Current Article

Calculated Risk: Chula Vista Big Bounce?

By John Batchelor on April 16, 2009 at 5:05 PM in American Consumers, Banking Institutions, Economy, Housing & Housing Crisis, Real Estate

Calculated Risk’s choice California Jim the Realtor posts today a surprising positive indication in Chula Vista, California. “The banks are starting to get it,” is Jim’s judgment. This is a foreclosure, what is called an REO, and the moving picture tells the story. Purchased at $655k in ’04, it was refinanced at $828k in July ’06. Probably 100% refinanced. The owner was clearly a greedy fool and stupid gambler, same for the mortgage lender and bank who cooked the deal. The bank finally foreclosed and has now cleared the house up with new appliances and paint. Jim likes this energy by the bank, and this energy might be the news. The banks are sitting on a huge trove of REOs, waiting for the market to improve. Now they are moving. This house, 5 bedrooms on a 5600 sq. ft lot, is listed at $399k. It now has 41 offers. Jim guesses it will go for $475-500k. More than $300k vanishes, but the situation is not worthless, much like those toxic assets. The formula is, Mark down sharply, reap 60 cents on the dollar. Find the bottom and bounce.

avwrobel

Gee, a single house. Info from a realtor. Happy days are here again!! Please. Stupid story to post.
Ellen D

One swallow doesn’t make a summer.

And I’m in California – I’d be happy to see movement up.
Tricia Spiegel

Such a pretty house. I am amazed that it is priced so low in California.

So, someone lost 400k along the way, right? I gather it was us???
oowawa

Hahaha, Tricia. Seems the banks are just as happy as hogs in slop right now. Gee, maybe it was us who got hosed, you think? It’s hard to tell what’s going on, with all these bizillions & gazillions (I can’t count that high) going from the government (US, that’s us) to the banks through AIG perhaps via who knows what conduit . . . The shell game has me confused! And that’s the way they want it . . .
John Smith

Just because it has 41 offers does not mean that anybody will be able to get it financed. They would have to come up with a 100K down payment. I would like to know how many are all cash offers.
Peggy Sue

oowawa said:

“Gee, maybe it was us who got hosed, you think?”

You think, indeed! Keep the public confused. That’s just the way they want it!
Ginger

I’ll bet that there are more who are buying homes as investment properties. They are probably the same people who helped cause the situation in the first place. They got rich off taxpayers backs and are doing it again.
http://www.nationalRantPage.blogspot.com Triple Eight

it’s all a sucker rally.
ritamary

To put it bluntly, Chula Vista is not exactly a place where I would want to live. This is the California version of the bargains in Detroit I recently saw on CNN. Maybe someone from across the border (which is quite near Chula Vista FYI) might have the cash to buy this house.
elise

span filter ate my comment.
ScottVA

I guess you haven’t heard about a little thing called FHA…. and I assume Chula Vista is in a higher window of loan max for FHA which means someonce can buy it with 3.5% down…. I work as a real estate investor based in DC and I can tell you things are moving here.