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Hi rammi43,
No problem, hope the information helped. About prices, I don't think anyone can predict what home prices will be in the future but can only make some assumptions based on the current information they have.
I did a quick calculation on another post comparing home prices vs. rental prices here: http://www.city-data.com/forum/2929101-post28.html
In terms of the Preserve, I think prices really depends on what you as a buyer has to offer. If you have a substantial down payment (20%+, and have an excellent credit history) I think you can negotiate almost an additional 15%-20% off the builders listed price (depending on the builder and especially if they have sitting inventory - if not then it'll be harder). This is because you will be a safer bet for the builder towards closing the sale. Otherwise, if your bringing nothing down, and have poor credit, I wouldn't count on the builders being too enthused in selling the house to you (especially, after talking to the sales office people and hearing how many people drop out of escrow because they couldn't get the loan).
So, while Sitting inventory lasts, I think you can see prices very "flexible". In terms of inventory, the Mulberry's have quite a few homes that are complete and sitting (so i'd imagine you can probably negotiate pretty well). The Tetherwinds (Condos/Townhomes) next door and Citrus Commons are building more units so i'm guessing condo/townhome demand isn't too bad. For reference, condos probably run in the mid 200s to low 300s in the Preserve.
The bigger houses at the end have a few sitting inventory. But like I said in the above post, some builders are selling off the remaining units and not building anymore until the market picks up and/or if they receive a deposit/contract from the buyer.
So all in all, I think prices are gonna fall some on the sitting inventory, but then firm up when supply runs out, and hopefully rise again when builders start building again.
Just for your information on why I have all this information. It's because my parent's are in the process of buying a place in one of the big houses at the end of the Preserve, my sister is looking into possibly buying a house in the area (currently renting - we so far looked at chino hills, corona, eastvale, and the preserve), and my in-laws are contemplating on moving out of a condo to a nicer home around where we live.
Thanks,
chuck22b
Dear Chuck22b,
Thank you for your valuable information. I have only 3% down payment and 710 credit score (average of 3). I am pretty much looking around $300K homes. 2 weeks back in College park DR Horton homes priced at >$400K ( fro 1728 sq ft) , now they are selling same homes for +or - $334K.( but the HOA is around $230) I got shocked by seeing that price. Is there any homes in my price range in preserve?
I got some news..the sky *is* falling on the IE. You can accept the reality to continue to sugarcoat it until it hits close to home. But really, you don't need to justify your purchase at the peak, especially if your home is *not* an investment. But what you are basically saying is it's ok to buy now in a declining market? Why catch a falling knife? IE prices are on a steady decline. I just saw a resale home in a nice area of the IE listed for 199k today. 2003 prices already. Matter of time before it spreads to other areas and we see 2002, then 2001. I have been in this area for over 15 years. 10 years ago homes were selling for 90k. Same home experienced the false bubble appreciation and tripled to 400k. Now it's over correcting to normal appreciation price which would put it at about 170-200k home. Yes, definitely the IE has a chance of seeing 2000 prices. I understand its a very hard pill to swallow especially if you bought at the peak and nobody wants to see home values drop ( I own 2 homes out here) but its the reality right now. BTW The local job market wont hold up prices. Over 50% of the local jobs are blue collar and many related to the now defunct housing market. How are these people going to continue to sustain these 400k homes? Historically the IE has predominantly been blue collar working class folks and that has not changed. Way too many 40k salary folk bought 400k homes. Hence the foreclsoures that are hurting all and will continue to drive IE homes down. Sorry, but it is what it is, a falling sky.
One more thing. Appreciation will prevail once more, you are right, but not the silly bubble appreciation of the last 5 or so years. My prediction based on facts: the IE will decline another 20% or so. Prices will stabilize for a while and then we will be back on track for normal appreciation rates.
Hi rammi43,
The condos for sure are in your price range ranging from mid 200s to mid 300s and can go up to 2000+ sqft, 3+ bedrooms. But, Condos/Townhomes have a lot higher HOA since they cover the building maintenance and are around $300-$335 (but a lot of builders are saying that they'll pay a year of dues or something like that).
Our community's HOA is $183 (single family homes are cheaper since you have to cover building maintenance). In terms of brand new homes you can probably try to negotiate 10-15% off if you can somehow raise your down payment a little. I think 710 credit score is pretty good and should be ok. I think homes in our complex (Mulberry's) can maybe go for around $340 - $360k. That's if you can come up with a higher down. If you wait a few months and save up, and there's still sitting inventory I think you can maybe get your price.
Besides our community the houses on the end of the Preserve are a lot bigger, and would probably be around the low 400s at best. Likewise, with a larger down and good credit score you can try to negotiate.
Outside of the Preserve, in Eastvale you can definitely hit your price range but the neighborhoods are a little darker at nights (potentially more crime), and is in an unincorporated area - which means there aren't any city services and it uses the county resources, police, fire, etc.).
If your looking at somewhat new, you can definitely find places in the Preserve at your price range (from people who are short-selling, there's a house in our community listed for $325k 3 bed 2.5 bath). A somewhat new house would have blinds already installed and the yard should already be done (so that's ~ 5-10k in work), not sure if the builders gave away granite counters and tiling two years ago though.
One more thing. Appreciation will prevail once more, you are right, but not the silly bubble appreciation of the last 5 or so years. My prediction based on facts: the IE will decline another 20% or so. Prices will stabilize for a while and then we will be back on track for normal appreciation rates.
Hi jvaz,
Yea, i'm very aware that the sky is already falling, and I agree that we won't have magic appreciation that we saw earlier for awhile, but my response is that new homes are not going to hit so low to the 100-200ks seen in years earlier (90s). Mainly because rents are high. Also, I'm not talking of the IE in whole, I'm talking about the Chino, Chino Hills, Corona, Ontario, Rancho area of the IE. Some parts of the IE will seriously get hit since they're way out in places that can not support/justify the costs/price. Chino, Chino Hills, Corona has been fairing better since they are closer to LA and Orange Counties that support the 80+k household income required to get a 300-400k house. Also, there are a lot of large corporations migrating into the Ontario area since it's cheaper that aren't housing related. Mostly warehouse, logistics, and DC related that are holding areas for shipping to the rest of the US. So as long as US imports/exports goods there should be jobs, and even better is if the IE embraces Clean Tech, and Clean tech companies come to the area.
Yea i can't justify why a 90k home is worth triple... that definitely is ridiculous especially if the owner didn't do any remodeling and/or retrofitting. But i'm sure you've noticed in the 10-15 years living here that the environment, especially in the cities nearer to LA and OC, has drastically changed.
Lastly, we didn't buy at the peak, the peak was two years ago 2005 and the market has been adjusting for about a year. We actually negotiated the price down quite a bit because we had 20% down saved up and a good credit history. What I was trying to explain was that if you have that kind of down, and a good credit history you definitely can negotiate the extra 15-20% extra lower than the listed builder price.
Well, I hope I clarified some.
FYI - a good thing to watch for new home prices is the new home sales numbers. a report is coming out tomorrow. if it's stable or rises seasonally, then there's hope, if not, then more potential down turn.
Hi rammi43,
The condos for sure are in your price range ranging from mid 200s to mid 300s and can go up to 2000+ sqft, 3+ bedrooms. But, Condos/Townhomes have a lot higher HOA since they cover the building maintenance and are around $300-$335 (but a lot of builders are saying that they'll pay a year of dues or something like that).
Our community's HOA is $183 (single family homes are cheaper since you have to cover building maintenance). In terms of brand new homes you can probably try to negotiate 10-15% off if you can somehow raise your down payment a little. I think 710 credit score is pretty good and should be ok. I think homes in our complex (Mulberry's) can maybe go for around $340 - $360k. That's if you can come up with a higher down. If you wait a few months and save up, and there's still sitting inventory I think you can maybe get your price.
Besides our community the houses on the end of the Preserve are a lot bigger, and would probably be around the low 400s at best. Likewise, with a larger down and good credit score you can try to negotiate.
Outside of the Preserve, in Eastvale you can definitely hit your price range but the neighborhoods are a little darker at nights (potentially more crime), and is in an unincorporated area - which means there aren't any city services and it uses the county resources, police, fire, etc.).
If your looking at somewhat new, you can definitely find places in the Preserve at your price range (from people who are short-selling, there's a house in our community listed for $325k 3 bed 2.5 bath). A somewhat new house would have blinds already installed and the yard should already be done (so that's ~ 5-10k in work), not sure if the builders gave away granite counters and tiling two years ago though.
I just saw a resale home in a nice area of the IE listed for 199k today. 2003 prices already. Matter of time before it spreads to other areas and we see 2002, then 2001.
At this point in the cycle, the main driver for price discounting is distressed sellers (mostly banks). The proportion of distressed sellers varies alot by neighborhood, with the biggest concentrations in the newer tracts. Don't kid yourself into thinking that because it's new it wont be as badly impacted. If the home for sale sells at 325, what do you think it's going to do to the local values? My point is regardless of location, homes in all across the IE were and are way over priced. Now we are over correcting. I agree, newer home will not drop to 90s levels but I would dare to say a decline of about 40% from the peak. Do the math and good luck to us all!
Hi Jvazjr,
I agree with you about distressed sellers and bank owned properties... that's why I said it's a good opportunity for first time buyers to look into the market and for new communities to weed out the home owners. Especially if you've been saving for the last 2-2.5 years.
then 40% off from the peak would be 312k. As we've been discussing, a lot of homes are already around that range, especially the older ones. So, that means we're close or at the bottom of the bubble!
Also, i think most people understand Real Estate is local, and since the IE incorporates two of the largest counties in California, blanket statements like all of the IE is going to drop 40% etc. seems kinda ludicrous. Especially since some areas have only dropped ~8% last year and Chino Hills has dropped less or has even appreciated.
By the way, just curious as to where in the IE do you have your two houses and when you bought them. That can be helpful in understanding the discussion.
Just my 2 cents, Thanks,
chuck22b
Last edited by chuck22b; 02-26-2008 at 04:36 PM..
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