a great area of Old La Costa.  There are a number of examples throughout the older parts of Carlsbad where you see houses in complete disrepair right along side others that are very well-maintained.  I have seen many where the kids move back in with their parents and milk it until the end.  Not sure what happened here, but the original roof and trailer in the driveway suggest that pride of ownership passed this one by.

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3500 Levee,  Carlsbad

4 br/2.5 ba, 2,462 sf

$633,000  SP 12/03

$527,047  Min Bid

$599,000  LP guess

YB: 1999   HOA = 81, MR = 68

Trustee Sale date:  6/23/08

A standard tract house with a pool in Calaveras Hills in NE Carlsbad, the leading area in town for "pricing correction".  They had been trying to sell in the high-$700,000s for the last 14 months, but no luck.  I just closed a bigger one nearby today for $599,000 - hence my guess at the list price.  But Countrywide has a second loan of $168,706 on top of the $527,047, so they may end up trying higher?

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3456 Corte Selva, Carlsbad

4 br/3.5 ba, 3,263 sf

$823,000  SP 8/05 (new)

$774,297  Min Bid

$799,000  LP guess

YB: 2005,  HOA = 232 MR = 67

Trustee Sale date: 4/17/08

A common occurance here - regular folks buying a home leveraged to the hilt, then refinanced a couple of times to keep afloat, enjoy the free rent, and lose it eventually.  They did try to sell it, listing for $1.125 million, and coming down to $870,000 before cancelling three weeks ago.

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4344 Corte Al Fresco, Carmel Valley

4 br/2.5 ba,  2,555 sf

$980,000  SP 8/05

$828,873  Min Bid

$849,000  LP guess

YB: 1992,  HOA = 0, MR = $85

Trustee Sale date: 4/21/08

This will be an interesting test - Navy Federal has a second loan of $100,000.  Do they come in and cure the first to see if they can recoup some or all of their balance?  They are probably seeing the potential value at $850,000 to $900,000 - do they take a chance to make a couple of bucks, risking more loss if it doesn't work?

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2575 Arundel, Carlsbad

5 br/4.5 ba,  4,608 sf

$1,151,000  SP 12/05

$1,073,432  Min Bid

$995,000  LP guess

YB: 2006,  HOA = $193  MR = $200

Trustee sale date: 4/23/08

This will probably be the beginning of the end for Bressi Ranch - once a big bomber slides under $1 million, it'll be hard for anyone else to get above that.

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17165 San Antonio Rose (in the Crosby)

4 br/4.5 ba,  3,704 sf

$1,331,500  SP 3/07

$1,128,063  Min Bid

$1,095,000  LP guess

YB: 2005, HOA = $492  MR = $623

Trustee Sale date: 5/19/08

Not sure if payments were ever made on this one, if so, not more than one.  The house next door, also a foreclosure, just sold for $1,062,500 last week. 

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3953 Stonebridge, Rancho Santa Fe

5 br/4.5 ba, 5,336 sf

$1,825,000  SP 8/03

$1,254,854  Min Bid

$1,995,000  LP guess

YB: 1991,   HOA = $143  MR = 0

Trustee sale date: 5/12/08

Hard to believe that these owners haven't tried to sell this Meditteranean villa on 2.86 acres - if it goes to sale they will have left over a half million on the table.

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6108 Rancho Diegueno, RSF

5 br/6.5 ba,  10,475 sf

$3,500,000  SP 11/02

$717,771  Min Bid (2nd loan)

$3,995,000  LP guess

YB: 2001,  HOA = $200 MR = 0

Trustee Sale date: 5/22/08

There is a first mortgage of $2,275,000 that hasn't filed a NOD, so maybe the owners are just trying to re-negotiate their second mortgage - they have until Thursday to figure it out.  The value on this one isn't that obvious.  It should look like a steal for $4 million considering that there are three active listings on the street ranging from $7,875,000 to $15,988,000.  But the competing listings do have the obligatory tennis courts and ocean views, but I think if you could get this for less than $4 million, you might be able to find a way to live without a tennis court - or just use your neighbor's?

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Interested in a foreclosure?  Let me know!  jim@jimklinge.com

Smithers asked about the trend of downtown condos - is there any uptick?  Not really.

This graph shows the monthly median sales prices, and the $-per-sf over the last three years.  As you can see, they fluctuate wildly, so the RED trend lines are probably the better indicator:

Sales haven't improved either, and March or April have been the best months of the year lately.  But between 2005 and 2008 the closed sales have dropped 44%, from 102 t0 57 closings last month.

There are currently 595 active listings of downtown condos, not counting all of the brand new units being sold by developers (though 83 of the 595 are listed as being built in 2008).  The unsolds are averaging 107 days on market, and $664/sf, where April's closed sales averaged $509/sf, which was the highest month of the year.

There are always going to be the high-priced fancy ones at the top skewing the numbers.  When looking at last month's 57 closings and taking out the 12 closings over $900,000, the numbers look more realistic.  There were 45 sales averaging $437/sf.

As long as both sales and pricing are trending downward, it would seem that we have a ways to go - on average.  But we really should factor in another variable - the view - making the analysis multi-dimensional.  A case could be made for 2 br condos being real popular when priced in the $300/sf to $400/sf range - if you can find one with a good view for $400/sf, it's probably worth a look.