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Type: Listed on MLS(#066097465)
List Price: $660,000
Cost: $705,000
Loss@6% Sales Expenses: $84,600
Loss%: 12.00%
Purchase Date: 11/30/2005
Holding Period: 13 months and counting...
Bedrooms: 4
Bathrooms: 2.5
Square Feet: 1880
Resale Details: view
6 comments:
Banks are now tightening up on loan standards. I just talked with two friends last night who need to buy (they are planning to stay for 10 years at least, and know the downside risks), their appraiser came back with a caution. . . "possible decling home values in 2007". . .the out of state underwriter (from Florida) came back and demanded more downpayment. Luckily they can do that, but their lender said that banks are really tightening up. Tigher credit standards will hasten the downturn, as fewer people will qualify. . .although I was in Las Vegas last week, and thousands of unsold homes have "zero down, zero $ move in, and 4 months "free" mortgage. . .I guess the developers are carrying the loans??
The developers pay money to get the loans rolling. You are still financed through a bank like normal. In this case, rather than lower the price by 40-50k, they put up that money to cover closing costs, several months of mortgage, etc...
It's just a way a developer can lower the price without lowering the price. You still have to qualify for the loan, but all that money the developer is putting up counts as equity to the bank.
A very interesting article about that very issue just came out in the UT (you may need to put together the link from two pieces):
http://www.signonsandiego.com/uniontrib/20061203/news_mz1h03scene.html
or
http://www.signonsandiego.com/
uniontrib/20061203/
news_mz1h03scene.html
Mark,
The more foreclosures and short sales we see the tighter banks and mortgage underwriters are going to become with credit. Much like all the stories about flipping drove more speculation, risk taking and lose money losses cause the exact opposite reaction in lenders and investors.
I was in Vegas recently as well, a solid majority of the billboards on I-15 were not for casinos but for homebuilder advertisements!
I believe that we still have a ways to go down.
This was 100% financing.
$564 first, $141 second, both by the same lender. Looks like Deutche owns the first, maybe the second too. Bet it sits for a little while. This will be interesting to watch. Things like this could start setting much lower marktet prices.
Mr. Brightside
Yes, I noticed that in Riverside County on I15, I could hardly see the scenery? for all the Lennar and KB billboards, ditto up in Victorville, etc. If I were to put a timeframe to this, I would say we were at the end of the first quarter of play - a long long way till the end of the game.
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