A TON of listings in an area - What does it mean?

Question

So, new to this whole REI thing. I'm messing around on Zillow just to start looking at various markets - what stuff is being listed for, for what, etc. A particular area of the map is LIT UP with listings. What might be going on here?

For my California peeps, I'm looking at Hemet, CA. Inland Empire - pretty far out from urban centers. When I was last out there a few years ago, seemed to be a bit of new construction going on.

Does this mean good opportunities or STAY AWAY?

Rick H. · Answer

Account Closed Parolees are released in Desert Hot Springs, go to Yucca Valley where their grandparents live, who get fed up, then end up at their Mother's place in Hemet.

I can draw you a map with arrows and routes.

Think I'm kidding?

Account Closed · Answer

A ton of listings might not mean anything. Hemet is only 90 miles from LA,has a population of about 90,000 and is close to 2 major employers( casinos )The area also has a good size senior population and the town is still recovering from the foreclosure crisis but there has been a lot of sales due to the lower prices as compared to LA.You have to filter the listings and view the short sale,foreclosures and straight sales to get an accurate picture.As an investor you need to stick to your criteria and then search Hemet to evaluate what is really going on beneath the surface . There was  a lot of new construction that was halted and is just beginning to come back on line due to the rising prices.

Aaron Mazzrillo · Answer

I own quite a few rentals in Hemet. Typical tenant has neck tattoos, a felony.. or two, will probably grow weed in your backyard and works a blue collar job. And my rentals aren't garbage. Typical 3/2, 1,200 sq/ft, single story with A/C and 2 car garage rents for $1,195 and will retail for $180K. (But that isn't what I paid.)

I've been told by one of my tenants that the city is where the criminals being released from California prisons end up. I'm not so sure she isn't right either. The city has enacted an obnoxious landlord rental program. You have to register with code enforcement, include an addendum in your lease that has something to do with criminal activity on your property (I didn't read it and didn't make my tenant sign it), and sign a clause stating you will allow code enforcement, or as I like to call them government agents, come onto the property to look for code violations AND inspect the inside of the house if they desire. If you're tenants won't allow it, you have to use court action to force them under the landlord right of entry laws, at your expense. It is complete BS and in my opinion a clear violation of a person's 4th amendment rights of unreasonable search and seizure, but I'm not the person who is going to fight that fight in the courts.

If you don't register, it is $125, then an additional $225 two weeks later, then an additional $500 two more weeks later. I believe it can go up to $1,000/day. I don't know because I paid the $350 and $129 fee to register the house just to get them off my back.

Yes, there are LOTS of seniors out there, but they stick to the plethora of mobile home parks and absurdly cheap seniors only housing tracts.

Peter MacKercher · Answer

EXODUS. That's what it means.

Well, maybe.

You're already on the right track -- it's an issue that will require you to dig deeper. It might be something to do with larger-scale economic factors (city heavily relies on a large employer/industry sector), or might be due to some sort of new local issue, or, again on the employer bit, maybe there's a large number of military families living there that are being transferred (I'm not military, that might not be realistic).

Whatever the underlying issue is just do your due diligence finding out what it is. I'm not from CA, so I can't say I know that area at all; maybe someone else has more insight to ongoings there.

Since you're already asking so, kudos. Whether it's an opportunity or a reason to run depends on what you discover.

Account Closed · Answer

Nothing like long term tenants thanks@Rick Harmon

Account Closed · Answer

@Aaron Mazzarillo thanks for the cheery post you have made me feel better about my properties in Desert Hot Springs because we were rumoured to be where the criminals were released.

William Morgan · Answer

@Cynthia Carmona  What you might rather look for are Year over Year changes.

• What is the Year over Year (YoY) change in inventory?
• What is the YoY avg monthly sales?
• What is the YoY Days on Market?
• YoY price trend?
• YoY discount from list price?

What you might think is a ton could be perfectly normal.  If not you should be able to spot a trend.  Call around to some Brokers.  Some will have subscriptions to market condition reports that will provide this info - services like http://www.soldsandstats.com/

Aaron Mazzrillo · Answer

You go to city hall and get a permit to operate a rental in the city. Then you'll probably also need a business license. You'll have to sign a document agreeing to allow code enforcement to inspect your property and go inside if they desire.

It's just an extortionist profit center the city council has initiated to increase income for that pathetically broke city.

Jo-Ann Lapin · Answer

In the past our rehabbers have done well in Hemet. There were many moth balled development that are now in full swing of development with the econmonmy doing so well. You should look into the vacancy ratiuos for hemet and true size of residents now. The market there generally does have some wild swings so if it is a hold be cautious and try to find a subject that is superior to others.

A TON of listings in an area - What does it mean?

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