This is the worst one I've seen yet.
1) 1618 Arborella Ct, Perris, California
Condo, 1573 sqft sold 9/14/2007 for $336,000. Builder sale.
2) 3367 Night Bloom Lane, Perris
REO Re-sale,condo, model match, same complex.
sold 4/11/2008 for $142,800. Another pending in the same
complex supports that sales price.
7 month decline equal 57.5%.
8.2 % decline monthly
Can't go by builder sales.
I had one that was a builder sale for $299,900 and the sales office gave me 5 comps that all sold at about the same price closed within a few weeks. I got the HUD on a couple, the prices checked out with the clerk of the court and the mortgage indentures recorded with the clerk showed the same client I was working with, but a different appraiser must have done the jobs (or perhaps the dreaded AVM). This is in an upscale area where there is a lot of new construction. I think the AVMs might be skewed very easily.
I search the market and visited the sales office for the sister project 1/4 mile away but owned by a different developer. They are selling the same model for $110,000. Hmmmm. I look at my listings in the subject subdivision and I have one that is listed at $312,900 (builder listing it turned out) and the others are listed in the $115,000 range.
The builder, while I was on site, told me which projects to use in order to appraise the unit correctly. I looked at those projects that sure enough they sold for $265,000 to $325,000, similar to the subject, but they were all conversion developer sales.
The way that figures, those other sales that closed two or three weeks earlier for $299,900 lost 63% of their value in 21 days, that's a rate of decline of 1104% a year.
I am doing another one now, too. Different project but same area. This time I am the second appraiser. Turns out the first appraiser killed the deal and the sales rep sent me all the information and told me how the other appraiser was stubborn and insisted on using the short sales listed in the project (there are 27 of them ranging from $70,000 to $170,000, 17 of which are the subject model type ranging from $109,900 to $144,000). Sale price through the builder? $215,000!!! They closed about 10 of them in the past 2 months at that price or HIGHER. The short sales at $140,000 have been on the market 4 months and longer. One resale is offered at $109,900 and another is priced with the builder sales at $220,000, but that one is also up for rent.
It is troubling to me that these projects are closing out units, with financing, for the $200,000 to $300,000 range when there ain't no way they are worth it. I am dumbfounded that there are appraisers out there just willing to bring them in too. I do hope they were financed on AVMs.
Interesting fact, when the project first opened in July of 2006 the units were selling around $185,000. The market has declined between 18 and 35% since then, depending on how you choose to read it, but somehow in this project the prices have shot up to the $210,000 to $240,000 range.
