Bad is that there were only 12 sales in that time period as opposed to 13 the previous week.
Good was that the middle range prices, $600,000 and up have seen more action.

The one high price home, located in Cedar Ridge &  pictured here, took a significant reduction to sell, as we’ve seen repeatedly in Cedar Ridge. Beautiful homes that are not in proximity to the lake are suffering more than any others as far as price point goes. Big view homes of average size in good condition with garages have slipped to low to mid-600,000. Most of the homes you see in the $600,000 were either near the lake or with lake views. Price reductions from asking price in this area were reasonable not like the 10% percent dips we were seeing this summer. Gated communities are still sought after.

But one of the biggest changes which hearkens back to the good old days is that there are a lot of buyers out there right now seriously looking. I call it the “holiday season” buyers. When the air gets crisp and the leaves turn colors and fall, buyers become mesmerized by the prospect of great Thanksgiving, Christmas, Hanukkah and New Years celebrations in climate unlike most of Southern California. I think we will see an active market through the New Year and if you have your home listed with us, do not be shy about adding tasteful holiday touches to the residence, it will only wet people’s appetites.

Also the first two low priced homes were fabulous buys for lake rights in good areas- click here to see all of them. Very few REOs or Short Sales this period which is always good to see as they the primary cause of price drops. Inventory is still high but come the first of the year a great number will drop off as most people want to keep their homes off the market during the messy months.

As you know the prices you see on the e-mail are the asking price not the sale prices. The homes you see, sold for these prices: $193,000, $190,000, $235,000. $360,000, $355,000, $360,000, $437,500, $525,000, $627,000, $640,000, $625,000, and $820,000.

If you have any questions feel free to give us a call – 909.908.8520.

Best wishes,
Jan Skrentny and Rowland Parker

The further from the lake the more price falls. Lake front, lake front gated communities and areas those adjacent to the lake like Tavern Bay and West Shore are holding price better than anything else. The Lake is what Lake Arrowhead is all about. Big view homes are also holding up fairly well but to get a large view you get further from the lake. Thus the conflict.

There were an increase in the number of houses going into escrow last week. Still, houses going into escrow and houses selling are not the same. Especially when those houses are Short Sales or REOs.

Owner owned homes will still command more because by and large they are in better shape and you can depend on the disclosures. Short sales take long, long, long and are full of silences and uncertainty. REO’s give no assurances of anything other than your inspections better be very good.

- Jan Skrentny

But just recently I had another opportunity to demonstrate the value of that phrase. I was referred the home of two doctors from Redlands. They and their family had owned and enjoyed the lake view home for over 20 years but of late because the boys had grown and moved away, the house was not being used. The interior  was in excellent condition but the exterior had a lot of deferred maintenance that greatly reduced the value of the property – peeling paint, wood rotted decks, a dated feeling. Our agents estimated that in “as is” condition the home would sell for under $300,000.

But we calculated that if the doctors would spend money to fix, repair and repaint we could get them their investment back plus a fair amount more. A designer on our staff consulted with them about new colors for the home. We got bids from several builders and I over saw the repairs. In my next post I will show pictures to prove the point – the house turned out beautifully.

The doctors paid $20,000 for all new decks, paint, termite completion and exterior upgrades and before the house went on the market I got an offer of $365,000 for the property. Their $20,000 investment gained them a $45,000 profit in under one month.

Now not everyone has that kind of disposable funds available. But this is absolutely true – most buyers in this market want well cared for homes. Those sellers who are throwing their homes on the market in “as is” condition are lumping their most precious possession along with the banks repoes — also sold in “as is” condition.

You only get one chance to make a good first impression – use it wisely.

This is remarkable because listings (representing a house for sale) are the lifeblood of real estate agents.

The owner is a woman on social security. She lost her husband to cancer two years ago. She has five dogs (four English bulldogs) that she loves and breeds. Her husband was an avid gardener but since his death she is having a hard time keeping up with the garden, the house, even the animals.

In this market a new listing has to be both well priced and well presented; there is too much competition for buyers to think “okay” is okay. I told the widow to make a plan to have the house and yard fixed up, the interior simplified, and an area developed for the dogs to reside when the house is being shown. I gave her the name of a trusted handyman who could help her do some of these things.

We developed a strategy so that by spring of next year the house will be ready for sale. The seller may have to spend some money to make the changes but it will greatly improve the sales potential of the house and the return on her investment will be rewarded many times over.

You only get one chance to make a good first impression – that’s especially true in this real estate market.

I spent the afternoon looking at “repoes” – bank-owned repossessed homes.

I have several clients who are interested in buying up good homes at very good prices. There is a formula to it: With 20% down the price has to be low enough so that when the house is rented – the rent will cover the mortgage, taxes and insurance. Ideally there should be a little left over to cover repairs.

The point? Say you get a three bedroom two bath for $130,000 (this is possible in the mountains). You put $26,000 down, finance $104,000.  It’s an investment property so the bank rate will be higher than on your home loan, so say 7 ¼%. On a 30 year fixed that is $716.00 a month. Taxes are 1.5% of the purchase price or $1,950/ year – $162.50 a month. Insurance varies but say $800/ year or $67 / month. Total cost: per month: $945.50.

A good house will rent for $1,000 to $1,250 up here.

Four years from now when the market is strong again the home will sell for over $200,000. Your $26,000 investment, after cost of sale (commissions and costs) will net you $52,000 – tripling your money.  Hard to beat at any bank.

The problem? Most repoes are not in good condition. They are troubled, I call it “home-abuse;” technically it is bad or no  deferred maintenance.

That’s why I spent the afternoon looking. Good repoes are hard to find. You have to look hard and act quickly when you find one.

But that’s how money’s made in a bad economy. One Repo at a time.