Wednesday, February 27th, 2008 at 2:30 AM
Million-Dollar REOs
We’ve talked about Caminito Stella, Mesa Norte, and Heritage, but they aren’t the only high-dollar foreclosures. The REOs are flowing now, and no price range is immune – below are a few examples. Check the banks’ pricing too – it seems they are getting more aggressive (the first four are in 92127):
15266 Winesprings
4 br/3.5 ba 4,136 sf
$1,115,000 SP 2/06
$891,950 1st loan
$223,000 2nd loan
$899,900 LP 2/08
This one just went pending over the weekend, after 51 days on the market. List price is 20% below last sale.
YB: 2005, HOA = $86, MR = $375
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17177 San Antonio Rose
4 br/4.5 ba, 3,675 sf
$1,443,000 SP 1/07
$1,000,000 1st loan
$298,423 2nd loan
$1,199,000 LP 2/08
In the Crosby Estates – four others for sale on same street between $1.449 to $1.995 million, and three of the four are smaller. Note that the REO is unsold after 88 days, and price lowered from $1,300,000 – now 17% below last sales price.
YB 2006, HOA = $492, MR = $623
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7383 Los Brazos
5 br/4.5 ba 4,324 sf
$1,410,000 10/05
$1,490,000 refi
$1,199,000 LP 2/08
15% below last sale
This is the famous Ong house featured on BMIT – the bank has already foreclosed, and relisted it with their REO agent eleven days ago. But Mrs. Ong is still featuring it proudly as an active listing, on the range $1.399-$1.450. Did I mention that it backs to power lines?
YB: 2003, HOA = $227, MR = $742
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7404 Rancho CatalinaTrl
4 br/3.5 ba 3,975 sf
$1,144,000 SP 12/04
$915,000 1st loan
$500,000 2nd loan
$1,250,000 LP 2/08
I’m just guessing on the amount of the first, they had refinanced three times, pushing the 1st lender off the screen. Wells Fargo had the second, and was the one who foreclosed – something is better than nothing? This isn’t anything more than a big tract house with a pool on a lot that isn’t any more than 6,000sf. Two others on street for sale.
YB: 2004, HOA = $240, MR $560
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718 Lynwood, Encinitas
5 br/5.5 ba, 5,405 sf
$1,212,000 SP 5/03
$1,202,500 1st loan
$462,315 2nd loan
$1,650,000 LP 2/08
At the top of the hill in Encinitas Ranch with one of the best ocean views in the area. First escrow fell apart, but went back in pretty quick – now pending.
YB: 2003, HOA = $127 MR = $333
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6381 Keeneland, Carlsbad
5 br/4.5 ba 5,293 sf
$1,945,000 SP 7/06
$1,299,000 LP 2/08
33% under last sale
The one we’ve all been waiting for, and listed today for a blockbuster price – submarining all the other Bressi Ranch high-dollar listings. The owner is the same guy who has one awaiting foreclosure in La Costa Oaks too. This will be another one of those REOs that has multiple offers, and sell over list – it is a great strategy!
YB: 2006 HOA = $193, MR = $0 – wow!
Posted on Wednesday, February 27th, 2008 at 2:30 AM in Foreclosures | 18 Comments » | 
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So the top isn’t immune eh? 15-30% off isn’t chicken feed.
That said I would love skip ahead a year or two and see how happy these buyers are with their purchases. One might speculate they’re just the next round of NODs waiting to happen.
ice weasel | February 27th, 2008 at 6:07 amWonder if the latest reports on all the late CC payments are somehow connected to this high end, or should I say high priced, stuff going into FC. Or maybe it was the recent news of equity lines being frozen?
Real life story. We have a new employee at my work. She and her husband own a drywall business, with things slowing down she had to get a job (she was doing the books for the business for the past 10 yrs). She has many friends in RE related fields, two of which are RE agents, both became agents during the boom.
The first one "moved up" several times during the boom and ended up in a 1.2M home. When things slowed down last year she stopped making her mortgage payment, that was over 6 months ago. She has not been foreclosed on, YET. She figured she needed to make $20K a MONTH to pay her bills. She just got a job making $10 an hour doing administrative work, $20K a YEAR. That is what her skill set would get her.
The other RE agent had bought a primary residence, 600K, and an investment property for 800K. Both of those have been foreclosed on.She now is back working in a hospital administrative job for $15 an hour.
Apparently these two worked for the same RE office which is now closed and they have at least 5 other agents they worked with that are in their same boat.
She also told me several of her contractor friends that had overextended them selves when things were good and are now in financial trouble.
The high end foreclosures, in all areas, are coming in a big way. Jim’s examples are just the tip of the iceberg.
SMC | February 27th, 2008 at 6:11 amIt seems to me that, except for the fellow in the Crosby Estates, none of them had put anything down, or cashed out more than they put in. So they’re out free. But the lenders, especially those holding the seconds… ouch!
Daniel | February 27th, 2008 at 7:20 amTo piggy-back on SMC’s comments, we know a number of people who make around $100K-$200K and have purchased $1MM +/- houses — some with additional "investment" properties as well. Many of those have at least one spouse who got into real estate in the past few years.
Based on what I knew about their finances before these purchases, there is NO WAY they will be able to continue making their mortgage payments.
How many of these people exist? IMHO, a good 30-60% of the people who bought $1MM properties since 2003 will not be able to keep making those kinds of payments — especially as we get deeper into recession territory.
During a recession, if you lose a $10/hr job, you can ususally replace it fairly easily. Lose a $100K+ job — when many others are doing so as well — and it’s not so easy to find a new job that pays the same amount.
CA renter | February 27th, 2008 at 10:30 amThanks Jim. The YB: , HOA = $ MR = $ format is extremely useful.
2.5% of a million dollar transaction is $25,000. That’s plenty of incentive to become an agent given the low barriers to entry. Just selling an existing and buying a new house for yourself justifies the "effort." They’ll be gone come renewal time but I never considered them part of the industry anyway.
Rob Dawg | February 27th, 2008 at 3:10 pmI second Rob’s kudos on the YB/HOA/MR format. it is a winner (can you imagine right underneath the MLS price you have the HOA/MR for $1000/month?) talk about scaring away the buyer.
San Antonio Rose belonged to the infamous Hendrix Montecastro of the Temecula Fraud King. This is the perfect example of the type of people that would NOT care about that $1000/month HOA/MR, because the sole purpose was to flip. Returning to a situation where real people are living there with money they earned (and not stolen), you’ll be hard pressed to find someone willing to fork out $1000 before mortgage and property tax.
as for Winesprings, it now backs up to the recently opened Carmel Valley/Bernardo Center connection where cars travel up to 65 mph a few feet away from your house.
ocrenter | February 27th, 2008 at 3:47 pmI wonder how many Hummers out there we’re being bought with house equity?
Your house is not something to risk to buy "goodies".
Sad that there are families out there with young children that are going to suffer and live in apartments because mom and dad could not control their spending.
Todd
Todd | February 27th, 2008 at 4:08 pmImmunity? The financing on these are so crazy, it looks like this market would be extra vulnerable.
CVman | February 27th, 2008 at 4:21 pm"Mrs. Ong is still featuring it proudly as an active listing, on the range $1.399-$1.450."
this simple prank should take care of it…
ring ring…
hello?
hi Mrs. Ong, this is Jim the Realtor, how are you doing?!!
good…
hey Mrs. Ong, I got this buyer straight from Singapore that fell in love with your house and want to offer your $1.399 asking price, what say you?
uh… uh… the house not for sale anymore…
but I see it on the MLS?! oh, is the offer too low? alright alright, he is actually willing to pay your top range of $1.45, did I mention this is a cash offer?
……….
OCRenter | February 27th, 2008 at 4:23 pmThanks for the story SMC, it always baffled me that there were so many people making $1mil home purchases. It’s funny to come to the realization that many don’t earn as much as me.
I think ice weasel is onto something… These people are catching knives, and why wouldn’t they just walk away if the comps around them are at 60%-80% (don’t laugh, it will happen) of (not off) what they paid. I forsee an REO spin-cycle; the government already made it clear that there are no repercussions for fraud.
What happens to cars when they’re repossessed? I wonder if I can get a Benz, slightly used, for 20%-30% off of sticker. It seems to work for houses now…
Genius | February 27th, 2008 at 7:08 pmGenius,
Funny you mention cars, the ex-RE agent with the 1.2M house has had 2 cars repo’d too. She is currently selling all of her belongs, household stuff, on Craigs list. She will be moving back in with her parents when she finally gets evicted from the house. FYI, she is 47 yrs old.
That just brought something to mind about the "Baby Boomers" selling and down sizing. If adult children are moving back home, will they be able to???
SMC | February 27th, 2008 at 7:30 pmSpeaking of agents for whom the tide has turned, what’s up with she-who-shall-not-be-named?
greenlander | February 27th, 2008 at 8:42 pmChiming in with the others; the HOA and MR info is really useful. Very eye-opening! The HOA and MR alone on some of those houses is more than my parents entire house payment ha ha!
Erin | February 27th, 2008 at 10:03 pmThe HOA and MR alone on some of those houses is more than my parents entire house payment ha ha!
The HOA and MR alone on some of those houses is more than my entire house payment and I’m younger than our young at heart and spirit host Jim.
Rob Dawg | February 27th, 2008 at 10:17 pmYou may be younger, but I’m better lookin’
Jim the Realtor | February 27th, 2008 at 10:27 pmTouché. Brains bows to beauty.
Rob Dawg | February 27th, 2008 at 11:44 pmHave the politicians started reading this blog???
"WASHINGTON (AP) — Treasury Secretary Henry Paulson said Thursday that various proposals being put forward to deal with the housing slump would do more harm than good."
SMC | February 28th, 2008 at 8:11 pmNo, Paulson isn’t an elected politician…
If the government really wants to "help" the housing slump, what they ought to do is provide a source of funding for very low rate mortgages limited to people who have NOT gotten themselves in over their heads. This would reward homeowners who have lived within their means and don’t owe more than their homes are worth with more actual disposable income through refinancing their current mortgages (no cash-outs), and reward would-be homeowners who have refrained from digging themselves into subprime financing holes with the potential to afford one of those REO bargains (if they can qualify for conventional financing only), all without rewarding the subprime lenders and borrowers who created the current debacle.
GeneK | February 28th, 2008 at 9:08 pm