May Homes Report (Corona and Norco)

"Let me tell you something...everything you hear at a poker game is pure crap" ~ Aunt Iris

****Shocking to see this report just 7 days after my report!****
 In the first season of Friends, the boys and girls are playing poker. So, Monica asks her aunt to come and teach the girls how to play. The quote above is the "first lesson of poker". It might be appropriate to say about pretty much anything coming from the media. Yesterday the stock market advanced on "good news" from the real estate world. The existing homes data report suggests that the end is in sight; therefore, every one can be happy that we are taking the right steps to recovery.


The existing sales data report to me is as murky as ever before. There are five zip codes in Corona and average price per home decreased in three of the five zip codes (-1.32% in 92879, -12.12 in 92881 and -9.69% in 92883) in the past six months. The zip codes that showed growth were 92880 (3.42%) and 92882 (4.23%). Which results in a composite decline of 3.87% over the past six months. I realize that 3.87 is a ton better than the 13.39 declined seen in the past 4 years, but it is not the happy, cherry news that I read about yesterday. 


Now, I do understand that they were talking about national data, so that might explain the discrepancy. Having said that, I do live in California, Southern California to be exact so I obviously believe that this is the center of the world and closer to reality than any other place in the country! I also understand that the homes data report was not talking about the average price per home either. It was dealing with the median price per home and the volume of homes sold year over year. We have to realize that real estate has changed SO much in the past twelve months. The banks began to stop foreclosing homes (due to a number of reasons including fines from the government and litigation from tons of homeowners) and this is after they stopped releasing the homes that they have foreclosed for sale! What I am saying is that the banks sold less homes a few months ago which created less supply (almost no supply), this forced people who wanted to buy to bid up the homes they did buy. Therefore, the prices were artificially inflated. All you have to do is look at the homes currently available in Corona, REOs (bank owned homes) account for 1 in 8 of the homes on the market. This number is down massively off the high of a few years ago!


Lastly, there are lots of banks with tons of blood in their books. They have not released the homes that they have foreclosed, so we don't know how much worse things will get. CitiGroup Asset Disposition claims that there are 11,000,000 distressed properties in the foreclosure backlog. 

The dialog from Aunt Iris ends by her telling Pheobe, "those are nice earrings"...to which Pheobe looks around a sheepishly smiles and says, "thanks." Kind of my response to these reports...